May 2006
401(k) Newsletter
General Issues
Designing 401k Plans That Encourage Retirement Savings — Summary: Workers tend to make predictable investment errors. Some workers invest too heavily in the stock of their employer. Some workers never change their portfolio to adjust to their approaching retirement. The design features of 401k plans discussed here may be of substantial help in preventing workers from making such errors. Located at: AARP (PDF File). Click on headline for full article.
Many Americans' Retirement Hopes Are Filled With Holes — Summary: A large majority of Americans expect to enjoy a comfortable retirement, but many have not taken the actions needed to turn their aspirations into reality and face the prospect of having to work far longer than they expect, according to the 16th annual Retirement Confidence Survey. Located at: 401khelpcenter.com. Click on headline for full article.
Education, Advice Become More Personalized, Active — Summary: There seems little question that some of the "advice" that participants are receiving these days is, technically, education. Still, one only needs to dip below the nation's largest 401k programs to find the growing influence of financial advisors. Located at: Plansponsor.com (free registration required). Click on headline for full article.
Generation X Lacks Confidence in Social Security and Pensions — Summary: Members of Generation X by and large understand that Social Security and pensions may evaporate by time they leave the workforce and instead are looking to themselves to fund their retirement, suggests a new poll conducted by Harris Interactive. Located at: 401khelpcenter.com. Click on headline for full article.
The Expanding "Roth" Retirement Account — Summary: This paper discusses the most relevant factors to help participants make the decision between funding a traditional 401k/403b account or a Roth 401k/403b account. Located at: TIAA-CREF Institute (PDF File). Click on headline for full article.
The 2006 Retirement Confidence Survey — Summary: This Issue Brief reports findings from the 16th annual Retirement Confidence Survey®, which suggests that many American workers are not ready to undertake the task of financial planning for their own retirement and face the prospect of having to work far longer than they expect. Located at: Employee Benefit Research Institute. Click on headline for full article.
New Survey Reveals Women Want to Invest On Their Terms — Summary: Comparing men and women, the survey explored the early influences that shaped people's saving and investing practices, how they currently invest, their investing confidence levels and whether they believe they are doing enough to meet their future financial needs. Located at: 401khelpcenter.com. Click on headline for full article.
Fiduciary Issues
New Expectations, New Solutions — Summary: Although plan sponsors cannot force employees to "do the right thing," the highest level of protection afforded to fiduciaries under ERISA will occur if they have developed processes and taken reasonable and necessary steps to help participants achieve optimum financial security. Located at: BCSolutionsmag.com (PDF File). Click on headline for full article.
Getting a Grip on Fiduciary Responsibilities — Summary: The changing legal landscape of retirement plans makes staying abreast of fiduciary responsibilities a complex task. EBN Associate Editor Leah Carlson Shepherd asked Bob Arnoff, a fiduciary audit specialist, to share his thoughts on newly hoisted red flags. Located at: Benefitnews.com. Click on headline for full article.
Insider Training (Company Stock) — Summary: When a plan sponsor offers company stock as a 401k investment option to its employees, fiduciaries of the plan who also happen to be company executives can find themselves thrust into a very awkward position. Located at: Plansponsor.com (free registration required). Click on headline for full article.
DOL and IRS Issues
DOL Fiduciary Opinion Should Help Protect Employees — Summary: A recent advisory opinion from the Department of Labor should help employers protect their retirement plan participants from financial planners who will no doubt continue to circle as 401k assets swell. Located at: Benefitnews.com. Click on headline for full article.
Labor Department Unveils Retirement Planning Resource For Hispanic Americans — Summary: The U.S. Department of Labor released "Su Dinero Y Futuro Economico: Una Guia Para Ahorrar," a resource to help Hispanic Americans plan, save and invest for a secure retirement. Located at: U.S. Department of Labor. Click on headline for full article.
This eNewsletter is a digest of information published by a variety of sources on 401(k) and related issues. It is is provided for informational purposes only and is not intended as legal, tax, or investment advice. We hope you find the information useful.
