October 2006
401(k) Newsletter

General Issues

The 401k Advantage — Summary: Why it's good that millions more American workers will be participating in employer-sponsored defined contribution plans. Located at: BCSolutions Magazine (PDF File). Click on headline for full article.

Building a Better 401k Participant From the Bottom Up — Summary: Employers and their advisers don't need to communicate the need to save; major media do that daily with stories about the Social Security crisis, abysmal savings rates and aging workers. But they do need to communicate about debt so workers will be able to save aggressively for retirement. Located at: Benefitnews.com. Click on headline for full article.

Four in Ten Small Business Owners Perceive Cost to be Major Barrier in Offering a 401k Plan — Summary: A new Fidelity survey indicates that 43% of small businesses with fewer than 20 employees perceive cost as a major barrier in offering a 401k plan to workers. Fiduciary responsibilities (26%) and perceived complexity of plan administration (26%) were also cited as major challenges in implementing a plan. Located at: 401khelpcenter.com. Click on headline for full article.

Can 401ks Replace Pensions? — Summary: Many employees can earn as much retirement income with a 401k as they can with a traditional defined-benefit plan, a pro-employer advocate asserts. Located at: CFO.com. Click on headline for full article.

Impact of Retirement Risk on Women — Summary: The majority of women in the country may not be saving enough income for their retirement and will not be able to support themselves over their lifetime, according to a report published this week by the Society of Actuaries and sponsored by WISER. Located at: Society of Actuaries (PDF File). Click on headline for full article.

Workers Motivated by Richer Benefits — Summary: A whopping 78% of workers say their motivation would increase if their employer offered more benefits, such as health coverage and flex time, reveals a new survey from Harris Interactive and Kronos, which polled more than 1,000 employees. Located at: Benefitnews.com. Click on headline for full article.

Pension Protection Act of 2006 (PPA)

401k Provisions of the PPA — Summary: This is an overview of the 401k provisions of the Pension Protection Act of 2006 (PPA) including a few of the highlights, unresolved issues and surprises in the legislation. Located at: Reish Luftman Reicher & Cohen (PDF File). Click on headline for full article.

PPA: Requires Employers to Implement New Notice and Disclosure Requirements — Summary: PPA contains a number of new and modified notice and disclosure requirements for retirement plans. Some of these new rules affect all retirement plans, while others impact only certain types of plans. The new rules are summarized in this article. Located at: Gardner Carton & Douglas (PDF File). Click on headline for full article.

PPA Effective Date List — Summary: What are the effective dates of the major defined contribution and IRA provisions of PPA? Located at: McKay Hochman. Click on headline for full article.

Fiduciary Issues

Fiduciary Aspects of Automatic Enrollment — Summary: The PPA makes a number of important changes to encourage the use by employers of "automatic enrollment" features in 401k plans, including provisions that are designed to facilitate compliance with the fiduciary duty rules of ERISA. Many of the provisions affecting automatic enrollment features are not effective until the plan year beginning after December 31, 2007, but one important provision of the PPA regarding ERISA preemption and automatic enrollment is effective now. Located at: Trucker Huss. Click on headline for full article.

DOL and IRS Issues

Form 5500 Updates — Summary: What are the recent PPA and DOL Form 5500 changes? Located at: McKay Hochman. Click on headline for full article.