Technical Resources

Technical Resources covers the nuts and bolts of the retirement plan market, focusing on IRS and DOL regulations, ERISA litigation, fiduciary governance and more.

 

 


Technical Resources

Technical Resources

By John Iekel7/25/2014 • 0 Comments

It’s easy for inertia to take over when financial decisions have to be made, especially when it comes to investment choices in a 401(k) plan. In “Using Re-enrollment to Improve Participant Investing and Provide Fiduciary Protections,” a white paper prepared for JP Morgan Chase & Co., Fred Reish and Bruce Ashton discuss one solution — re-enrollment, or requiring participants to re-invest in the plan by making new decisions about how the funds in their retirement accounts are invested.
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By John Iekel7/24/2014 • 0 Comments

Is Washington obsessed with rollovers? ASPPA Executive Director and CEO Brian Graff thinks so. “There’s no one who doesn’t care about this issue. There is an obsession with the rollover issue in D.C.,” said Graff in the July 22 webinar, “Washington Update: Rollovers, Rollovers, Rollovers — it’s All About Rollovers.” He and ASPPA Director of Government Affairs Ron Triche discussed the ways in which rollovers are front-and-center on the federal radar screen. 
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By Ray Harmon7/24/2014 • 0 Comments

In a piece published in The New York Times on Tuesday, July 22, Gene B. Sperling, former Director of the Economic Council under the Office of White House Policy for President Obama, put on a white lab coat and diagnosed the tax incentive system for private retirement savings with a serious illness by cherrypicking data points to paint his desired picture. It’s no surprise that during Sperling’s time working for Obama, the President borrowed his favorite line and called the system “upside-down.” I criticized the President then for that misdiagnosis and I’ll criticize “Doctor” Sperling now for it too. 
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By John Iekel7/23/2014 • 0 Comments

Expenses charged to 401(k) plan participants declined in 2013, says a new study from the Investment Company Institute (ICI). In “The Economics of Providing 401(k) Plans: Services, Fees and Expenses, 2013,” the ICI reports that last year, participants spent less when they invested in equity, hybrid and bond funds.  READ MORE

By John Iekel7/21/2014 • 0 Comments

Target date funds (TDFs) are growing and likely to comprise a larger percentage of 401(k) assets, says Paladin Registry, an independent educational resource for investors.  READ MORE

By John Iekel7/18/2014 • 0 Comments

Seventeen states have, or are, considering measures that would allow private-sector employers to automatically enroll employees in IRAs. None of these measures has yet resulted in a law that does, although three states — California, Connecticut and Oregon — have enacted measures that create boards to study the matter, and an executive order in Maryland does so. But 14 of these states, if they enact an auto IRA law, will face an inconvenient little problem — they already have laws on the books that prevent such arrangements.  READ MORE

By John Iekel7/17/2014 • 0 Comments

The PBGC is stopping its enforcement efforts in open cases involving ERISA Section 4062 (e), and will not take on any new ones until after Dec. 31, 2014. In a July 8 press release, the agency said it is doing so to ensure that its efforts are targeted at cases in which pensions genuinely are at risk. The agency also said that it plans to work with the business community, labor and other stakeholders during this period. READ MORE

By John Iekel7/15/2014 • 0 Comments

Millennials’ embrace of savings is robust, says a report the Transamerica Center for Retirement Studies issued on July 15. The report says that employees born between 1979 and 1996 have a strong interest in saving and preparing for retirement.  READ MORE

By John Iekel7/14/2014 • 0 Comments

The IRS on July 11 announced that it is withdrawing a proposal it made in 1981 for an amendment to regulations governing IRA rollovers. The proposed amendment to Treas. Reg. § 1.408-4(b)(4)(ii) would have applied the rollover limitation on an IRA-by-IRA basis. This withdrawal affects individuals who maintain IRAs and financial institutions that are trustees, custodians, or issuers of IRAs. READ MORE

By Judy Miller7/11/2014 • 0 Comments

On Thursday, July 10, both the House Ways and Means (W&M) and the Senate Finance Committee (SFC) marked up bills to extend funding for the highway trust fund. Both bills include extension of the Moving Ahead for Progress in the 21st Century Act (MAP-21) interest stabilization provision to provide part of the necessary funding.  READ MORE

By John Iekel7/9/2014 • 0 Comments

The Department of Labor’s Employee Benefits Security Administration has announced that its ERISA Advisory Council will be examining issues and considerations related to facilitating lifetime retirement plan participation. In explaining its rationale for doing so, it cites the recent movement of participant assets out of defined contribution and defined benefit plans, and into retirement accounts not covered by ERISA — such as IRAs or other savings accounts — or as plan distributions.  READ MORE

By John Iekel7/2/2014 • 0 Comments

The Treasury Department issued a rule July 1 that essentially allows employees to convert part of their IRA or 401(k) balances into a longevity annuity. Under the rule, an IRA or 401(k) can allow participants to use $125,000 or up to 25 percent of their IRA or 401(k) — whichever is less — to buy a longevity annuity. The dollar limit will be adjusted for inflation in $10,000 increments.  READ MORE

By John Iekel7/1/2014 • 0 Comments

Nondiscrimination tests, sometimes described as the “rocket science” of the tax compliance world, can make an employer run afoul. And that’s exactly what happened to 57,277 of the 401(k) plans that Judy Diamond Associates reports in a study it recently released. The study says that the plans in question failed the most recent nondiscrimination tests they conducted in compliance with IRS regulations.  READ MORE

By John Iekel6/30/2014 • 0 Comments

Fiduciaries of an ESOP are not entitled to any special presumption of prudence with regard to purchases or sales of employer securities, except as the duty of prudence relates to diversification of plan investments, the U.S. Supreme Court ruled June 25.  In an ASPPA asap, Ilene Ferenczy of Ferenczy + Paul LLP, offers her insights on this case and what the ruling means.  READ MORE

By John Iekel6/27/2014 • 0 Comments

According to Acting Director of IRS Employee Plans Thomas Petit, the IRS still lists 401(k) plans among its top examination priorities. Petit provided that confirmation to attendees of the ASPPA Regional Conference in Chicago. READ MORE

By John Iekel6/26/2014 • 0 Comments

It will be a good deal more congenial than testifying before the Treasury Department — but just as informative. Maybe moreso! Robert M. Kaplan, who has more than 30 years’ worth of experience and is the recipient of the Pension Administrator’s Lifetime Achievement Award from the National Institute of Pension Administrators and has indeed testified at Treasury, will share his expertise on working with safe harbor 401(k)s in a July 17 webcast. READ MORE

By Judy Miller6/26/2014 • 0 Comments

The Senate Finance Committee met June 26 to consider a modified chairman’s mark of revenue raisers to pay for an extension of the highway trust fund through the end of the year. The hearing adjourned with no action, but with the stated intention of reconvening to mark up a proposal early in the week following the July 4 recess. Committee Chairman Ron Wyden (D-Ore.) indicated that in the interim, he and ranking member Orrin Hatch (R-Utah) would be discussing the revenue provisions with House Ways and Means Chairman Dave Camp (R-Mich.) with the goal of reaching common agreement. READ MORE

By John Iekel6/26/2014 • 0 Comments

Early withdrawals — loans taken against plan balances, hardship withdrawals and retirement account payouts when changing jobs — can provide participants quick infusions of cash that help meet pressing needs. But these forms of “leakage” can come at the expense of their future retirement security. A new analysis by the Employee Benefit Research Institute (EBRI) provides empirical data on the full impact of leakage on 401(k) balances.  READ MORE

By John Iekel6/26/2014 • 0 Comments

Proposed increases in Pension Benefit Guaranty Corporation premiums are a fool’s errand at best, says a report prepared for the American Benefits Council (ABC). “Further PBGC Premium Increases Pose Greatest Threat to Pension System,” a report Quantria Strategies, LLC prepared for the ABC, warns that it would it be more than pointless to raise PBGC premiums — it would be counterproductive. 
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By John Iekel6/26/2014 • 0 Comments

At their current savings rate, many Americans will have tough choices to make as they age. Not only that, but a low savings rate has broader serious implications for the U.S. economy and its solvency. “Another Penny Saved: The Benefits of Higher U.S. Household Saving,” a paper by Oxford Economics, paints a sobering picture of the current savings rate and its consequences for retirement. But it also offers some suggestions regarding how to address and maybe even reverse it, and what could result from that. READ MORE

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