Raymond James 401(k) Monthly Newsletter

Transcription

1 June 2015 Welcome to Fiduciary Insights, the monthly newsletter that keeps you in touch with issues, trends, events, and insights of significance to individuals connected with the retirement plan industry. The articles have been carefully selected from a variety of high quality sources. General Items Retirement Plan Sponsors Need to Care About Plan Design Why Isn't 401k Fee Disclosure Working? SIMPLE IRAs vs. Safe Harbor 401k Plans: What are the differences? Ten Steps to Achieve Your Retirement Goals Choosing a Retirement Solution for Your Small Business Fiduciary and Plan Governance Material Why Employers Need a Gap Analysis Regular Monitoring and Correction of Retirement Plans Can Reduce Correction Costs Managing a Plan Vendor Change Vendor Monitoring: Going Beyond the Determination of Reasonableness Insights: Studies, Research and White Papers Market Timing Among Costliest Participant Mistakes Can Neuroeconomics Improve 401k Decision Making? Plan Sponsors Eying New Set of DC Investment Providers Compliance and Regulatory Related Documentation for Loans and Hardship Withdrawals Must Be Retained SEC Examining 12b 1 Fees DOL on ERISA Fidelity Bonds Participant Level Fee Disclosure Regulation Modified General Items Retirement Plan Sponsors Need to Care About Plan Design Summary: This article is about retirement plan design and why finding the right TPA who can offer plan design services can that maximize savings for all of your employees and save money on taxes. Source: Jdsupra.com Why Isn't 401k Fee Disclosure Working? Summary: It's been more than two years now since the DOL required 401k plan fees to be disclosed in participant statements. Yet, at least one study says one in five employees still think they get their 401k for free. Author explores why fee disclosure may not be working. Source: Fiduciarynews.com

2 Raymond James 401(k) Monthly Newsletter SIMPLE IRAs vs. Safe Harbor 401k Plans: What are the differences? Summary: Savings Incentive Match Plans for Employees (SIMPLE's) are frequently mentioned as a low cost alternative to 401k Safe Harbor Plans for providing employees the opportunity to save for retirement. This chart compares the differences between SIMPLE IRAs and Safe Harbor 401k Plans. Source: Consultrms.com (PDF File) Ten Steps to Achieve Your Retirement Goals Summary: Everybody wants to be safe from the buffeting that life can inflict upon retirement plans, to have the financial resilience to bounce back when things go awry. For starters, here are 10 mistakes to avoid in retirement planning. Source: Aarp.org Choosing a Retirement Solution for Your Small Business Summary: Starting a retirement savings plan can be easier than most business owners think. What's more, there are a number of retirement programs that provide tax advantages to both employers and employees. Source: Dol.gov Fiduciary and Plan Governance Material Why Employers Need a Gap Analysis Summary: Plan sponsors and fiduciaries have a responsibility to ensure that ERISA covered plans are administered in compliance with applicable law. Conducting a gap analysis helps to ensure that plans are being administered in accordance with ERISA and the Code. A gap analysis can also ensure that the plan operates more efficiently, and, as a result, can help to minimize plan costs. Source: Wagnerlawgroup.blogspot.com Regular Monitoring and Correction of Retirement Plans Can Reduce Correction Costs Summary: Spring clean your company's retirement plan operations by confirming that your company's plan is operating in accordance with its terms and in compliance with IRS and DOL rules. Both agencies offer compliance and correction programs to companies with retirement plan failures. Such programs reward an employer who can detect and correct retirement plan failures early. Source: Quarles.com

3 Managing a Plan Vendor Change Summary: Whatever the reason to consider a change, once the decision is made to move the plan to a new recordkeeper, the plan sponsor must understand the process for implementing and managing the transfer and the timing requirements for the various notices that are used to communicate the change to the plan participants. Article reviews the process. Source: Consultrms.com Vendor Monitoring: Going Beyond the Determination of Reasonableness Summary: As a responsible plan fiduciary, ERISA requires you under Section 408(b)(2) to ensure that arrangements with your service providers are "reasonable" and that only "reasonable" compensation is paid for their services. This short article lists some questions you will want to ask your recordkeeper to help you make informed decisions about the services they provide to your plan. Source: Pension Consultants.com Insights: Studies, Research and White Papers Market Timing Among Costliest Participant Mistakes Summary: During a recent research briefing with J.P. Morgan Asset Management, some of the firm's top retirement strategists highlighted a stark statistic about the impact of emotional decisionmaking on portfolio returns: ill timed trading can easily cut 50% or more of participant wealth if not identified and prevented. Source: Planadviser.com Can Neuroeconomics Improve 401k Decision Making? Summary: A recent white paper describes the challenges most of us face when attempting to make good financial decisions. Using the science of neuroeconomics, the authors state that many of us hamstring ourselves by maintaining various bias' and emotional connections which end up resulting in bad investment decision making. Article outlines these tendencies. Source: Benefitnews.com

4 Plan Sponsors Eying New Set of DC Investment Providers Summary: As defined contribution plan sponsors continue to refine their investment lineups, there is a sizable shake up among the top 10 DC investment managers plan sponsors think of when considering a change to their lineups. Source: 401khelpcenter.com Compliance and Regulatory Related Documentation for Loans and Hardship Withdrawals Must Be Retained Summary: Most sponsors of defined contribution plans rely on a third party administrator to handle participant loans and hardship withdrawals typically through the TPA's website. However, in guidance issued last week, the IRS cautions that the sponsor not the TPA or the participant is responsible for maintaining documents proving that those transactions comply with the law. Source: Benefitsinbrief.com SEC Examining 12b 1 Fees Summary: SEC officials signaled this week that the agency is revisiting the rules regarding annual 12b 1 fees in mutual funds. Source: Benefitspro.com DOL on ERISA Fidelity Bonds Summary: This article provides an overview of the fidelity bonding requirements. It highlights key elements that employers and other plan sponsors should know about ERISA's fidelity bonding requirements. The questions and answers provide general information to help you understand the law and the fidelity bonding requirements. Source: 401khelpcenter.com Participant Level Fee Disclosure Regulation Modified Summary: The DOL has modified its regulation requiring plan administrators to disclose certain plan and investment related information, including fee and expense information, to participants and beneficiaries in participant directed individual account plans. The modified regulations now allow 14 months between notices. Source: Icemiller.com

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