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Defined Contribution Plans
A new survey finds that the median retirement savings for those who have access to a 401(k) plan is nearly nine times that of those who don’t.According to the 2016 Wells Fargo Retirement Study, those who have access to a 401(k) plan have a median savings of $87,000, compared with $10,000 for those...
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A recent report highlights five key 401(k) risk areas to keep an eye on.The report by ThinkAdvisor was based on an assessment of 19 “red flags” gleaned from Form 5500 filings by Judy Diamond Associates.Here are the five warning signs:Inadequate Fidelity Bond CoverageMore than 70,000 sponsors of 401...
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Stock drop lawsuits are generally about employer stock that has suffered a precipitous drop in value, and in rare cases, where participants have been deprived from keeping that investment — and then there’s this one.As noted above, these type of employer stock-based lawsuits are often over stock...
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The Fall 2016 issue of Plan Consultant is now online. The issue focuses on the most important matters facing the industry, including the DOL’s fiduciary rule, legislation that would eliminate obstacles to MEPs, and the new overtime rules, as well as expert perspectives on best practices. And you’ll...
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September has long been known as the worst month for U.S. stock performance (despite several well-chronicled October declines). How did average 401(k) balances fare this year?Well, as it turns out, the average account balance for younger (25-34), less tenured (1-4 years) workers actually rose 2% in...
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Delegates to the recent NAPA DC Fly-In Forum were treated to a discussion about a proposal touted as “rescuing retirement.” But the math (still) doesn’t seem to work. And it’s likely to kill the 401(k) (or at least its tax benefits). Here’s how.The proposal itself isn’t new — it’s the Guaranteed...
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The Pension Benefit Guaranty Corporation (PBGC) is proposing an expansion of its Missing Participants Program to cover terminated 401(k) and other defined contribution plans and certain defined benefit plans that the program does not now cover. Currently, the program is open only to PBGC-insured...
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The Senate Finance Committee announced Sept. 19 that it will meet on Sept. 21 to consider two retirement policy bills — but the real story might be what’s not in those proposals.The first bill — called the Miners Protection Act of 2016 — will address the funding shortfalls in the United Mine...
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Much has been written about the need to increase participants’ retirement savings during their accumulation phase and help them better prepare for the decumulation phase after retiring. A recent paper argues that while there are challenges, the sky is far from falling — and in fact there is much...
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Another major employer has been charged in an excessive fee lawsuit that not only contests the fees paid by the plan, but administrative fees paid by the plan to the plan sponsor as well.The suit claims that Northrop Grumman employees were “motivated to, and did, charge time and expenses to the...
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The Department of Labor’s Bureau of Labor Statistics (BLS) has released its latest report on employer compensation costs. The report, which concerns costs incurred in June 2016, shows that private-sector and state and local public-sector employers spent less on retirement benefits in June than they...
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A new plan sponsor survey offers insights into the issues regarding retirement income adoption by workplace retirement plans. Service providers may find it instructive in anticipating and meeting plan needs.More than a third of 212 plan sponsor respondents (37%) agree that solvency determination (i...
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The Department of Labor (DOL) could do a better job of encouraging lifetime income options, the Government Accountability Office (GAO) says in a new report. The report, issued Sept. 8, is aimed at plan sponsors, but service providers may find it instructive since it makes recommendations on how the...
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The IRS on Aug. 30 announced a significant relaxation in the restrictions that normally apply to plan loans and hardship distributions to Louisiana flood victims and members of their families.In Announcement 2016-30, the IRS says that the following individuals may be eligible to take advantage of...
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The IRS recently issued its 2016-17 Priority Guidance Plan, and it contains an array of goals for projects relevant to retirement plans. The plan outlines objectives the IRS intends to pursue during the period July 1, 2016-June 30, 2017.The IRS’ plans include the following projects relevant to...
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A plan trustee and recordkeeper — and a couple of large employers — have been sued for allegedly misusing the float income generated by their plans.The suit, filed in the U.S. District Court for the Northern District of California, challenges the plan fiduciaries of the Hewlett-Packard Company 401(...
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Each year the good folks at Beloit College produce a “Mindset List” providing a look at the cultural touchstones that shape the lives of students about to enter college. So, in what ways will their retirement plans differ from those of their parents?In the most recent list (they’ve been doing it...
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There’s good news in a recent report on retirement saving and consumer attitudes toward it. But at the same time, it also provides fresh proof of changes in the retirement sphere as well as challenges to be faced.Two reports by LIMRA, “For-Profit Sector Employees: 2016 Consumer Survey Update” and “...
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One could hardly read the headlines this past week without experiencing a certain sense of déjà vu. After all, it’s been not quite 10 years since the then relatively obscure St. Louis-based law firm of Schlichter, Bogard & Denton launched about a dozen of what have come to be referred to as “...
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Earlier this year I wrote a post about ERISA litigation going “off the rails.” Alas, it feels like we've gone from bad to worse since then.In the past week, a whole new round of lawsuits involving academic institution 403(b) plans has hit the news. Despite the “newness” of the targets (large...
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