401K | Compass Corporate Retirement Solutions BLOG

16 Aug

The practical side of being a fiduciary

By Jerry Kalish
August 1, 2009
It’s a tough world out there now for retirement plan fiduciaries. Buffeted by the most complex set of forces since ERISA arrived in 1974, plan fiduciaries today must cope with heightened compliance enforcement by the Internal Revenue Service and the Department of Labor, increasing litigation by plan participants and tightened fiduciary liability insurance markets.Despite all these forces that are swirling around, there are some practical ways that fiduciaries can effectively manage their responsibilities. But before you say, “I’m not a fiduciary,” you should double-check. As an HR/benefits executive, you may be a fiduciary if you:
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16 Aug

Workers Put Money Back into 401(k)s

By MARK JEWELL

The Associated Press

Published: August 16, 2009

BOSTON – Workers again are embracing 401(k) plans after the market meltdown and ongoing recession left many unable or unwilling to set aside some of their paychecks for retirement, according to the nation’s largest workplace savings plan provider.

In the second quarter, more participants in Fidelity Investments’ defined contribution plans raised the amount they set aside rather than decreased the percentage of pay they put into their savings. In a study released Wednesday, the Boston-based company said it’s the first time that’s happened in a year.
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13 Aug

401(k) plans for everyone?

With a growing retiree population, can any public-employee pension fund stay solvent? Scott Adams and Marcia Fritz debate.

1:45 PM PDT, August 10, 2009

LA Times

Today’s topic: Even after a potential reform, can any public-employee pension stay solvent when the number of retirees is growing? Are 401(k)-style plans inevitable for all state employees?

The 401(k) disaster

Point: Scott Adams

Our country is facing the greatest threat yet to ensuring retirement security for every American. The reckless experiment of relying on 401(k) plans has been a failure. Many Americans have seen their dream of retiring with dignity vanish along with their home equity. Worst, many cannot afford to retire at all.
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13 Aug

Will 401(k)s Wither Without Employer Match?

By Michelle Singletary
Sunday, August 9, 2009

Washington Post

This recession has taken so much from people.

Jobs have disappeared in numbers we haven’t seen in decades. Homes have been lost. Credit lines have been reduced or withdrawn. And, of course, retirement accounts have been pummeled. On that last point, some people have wondered whether it’s worth still contributing to a 401(k) — not just because their portfolios have lost so much, but because their employer no longer matches their contributions.
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12 Aug

Leading the Horse to Water

The market’s recent plunge likely frightened more Americans into a willingness to consider putting at least some of their 401(k) assets in a retirement-income product at retirement. Now, Congress may give them a nudge to go ahead with it.

Support for tax advantages for annuities, previously proposed in 2005 by Rep. Earl Pomeroy (D-North Dakota), seems low this year, given the government’s other current financial demands. However, several other ideas appear to have potential traction, and they speak to the logistical and psychological reasons that many see at the heart of 401(k) participants’ continued aversion to retirement-income products—the overall inertia, concerns about the complexity and cost of choosing an annuity on the open market, the fear of losing money to unstable financial institutions, and the impression that a series of small payments made over time has less value than one big lump-sum payment.
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11 Aug

Cutting Employer Contributions Is not the Whole Story

August 6, 2009 (PLANSPONSOR.com) – Though the economic downturn has forced many plan sponsors to reduce their 401(k) contributions or cut them entirely, a new survey suggests those sponsors are still contributing to their employees’ retirements in other ways.

Diversified Investment Advisors’ Report on Retirement Plans—2009, a survey of corporations with 1,000 or more employees, finds that 46% of plan sponsors are planning to reduce or eliminate employer contributions to their 401(k) plans or have already done so; however, the survey also revealed that cash balance and 401(a) plan offerings are on the rise.
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11 Aug

46% of larger firms drop 401(k) contributions

By Jeff Nash
August 6, 2009, 1:15 PM ET

Pension & Investments

Nearly half of U.S. employers with at least 1,000 workers have dropped or are planning to eliminate contributions to their 401(k) plans, according to a Diversified Investment Advisors survey.

Twenty-four percent of the companies surveyed said they have eliminated employer contributions to their 401(k) plans, while another 22% said they plan to do so this year.
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10 Aug

A Tax Break You May Be Missing

By ANNE TERGESEN

Wall Street Journal

Given the deep recession, many people may need to tap their nest eggs sooner than expected. If your retirement plan contains company stock, some relatively simple steps can significantly reduce the tax bite on those withdrawals.

The strategy, known as net unrealized appreciation, or NUA, is one that any person leaving a job or retiring should consider before moving assets from a company savings plan into an individual retirement account. Too often, though, this tax-code rule gets overlooked.
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10 Aug

ICI chief: Don’t subject funds, plans to conflicting rules

By Doug Halonen
July 17, 2009, 12:18 PM ET

Pension & Investments

A new consumer watchdog agency proposed by the Obama administration should not have regulatory authority over mutual funds or retirement plans, because they already are regulated by the federal government, Paul Schott Stevens, president and CEO of the Investment Company Institute, testified today before the House Financial Services Committee.

Mr. Stevens said in prepared remarks before the panel that mutual funds and retirement plans are already regulated by the SEC and the Department of Labor.
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10 Aug

Employees Name Investment Adviser In 401(k) Suit

By Mark Bruno
July 19, 2009, 6:01 AM EST

New targets have surfaced for lawsuits over 401(k) fees: small retirement plans, their investment advisers and service providers.

A group of fewer than 30 em-ployees at a small company in Kansas has filed a lawsuit against the investment adviser, record keeper and custodian for its $2 million 401(k) plan, alleging that the trio of plan providers caused participants to pay “secret” and “excessive” fees.
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