05 Sep

Uncertainty Makes It Hard to Plan for Retirement

Shifting and uncertain retirement dates are becoming the norm in the
American workforce, making it harder for employees to establish
meaningful financial plans, recent MetLife research indicates.
According to the company’s 9th annual Employee Benefits Trends Study, four out of ten employees have changed their predicted retirement date since last year, and 30% raised their expected retirement age. Furthermore, this trepidation about hitting retirement goals could be accelerating; 59% of workers in the study expect to work beyond age 65, compared with 52% one year ago.

Given these indistinct targets, many employees lack confidence in their ability to prepare for the culmination of their working years, with only 39% feeling assured about managing the funds in their employer-sponsored retirement plan, according to the survey findings.
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05 Sep

401(k) Law Suppresses Saving for Retirement

A 2006 law designed to boost employees’ retirement-savings is having the opposite effect for some people. Under the law, companies are allowed to automatically enroll workers in their 401(k) plans, rather than require employees to sign up on their own. The measure was intended to encourage more people to bulk up their retirement nest eggs—a key goal in a country where millions of people aren’t saving enough.

But an analysis done for The Wall Street Journal shows about 40% of new hires at companies with automatic enrollments are socking away less money than they would if left to enroll voluntarily, the Employee Benefit Research Institute found. The nonprofit performed a complex computer simulation of savings patterns drawing on data from more than 20 million 401(k) participants.
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16 Jun

Who is The New Fiduciary?

The Department of Labor’s (DoL) proposal for a new definition of fiduciary was discussed at the PLANSPONSOR National Conference—and a representative from the DoL was present to add his viewpoint.

Michael Davis, Deputy Assistant Secretary at the DoL, today began by saying how the concept of fiduciary is the core component of the Employee Retirement Income Security Act (ERISA).  ERISA was created to protect participants and their assets, he said, and the fiduciary serves as the umbrella for these protections. The original five-part test to determine if one is acting as a fiduciary (the advice is individualized, provided for a fee, provided on a regular basis, pursuant to a mutual understanding between the plan sponsor and adviser, and the advice will form the primary basis for the plan’s decision-making), is being overhauled, Davis said, to better protect plan sponsors—particularly sponsors of smaller plans.
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16 Jun

Many Employers Feel Responsible for Benefits and Advice

Slightly more than half (53%) of employers feel responsible for providing financial vehicles, as well as education and advice, to help their employees have a secure retirement, according to Bank of America Merrill Lynch.   
The Workplace Benefits Report from Bank of America Merrill Lynch examined the role of financial benefit plans in employers’ talent management strategies and in the overall financial well-being of their employees.
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01 Apr

Court Gives Final Approval to 401(k) Fee Case

A U.S. District Court judge has granted final approval of an $18.5-
million settlement in an excessive 401(k) fee suit.

The agreement ends proceedings in Kanawai v. Bechtel Corp., in which two former Bechtel employees alleged the company violated its Employee Retirement Income Security Act (ERISA) fiduciary responsibilities by not using its size to get lower fees from vendors.
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05 Feb

SIFMA Asks DoL to Reconsider Fiduciary Definition Change

Feb 03, 2011 — The Securities Industry and Financial Markets Association (SIFMA) has asked the Department of Labor (DoL) to reconsider its proposed rule that would redefine the term “fiduciary” under the Employee Retirement Income Security Act (ERISA). —
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