Archive for ‘General Articles’ Category
Jun
17
2011
Good Article On Shortfalls of “Fiduciary Guarantee’s”Posted on 08:17, June 17th, 2011 by lee
New Participant Disclosure Requirements A new set of participant disclosure requirements will take effect for most 401(k) and 403(b) plans later this year (Participant Disclosure Regulation). The regulation creates a new ERISA fiduciary duty for administrators of all retirement plans that provide for participant investment. Plan administrators of covered plans will need to give participants an expanded array of information that meets specific content, formatting and frequency requirements. The requirements apply to plan years beginning on or after November 1, 2011. Read the rest of this entry » Nov
29
2010
Important 2010 Year-End Notices For Qualified Retirement Plan SponsorsPosted on 10:18, November 29th, 2010 by lee
When meeting with clients and prospects a “reminder” of year-end task is perfect entree into conversation about 401k Safe. Our clients no longer have to deal it. Sep
27
2010
Safe Harbor Plan Option allowed by the PPA-Part TwoPosted on 11:37, September 27th, 2010 by lee
Safe Harbor Plan Option allowed by the PPA The PPA waives the nondiscrimination testing requirements for plan sponsor who have a Qualified Automatic Contribution Arrangement (QACA). These are often referred to as safe harbor automatic enrollment arrangements. This requires meeting the EACA requirements and complying with two additional requirements. Read the rest of this entry » Sep
12
2010
Eligible Automatic Contribution Arrangements (EACA)Posted on 12:53, September 12th, 2010 by lee
The PPA allows plan sponsors state preemption for automatically enrolling employees without written consent just by maintaining an “ERISA” qualified plan and providing notice to employees. There are two types of automatic contribution arrangements under the PPA: Eligible Automatic Contribution Arrangements (EACA) and Qualified Automatic Contribution Arrangements (QACA). In this blog we will discuss the EACA. Read the rest of this entry » Jun
15
2010
Disclosure – Build Credibility with Your ClientsPosted on 15:33, June 15th, 2010 by lee
The mainstream media is ranting on about the new 401k Fee disclosure rules. “Finally, we are saved!” Without a doubt, the majority of plan sponsors have no idea what they are paying in fees, so the government is going to force the providers to tell them. The first thing plan sponsors will learn if an employee sues them for “breach of fiduciary duty” is what they have been paying in fees. Those that don’t know will not have a leg to stand on. The rules don’t state what the fees should be but that fiduciaries have an obligation to know what they are and that they are reasonable. Read the rest of this entry » Anyone that lives on or routinely travels to the gulf will appreciate the difference between a fiduciary and someone that is selling stock in a company. Transocean is held to a different standard as a fiduciary. As a fiduciary one is held to the highest standard of care . If you owned a million dollars of trans. stock you would have no recource. If you made 10/hour and had a thousand dollars in your 401k it’s a different story. Does the distinction make sense? Why does the stockholder not have the same recourse as the 401k plan participant? Read the rest of this entry » “A time of turbulence is also one of great opportunity for those who can understand, accept, and exploit the new realities” Peter Drucker The supreme court changed the reality of the 401 (k) landscape when it ruled that one person could sue the plan sponsor. One distraught employee can file a law suit against a CFO and CEO, and he can most likely find a lawyer to take it on contingency. It’s free, and the liability can be personal. Strong leaders “face up to reality and resist the temptation of what “everybody knows,” which are about to become the deleterious superstitions of tomorrow.” Peter Drucker http://www.lanepowell.com/9600/irs-announces-401k-compliance-check-questionnaire-project/ http://www.irs.gov/retirement/article/0,,id=223440,00.html 4o1k Compliance questionnaire-It is 46 pages and is only 60 questions if you don’t count the a’s,b’s, and c’s. It is not voluntary. No doubt 99.99% of plan sponsors will not have the resources to complete this with internal resources. How much will this increase the cost of maintaining a 401k plan? Someone has to sit down and gather all of the data and begin the miserable process of answering all of the questions. Either the plan sponsor will have to pay for it or it will be deducted out of the participants accounts, someone has to pay for it. I would urge you to print the document out and show it to prospective clients. I don’t think anyone would believe the government would put such a burden on employers if they didn’t actually see it. I didn’t. Apr
20
2010
“meet a worker’s long-term retirement savings needs, rather than just preserving capital.” Heart of QDIAPosted on 20:23, April 20th, 2010 by lee
“Meet a worker’s long-term retirement savings needs, rather than just preserving capital.” This is the heart of QDIA. At the risk of repeating myself, the majority of employers we meet with default employee funds into a money market account. They mean well. It’s not illogical to assume that if an employee fails to take the time to invest their money that the employer is acting prudently by defaulting the employee’s funds into a guaranteed account, but it’s not so. The government has decided in its infinite wisdom that if an employee fails to take the time to insure his or her funds are invested the responsibility defaults to the employer. I urge you to review this link in that it will prove invaluable in opening new cases. If you are selling 4o1k Safe we have this feature built into our plan. As the Sponsor, Administrator, and Fiduciary of our 401k plan we take this action not only because it’s in the best interest of the participants but because of the liability in sponsoring the plan. http://www.mhco.com/Library/Articles/2009/AQDIAnotice_112009.html |