Headlines about "Ret plan investments - costs"
Gathered from the web by the editors at BenefitsLink.com.
[Guidance Overview] Final Fee Disclosure Regs Contain Important Relief for 403(b) Plans
"As with everything 403(b), there are going to be complications, as it is not a totally carte blanche of pre-2009 'frozen' contracts. There will be odd circumstances, like where vendors who insist on employer approval on loans and distributions from those contracts (but the price of that insistence will be 408(b)(2) disclosure)." (Business of Benefits, Robert J. Toth Jr.)
401(k) Plan Sponsors Less Confident That Employees Will Be Financially Prepared for Retirement (PDF)
"84 percent of polled executives responsible for [401(k)] plans say only some or very few employees will be financially prepared for retirement, a new Deloitte survey reveals. . . . To encourage plan participants to make better use of their 401(k), nearly half of plan sponsors (49 percent) are offering features that automatically increase participants' contribution levels. However, nearly two-thirds (64 percent) of plan sponsors report that fewer than 10 percent of participants take advantage of this opportunity." (Deloitte; International Foundation of Employee Benefit Plans; International Society of Certified Employee Benefit Specialists)
Deloitte's 2011 401(k) Benchmarking Survey (PDF)
68 pages. 'While plan sponsors and fiduciaries are generally aware of the fees charged for the administration of their plans, the possibility exists that many will be surprised by the sum total of costs." (Deloitte)
[Opinion] A Closer Look at the Braden v. Wal-Mart Case: How Not to Run a 401(k) Plan
"The Wal-Mart case is the poster child for the way in which a 401(k) plan should not be run: plan investment options bearing excessive and entirely unnecessary costs, undisclosed conflicts of interest, lack of meaningful disclosure of costs to plan participants (which was actually part of the agreement between plan fiduciaries), and, I'd argue, an apparent absence of any serious fiduciary mindset on the part of the plan sponsor fiduciary and the trustee fiduciary." (Morningstar Advisor)
[Guidance Overview] DOL Finalizes, Delays 401(k) Fee Disclosure Rules
"The final regulations 'strongly encourage' service providers to offer plan fiduciaries a 'guide' or summary of their disclosures. The DOL included a sample guide as an appendix to the final rule. Debate about whether to require such a summary disclosure is rumored to have delayed the release of the final rules. For now, the summary is voluntary, but the DOL strongly hinted that it may make the summary mandatory in future regulations." (Benefits in Brief)
[Guidance Overview] Final ERISA Section 408(b)(2) Regulations Include Significant Differences from Interim Rules
"These regulations make several significant changes . . . including: [1] Excluding certain frozen IRC Section 403(b) plans issued before January 1, 2009 from coverage under the regulations; [2] Enhancing the information relating to 'indirect compensation' required to be disclosed; [3] Adding certain investment-related disclosures to facilitate compliance with DOL regulations under ERISA Section 404(a); [4] Extending the effective date to July 1, 2012. This has the effect of delaying the effective date of most participant-level disclosures under ERISA Section 404(a) to August 30, 2012." (Practical Law Company)
Who's on The Hook for Decisions Made in Your 401(k)?
"If you are a business owner, on the Board of Directors or serve on the Plan Investment Committee, follow the line of questions from a 'hypothetical deposition' directed to you and picture how you would answer the questions." (Forbes)
[Official Guidance] Text of Final 408(b)(2) Regs on Fee Disclosures to Plan Fiduciaries by Covered Service Providers (PDF)
109 pages. 'This document contains a final regulation under the Employee Retirement Income Security Act of 1974 (ERISA or the Act) requiring that certain service providers to pension plans disclose information about the service providers' compensation and potential conflicts of interest. These disclosure requirements are established as part of a statutory exemption from ERISA's prohibited transaction provisions. This regulation will affect pension plan sponsors and fiduciaries and certain service providers to such plans." (U.S. Employee Benefits Security Administration)
[Guidance Overview] Second DOL 'Fact Sheet'; Description of Major Changes to Final Fee Disclosure Rule
"The final rule's effective date has been extended to July 1, 2012, to allow additional time for compliance." (U.S. Employee Benefits Security Administration)
[Official Guidance] DOL 'Fact Sheet' on Final Regs on Service Provider Disclosures Under ERISA Section 408(b)(2)
"The final rule reflects a number of technical and other changes . . . including the following: . . . Expansion of the information that must be disclosed concerning a [Covered Service Provider's] receipt of indirect compensation to include a description of the arrangement between the payer and the CSP pursuant to which indirect compensation will be paid; Conformance of investment-related disclosures for covered plans' designated investment alternatives to the requirements of the Department's participant-level disclosure regulation; and A separate provision for the disclosure of changes to investment-related information, which must be updated at least annually." (U.S. Employee Benefits Security Administration)
[Guidance Overview] DOL Publishes Final 408(b)(2) Fee Disclosure Regs; Treasury Publishes Regs on 'Lifetime Income' Options
"[T]he U.S. Departments of Labor and the Treasury today announced two executive actions designed to help enhance security for millions of Americans saving for retirement. The measures will expand transparency in the 401(k) plan marketplace and broaden the availability of retirement plan options so that Americans can maximize their ability to save responsibly and securely." (U.S. Employee Benefits Security Administration)
The Making of The 403(b) Model Disclosure Form
"These [403(b)] plan participants are not fiduciaries, and often do not have anyone to be able to collect and compare data on their behalf. They are sold investment products directly. So it really becomes a very simple issue for that school teacher or administrator: how much sales commissions is my investment generating; what services am I getting in return; is there a way for me to compare it all; and how can I reasonably access comparative data on the investments themselves?" (Business of Benefits, Robert J. Toth Jr.)
Unraveling The Mystery of 401(k) Disclosures
"Sponsors will be required to present information about the investment options in the retirement plan in a chart that allows plan participants to compare fees and expenses . . . . Plan sponsors can use a model chart developed by the Labor Department or they can develop their own." (MarketWatch)
New Fee Disclosure Solution Released By NEA, NTSAA & ASPPA Joint 403(b) Taskforce
"Partners of the 403(b) Transparency Taskforce including the National Education Association (NEA), the National Tax Sheltered Accounts Association (NTSAA) and The American Society of Pension Professionals & Actuaries (ASPPA) today launched the 403(b) Model Disclosure Form -- the first ever transparency standards for disclosure of fees and services in the public school 403(b) marketplace." (American Society of Pension Professionals & Actuaries)
403(b) Model Disclosure Form (Jan. 2012)
"This form is designed to provide [you, a 403(b) plan participant,] with the ability to easily compare detailed information regarding the investment options available to you. It is designed to provide you with a snapshot of the critical information needed when selecting an investment, including the services to be provided to the participant, the fees to be charged to the participant, investment information, the commissions payable to the persons who provide services to the plan, and other payments to third parties." (ASBO, NEA & NTSAA Joint 403(b) Taskforce)
Pushback from Disclosure of Costs to Participants: Too Much 401(k) Sunshine?
"[R]ecord keepers for some plans are already experimenting with new ways to explain fees to retirement savers. And in at least one case, those disclosures are raising more questions than employers or investment advisers want to answer." (Wall Street Journal)
[Guidance Overview] What Is a Fiduciary (and Why Should We Care)?
"Advisers, as fiduciaries, have a legal mandate to place client interests first. Advisors, on the other hand, must only provide 'suitable' investments to clients while placing their firm's interests first. This means a lot of those 'self-dealing' types of transactions." (BenefitsPro)
New Tool to Clearly Disclose 403(b) Fees
"[A]n industry task force, including the National Education Association, today will unveil a tool [called called the 403(b) Model Disclosure Form] that will clearly disclose 403(b) plan fees." (USATODAY.com)
Is Your Retirement Plan Due for an RFP In 2012?
"No law specifically requires plan fiduciaries to solicit bids through a request for proposal (RFP) process at the expiration of a service contract. However, the rising trend of 401(k) fee litigation underscores the belief among many practitioners that engaging in such an RFP process every 3-5 years constitutes 'best practices' and should be undertaken by prudent plan fiduciaries." (McKenna Long & Aldridge LLP)
401(k) Plans Step into the Sunshine with New DOL Rules Requiring Fee Disclosures
"Analysts and companies in the industry say the increased disclosure will allow companies to negotiate better deals and employees to request more cost-efficient plans. Already, the prospect 'is putting downward pressure on fees,' said [the] leader of consulting firm Callan Associates Inc.'s defined-contribution practice." (The Wall Street Journal)
A Retirement Plan Sponsor's Guide to Choosing a Third Party Administration Firm
"With fee disclosure regulations to be effective on April 1, 2012, many retirement plan sponsors like you may be on the lookout for hiring a new third party administrator (TPA) after they find out [that] the fees they are actually paying to the old one are unreasonable. Even if you are not looking for a new TPA, as a plan fiduciary, you need to shop around your plan to other TPAs in order to make sure you are exercising your fiduciary responsibility prudently by confirming that the fees you pay to the TPA are reasonable for the services provided." (The Rosenbaum Law Firm P.C. via JD Supra, LLC)
[Guidance Overview] Effective Date of DOL's Fee Disclosure Regulations Near: Plan Sponsors Should Not Procrastinate
"Plan sponsors should ensure that service providers are complying with their regulatory disclosure requirements. The steps to follow are (in some respects) similar to the participant fee disclosure steps . . . ." (Ice Miller LLP)
How to Take Advantage of New 401(k) Fee Disclosures
"With this new information about the 401(k) fees you are paying, you will have an opportunity to reduce the costs of your retirement investments." (U.S. News & World Report LP)
Low-Cost Entries Shake Up Small Retirement Plan Market
"If you own a small business, the time to comparison-shop for 401k plans has never been better. Low-cost plans are cropping up, as new federal regulations kicking in this year call for greater disclosure of feeinformation to plan participants and sponsors." (Thomson Reuters)
It Pays to Understand Your 401(k) Plan Fees
"[T]his year, plans are scheduled to be required to begin issuing annual and quarterly statements with performance and fee information. You'll get a chart that lists each investment available in your 401(k), with a description of what it is." (Chicago Tribune)
[Guidance Overview] Fee Disclosure: A Detailed Overview for Plan Sponsors and Their Advisors (PDF)
"[This article] is a summary of the provisions of the new regulations and how plan sponsors and participants will be affected." (Sentinel Benefits & Financial Group)
New Fee Disclosure Rules Help Make Costs More Transparent
"The regulations for calendar-year plans take effect 60 days after April 1, 2012, so most participants won't start receiving the new information until May 31, 2012. The DOL will now require your employer and any other provider to the plan (such as the plan's financial adviser and recordkeeper) to ensure the distribution of the following information to you: . . ." (The Smarter Investor (usnews.com))
Study Reveals Wide Range of 401(k) Plan Fees
"The average total plan cost for a small retirement plan (100 participants) for all expenses bundled together, including investment fees deducted from participants' assets and administrative/recordkeeping expenses and trustee fees, paid by the plan sponsor or passed along to participants, was 1.3 percent of assets under management in 2011." (Society for Human Resource Management)
Federal Thrift Savings Plan Administrative Expenses Stay Steady
"Net administrative expenses charged to each participating federal employee's Thrift Savings Plan account were about 20 cents per $1,000 of investment in 2011, roughly the same as the figure for 2010, TSP officials said Monday." (Government Executive)
[Opinion] The Case Against Basis Point Fees for All Services
"How does a plan fiduciary respond to participants who question the fees; particularly if it is a long-term employee that has likely taken a beating on returns over the past couple of years? Now they find out later that they are paying four times the amount that the plan deems reasonable for the services being provided. It could get ugly." (Smart401k)
[Guidance Overview] New DOL Regs Offer More Investment Advisers the Opportunity to Provide Advice to Participants in 401(k) Plans and IRAs
"Under the New Regulations, relief is provided for investment advice arrangements qualifying as fee-leveling arrangements, 'certified' computer model programs, or both." (Kilpatrick Townsend & Stockton LLP)
401k Averages Book Reveals Wide Range of 401(k) Plan Fees
"The average total plan cost for a small 401(k) plan (100 participants) is 1.30%. According to the 12th Edition . . ., the average total plan cost for a large retirement plan (1,000 participants) is 1.08%. The study shows the small plan average investment expense is 1.24%, while the large plan average investment expense is 1.05%." (PLANSPONSOR.COM)
Options for 401(k) Plans Get More Affordable
"As employers prepare for new federal rules requiring them to explain how fees affect 401(k) returns, industry providers are rolling out better, lower-cost plans." (USA TODAY)
Taking Aim at 401(k) Fees
"As regulators focus more on the fees participants pay for their 401(k)s, Charles Schwab is launching a 401(k) plan that offers only index mutual funds, which are often much less expensive than actively managed funds." (Treasury & Risk)
Best Practices for 403(b)s Subject to Fee Disclosure Rules
"[T]he NTSAA Fee Transparency Task Force is in the final stages of the development of a fee disclosure document patterned after the DoL model comparative fee chart. The document will be available for non‐ERISA employer plans in the belief that employers and participants will benefit from total transparency as they exercise their freedom to choose their own investment options, and financial advisers. It is expected that the Task Force will launch the new document in the first quarter of 2012." (PLANSPONSOR.COM)
Top Five Fiduciary Issues of 2011 from Fees to Fund Lineups
"Some of these fiduciary issues require plan sponsor compliance; others are simply topics that are important to sponsors seeking to maintain their status as employers of choice." (The Vanguard Group, Inc.)
Collective Investment Trusts: An Investment Vehicle for 401(k) Plans?
"With the new [fee] transparency, some plan sponsors will probably start looking for lower-cost investment options, and CITs may fit the bill." (U.S. News & World Report LP)
[Guidance Overview] Service Provider and Participant Fee Disclosure Regulations: Effective Dates
"The participant fee disclosure regulations apply for plan years beginning after October 31, 2011. However, the deadline for the plan administrator of a covered plan to provide the initial annual plan, expense, or investment disclosures to participants is now 60 days after the later of: 1. The effective date of the 408(b)(2) regulations (i.e., April 1, 2012), or 2. The date the regulations apply (i.e., plan years beginning after October 31, 2011)." (SunGard Relius)
Broker-Dealers Up in Arms 401(k) Fee Disclosure
"The issue: the proposed rules will require brokers to report how much they are paid to distribute mutual funds through brokerage windows. The trouble, brokers say, is that they offer thousands of mutual funds from hundreds of companies and often have different fee structures for each one." (Reuters)
Plan Sponsors Need to Be More Aware of Administrative Fees
"According to Callan's 2012 Defined Contribution Trends Survey: Where Have We Come From and What Lies Ahead, approximately 13% of plan sponsors do not know what types of administrative fees are applied to their company stock fund. In addition, 19.4% of plan sponsor that have funds with revenue sharing do not know what proportion of their funds pay revenue sharing." (PLANSPONSOR.COM)
[Opinion] The SPARK Institute Letter to DOL re: Delay of 408(b)(2) Regulations (PDF)
"Some record keepers have already built fee summaries and have initiated rollout of their new 408(b)(2) materials. Any change to the interim final rules is likely to require systems and coding changes, as well as changes to processes, procedures, documents and communications for the vast majority of record keepers." (The SPARK Institute)
Retirement Fund Fees May Get Squeezed by 401(k) Disclosure Rules
"Some companies that offer 401(k) investment funds share fee revenue with firms that provide recordkeeping or brokers that sell retirement plans. The amount flowing between funds and their service partners may be more than $5 billion annually, according to BrightScope Inc., a San Diego-based firm that tracks 401(k) data. The Labor Department rules, which may still change, will give employers details on those transactions." (Bloomberg L.P.)
[Opinion] New Regulation Targets Hidden Fees in 401 (k)
"The new rule is in response to numerous lawsuits filed by employees who learned after the fact that they were paying large hidden fees to investment firms managing their accounts. Under the new requirement, insurance companies, payroll services and to some extent mutual fund companies will no longer be able to hide their unconscionable fees to people participating in their retirement plans." (The Washington Post; free registration required)
DOL May Delay 401(k) Fee Disclosure
"The Labor Department has a 'high degree of confidence' that it can issue the rule by the end of January, according to a person familiar with the matter, adding that the department was sympathetic to the industry's concerns about the short deadline for complying with the rule and wanted to avoid 'a chaotic adjustment period.'" (Thomson Reuters)
Disclosures to Plan Participants a Big Change to the ERISA Regs for 401k Plans
"In our opinion this single aspect of the new regulations is going to be a game changer for the 401k industry. A combination of complex, often hidden fees offered by plan providers and a blind eye to fiduciary responsibility by plan sponsors will change dramatically, as plan sponsors and employees go from uninformed about plan fees and services to transparency." (Investment Insight Wealth Management, LLC)
DOL Regs Require 401(k) Plan Providers to Spell Out Some of the Fees Workers Pay in 2012
"Many investors don't realize that more than a half a dozen fees may be charged against their 401(k) account for recordkeeping, administration, investment advisory, brokerage and management services. In addition, at least eight kinds of indirect fees and expenses could be charged. These are often shaved off the top of the account's investment returns.' in 2012 with new Labor Department . (USA TODAY)
[Guidance Overview] Service Provider Fee Disclosures
"Now we are more than 5 months past the originally scheduled effective date of the service provider regulations, with only 3 months until the currently announced April 1, 2012 effective date, and the DOL has yet to issue final regulations. Many believe that the possible addition of a requirement to add a summary disclosure statement is a major part of the reason for delay. It may well represent the only truly major change in the final regulations." (SunGard Relius)
Internal Bank Papers Show Worry over Florida Pursuit of Pension Fraud
"An informer in a state fraud case against Bank of New York Mellon Corp. offered prosecutors an inside look at how the bank allegedly scrambled to contain a government investigation into whether the bank overcharged Florida's state and local pension funds, among others, to execute currency trades." (Tampa Bay Times)
Retirement Plan Changes Coming in 2012
"The year 2012 should largely be about enhanced disclosure . . . . For instance, retirement-plan sponsors will have to disclose to 401(k) participants the fees and expenses associated with the funds in their retirement plan. That includes new annual notices, quarterly statements, enrollment workbooks and education about fees." (MarketWatch, Inc.)
[Guidance Overview] ERISA 404(a) Participant Disclosure Regulation Resource Center
"The participant disclosure regulation requires plan fiduciaries to provide certain disclosures to eligible participants regarding: plan information, fee information, investment information." (Principal Financial Services, Inc.)
Five Retirement Blunders of 2011
These may be the top 'media missteps, lawmaker oversights, and plan misjudgments' that occurred in 2011. (BenefitsPro)
Preliminary Settlement Reached in High-Profile 401(k) Fee Lawsuit
"Fiduciaries would have to remove retail funds from a 401(k) plan's investment lineup, under a proposed settlement of the Braden v. Wal-Mart excessive fee litigation. As preliminarily approved Dec. 5 by a federal court in Missouri, the settlement also calls for a $13.5 million cash payment . . . This lawsuit contrasts with other recent appellate cases where fiduciaries prevailed on excessive fee claims involving retail funds." (Mercer Select)
[Guidance Overview] Department of Labor Releases Revised Interim Policy on use of Electronic Media for Certain Disclosures in Participant-Directed Individual Account Plans (PDF)
Extensive summary; includes very useful chart of compliance options. (Transamerica Center for Retirement Studies)
Plan Sponsors: Please Don't Mess Up Our 401(k) Investments
"My plea to plan sponsors stems from my concern that we could have a lot of confused investors if the financial industry doesn't handle the situation properly. And that could cause people to avoid retirement planning." (U.S.News & World Report LP)
Brightscope's List of the Best 401(k) Plans for 2011
"BrightScope found that companies -- at least the giant ones that made the list -- were significantly more generous with their employees than last year. The average company provided an average of $11,000 per plan participant in 2011, up from $8,000 last year." (New York Times; free registration required)
U.S. Retirement, Risk & Finance Perspective on Fee Allocation: Trends and Strategy
"[The] focus on fees has also raised the profile of fee disclosure. As discussed in this Perspective, plan sponsors are expressing greater interest in exploring all alternatives to protecting against asset 'leakage', including targeting an equitable approach to the allocation of fees." (Mercer LLC)
Principal Financial Group Unveils 'ERISA 404(a) Participant Disclosure Regulation Resource Center'
"The new Participant Disclosure Regulation Resource Center provides: [i] An overview of the ERISA 404(a) participant disclosure regulation; [ii] Step-by-step instructions for when and how to take action; [iii] Details on disclosures plan sponsors are required to provide and what The Principal is doing to help; [iv] A tool to help sponsors create a disclosure reference guide describing their plan's compliance dates; [v] Materials to communicate with and educate employees." (Principal Financial Group)
[Opinion] ASPPA and CIKR Recommendation Letter to Extend the Applicability Dates of the Fee Disclosure Regulations
"[W]e believe that it is of critical importance that sufficient time be provided to make the necessary system changes to implement the final rules. Without knowing what changes will be made in the final 408(b)(2) regulation, it is difficult to predict how much time will be needed." (American Society of Pension Professional and Actuaries )
[Guidance Overview] An Effective Strategy for Plan Sponsors in a New Regulatory Age (PDF)
"Under the new regulation, plan sponsors are expected not only to ensure the receipt of their vendors' reports, but also to prove that they reviewed the reports, decided on the adequacy of the reports, and concluded that their vendors' fees are reasonable. [This white paper addresses the action that plan sponsors can and should take to satisfy their revised fiduciary requirements under the new DOL regulation. It will also demonstrate how plan sponsors' approach to the new rule canserve as an effective risk management strategy, while enacting effective stewardship principles.]" (Roland/Criss)
ASPPA and Council of Independent Recordkeepers Request Fee Disclosure Extension
"[A]lthough the groups continue to support the DoL's efforts to improve fee disclosure for individual account plans, 'unfortunately, the application of both the interim (408(b)(2) and 404(a) regulations is only three months away, and the DoL has not issued the final guidance needed to create systems to comply with the regulations.'" (planadviser; free registration required)
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