Headlines about "401(k) plans"

Gathered from the web by the editors at BenefitsLink.com.
Defined Benefit Plans Outperformed 401(k) Plans During 2011 by Largest Margin Since Mid-1990s
"[The] analysis of more than 2,000 plan sponsors found that DB plans had median investment returns of 2.74% in 2011, while DC plans had median returns of -0.22%. The nearly three-percentage-point difference is the widest margin by which DB plans outperformed DC plans since 1995 ... The analysis also found that despite the large performance difference in 2011, the gap between DB and DC plans narrowed during the previous five-year period." (Towers Watson)

Global Bonds: A Better Solution for DC Investors (PDF)
"The most obvious potential benefit to globalizing comes from a significantly increased opportunity set. The Barclays US Aggregate Bond Index as of year-end 2012 represents about $15.5 trillion in outstanding debt and about 8,000 issues. Its global counterpart, the Barclays Global Aggregate Bond Index, clocks in at nearly two and a half times that size: $39 trillion in outstanding debt and more than 14,000 issues. That's a much bigger pond to fish in." (Alliance Bernstein)

[Opinion] Text of ASPPA Comments to IRS on In-Plan Roth Rollovers Under ATRA
"ASPPA recommends that the IRS [1] extend the deadline for the adoption of the 'discretionary amendment' that will be necessary to put in effect the ATRA provisions until the later of: the last day of the plan year that the amendment is effective; or December 31, 2014.... [2] issue guidance clarifying that only fully-vested contribution sources are eligible to be transferred through an [In-Plan Roth Rollover (IRR)], or, alternatively, that a plan sponsor may limit IRRs only to contribution sources that are fully vested.... [3] issue guidance confirming that section 402A(c)(4)(E)(ii) of the Internal Revenue Code ... permits non-spouse alternate payees and non-spouse beneficiaries to effect a transfer that is treated as an IRR in plans which permit IRRs." (American Society of Pension Professionals & Actuaries)

Keys to Successful Rollover and In-Plan Asset Retention Strategies (Video)
"[LIMRA analyzes] the most recent research that identifies the factors -- including participant and provider characteristics -- that determine whether individuals will choose to keep their defined contribution plan money with the plan provider." (LIMRA)

Wagner Law Group Legal Updates in ERISA, Employee Benefits & Human Resources, May 2013
Articles include: Tax Reform Proposals Regarding the Retirement System; DOL Offers Tips on TDFs; Definition of Fiduciary; Re-Enrollment Default Investments: Bidwell v. University Medical Center; 408b-2 and 404a-5 Disclosure Aftermath; Brokerage Accounts; New Areas of Potential Litigation. (The Wagner Law Group)

Younger Prospects Getting Cold Shoulder from Advisers
"[T]wo-thirds of executives at broker-dealer and registered investment adviser firms ... said they are still focused on serving and attracting baby boomer clients, while just 23% said they're targeting Gen X (ages 34-48) and Gen Y (18-33)." (Investment News; free registration required)

How the Selection of a Financial Adviser Can Go Wrong
"[L]et's say you take a financial problem, or your retirement goals, to two or three financial advisers. New studies show that you're unlikely to get the same, or even similar, recommendations about what investment products to buy or what strategy to pursue. And that could make a big difference in your financial future... [R]etirement-savings recommendations vary greatly based on the type of firm for which a financial adviser works." (The Wall Street Journal)

For Most Retirement Plans, the Great Recession Rate Has Not Resulted in Lower Matching Contributions
"An analysis of more than 9,000 retirement plans ... found about three-quarters of companies (72%) maintained or added employer contributions over the past five years. Only 12% terminated and did not reinstate their matching contributions, and 5% suspended their match, but have reinstated it." (PLANADVISER.com)

Five Steps Toward Fixing the Hole In Your Retirement Plan
"What's left for working Americans who expect to retire is a real puzzler. How can an individual replicate the predictability and solidity of a pension-style plan sized down to one? Is it even possible? The answer is yes, but it takes a fundamental re-imagining of the purpose of saving and retirement." (Forbes)

The Impact of an Advisor on Retirement Savings Levels (PDF)
"[T]he savings targets set by those in the lowest-income quartile who had sought the input of a financial advisor were associated with a lower risk of running short of money in retirement by anywhere from 9 to nearly 13 percentage points, depending on family status and gender.... As for those who 'guessed' at those retirement savings targets, the analysis also finds that for all four income quartiles, those who did so ... were less likely to choose an adequate target." (EBRI)

Does Automatic Enrollment Actually Increase Participant Savings?
"Are there those who once might have filled out an enrollment form and opted for a higher rate of deferral (say to the full level of match) that now take the 'easy' way and allow themselves to be automatically enrolled at the lower rate adopted for most automatic enrollment plans? Absolutely. However, as the EBRI data show -- and, for anyone paying attention, have shown for years now -- the folks most likely to be disadvantaged by that lack of action are higher-income workers." (Nevin Adams via EBRI)

Seventh Circuit Addresses Whether Financial Service Provider Is ERISA Fiduciary
"The DOL argued that AUL exercised its contractual right by not exercising it every time it invested plan assets in a fund that was more expensive than another fund that it could have chosen. The court rejected this 'non-exercise' theory of exercise as unworkable and unprecedented. Instead it found that an omission was insufficient to satisfy the requirement that the individual exercise authority or control over plan assets." (Alston & Bird, via Employee Benefit News)

Senate Bill Would Accelerate Required Minimum Distributions to Most Beneficiaries
"The Student Loan Affordability Act would require the retirement savings accounts to be distributed within five years of the death of the account holder, unless the beneficiary is within ten years of the account holder's age, an individual with special needs or disabled, a minor, or the account holder's spouse. This provision saves taxpayers approximately $4.6 billion over ten years." (Committee on Health, Education, Labor & Pensions, U.S. Senate)

[Opinion] How Much Income Will Your 401(k) Provide?
"The [DOL] is developing rules that would require workers to get estimated income illustrations from their defined contribution pension plans so they can understand more thoroughly how long their retirement savings might last. The department is asking for input from retirement planning specialists, employers, workers and others as it looks for ways to educate people and help them save more effectively for retirement.... With each passing decade, workers increasingly are asked to shoulder the responsibility for their retirement as the share of employers offering traditional pension plans shrinks." (AARP)

Presumption of Prudence Allowed Stock Drop Case to Be Dismissed on Pleadings
"The Seventh Circuit's opinion includes a remarkable discussion of the overvaluation and excessive volatility theories that are the foundation of fiduciary breach claims in stock drop cases. That discussion leads the court to have 'fundamental doubts' as to whether ERISA fiduciary breach claims can ever be sustained -- at least in the absence of allegations of misrepresentation or other wrongful conduct -- when the employer's stock is publicly traded in an efficient market and employees have other investment options which they can substitute with relative ease." (Thomson Reuters / EBIA)

The Retirement Exchange: A New Plan, or a Twist on the Multiple Employer Plan?
"In the exchange, the document that governs the plan is in the name of each individual employer, not the overarching plan sponsor as is the case with MEPs ... A rogue employer with a 'defective' plan is segregated from the rest of the plans ... A toxic plan infecting others 'does not exist in the exchange.'" (InsuranceNewsNet.com)

Future Retirees at Risk of Downward Mobility, Pew Finds
"The report estimates that, at the median, Americans born between 1966 and 1975 -- so-called Gen-Xers -- will be able to replace just half their pre-retirement income once they stop working, well below the minimum 70 percent replacement rates recommended by most financial planners. Late baby boomers -- which the report defines as those born between 1956 and 1965 -- will be able to replace 60 percent of their working incomes in retirement, the report estimates. Both replacement rates are below what financial experts say is necessary for a secure retirement." (The Washington Post)

Retirement Security Across Generations
"This report explores how the Great Recession affected the wealth and retirement security of baby boomers relative to younger and older age groups.... Early boomers (born between 1946 and 1955) were approaching retirement in better financial shape than the age groups that came before them.... The picture of wealth accumulation and savings for Americans born after 1955 was more mixed.... Both cohorts of baby boomers and the Gen-Xers have significantly lower asset-to-debt ratios than do the older groups.... All groups experienced wealth losses in the Great Recession, but Gen-Xers took the hardest hit.... Replacement rate analysis shows that the youngest cohorts will not have enough assets for a secure retirement." (Pew Center on the States)

Retirement Plan Participants: Comparing Concerns of Men to Those of Women
"There are few retirement readiness issues on which men and women feel equally secure.... When asked about future prospects, men are more likely than women to say they expect to be better off financially one year from now. They also express greater concern with their level of household debt. Women are more concerned about not saving enough for retirement, health issues and the financial situation of their children." (Spectrem Group)

Reenrollment in Retirement Plans: Better Process, Same Great Benefits
"[Reenrollment] can be a powerful method to address a plan's asset allocation problems and the inertia of plan participants. Reenrollment resets participant investments, directing current and, typically, future holdings into a qualified default investment alternative (QDIA) such as a balanced fund, managed account, or life-cycle or target-date fund." (Vanguard)

Brief on Appeal Filed by Plaintiffs in Tussey v. ABB Case
"The following summary is taken directly from the Plaintiffs' brief: The district court properly found ABB breached its duties by [1] allowing Fidelity to receive excessive recordkeeping compensation through revenue sharing in the amount of $13.4 million.... [2] moving all participant investments from the stellar-performing Wellington Fund into the untested Fidelity Freedom Funds for no prudent and loyal reason and in violation of the IPS.... [3] selecting higher-cost share classes of Plan mutual funds... [4] The district court properly found Fidelity breached its fiduciary duties by earning income from Plan assets as they floated between accounts." [The full text of briefs filed to date can be found at the link.] (Plan Tools, LLC)

How to Reduce Employee Cravings for 401(k) Loans
"Plan sponsors should consider some options to limit the amounts of loans while still offering them: 1. Allow only one outstanding loan at a time.... 2. Limit participant loans for hardship reasons only." (Employee Benefit News)

Automatic 401(k) Saving Features No Fail-Safe to Retirement Success
"Workers can always opt out of the auto-saving features, but they usually don't ... On the plus side, automation leads many who would otherwise save nothing to steadily sock away a slice of their paycheck. But the 3% default contribution rate favored by employers doesn't come close to the savings rate needed for a secure retirement: roughly 12% to 15%, experts say, including both worker and employer contributions." (Kiplinger)

[Opinion] Why the Industry Needs to Accept Some Blame for Flaws in PBS Frontline's 'Retirement Gamble'
"If a smart journalist, looking for as much information as possible about retirement plans and interviewing dozens of plan participants, plan sponsors, and academics, still can't understand his own retirement plan, then it may be that those doing the explaining aren't doing a very good job. Some of the blame for inaccuracies and missing information in the documentary is reflective of confusion and missing information in the industry." (RIABiz)

Six Reasons a 401(k) Is Better Than a Pension
"[B]lindly claiming that the pre-401(k) days are better is just inaccurate, because there are plenty of reasons the do-it-yourself system is better. Here are a few to consider: Not every employer offered pensions, even when they were popular.... The assets in 401(k)s vest much sooner, and you own the funds.... You can control taxes a little better with an IRA or 401(k).... If you really need it, you have access to the money.... There's a chance that your heirs will get some money.... Your 401(k) plan may have high fees, but low-cost investments are possible." (U.S.News and World Report)

Consumer Fact Sheet: The Basics of Investing
"The Insured Retirement Institute (IRI) and the National Retirement Planning Coalition (NRPC) released a new fact sheet focused on the basics of investing as part of their six-month national retirement planning campaign.... According to research by IRI, only about 17 percent of Boomers believe that they are extremely or very knowledgeable about making financial investments. Even more alarming, more than 40 percent of Boomers say that they are not very or not at all knowledgeable about investing." (Insured Retirement Institute)

[Opinion] Beware of Target-Date Funds
"[D]espite the growing popularity of TDFs, flaws with these types of investments abound.... TDFs encourage people to be lazy.... TDFs don't properly tackle the issue of longevity.... TDFs undermine the crucial role of professional investment advice.... TDFs are not adequately diversified." (Advisor One)

[Guidance Overview] Roth Adoption and the New In-Plan Conversion Feature
"[The authors] anticipate that the Roth feature will appeal to successful plans -- those with high levels of savings and well-diversified plan assets -- where the sponsor is seeking to add incremental plan features for consideration by participants. For sponsors overseeing plans with below-average participation and savings rates, or poorly diversified plan assets, the Roth feature is likely to remain less important than optimizing savings and investment behaviors." (Vanguard)

The Changing Face of Retirement Worldwide: The Aegon Retirement Readiness Survey 2013
"The 2013 [Aegon Retirement Readiness Index (ARRI)] scores show a decline from those in 2012. The total ARRI score dropped from 5.19 out of 10 to 4.89, with all 10 countries surveyed in 2012 registering a decline. Although in some countries there are now some signs of recovery from the economic crisis, the change in ARRI scores across the board was negative....Nearly two-thirds (64%) of respondents believe that future generations will be worse off in retirement than current retirees." (AEGON)

Fiduciary Obligation to Select Appropriate Share Classes
"[The Tibble v. Edison] trial court found, and the appellate court agreed, that plans must use their purchasing power to select the appropriate share class. The practical consequence is that advisers should make recommendations based on the share classes available and must educate plan sponsors about the available share classes, including their costs, and plan sponsors (typically acting through their plan committees) must understand that multiple share classes may be available and must investigate which are best for their plan and participants. That could be a daunting task." (FredReish.com)

Rethinking Target Date Funds: Fulfilling Fiduciary Responsibilities (PDF)
"[S]ignificant differences among target date offerings exist -- asset allocation, underlying design and philosophy -- presenting a challenge for plan sponsors in the selection and monitoring of target date strategies." (Plan Sponsor Advisors)

[Opinion] The 401(k) Debate
"The shift to 401(k) plans comes across as a harmful move by U.S. employers. Yet the move to defined contribution plans (the general term for these plans) has been a global phenomenon ... The complexity and decision overload described in the documentary are becoming passe .... The documentary missed the critical role played by employers in overseeing their plans; it also overlooked the fiduciary rules they must follow." (Vanguard)

Top Five Actions Employers Can Take to Help Employees Become Super Savers for Retirement (PDF)
"Drive employee participation in the plan and encourage contribution increases over time.... Encourage employees to use resources that help evaluate retirement readiness.... Offer target date solutions that automate investment decisions.... Use proactive communications that motivate employees to take appropriate action.... Use leadership and centers of influence to promote retirement savings." (Transamerica Retirement Solutions)

[Guidance Overview] EPCRS Overpayment Rules
"[Assume] a profit sharing plan permits in-service distributions to participants who have attained age 59-1/2 ... incorrectly permits a participant who is age 40 to receive an in-service distribution (non-hardship) of his or her account balance. The plan is not a 401(k) plan. The appropriate correction would be to: Inform the participant that the distribution was made in error; Request that the participant return the distribution, plus earnings, to the plan; and Inform the participant that the distribution is not eligible for rollover." (McKay Hochman)

IRS Final Report on 401(k) Compliance Check Questionnaire (PDF)
"The Final Report explains the sample selection and analysis methods and provides the response to each question by percentage of plans, plan sponsors, or participants. It also includes stratified data based on plan size and a section on Automatic Contribution Arrangements. The findings will be used to gain a better understanding of the health and compliance behaviors of 401(k) plans and to better allocate IRS resources to foster voluntary 401(k) plan compliance." (ING)

[Opinion] Employers Face Looming Litigation Threat from 401(k) Plan Loan Defaults
"The dramatic increase in pension leakage is a very bad omen for employers and fiduciaries. It signals that a broader cross section of American families has been adversely affected. This fact -- plus the increasing availability of optional death, disability and unemployment protection as a plan loan feature -- make fiduciary claims disproportionately more likely as time goes on. In fact, as a candidate for the next breach-of-fiduciary-duty cause du jour, pension leakage has a lot going for it." (Pensions & Investments)

The Language of Savings
"The relatively new field of behavioral economics which blends micro-economics and psychology is being used to help employees make better decisions about their 401(k) plans.... [T]he underlying process of helping employees save for retirement is about communication -- which is to say, the language we use.... Recent research... goes to that very concept when [it] added the linguistic dimension to how and why people make savings decisions." (The Retirement Plan Blog)

[Opinion] PBS Frontline's 'The Retirement Gamble' Got 401(k)s Right
"[T]he following are key things to consider whether you are an employer offering a 401(k) or an employee investing in one: [1] Costs Matter: Keep investment fees low as it can help keep more money invested in the markets versus in the hands of financial providers.... [2] Over the long-term, few professionally managed funds (known as actively-managed funds) outperform its peer market index.... [3] Choose a provider that takes on a fiduciary responsibility with your 401(k): This simply means use a provider that agrees in writing to act in your company's 401(k) plan's best interest." (Avik Roy, in Forbes)

Optimistic About Their Financial Futures, Gen Y Saving Earlier and Planning Now for Retirement
"In addition to saving more aggressively and earlier, Gen Y is also optimistic about their retirement savings potential. Today, Gen Y mass affluent believe they will save on average nearly $2.5 million for their retirement, compared to those working mass affluent ages 51-64 who anticipate saving just $260,000." (Bank of America / Merrill Lynch)

[Opinion] The Social Costs of Choice, Free Market Ideology and the Empirical Consequences of the 401(k) Plan Large Menu Defense
"Under the 'large menu defense'" courts have held that, even assuming a failure to exercise due care in selecting plan options, the employer can nonetheless claim the protection of the employee-control safe harbor under ERISA because, when the plan's menu is sufficiently large, the plan participant is deemed to have exercised legal control over the relevant investment decision.... Research has shown that large 401(k) menus result in lower participation rates, overly conservative allocations, inferior investment options and other adverse effects that, collectively, cost workers billions of dollars every year." (Mercer Bullard via SSRN)

Retirement Plans Offering Company Stock Presumed Prudent
"[T]he 7th Circuit judges ... [cited] a raft of case law opposing the idea that offering company stock as an investment option for plan participants is an ERISA violation, regardless of the stock's market return.... '[T]he theory also seems to be based often on the untenable premise that employers and plan fiduciaries have a fiduciary duty either to outsmart the stock market, which is groundless, or to use insider information for the benefit of employees, which would violate federal securities laws.'" [White v. Marshall & Ilsley, No. 11-2660 (7th Cir. Apr. 19, 2013)] (Thompson SmartHR Manager)

Low Interest Rates Could Ding Retirement Plans, EBRI Warns
"In a scenario where retirement income and wealth account for 100% of an investor's simulated retirement expenses ... around a quarter of Baby Boomers and Gen Xers who would have had sufficient retirement income under interest rates at historical averages would run out of money if the current low rates were taken as a permanent condition.... [O]nly 5% to 8% of the same Boomers and Xers would run out of money under perpetually low rates if income and wealth accounted for 80% or less of their retirement expenses[.]" (On Wall Street)

[Official Guidance] 'Pension Loans' or Settlement Income Streams: What You Need to Know Before Buying or Selling Them (PDF)
"After acquiring the rights to a future income stream (such as a retiree's pension payments), these pension purchasing or structured settlement companies ... may turn around and sell these income streams to retail investors ... [T]hese products go by various names -- pension loans, pension income programs, mirrored pensions, factored structured settlements or secondary-market annuities. [T]hey may be pitched to investors with words like 'guaranteed' and 'safe' -- and may tout robust returns ... [T]he advertised returns may sound enticing, but investors should be aware that these investments can be risky and complex." (Office of Investor Education and Advocacy, Securities and Exchange Commission)

For Advisors, Justifying Fees Means Justifying Value
"The strategy that self-directed platforms are using is clear: devalue the advisor and create the illusion that investors can achieve financial goals on their own without paying an advisor. In essence, these platforms claim that technology can do all the heavy-lifting. Because fee-conscious investors find such a prospect quite seductive, advisors must now act decisively to protect the economic health of their practices." (Financial Advisor)

Advisors Must Better Plan for Health Care Costs
"When addressing health care with clients, include the following subjects into the discussion ... [1] What is your cash flow to pay for serious illnesses? Do you want to tap into your retirement plan or access life insurance benefits? [2] Tax planning: Understand all co-pays and out of pocket expenses. Track these during serious illnesses for more effective tax planning. [3] Family deductibles: If you know your clients have hit greater than 10% of adjusted gross income for deductibles, make sure everyone in the family gets their health needs taken care. All of those expenses are deductible." (Financial Planning)

Considerations for Fiduciaries Choosing Target Date Funds As QDIAs in 401(k) Plans
"As many small plans do not have sufficient investable assets to have bargaining power when negotiating with mutual fund platform providers, the mutual fund choices available to these plans are often limited.... [I]t becomes more important for the fiduciaries to understand the specific characteristics and assumptions of the TDFs in their lineup. This need is magnified because many of the assumptions about TDFs in general do not always reflect reality." (Bloomberg Law)

Defined Contribution Plan Fees: One Plan Sponsor's Perspective (PDF)
"It did take some convincing for the Benefits and the Investment Committee to move away from a revenue-sharing approach and agree to charge participants' accounts directly for record keeping. ... Record keeping fees are not driven by how large an account balance you have; they are driven by the cost of maintaining your record -- making that cost fairly easy to quantify. Therefore, we decided to charge participants a quarterly account maintenance fee. It's not a large amount and it's fully transparent." (NEPC)

401(k) Index Observations, April 2013
"After an active start to the year, defined contribution plan participants' daily transfer volumes continue to decline since January -- to 0.024% of balances per day in April, according to the Aon Hewitt 401(k) Index. The trailing 12-month average remains at 0.025%, while the 2013 average through April is 0.030%. There were three days in April with transfer activity above normal, which remains the same as March." (Aon Hewitt)

Don't Let 'Dead' 401(k)s Skew Your Retirement Preparation
"Americans typically work at seven different companies during their career, and most of them have something to show for each stop along the way.... New research on the contents of Americans' IRAs and 401(k)s suggests that these orphaned retirement plans often languish untouched since the last automatic-deposit contribution, like dusty museums of our financial needs at the time, and out of whack with our current age and attitude toward investing." (CNBC)

[Opinion] Text of IRI Statement on DOL's Income Illustrations Notice
"We strongly support educational initiatives that enhance Americans' understanding of their retirement savings options and help them to develop plans for their future financial security. Providing such income illustrations will help them understand how much income can be generated from savings and adjust their savings and investment strategies accordingly so they can attain financial security during their retirement years." (Insured Retirement Institute (IRI))

[Guidance Overview] Preparing Participant-Directed Retirement Plans for 2013 Disclosures
"Due to the threat of a prohibited transaction, service providers are motivated to close any disclosure gaps identified by the plan. Still, potential headaches exist.... [The DOL] failed to create a standard disclosure format for the 408(b)(2) Disclosure information. Furthermore, recordkeepers are not required to synthesize information provided by unaffiliated investment issuers. Accordingly, the administrator of a participant-directed plan with a large investment menu may need to assimilate a slew of different disclosure formats." (Pillsbury Winthrop Shaw Pittman LLP)

HSA Assets Continue to Surge
"On average, employees with both [401(k) and HSA] plans tend to save more of their annual salaries (8.5% average annual deferral rate) in their DC accounts than employees with just a DC plan (8.1%)." (Financial Planning)

[Guidance Overview] Waiver of 60-Day Rollover Requirement Granted to Taxpayer Who Was Not Provided Written Notice of Rollover Requirements
"The IRS found that the information supplied by the taxpayer was consistent with his assertion that his inability to complete a timely rollover was due to the plan's failure to provide proper written notice. This included documentation showing that the remaining amount was still in his money market account and had not been used for any other purpose. Therefore, the IRS waived the 60-day rollover requirement for the remaining amount and granted the taxpayer 60 days from the issuance of the letter ruling to contribute that amount to an IRA." (Wolters Kluwer Law & Business)

[Opinion] Despite Risks, Retirement Savers Plow Into Target-Date Funds
"A torrent of money flowing into target-date funds suggests many retirement investors may be ignoring the risks of this key category. These funds now represent the second-most-popular allocation after U.S. large-stock funds within defined-contribution plans like 401(k) accounts ... Some target-date funds are much more volatile than others, depending upon their allocation. Their internal risks are poorly understood, fund expenses are high and they yield varying results." (Reuters)

Borzi: Exemptions from Conflict of Interest Will Be Part of New Fiduciary Proposal
"During the last 60 days, most of the concern expressed about exemptions has focused on IRAs, said Rick Meigs, president of 401khelpcenter.com LLC. 'There are not a lot of concerns about qualified retirement plans.' Meigs said the chief concern focuses on broker-dealers and their ability to collect commissions for selling securities to their clients. Once they are required to meet a fiduciary standard instead of the traditional suitability standard, 'they would be driven out of business without an exemption that allows them to collect commissions.'" (RIABiz)

[Opinion] Why Frontline's 'The Retirement Gamble' Is Important
"[1] It highlights a critical problem that affects 90 million Americans who invest in the $13 trillion mutual fund industry. [2] It highlights three problems which are widespread, but not often publicly discussed: the impact of high mutual fund and 401(k) fees; the conflicts-of-interest that prevail in the financial industry sales and advice industry; and wealth destruction. [3] It presents the problem facing millions of Americans who face a financially insecure retirement future [4] It addresses how millions of unprepared investors are now engaged in a do-it-yourself retirement planning process. [5] It shows how employers have transferred all retirement planning and investment risks, and most of the costs, to their employees." (MutualFundReform.com)

[Opinion] Bold 401(k) Overhaul Proposal from Knight Kiplinger
"There's no longer any debate over whether working Americans are accumulating enough savings and employer contributions, supplemented by Social Security, to live comfortably in retirement. Indisputably, they are not, and the matter is getting critical.... Fortunately, scrapping the present system isn't necessary. Reform would be enough -- as long as it's a bold overhaul, not just tinkering around the edges." (Kiplinger)

Retirement Readiness Worries Persist Despite Record 401(k) Balances
"Only 12% of plan sponsors feel that most of their employees are or will be financially prepared for retirement, down from 15% who felt so a year ago. The vast majority of sponsors (70%) feel that only some of their employees will be prepared. The lack of confidence comes despite increased account balances averaging [a record] $85,000[.]" (Financial Planning)

Are 401(k) Matches an Endangered Species?
"More companies are delaying employee eligibility for matching contributions until employees have been with the company or participated in the 401(k) plan for a certain period of time. The percentage of employers offering immediate eligibility declined from two-thirds in 2011 to 56% in 2012 ... Among the 44% of plan sponsors delaying matching contribution eligibility, 12% require a waiting period of less than a year, 23% use a one-year waiting period and 9% use some other length of time." (Business Finance)

[Official Guidance] Link to DOL's Online Lifetime Income Calculator
"Using assumptions described in the [proposed regulations], this calculator illustrates an annuitization approach to estimate the monthly lifetime income streams based on both the participant's current account balance and on the projected value of the account balance at retirement. For both balances, the calculator develops two level lifetime payments: one for the life of the participant (with no benefits to any survivors) and the second for the joint lives of the participant and the spouse with a fifty percent survivor's benefit for the spouse's lifetime. This calculator uses a simplified computation (e.g., annual contributions, mid-year retirement). Depending on the comments received in response to the ANPRM, the next version of the calculator may provide a more precise computation (e.g., monthly contributions, retirement in a specified month)." (Employee Benefits Security Administration, U.S. Department of Labor)

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