Headlines about "IRAs"

Gathered from the web by the editors at BenefitsLink.com.
Trends in Health Coverage for Part-Time Workers
"The percentage of workers employed part-time has been rising since 2007, increasing from 16.7 percent to 22.2 percent in 2011. Part-time workers have experienced a much larger decline in coverage than full-time workers. Between 2007 and 2011, full-time workers experienced a 2.8 percent reduction in the likelihood of having coverage from their own jobs, while part-time workers experienced a 15.7 percent decline." (EBRI)

Seventh Circuit Rejects Inherited IRA Protection in Bankruptcy
"The bankruptcy code protects 'retirement funds to the extent that those funds are in a fund or account that is exempt from taxation under Sections 401, 403, 408, 408A, 414, 457 or 501(a) of the Internal Revenue Code.... What the court questioned, and answered in the negative, was whether her account was still a 'retirement fund' once Heidi inherited it." (WealthManagement.com)

[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)

Beware of Prohibited Transactions in Self-Directed IRA Investment Opportunities
"A taxpayer who has a self-directed IRA and who guarantees a loan entered into by a company the shares of which are owned by the IRA runs afoul of the tax Code's prohibited transaction rules, causing the account to fail to qualify as an IRA, according to the Tax Court[.]" [Peek v. Comr., 140 T.C. No. 12 (2013)] (Bloomberg BNA)

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)

A Nervy Approach to Retirement Saving: Self-Directed IRAs Using Exotic Investments
"[W]hile many Americans rely on their savings or 401(k) plans to see them through their golden years, high-end folks are falling in love with another option -- something called the self-directed individual retirement account. The idea is simple enough: Invest in anything you want, but put the investment into a special IRA, so it isn't taxed until retirement ... [But] some experts are expressing serious reservations about the skyrocketing growth of self-directed IRAs ... because many parts of this business aren't regulated." (The Wall Street Journal)

Be Careful if ROBS is Your Business Financing Strategy
"A recent tax court opinion highlights the importance of meeting all legal requirements with these arrangements.... The business owed money to the seller of the assets used in the business and the individual IRA owners had personally guaranteed that debt. The individuals later converted their IRAs from traditional IRAs to Roth IRAs. The business was sold a few years later and the individuals assumed that the gain on the sale would be tax free when received by the Roth IRAs and tax free when distributed to the individuals who owned the Roth IRAs.... The IRS [claimed] that the personal guarantees by the IRA owners of the note to the seller constituted an indirect loan to the IRA itself.... The tax court noted that the owners did not discuss the personal guarantees with the advisor and in any case the advisor was the promoter of the arrangement so was not an independent advisor upon whose advice the owners could rely to avoid penalties." [Peek v. IRS and Fleck v. IRS, Nos. 5951-11, 6481-11 (U.S.T.C. May 9, 2013)] (Leonard, Street and Deinard)

IRA Withdrawals: How Much, When, and Other Saving Behavior
"The bottom-income quartile of [households between ages 61 and 70] had a very high percentage (48 percent) of households that made an IRA withdrawal, and their average annual percentage of account balance withdrawn (17.4 percent) was higher than the rest of the income distribution. Among households between ages 71 and 80 that are subject to RMDs, those that have a withdrawal exceeding the RMD amount had average withdrawal amounts that were more than double the amounts taken by those that withdrew only the RMD amount." (EBRI)

[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)

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)

[Official Guidance] Text of IRS Private Letter Ruling Extending 60-Day Rollover Period Because of Bank Error (PDF)
"Taxpayer A maintained IRA B, a [CD], with Bank C. Upon maturity of the CD ... Taxpayer A initiated a transfer of Amount 1 from IRA B to an account at Bank D. Instead of depositing Amount 1 into a rollover IRA account as Taxpayer A intended, Bank D deposited Amount 1 in Account E, a non-IRA CD.... When the mistake was discovered ... Bank D transferred Amount 3 to ... and IRA CD. Taxpayer A ... believed that Account E was and IRA and that Bank D made a mistake in depositing Amount 1 into a non-IRA CD." [PLR 201319034, dated Feb. 14, 2013, published May 9, 2013] (Internal Revenue Service)

[Opinion] President Proposes IRA Changes
"The proposal amounts to killing a mosquito with a sledgehammer, based on the following three considerations: [1] This proposal would require an entirely new information-gathering and enforcement mechanism.... There are probably thousands of [people] who have accumulated 'too much,' but that's a drop in the bucket compared to the millions and millions who have 'too little.' So this newly created giant dragnet will snare just a few people.... if their IRAs are already that large, they don't want to put more in anyway!" (Natalie Choate for Morningstar Advisor)

Bankruptcy Court rules Grant of Security Interest in IRA to Broker/Dealer Not a Prohibited Transaction
"A grant of a security interest in the assets of an IRA by a debtor to the broker/dealer acting as IRA custodian was not a prohibited transaction ... because it secured no actual lending obligation and by its terms was not applicable in the event of any conflict with ERISA or the Code, according to a U.S. Bankruptcy Court in Tennessee. Thus, the nearly $40,000 held in the debtor's traditional and Roth IRAs remained exempt from her bankruptcy estate." (Wolters Kluwer Law & Business)

[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] Proposed Cap on IRAs, 401(k)s Is Hardly Onerous
"Obama isn't keeping people from saving as much money as they can or want. The question is how much the rest of us should have to chip in. Obama is suggesting that at some point retirement accounts, invented to encourage working people to set aside enough for their sunset years, no longer need a helping hand from taxpayers" (Arizona Daily Star)

California Dreaming: The California Secure Choice Retirement Savings Trust Act
"Contrary to the drafters' intent, the savings accounts authorized under the [California] Act do not qualify as individual retirement accounts under the Code. Hence, employees participating in savings arrangements established under the Act will not receive the income tax benefits associated with individual retirement accounts.... [T]he Act should survive ERISA preemption if [it] is amended to have true individual retirement accounts.... President Obama has recently proposed a federal mandate under which employers with more than ten employees would be required to maintain either retirement plans or IRA coverage.... The Golden State�s Act will play an important role in that debate." (Prof. Edward A. Zelinsky, via SSRN)

Rebound in Retirement Plan Balances and Contributions Despite the Economic Downturn
"The average contribution to [SEP-IRA, Self-Employed 401(k) or SIMPLE-IRA savings plan] accounts increased across the board since 2007, with those using Self-Employed 401(k)s showing the largest increase of 21 percent to $20,950. Employer contributions to SEP-IRAs increased 14 percent from 2007, reaching $13,250 in at the end of 2012, while average employer/employee contributions to SIMPLE-IRAs increased the least, rising 4 percent to $6,000." (Fidelity Investments, via BusinessWire)

[Guidance Overview] IRA Contribution Deadline Not Extended for Suffolk County Residents and Others Affected by Boston Marathon Explosions
"According to the IRS drafter of Notice 2013-30, the relief does not at this time apply to making IRA or other tax-advantaged savings contributions.... Similarly, the relief does not currently apply to the completion of other commonly extended time-sensitive tax-related acts, such as rollovers or recharacterizations, filing Form 5500 for a retirement plan, making plan loan payments, etc.... The relief for filing individual income tax returns and making tax payments automatically applies to all individuals who live in Suffolk County, MA, including the city of Boston, victims of the explosions, their families, first responders, others impacted by the tragedy who live outside of Suffolk County, and taxpayers whose tax return preparers were adversely affected." (Ascensus)

Federal Circuits Disagree on Beneficiary Excluding IRA From Bankruptcy Estate
"[T]he Seventh Circuit [concluded] that the inherited IRA assets would not be exempted from the bankruptcy estate. Its opinion noted that the exemption under IRC Sec. 522(b)(3)(C) is for retirement funds, that an inherited IRA of a nonspouse beneficiary is subject to distribution rules different from those that applied to the taxpayer who established the IRA to save for retirement, and therefore such assets should not be considered retirement funds." (Ascensus)

[Official Guidance] IRS Retirement Plan Fix-It Guides
Guides are provided for 401(k) plans, 403(b) plans, SARSEPs, SEPs and SIMPLE IRAs. Excerpt: "Each guide provides: an overview of the rules for each plan type, an overview of the Employee Plans Compliance Resolution System, the most frequent errors we find in each plan type and tips on how to find, fix and avoid these mistakes." (Internal Revenue Service)

Eliminating Friction and Leaks in America's Defined Contribution Retirement Plan System (PDF)
"A utility that facilitates the movement of participant savings from a DC plan to other retirement savings vehicles, particularly other 401(k) plans, is a proven, 'in plan' solution to the system's friction and leakage challenges.... [and is] a utility of this nature that involves programs supporting participant decision-making at job change results in better outcomes for all parties. Implemented system-wide by plan sponsors and recordkeepers, such a utility would eliminate systemic breakdowns[.]" (Boston Research Group)

Study of Retirement Plan Participation and Asset Allocation, 2010 (PDF)
"Those who own an individual retirement account (IRA) are more likely to be invested all in stocks if they also have a 401(k)-type of plan. Those who participate in both a defined benefit (DB) pension plan and a 401(k)-type plan were less likely to allocate the latter to all interest-earning assets, such as bonds, meaning they also will invest more in stocks. As family-head IRA owners' ages increased, the likelihood that they were invested all in stocks decreased." (EBRI)

[Opinion] Analysis of Proposed Budget Limit on Tax-Advantaged Retirement Savings (PDF)
"[B]ecause it is based on actuarial assumptions tied to [DB] plan benefit limits, the [maximum permitted allocation (MPA)] will, in reality, likely be far lower than $3 million -- both if interest rates return to historic averages and (even if interest rates remain at historic lows) for younger workers.... [T]he fact that the MPA is as high as $3 million in today's interest rate environment is an historical aberration." (Davis & Harman LLP)

[Opinion] To Boost Retirement Savings, Stop Giving Tax Breaks on 401(k)s
"How about this idea instead: Repeal the tax break associated with 401(k)s, IRAs, and similar tax-sheltered plans. Substitute automatic enrollment for the subsidies. Eliminating the subsidy would boost the government's budget by some $100 billion a year.... Recent economic research strongly supports the policy shift. The main beneficiary of the different approach would be average workers." (Chris Farrell, in Bloomberg BusinessWeek)

IRAs Remain Linchpin of U.S. Retirement Savings, But Savvy Account Management Often Lacking
"At the end of last year, IRAs had $5.4 trillion in assets compared with $5.1 trillion in 401(k)s and other defined contribution plans. Some 40 percent of U.S. households own at least one type of IRA, which offer tax incentives to save for retirement. Many of these IRA holders are left to their own devices to manage their accounts." (Daily Journal)

Is Your Smartphone Hurting Your 401(k)?
"Northwestern Mutual released a survey this week that linked the 'immediacy' of communication technology with the difficulty that some people have with long-term planning (like saving for retirement, for example). About 31% of all respondents, and 30% of baby boomers, said that they felt distracted by the constant availability of email, messaging and other data through mobile devices. And 74% of boomers said that the faster pace of society made it harder for people in general to concentrate on long-term goals." (MarketWatch)

How To Invest $3 Per Day For Retirement
"Most recent college graduates have not put a lot of thought into retirement. This is usually because they believe it to be too far away, or that they don't have any expendable income to invest. What they do not realize is how severely they are hampering their odds of an enjoyable retirement. It is crucial to start investing as soon as possible, even without a substantial initial investment." (Seeking Alpha)

Retirement Saving Tips for Couples
"Your income-earning structure and AGI greatly affect your ability to take tax deductions for IRA contributions, for example, while access to employer-sponsored retirement plans can influence how much, if any, of your savings you may want to direct to IRAs." (U.S.News and World Report)

When Rolling Over, Make Sure You Don't Get Squished by Costs
"Investing pros agree that cashing out retirement savings is hardly ever wise. But there are benefits to both of the other alternatives: IRAs typically offer a wider range of investment options, while 401(k) plans offer lower costs, particularly if they are sponsored by a big employer. Those cost savings can be significant in the long run." (The Wall Street Journal)

Major Changes Proposed for Employer-Provided Retirement Benefits (PDF)
"The proposal calls for instituting an overall cap on the amount individuals may accrue under all types of retirement plans .... Also of interest to employee benefit plan sponsors are provisions of the budget proposal that call for changes to PBGC premiums and the elimination of the exclusion for dividends paid on stock held by ESOPs. Other retirement-related proposals would affect IRAs, including a proposal for mandatory workplace IRAs for employers that do not sponsor another retirement plan." (PricewaterhouseCoopers)

401(k) Rollover Study Triggers Call for Action to Protect Plan Participants
"One of the biggest steps is updating a 37-year-old fiduciary standard that was developed in a very different marketplace, said Phyllis C. Borzi, assistant secretary of labor for [EBSA]. 'We believe our work regarding the definition of fiduciary is key to addressing conflicted investment advice and related problems your report identifies,' Ms. Borzi said in a letter to the GAO." (Pensions & Investments)

Budget Proposals for Savings: A Deterrent or Not?
"Scott Macey, president and CEO of [ERIC], says the budget proposal does not consider unintended consequences.... 'Policymakers should keep in mind that most monies saved in retirement accounts are tax deferrals, and will eventually be subject to taxation. There are also complex rules which limit the amount that highly compensated workers can contribute to retirement plans, as well as detailed rules that assure comparable treatment of all participants in plans. This proposal appears to be a way to pay for other Administration spending priorities, with no real sound policy justification.' (PLANADVISER.com)

Will the Federal Government Shrink Your IRA?
"[The proposed retirement savings cap] is based on the amount needed to generate an annuity payment of $205,000 a year for a 62-year-old worker in a traditional, defined-benefit pension plan. If interest rates rise, annuities could get cheaper, meaning the cap could shrink. Going back to late 2006, for example, annuities paying that amount cost as little as $2.2 million for someone age 65[.]" (The Wall Street Journal)

[Opinion] Comments to SEC on Standards of Conduct and Other Obligations of Broker-Dealers and Investment Advisers (PDF)
"Because it is not possible to determine the effects of possible SEC reforms without taking into account the interaction with possible DOL reforms significantly affecting the same conduct and the same IRA market, the responses to the SEC Request will virtually all be incorrect as soon as the DOL acts, thus rendering the SEC's administrative record unhelpful.... [T]here is complete overlap between the two projects with respect to investment services provided to IRA owners. Since IRA assets were approximately $4.9 trillion as of the end of 2011, the degree of overlap between the two projects is enormous." (Davis & Harman LLP)

The Impact of a Retirement Savings Account Cap (Updated by EBRI) (PDF)
"With the release of the full budget details ... it is clear that the proposed cap would apply not only to individual accounts (such as IRAs and 401(k)s) but to defined benefit pension accruals as well.... Since the earlier EBRI analysis did not contemplate the inclusion of defined benefit accruals, it seems likely that the number of individuals affected will change." (EBRI)

[Opinion] Now He's After Your 401(k)
"How many times have you read financial-advice stories lecturing you to max-out on your IRA, save as much as you can in your 401(k), and even pay taxes now to change your regular IRA into a Roth IRA that will be tax-free until you die? Well, be careful how much you save. That's the message in President Obama's budget for fiscal 2014 ... Thus do our political betters now feel free to define for everyone what is 'needed' for a 'reasonable' retirement. Not to be impertinent, but does this White House definition include being able to afford summers at age 70 at Martha's Vineyard near the Obamas?" (The Wall Street Journal)

Budget Proposal Would Require Small Employers to Offer IRAs
"The fiscal-2014 federal budget plan ... includes a proposal to require that small employers -- defined as those with less than $20 million in annual payroll -- automatically enroll employees in an IRA, from which they could opt out. The measure would apply to companies that offer 401(k) programs and employees who don't participate in those plans. The purpose is to stimulate retirement savings through the automatic-enrollment feature." (CFO.com)

Five Years Is the New Permanent Under Obama's Proposed Estate Tax Reversal
"Obama's 2014 budget proposal ... would increase estate taxes and limit techniques used by the wealthy to transfer assets through trusts. The plan also caps at $3.4 million the amount individuals can amass in tax-preferred individual retirement accounts and requires those who inherit IRAs to take taxable distributions within five years instead of over their lifespan.... The budget plan calls for returning the estate tax in 2018 to 2009 levels, which is a reversal from the so-called fiscal-cliff budget deal Obama signed in January. That law made the estate-tax terms permanent and indexed them for inflation." (Investment News; free registration required)

How Obama's Budget Impacts Retirement Savers
"Chained CPI.... New retirement account limits.... Automatic IRAs.... Close the Medicare Part D donut hole sooner.... Higher premiums for high income Medicare beneficiaries.... New Medicare co-pays." (U.S.News and World Report)

[Opinion] Obama Budget Slams Small Business Retirement Plans
"Without any further incentive to keep the plan, many small business owners will now either shut down the plan or reduce contributions for workers. This means that small business employees will now lose out not only on the opportunity to save at work, but also on contributions the owner would have made on the employee's behalf to pass nondiscrimination rules.... Even President Obama's own pension, based on reasonable actuarial assumptions, is worth at least $5 million dollars. That's 40% more than the small business retirement savings cap permitted under the President's budget." (American Society of Pension Professionals & Actuaries)

The Impact of a Retirement Savings Account Cap (PDF)
"The retirement plan account savings cap in the White House budget proposal is reportedly tied, not to a hard dollar limit, but rather one that would finance, in 2013, an annuity of $205,000 per year in retirement ... The corresponding account balance threshold would fluctuate over time, based on discount rates -- and that means that the number of accounts that could exceed the threshold in the future could be significant. For example, based on a time series of annuity purchase prices for males age 65 going back to late 2006, the actuarial equivalent of the $205,000 threshold could be as low as $2.2 million. At that level, nearly three percent (2.99 percent) of 401(k) accounts are projected to be impacted. Of course, a higher interest rate environment could result in an even lower cap threshold." (EBRI)

[Opinion] Mark Iwry's Recommends: 'Create a Stronger, More Powerful 401(k)'
"The President has proposed a major expansion of retirement savings coverage.... '[A]utomatic IRAs' would extend the power of automatic enrollment to those employees who don't have access to a 401(k), by letting them use their employer's payroll system as a conduit to channel their savings through automatic enrollment into [IRAs]." (Mark Iwry, Senior Adviser to the Treasury Secretary, via Bloomberg)

[Opinion] Obama Budget Calls for Limit on Retirement Accounts
"[T]he Obama budget document ... will include a new proposal to limit the total amount an individual can put aside in tax deferred retirement savings like 401Ks and IRAs to an amount sufficient to generate an annual income in the golden years of less than $250,000 per year. Why do it? According to a senior administration official ... wealthy taxpayers can currently 'accumulate many millions of dollars in these accounts, substantially more than is needed to fund reasonable levels of retirement saving.' Who says?" (U.S.News & World Report)

IRA Contributions Continue To Grow
"Contributions increased across the board for all age groups but rose more for older investors -- up to an average of 6 percent for those in their 60s -- from $4,674 in 2009 to $4,960 in 2012. The lowest contributions were made by those in their 20s, reaching $3,235 in 2012 from $3,154 in 2009." (Financial Advisor)

[Opinion] Obama Wants to Limit Retirement Accounts
"Complaining that 'some wealthy individuals are able to accumulate many millions of dollars in these accounts,' the Obama administration announced a plan to cap the total sum of any individual's retirement accounts at $3 million. Stashing cash beyond that point, the administration insists, builds sums 'substantially more than is needed to fund reasonable levels of retirement saving.' The administration's argument seems to be based on the use of the word 'million,' implying that only nasty rich people would want to accumulate such a hoard. But is that true? How much is enough for 'reasonable levels of retirement saving.'" (Reason.com)

Retirement Security Data Brief: Retirement Plan Assets After the Market Crash and Great Recession (PDF)
"When the stock market eventually bottomed out in the first quarter of 2009, retirement accounts had lost about $2.7 trillion, 31 percent of their peak 2007 value. Despite the ongoing turbulence in the stock market, retirement account balances have increased since 2009 -- surpassing $10 trillion for the first time ever in the first quarter of 2013 ... The impact of the stock market crash was even more dramatic for defined benefit pensions -- whose assets declined 37 percent from their peak 2007 value. In contrast to retirement accounts, defined benefit pensions have not fully recovered from the crash and Great Recession." (Urban Institute)

Seven Obstacles to Rolling an Old 401(k) into a New One
"Here's why it's difficult to keep your money in the 401(k) system: ... Plan administrators are not always required to allow former employees to leave funds in the 401(k) plan... 401(k) rollover waiting periods.... Complex 401(k) verifications.... Lengthy paperwork requirements.... Excessive processing time.... Potential to trigger fees and taxes.... Pervasive marketing of IRAs." (U.S.News and World Report)

[Opinion] Cashing Out or Rolling Retirement Balances into Other Vehicles Can Place Employees' Retirement Savings at Increased Risk
"The GAO's report brings to light very real problems with the current rollover system ... Keeping retirement dollars in the employer-provided system is paramount to helping workers ensure that they are adequately prepared for retirement, and we have long been concerned about the difficult process workers face when trying to roll one employer 401(k) plan into another." (Aon Hewitt)

Retirement Plan Providers Misleading Savers About IRA Rollovers, Government Report Concludes
"Undercover investigators hired by the GAO called 30 of the largest 401(k) providers to study how the firms market products to 401(k) account holders. Eleven firms encouraged a rollover to an IRA, while 12 raised doubts about the caller's ability to roll over to a new employer's plan and 16 touted IRAs for having more investment options. In addition, 7 incorrectly said that there were no fees to open or maintain an IRA, according to the report. And 5 out of 10 large firms advertised free IRAs on their websites, while scattering fee information among hard-to-find documents." (CNNMoney.com)

[Opinion] GAO Uncovers Troubling Practices by Financial Firms That Drain Americans' 401(k) Retirement Savings
"'This report is a wake-up call that we need stronger consumer protections in the growing 401(k) rollover market. When Americans call up their 401(k) plan provider looking for advice, they shouldn't be inundated with marketing materials masquerading as objective, investor education -- but that is exactly what's happening to many individuals,' said Senate Health, Education, Labor, and Pensions Committee Chairman Harkin[.]" (U.S. Senate Committee on Health, Education, Labor & Pensions)

Relationships Are Key to Success in Retaining Assets of Rollover-Eligible Participants
"Each year, more than $350 billion becomes available for rollovers as retirees and pre-retiree workers leave their employers. The challenge for plan service providers is to find ways for their company to keep plan participants' money under their management.... Several factors influence participants who stay with their plan: [1] Proactive contact ... [2] Personalized investment guidance, and discussions of post-retirement needs in the years leading up to retirement. [3] Financial advisors influence decisions to switch companies; but individuals whose decisions were influenced by provider-affiliated professionals were three times as likely as those influenced by non-affiliated professionals to stay with the plan provider." (LIMRA)

GAO Report Says Workers Hurt When Rolling Over 401(k) Plans to IRAs
"Rollovers into IRAs can be lucrative for financial companies that run 401(k)s. As part of a study, Government Accountability Office personnel called 30 of the largest 401(k) service providers, posing as plan participants. They often received sales pitches for IRAs." (Investment News; free registration required)

Individuals Miss Out on Savings and Tax Benefits of IRAs
"Despite low participation and awareness of how IRAs work, the study shows people are open to the potential benefits that come with an IRA, with 57 percent of those who did not have an IRA saying they would consider one. This includes almost three-quarters of Gen X (ages 35-44), two-thirds of Gen Y (ages 18-34) and half of late baby boomer (ages 45-54) respondents who currently don't have an IRA." (TIAA-CREF)

Making a 'Backdoor' Roth IRA Contribution
"[If] a taxpayer rolls over a distribution from his or her IRA to an eligible retirement plan ... and the amount rolled over equals only the sum of deductible contributions and earnings on all contributions ... but not any nondeductible contributions, the entire amount rolled over will not be taxed at the time of rollover.... The taxpayer's remaining IRA balance after the rollover should equal its basis, so the taxpayer could immediately withdraw that remaining balance tax free or convert it to a Roth IRA tax free." (Journal of Accountancy)

[Guidance Overview] Roth Retirement Savings Are More Accessible Than Ever (PDF)
"One of the most important considerations is that of designing a communication program to explain the benefits of Roth contributions and how they differ from traditional contributions to participants. Such a program would ideally incorporate information about the conversion opportunity so that participants have a full understanding of the options available to them, as well as an awareness of the tax ramifications of converting assets to a Roth account." (Arnerich Massena)

[Guidance Overview] 'Blue Book' Clarifies Distribution Restrictions Following In-Service Roth Conversions
"The 'Blue Book' for [the American Taxpayer Relief Act of 2012], as released by [JCT] in February 2013, clarifies the provisions authorizing in-service rollover distributions of 401(k) funds to Roth 401(k) plans. Significantly, the Blue Book explains that amounts subject to a distribution restriction in a 401(k), 403(b), or 457(b) plan before an in-plan transfer remain subject to the applicable distribution restrictions after the transfer." (Wolters Kluwer Law & Business)

[Official Guidance] IRS 'Retirement News for Employers' (March 18, 2013 Edition)
Topics include 403(b) correction procedures, a discussion with the EP examination director, self-correction of plan errors, and 2012 reporting reminders for Roth IRA rollovers and conversions. (Internal Revenue Service)

[Opinion] Ban Actively Managed Funds in 401(k)s, IRAs
"Actively managed, high-fee funds should be banned from any type of account that receives favorable treatment under the Internal Revenue Code to encourage retirement saving. Many studies have shown that actively managed funds underperform index funds, even before accounting for the higher fees charged by the former ... But broker-sold mutual funds perform worst of all." (Alicia Munnell via MarketWatch)

[Guidance Overview] IRS PLR Addresses Account-Opening Bonuses in IRAs and 529 Plans (PDF)
"For IRAs, the Service conceptualized the bonus as interest or other earnings (e.g., a dividend) paid on the IRA, and ruled that the firm had no reporting obligation either under Internal Revenue Code section 6041 pursuant to a statutory exception for such payments (section 6049(b)(2) and (4)) or 'any other information reporting requirements of the Code.' Although not explicitly addressed, the implication of this ruling is that the bonus (i) is not taxable to the IRA owner until distributed and (ii) does not count against the IRA annual contribution limit." (Sutherland)

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