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When Good Loans Go Bad Bookmark

The economic environment of the last few years created financial challenges for individuals and businesses alike. Even though the worst of the recession appears to be behind us now, some of those financial challenges have had a ripple effect that continues to show itself. One area where that is especially true relates to the loans participants took from their 401(k) plans. Economic pressures certainly brought about an increase in loans, but it also caused some participants with loans to have trouble repaying them.

Don't let Missing Participants and Small Balances become a Big Problem Bookmark

At some point, almost every company that sponsors a retirement plan will experience the “fun” of tracking down a missing participant in order to pay a benefit. Although difficult to avoid completely, there are steps employers can implement as part of normal operations that can greatly minimize the headache. One of the most effective steps is to distribute benefits to former employees as soon as possible after termination of employment, before they have an opportunity to become missing.

New Roth Opportunity for 401(k) Plans per Fiscal Cliff Deal Bookmark

 
The recently passed fiscal cliff deal (officially known as the American Taxpayer Relief Act of 2012) includes a new rule that allows more people to convert money in their traditional 401(k) plan to a Roth 401(k) account. Doing so is called an "in-plan Roth rollover."  Until now, only individuals eligible for a distribution (over the age of 59½ or terminated from employment, etc.) could elect a Roth rollover. The new provision expands eligibility to everyone. The Roth plan feature gives participants the option of paying taxes now on their retirement savings instead of when they withdraw money later from their accounts.

Fiduciary Fact or Fiction Bookmark

The rules that govern the behavior of retirement plan fiduciaries are quite complex. Any time we are required to deal with complicated subject matter, things can get confusing, potentially leading to decisions based on a misunderstanding.

Increasing 401(k) Plan Participation Bookmark

Cash or deferred retirement plans, more commonly referred to as 401(k) plans, have become the backbone of the private pension system in America. They long ago replaced employer-sponsored pension plans as the most common vehicle for retirement savings.

Fiduciary Liability for Participant-Directed Plans Bookmark

It seems that every month there are new stories in the financial press about participants suing their employers for mismanagement of the company 401(k) plan. While most of these suits have been directed at larger companies, the increasing frequency has employers of all sizes looking for ways to minimize their liability. One way to do that is to comply with a set of "safe-harbor" rules found in section 404(c) of ERISA.

An ICI Review of the Economics of Providing Retirement Plans Bookmark

An ICI Review of the Economics of Providing Retirement Plans
While the Department of Labor has delayed the implementation of new fee disclosure rules about fees charged to plans and participants, it may be useful to refer to the recent report "The Economics of Providing 401(k) Plans: Services, Fees, and Expenses, 2009" published by the Investment Company Institute (ICI), a national industry group representing companies offering mutual funds, ETFs, and unit investment trusts (UITs). Members of ICI manage assets of $12.74 trillion and serve over 90 million shareholders. As the title suggests, this report offers research insights into the costs associated with 401(k) plans. You may find the information also relevant to similar plan arrangements.