Fall 2010
2010 Retirement Confidence Survey: An Overview
The percentage of workers who are “very confident” about having enough financial resources for a comfortable retirement has stabilized at 16 percent, according to the 2010 Retirement Confidence Survey conducted by the Employee Benefit Research Institute.
About 46 percent are "not too confident" or "not at all confident" about having enough money in retirement.
continueConsider Some "Brain" Power to Help Boost Employee Retirement Confidence
Looking to help boost Retirement Confidence with your employees? Our 401(k) on the Brain and Retirement on the Brain (for 403(b) and 457 plans) educational series can help your employees feel more comfortable about their financial future. Using everyday language, the seven educational modules address a range of retirement, investing and financial planning topics. Each education module includes a brochure and some include additional companion materials. Contact your Relationship Manager at The Standard for more information.
A New Rule of Thumb?
In recent years, experts have recommended that most people plan to have available 70 to 80 percent of their pre-retirement pay in order to maintain their standard of living in retirement. Recent research by Hewitt Associates LLC suggests a new perspective on this target.
Hewitt looked at projected retirement levels for more than two million employees who were participating in their employer’s saving plan and could work a full career (assumed to be 30 years) at that employer.
continueInvestment Directives for Re-Hired, Re-Enrolled Employees
Do you have re-hired employees who have re-enrolled in your retirement plan? In the past these employees may have had the option of using their former investment directives when re-enrolling, even though they had previously taken their money out of the plan.
Effective in September 2010 for all plans, historic investment directives will be automatically removed and replaced with the plan level default when a participant terminates and takes a full distribution. These employees will need to select their investment preferences in the event they are hired back and enroll in the plan. This change will give re-hired participants a chance to take a fresh look at their investment choices and ensure they align with market performance, their investment style and retirement horizon.
If you have questions about this information, please contact your Account Manager.
Plan Sponsors Ask...
Q: Is the trend toward immediate eligibility to participate in 401(k) plans continuing?
A: Yes. In a December 2009 eligibility survey, the Profit Sharing/401(k) Council of America’s (PSCA) found that 57 percent of all surveyed plans (and 71 percent of plans with 1,000 or more employees) allow immediate participation in their 401(k) plans. In 1998, only 24 percent of plans permitted immediate eligibility and in 2005, 49 percent did so.
continueWeb Resources for Plan Sponsors
Internal Revenue Service, Employee Plans
www.irs.gov/ep
Department of Labor, Employee Benefits Security Administration
www.dol.gov/ebsa
401(k) Help Center
www.401khelpcenter.com
Benefitslink
www.benefitslink.com
Plan Sponsor
www.plansponsor.com
Profit Sharing/401(k) Council of America
www.psca.org
Employee Benefits Institute of America
www.ebia.com
Employee Benefit Research Institute
www.ebri.org
The Mainspring in Motion quarterly newsletter for retirement plan sponsors features market commentary, regulatory and legislative updates, product enhancement announcements and articles on retirement readiness, savings, participant behavior and improving plan effectiveness.
Plan Sponsor's Quarterly Calendar
Consult your plan’s counsel or tax advisor regarding these and other items that may apply to your plan.
October
Audit third quarter payroll and plan deposit dates to ensure compliance with the Department of Labor’s rules regarding timely deposit of participant contributions and loan repayments.
Verify that employees who became eligible for the plan between July 1st and September 30th received and returned an enrollment form. Follow up for forms that were not returned.
For calendar year Safe Harbor plans, issue the required notice to employees during October or November (within 30-90 days of the beginning of the plan year to which the safe harbor is to apply). Also, within the same period, distribute the appropriate notice if the plan features an EACA (Eligible Automatic Contribution Arrangement), QACA (Qualified Automatic Contribution Arrangement) and/or QDIA (Qualified Default Investment Alternative).
November
Prepare to issue a payroll stuffer or other announcement to employees to publicize the plan’s advantages and benefits, and any plan changes becoming effective in January.
Conduct a campaign to encourage participants to review and, if necessary, update their mailing addresses to ensure their receipt of Form 1099-R to be mailed in January for reportable plan transactions in 2010.
Check current editions of enrollment materials, fund prospectuses and other plan information that is available to employees to ensure that they are up-to-date.
December
Prepare to send year-end payroll and updated census data to the plan’s recordkeeper in January for year-end compliance testing. (Calendar year plans)
Verify that participants who terminated during the second half of the year selected a distribution option for their account balance and returned the necessary form.
Review plan operations to determine if any ERISA or tax-qualification violations occurred during the year and if using an IRS or DOL self-correction program would be appropriate.
