Excerpt: "Growth in the number of 401(k)-type plans and the number of participants in those plans, which increased sharply in the 1990s, has slowed in recent years, according to a new EBRI study." (Employee Benefit Research Institute (EBRI))

2 pages. (Milliman)

6 pages. Excerpt: "As households become more reliant on 401(k) plans for retirement income, policymakers have become more concerned that participants are unaware of the fees charged in their 401(k) plans. Small differences in fees charged can have large impacts on 401(k) account balances upon retirement. This report provides information on the kinds of fees that are charged in 401(k) plans and details the provisions of H.R. 3185, the 401(k) Fair Disclosure for Retirement Security Act as introduced on July 14, 2007. was passed by the Committee on Education and Labor by a vote of 25-19 on April 16, 2008. It will updated to reflect other 401(k) fee disclosure legislation." (Congressional Research Service, U.S. Library of Congress)

Excerpt: "Americans held $17.6 trillion in retirement assets at the end of 2007, up $1.1 trillion from year-end 2006, the Investment Company Institute reported." (Occupational Health and Safety)

Excerpt: "The Department of Labor (DOL) has issued Field Assistance Bulletin (FAB) 2008-03 to respond to a number of questions practitioners have raised regarding the final regulations on qualified default investment alternatives (QDIAs) . . . . The FAB is in question and answer format, addressing 22 'most frequently asked' questions regarding the QDIA regulations. Here are highlights of the new guidance: . . . " (SunGard Relius)

Excerpt: "A coalition of consumer advocates, public policy groups and academics wants to attack our country's dependence on debt by creating a national campaign much like the one used to curb smoking." (Michelle Singletary in the Washington Post; free registration required)

Excerpt: "The analysis of nearly 1 million retirement portfolios found that 69 percent have inappropriate risk or diversification of holdings and 36 percent have worrisome concentrations of company stock. In addition, one-third of savers aren't putting enough aside to qualify for the full company matching contribution." (AP via Washington Post; free registration required)

Excerpt: "In 2006, 87% of plan sponsors said they do not believe most employees are/will be financially prepared for retirement. (Deloitte/IFEBP) Just 13% said half might be ok. If that's not a sign of failure, what is?" (Dennis Ackley)

Excerpt: "Concerns mount about planned ERISA changes. Some say DOL's proposed changes to 408(b)(2) of ERISA -- especially those dealing with advance compensation disclosure and conflict of interest reporting aspects -- are overly burdensome and redundant. 'It switches the burden from the employer to the service provider to actually provide the information . . . .'" (Employee Benefit Adviser; free registration required)

Pages 1-2 of 7 pages. Excerpt: "A federal district court in Iowa allowed class action claims to proceed against a financial services company for alleged breaches of fiduciary duty under the Employee Retirement Income Security Act of 1974, as amended ('ERISA'), resulting from the company encouraging retirement plan participants to roll over their 401(k) plan assets into IRAs invested in the company's proprietary mutual funds." (Goodwin Procter LLP)

Excerpt: "The Department of Labor (DOL) has issued Field Assistance Bulletin (FAB) 2008-03 to respond to a number of questions practitioners have raised regarding the final regulations on qualified default investment alternatives (QDIAs) published in October 2007 and effective last December. The DOL also issued minor modifications to the final QDIA regulations." (SunGard Corbel LLC)

Excerpt: "[I]s your 401(k) plan as effective as it can be in helping employees save for their retirement? Does it have auto-enrollment and other useful features that are available today from providers? These features can enhance the appeal of your employee savings programs and increase usage, making them even more effective." (Towers Perrin)

Excerpt: "A bill allowing the state of Connecticut to sponsor a 401(k) plan for small businesses apparently was a casualty of the last-minute scramble by lawmakers to end their current session Wednesday night." (PLANSPONSOR.com; free registration required)

Some areas advisors working with 401(k) plans might review include: Service agreements, vendor relationships and fees, documentation, and education and training. (Financial Advisor)

Excerpt: "The good news for plan participants is that the second quarter is off to a strong start. The S&P 500 index recovered quickly and posted a 4.9 percent gain for the month of April, ending a streak of five consecutive negative months. Non-U.S stocks were up more than 5 percent in April, while emerging markets were up more than 8 percent." (Workforce Management; free registration required)

Excerpt: "The use of annuities as an investment alternative within 401(k) plans will gain momentum as those approaching retirement seek to create guaranteed retirement income streams, according to a report by the Financial Research Corporation (FRC)." (Wolters Kluwer)

Excerpt: "The Department of Labor has modified the final qualified default investment alternative (QDIA) regulations to: (1) expand the definition of 'stable value funds' which are entitled to grandfathered fiduciary relief, (2) explicitly allow a committee of the plan sponsor to manage the investment of a QDIA, and (3) delete the 'round trip' restriction from those prohibited under the regulations." (Deloitte via BenefitsLink.com)

Pages 1-2 of 10 pages. Excerpt: "The . . . questions are designed to refresh, and to fine tune, your benefits expertise. Some of the answers (which are found on page 8 of this Newsletter) may surprise you." (Trucker Huss)

Excerpt: "Over the past several years, more than two dozen lawsuits have been filed relating to 401(k) plan fees and, more specifically, 'revenue sharing' arrangements with plan service providers. . . . In addition to the lawsuits against plan sponsors, lawsuits have been brought against 401(k) plan service providers. These cases typically are based on allegations that the service providers are 'functional fiduciaries' under ERISA. [At the target page, links are provided to an outline and a chart on the issues.]" (Groom Law Group)

Excerpt: "Becoming a millionaire may sound impossible. Millionaire may strike you as a term that's meant for other people, not you. But that's just not true." (Success Magazine)

2 pages. Excerpt: "Plaintiffs are former participants in 401(k) plans, who allege that in rolling over their plan accounts to IRAs, defendants violated ERISA. On April, 21 2008, a federal judge in Iowa ruled that former participants in a 401(k) plan lacked standing to pursue legal remedies under ERISA, despite the Supreme Court's recent ruling in LaRue v. DeWolff, Boberg & Assoc., Inc., 128 S. Ct. 1020 (2008), but held that standing was proper to pursue equitable relief under ERISA. Young v. Principal Financial Group, Inc., S.D. Iowa., No. 4:07-cv-386." (Sutherland Asbill & Brennan LLP)

Excerpt: "EBIA Comment: The technical corrections to the final regulations and the FAB clarify many issues that the regulations raised. The FAB's references to future guidance, though, remind us that these rules may evolve further as plan sponsors and the DOL acquire more experience with their operation. That evolution, and the close connection between the DOL's QDIA rules and the IRS's rules on automatic contribution arrangements, will require plan sponsors to continue monitoring developments in this area in order to maximize the available fiduciary relief." (Employee Benefits Institute of America)

Excerpt: "A participant in the Sprint Retirement Savings Plan of Sprint Nextel Corporation has sued the company and other plan fiduciaries for continuing to offer company stock as a plan investment." (PLANSPONSOR.com; free registration required)

Excerpt: "If adopted, the regulations should allow plan sponsors to better determine whether fees paid to service providers are reasonable. Plans sponsors will be able to compare fees among competing providers. Today, it's difficult for most plan sponsors to understand the amount and manner in which fees are paid. There is a sense by Labor officials and others that fees can be excessive. Part of this is due to the fact fees are often not fully disclosed, and the lack of knowledge breeds suspicion." (Charlotte Business Journal via bizjournals.com; free registration required)

Excerpt: "FAB 2008-3 addresses other issues as well, but leaves many other questions unresolved. It is not clear at this time whether we can expect additional guidance from the Department on QDIAs, or if this FAB is as much as we will get. In either case, plan sponsors would be well advised, IMO, to carefully review the FAB to be sure they are complying with the QDIA regulations." (Baker & Daniels)

Excerpt: "Like many of the other suits that have been filed since 2006 against such big employers as Boeing, Deere & Co. and General Dynamics, the suit against Wal-Mart, which was filed last month, claims the company breached its duties as a fiduciary by allowing its 401(k) plan participants to be charged 'unreasonably expensive' fees. The plaintiffs are seeking class-action status." (Workforce Management; free registration required)

Excerpt: "A Merck & Co. 401(k) participant has charged the drugmaker with breaching its fiduciary duties by continuing to permit investments in company stock despite the effects on share price of problems with its cholesterol-reducing drug Vytorin." (PLANSPONSOR.com; free registration required)

Excerpt: "On April 29, 2008, the DOL released Field Assistance Bulletin No. 2008-03, which provides plan sponsors with additional guidance on the QDIA final regulations. This bulletin provides answers to some of the most frequently asked questions about the QDIA regulations in areas such as the scope of the regulations, notice requirements, limitation on fees and restrictions, management and asset allocation, capital preservation, and 'grandfather' relief." (Aiken and Aiken)

Excerpt: "Employee plaintiffs are lining up to sue the major brokerage firms over losses in company stock. A number of proposed class actions have been filed against Citigroup, Merrill Lynch and Morgan Stanley. According to the lawsuits, the companies made inadequate disclosures about their subprime and collateralized-debt-obligation exposure. The suits allege that by including company stock in 401(k) and other savings plans, and encouraging employees to buy shares, the firms violated their fiduciary duties to participants under ERISA." (FinancialCounsel.com)

Excerpt: "Defined contribution plan executives are unprepared for upcoming accounting changes, leaving themselves open to IRS scrutiny, according to a new survey. The 2008 Plan Sponsor Retirement survey conducted by Grant Thornton found that plan executives are not paying close enough attention to their plans' governance and auditing practices, both of which will be affected by the implementation of Financial Accounting Standard 157, which goes into effect in 2009. (FAS 157 does not just affect DC plans, but includes other employee benefit plans.)" (Financial Week; free registration required)

Excerpt: "The proposed seven-day safe harbor for deposits to small plans is welcome relief from a confusing requirement. EBSA indicates that it is open to extending the safe harbor to larger (100 or more participant) plans, if it receives compelling arguments during the comment period for the proposed regulations. In the meantime, employers and plan trustees should review the timeliness of deposits and take action to correct any delinquencies discovered." (Bond, Schoeneck & King, PLLC)

Excerpt: "The complete results are offered as Excel spreadsheets; if you'd like to download these files and you're not a member of CFO.com, [then CFO.com will] need an email address, user name, and password." (CFO.com)

Excerpt: "Over the years, as more providers have gotten into the defined-contribution business, their fees and behind-the-scenes revenue-sharing arrangements have become so complex that plan-expense comparisons are virtually unattainable. And that's a problem. If plan sponsors can't ascertain the true cost of their defined-contribution plans, they certainly can't explain fees to plan participants, who pick up many of these expenses." (CFO.com)

Excerpt: "The Department of Labor recently issued guidance on two issues that will help many employers navigate its regulations." (Winston & Strawn LLP)

Excerpt: "A highly disturbing fact is that many plan sponsors fail to discharge their ERISA section 404(a)(1)(A) duties because they don't know about--much less understand--the total economic impact that the hodgepodge of both 'visible' costs (e.g., the annual expense ratio of mutual funds) and 'invisible' costs (e.g., the bid-ask spreads of mutual funds) can have on the account balances of the participants in the plans provided to them by the sponsors." (Morningstar)

Excerpt: "When must 401k deposits be made? Who's responsible when contributions are not made? The Department of Labor is flexing its regulatory and advisory muscle to clarify any misunderstanding that may exist and at the same time is asking the benefit's community to suggest alternative solutions." (James Farley via 401khelpcenter.com)

Excerpt: "What is known is this: Many want a law that strikes a balance between the cost and benefits of disclosing administrative, investment, transaction and other types of fees to the 50 million workers who are contributing to a 401(k) plan. The law must be crafted, experts say, such that the fee disclosure is not onerous for employers, yet is still meaningful for workers." (MarketWatch)

Excerpt: "Due to the current economic climate, 8% of investors have halted or reduced their contributions in 401(k) plans in recent months, according a study to be released next week. The study from Cogent Research LLC of Cambridge, Mass. showed that 57% of respondents are worried about maintaining their current standard of living." (Investment News; free registration required)

Excerpt: "Boeing Co. could drop defined benefit plan coverage for new employees represented by the International Association of Machinists and Aerospace Workers and possibly other unions, said Todd Blecher, a Boeing spokesman. The new IAMAW employees would be placed into a 401(k) or other type of defined contribution plan under a proposal that Boeing executives are considering in contract talks with the union." (Pensions & Investments)

4 pages. Excerpt: "In this latest piece, [Brooks Hamilton] admonishes plan fiduciaries to consider the legacy that they will leave, and provides some excellent suggestions for radiating 'caring conduct and honorable stewardship'." (Brooks Hamilton via MJM401k)

5 pages. Excerpt: "The American Society of Pension Professionals & Actuaries (ASPPA) appreciates this opportunity to comment on the proposed amendments to the regulation defining when contributions that are made by participants in an employee benefit plan are 'plan assets' for purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended (ERISA) (the Proposed Regulation)." (American Society of Pension Professionals & Actuaries)

3 pages. (American Benefits Council)

Excerpt: "From a pure tax standpoint, a Roth IRA is usually a better choice if you expect to be in a higher tax bracket when the time comes to make withdrawals. A pretax vehicle like a 401(k) or traditional IRA is a better option if you expect to be in a lower tax bracket when you retire.But if you've got a lousy 401(k) plan, the Roth IRA wins hands down, no matter how your tax situation is likely to shake out." (Money via CNNMoney.com)

Excerpt: "The U.S. Department of Labor's Employee Benefits Security Administration today announced publication of technical corrections to the final regulation on qualified default investment alternatives along with guidance to clarify the scope and meaning of the final rule." (ERISA Rules and Regulations)

Excerpt: "The final regulation provides the following conditions that must be satisfied in order to obtain safe harbor relief from fiduciary liability for investment outcomes: . . ." (Employee Benefits Security Administration, U.S. Department of Labor)

22 Q&As. Excerpt: "Since publication of the QDIA regulation, a number of issues have been raised concerning the scope and meaning of various provisions of the QDIA regulation. This Bulletin is intended to supplement the QDIA regulation by providing guidance, in a question and answer format, on a number of the most frequently asked questions." (Employee Benefits Security Administration, U.S. Department of Labor)

8 pages; to be published in the April 29, 2008 Federal Register. Excerpt: "The Department published in the Federal Register of October 24, 2007 . . . a final regulation providing relief from certain fiduciary responsibilities for fiduciaries of participant directed individual account plans who, in the absence of directions from a participant, invest the participant's account in a qualified default investment alternative . . . . The Department has determined that two paragraphs in the final regulation, and one statement in the Supplementary Information, require correction. Accordingly, this document corrects the final regulation by revising these paragraphs." (Employee Benefits Security Administration, U.S. Department of Labor)

2 pages. Excerpt: "Plan sponsors now have the ability to provide participants in their defined contribution plans an advisory service which will assist participants in the selection of investments within the plan. In addition, these services can provide Managed Accounts which will create diversified investment portfolios and rebalance them over the course of the participant's life. Furthermore, the uncertainty of liability on the part of plans sponsors for the advice of this service appears to have been settled in a manner that should put plan sponsors' fears to rest." (National Association of Government Defined Contribution Administrators)

Excerpt: "[F]inancial services firms are offering a wide and growing array of innovative new investment options for use within 401(k) plans. In doing so, they promise to give the 401(k) plan new life as both a retirement savings vehicle and a retirement income generator. Prudential's solution takes the form of a suite of five 'Prudential IncomeFlex Funds' that it debuted in December 2006. Targeted to investors 50 and older, the funds are designed to function both as a savings vehicle while the participant is working and an income vehicle once they stop working." (The Wall Street Journal)

Excerpt: "A recent survey by Grant Thornton International Ltd. has found a heightened focus by plan sponsors on investment decisionmaking and monitoring. In a press release, Grant Thornton said plan sponsors have determined an Investment Policy Statement (IPS) is critical to decisionmaking by retirement plan investment committees. Eighty-two percent of sponsors surveyed said they have an IPS in place." (PLANSPONSOR.com; free registration required)

Excerpt: "Roughly 22% of corporations now offer a Roth 401(k) option to their workers, up from 12% last year, according to a survey from accounting firm Grant Thornton, which, along with Plan Sponsor Advisors and law firm Drinker Biddle, polled chief financial officers and human resources executives at nearly 200 companies." (Financial Week; free registration required)

Excerpt: "A lawsuit by former 401(k) participants against the Principal Financial Group appears poised to make new law. The lawsuit is over allegations that the company duped participants into IRA rollovers into Principal's proprietary mutual funds." (planadviser)

Excerpt: "Conclusion. The option of borrowing against a 401(k) is attractive; however, potential borrowers should be wary. Even in extreme situations, it is best for workers to seek other sources of capital before tapping their 401(k) accounts. Otherwise, borrowers are leaving much of their potential earnings on the table. A small loan now can equal a huge loss in future retirement security." (National Center for Policy Analysis)

Excerpt: "The issue that seems to loom largest in the minds of those paying attention is the requirement that all service providers break down their charges into four specific categories: administrative fees, investment management fees, transaction fees, and other fees." (PLANSPONSOR.com; free registration required)

Excerpt: "Newly released findings of a survey by PIMCO shows the DC plan consulting business is changing to adjust to new plan trends by, among other things, offering custom target-date funds and adding inflation-protection investment vehicles to fund offerings." (PLANSPONSOR.com; free registration required)

Excerpt: "The updated 2007-2008 Priority Guidance Plan lists regulations and other guidance still under development. It also adds new items and indicates which items have already been published. Here are some of the significant projects affecting 401(k) plans and health plans that are listed as outstanding in the updated Priority Guidance Plan . . . ." (Employee Benefits Institute of America)

44 pages. Excerpt: "This is the first study to examine both how well plan administrators select funds and how participants react to plan administrator decisions. We find that on average administrators select funds that outperform randomly selected funds of the same type. When administrators change offerings, they choose funds that did well in the past, but after the change deleted funds do better than added funds. Plan participants react strongly to past performance in their allocation decisions. This accentuates the changes in allocation caused by returns. Participant allocations do no better than naïve allocation rules such as equal investment in each offering." (Reish Luftman Reicher & Cohen)

Excerpt: "Employees expect clear, complete and honest communication. When they don't get it, trust weakens and commitment suffers - and so may profits. Employees who don't trust 401(k)s, 403(b)s, or their employer aren't likely to take full advantage of the plan, even with automatic enrollment. Unfortunately, the retail approach to selling is sometimes used in 401(k)s and 403(b)s." (Employee Benefit News; free registration required)

Excerpt: "Even though they are not in the title of the law, 401(k) plans also were significantly affected by PPA. In fact, the law opened the door for some of the most sweeping and beneficial changes in how 401(k)s operate -- both for the private-sector employers that sponsor these retirement plans and for the workers who participate in them." (The Wall Street Journal)

Excerpt: "401(k) conventional wisdom is that loans are just a part of any well-rounded 401(k) plan. Because TRI-AD tends to be a leader rather than blindly following conventional wisdom, we are going to express the opinion that largely unfettered access to 401(k) accounts is counter to the plans' purpose of providing a way for participants to save successfully for retirement." (TRI-AD)