BLS: DC Plans More Costly Than DB Plans

Though it seems like nothing will bring back DB plans (perhaps for good reason), it does cost more to run a DC than DB plan, according to research conducted with private companies in March 2012 by the Bureau of Labor Statistics. Overall, the cost to run a DC plan was 40% higher per employee.   Read More

How to Improve Your Skills as a 403(b) Advisor

A number of recent studies clearly demonstrate the importance of the work done by “face-to-face” financial advisors, in terms of the success and results of the account balances in 403(b) and 457 plans. We are told in those studies that the face-to-face service not only increases the amount contributed in these plans, it results in a better investment result. In an article that from the November/December issue of “Market Beat,” published by the National Tax Sheltered Accounts Association (NTSAA), Kent Schutte provides some great insights on the activities that contribute to these results.   Read More

DOL Enforcement Activities Expected to Grow for Audit Issues

The vast majority of retirement plans do not have to be audited, leading some to argue that the 100-eligible-employee threshold, which has been in place for a while, should be increased. Regardless, retirement plan sponsors with 100+ eligible employees — not 100 participating employees, which is the threshold for health and welfare plans — should be especially careful, with increased DOL enforcement activity likely.   Read More

WSJ: Plan Advisors in the Driver’s Seat of 401(k) Plans

Crystallizing the opportunities and challenges of plan advisors, the Wall Street Journal published a piece that put advisors at the center of change in the 401(k) market. Society, government and the general press have clearly awakened to the importance of participant directed corporate retirement plans like 401(k)s. The burden of funding, investing and planning is shifting to individuals who are clearly not equipped — which puts advisors in a key position. But are they ready, and are there enough skilled practitioners to handle the demand?   Read More

The Elephant in the Chat Room

It’s evident that social media is altering the communication landscape. And while Lady Gaga, Justin Bieber and Katy Perry are busy building their Twitter empires (with more followers than the entire populations of Germany, Turkey, South Africa, Canada, Argentina, United Kingdom and Egypt!), they don’t have FINRA, the SEC or other regulatory entities outlining a series of rules regarding what they can and cannot say — and watching to make sure they follow the rules.   Read More

Ameriprise Case Moves Forward: Where Will it Lead?

In what could be a seminal case for the DC industry, a pretrial conference was scheduled in Minnesota for Jan. 7, 2013 in the suit by Ameriprise DC participants claiming fiduciary breach and prohibited transactions. The trial could begin as early as Dec. 9, 2013, or it could delayed until July 31, 2014 if the defendant’s recommendations are followed. In the lawsuit, which was filed in September 2011, Ameriprise employees claimed that instead of proprietary funds which paid fees to Ameriprise and its subsidiaries, less expensive share classes saving 25 bps could have been offered.   Read More

What’s the DOL Planning in 2013?

The Department of Labor publishes a semi-annual Unified Agenda of rules and regulations that are in the works or under review. The latest list for DOL’s Employee Benefits Security Administration (EBSA) includes five important items that plan advisors need to know about covering the definition of fiduciary, TDFs, lifetime benefits and 408(b)(2).   Read More

Take Advantage of Holiday ‘Downtime’

Entrepreneur magazine’s Lisa Evans lays out six good tips to make use of your holiday downtime, but let me add two more: (1) reconnect — this is a great time to reach out and make contact with those people that have been influential in your business and life that you haven’t spoken to in a while; and (2) recognize — drop your “A” clients a personal note of thanks and appreciation. There’s nothing like a warm and informal “high touch” contact to keep a relationship strong.   Read More

The Government is Here to Help — Really

Lest you think that the IRS is just out to catch mistakes and run up revenue from fines and penalties, here are a few simple and straightforward ways to stay out of trouble, courtesy of the agency:
• Common Mistakes During Plan Audits
• Whether IRS Loan Limits Apply to All Plans
• Late Deposit of Salary Deferrals — Fixing Common Plan Mistakes   Read More

DB Plans Are Waning — What’s on the Horizon?

The death of DB plans is not greatly exaggerated, according to a Vanguard survey of DB plans. Though most do not anticipate any major changes in design or status going forward, based on surveys with 169 plans encompassing $167 billion in plan assets, 57% of plans closed or froze their plans. In fact, the number of frozen plans was more than twice the 2010 total. And 59% of plans were open and active in 2010, compared with only 43% in 2012.   Read More

Morningstar’s 2013 Stock Market Outlook

Many firms provide market forecasts, but Morningstar has a few special things going for it — such as being unbiased (ostensibly) and having an analyst named Heather Brilliant. Ms. Brilliant’s forecast for 2013 includes a few elements that you should consider. Over the coming week, Morningstar will provide outlooks for the different sectors and provide 30 top stock picks.   Read More

A Savings Santa Claus?

Years ago, when my kids were still kids, we discovered an ingenious website that purported to offer a real-time assessment of your “naughty or nice” status. As parents, we rarely invoked the name of Santa to encourage good behavior, but no tone of voice or physical threat ever had the impact of that website — if not on the kids’ behavior (they were kids, after all), then certainly on the level of their concern about the consequences.   Read More

Mergers & Acquisitions: Beware of ERISA

Have you ever been involved with a plan sponsored by a company that’s either merging with or acquiring another? Though most advisors “should not try this at home,” it’s good to understand the issues and get in front of them if possible — since this may, in fact, determine whether the advisor is out of a job or not. Combining the Internal Revenue Code and ERISA can be like handling nitroglycerine, so experienced counsel is essential.   Read More

Views from the Summit: Tips on How to Get Published

Authoring articles that appear in industry or trade publications is an excellent public relations technique to promote your firm to potential clients and referral sources. In the first of a series of posts by speakers at the 2013 NAPA/ASPPA Summit, March 3-5, 2013 in Las Vegas, Barbara Lewis, a former journalist who has written for The Wall Street Journal as well as many other national publications, shares tips on how — and why – to get a bylined article published.   Read More

Cliff Diving Now Looks More Likely

Brian Graff, Executive Director/CEO of ASPPA and NAPA, offers his Washington insider’s perspective on the latest developments in efforts to avert the approaching fiscal cliff. The likelihood of going over the cliff has increased dramatically, Graff says, outlining three possible, albeit unlikely, scenarios that could produce a viable solution and avert the cliff.   Read More

Retirement Plans Show Record Assets Driven by 401(k)s and TDFs

U.S. retirement plan assets approached $20 trillion in Q3 2012, according to an ICI report, which is a new record. At $19.7 trillion, there was an increase of 3.7% compared with Q2, due mostly to an increase in equities, including DB, DC, IRA, annuity reserves and government plans. Both 401(k) plans and TDFs hit new records, at $3.5 trillion and $460 billion respectively, with 91% of TDF assets in 401(k) and IRA plans.   Read More

Employee Education — Back to the Drawing Board

The consensus is that education efforts within participant-directed plans have mostly failed, especially when compared with the effects of automatic enrollment, auto deferral, QDIAs and auto escalation. So is there a real alternative to helping individuals within participant directed plans save enough money to retire comfortably? There are no simple answers or silver bullets, but based on many surveys and anecdotal evidence, maybe there are different directions we can take.   Read More

Happy Holidays to You!

The staff at NAPA Net will be taking a well-deserved break from our “Daily” grind Dec. 24-25 to celebrate the holidays. Since our launch on Oct. 1, we have tried to deliver relevant and important news and practical tips to help plan advisors build, grow and manage their retirement practice. Knowing how busy you are, we cull the Internet for what we think is important so you can spend more time with clients, staff and family. We hope that you accept this “present” of NAPA Net and the Daily in the spirit in which it is given — to help you help your clients, connect with other advisors and continue to improve our thriving retirement system, which depends on knowledgeable and dedicated advisors and industry professionals like you.   Read More