December Benefits Brief

DOL Clarifies Rules for Electronic Disclosure to Plan Participants Under 404(a) 

For plan years beginning November 1, 2011, plan administrators will be required to make certain disclosures to plan participants under 404(a). In reponse to several inquiries regarding the use of electronic media, the Department of Labor has issued a revision to their interim policy. Plan administrators can use electronic media to distribute disclosures to participants, utilizing either the general safe harbor for electronic plan communications, or by following specific guidelines set forth for 404(a) disclosures. 

Revised Interim Policy on Electronic Disclosure Under 29 CFR 2550.404a-5 - US Dept. of Labor 


Vanguard Participant Returns 2005-2010 

Vanguard recently released their analysis of participant returns during the period 2005 to 2010. Participants saw an average annual return of 3.76% for the period, despite enduring the horrible returns of the 2008 bear market. Vanguard's research provides some interesting insights into the actual experiences of retirement participants during a historic market environment.  

Participants During the Financial Crisis: Total Returns 2005-2010 - Vanguard


IRS to Expand Relief Under EPCRS for 403(b) Plan Compliance Failures 

The Employee Plans Compliance Resolution System (EPCRS) has long provided a measure of relief to qualified retirement plans, including 401(k)s, for plan compliance failures. Relief for 403(b) plans under EPCRS has been more limited. The IRS announced earlier this year that they will extend all correction opportunities under EPCRS to 403(b) plans in the near future. These corrections will include document failures and relief from certain adverse tax consequences. 

Relief for 403(b) Plan Compliance Failures - Fox Rothschild, LLP


PSCA Releases Results of 403(b) Plan Sponsor Survey 

Faced with new 403(b) plan rules, increased regulatory scrutiny, and challenging economic times, many plan sponsors have considered changes to their retirement plan benefits. Participants faced with the same circumstances have re-evaluated their retirement plan benefits as well. The Plan Sponsor Council of America (PSCA) has released the results of their survey of 403(b) plan sponsors, focusing on changes to plan benefits and participant behavior.  

403(b) Plan Response to Current Conditions - PSCA


Recession's Impact on Wealth & Retirement for Near Retirement Workers 

Participants nearing retirement generally have the largest accumulated wealth in a retirement plan, based on the contributions they have made over the years and the general appreciation of their assets during their working life. As a result, these participants are most exposed to market fluctuations, both because of their short time horizon until retirement and because any returns they earn are applied across a larger account. Those nearing retirement in the past few years had to endure the 2008 credit crisis and recession. The National Bureau of Economic Research recently analyzed data from the Health and Retirement Study to determine how the recent recession impacted personal wealth and retirement among near retirement workers.   

How Did the Recession of 2007-2009 Affect the Wealth & Retirement of the Near Retirement Age Population in the Health and Retirement Study - National Bureau of Economic Research


IRS Form 8955-SSA FAQ Released 

The IRS recently released their FAQ for the new Form 8955-SSA. The new FAQ includes guidance on reporting participants who separated from service prior to 2008 with a vested benefit.    

Retirement Plan FAQs Regarding Form 8955-SSA - US Internal Revenue Service

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