January Benefits Brief

Settlement Reached in Fiduciary Breach Case 

A settlement is currently pending in the case of Braden v. Wal-Mart Stores, Inc. et al. In this case, a participant brought claims against his Plan's sponsor and named fiduciary for excessive fees and imprudent selection of investment options. Under the terms of the proposed settlement, the defendents will pay $13.5 million, which will be used to pay plan expenses. The defendents also agreed to retain an investment advice fiduciary to make recommendations on their fund lineup and monitor plan investments. 

Settlement in Major 401(k) Fee Case is Preliminarily Approved - Goodwin Procter 


Fee Disclosure Best Practices for 403(b) Plans 

Under the new 408(b)(2) regulations, covered service providers will be required to disclose information about fees and services to ERISA plan sponsors. These plan sponsors must in turn provide fee information to their participants. At a recent National Tax-Sheltered Accounts Association Summit, industry representatives discussed fee disclosure issues unique to 403(b) plans, as well as some best practices for providing disclosure.   

Best Practices for 403(b)s Subject to Fee Disclosure Rules - Plan Sponsor  


Are 403(b) Participants Ready for Retirement? 

Fidelity released the results of their Higher Education Generational Survey, which found that fewer than 1 in 4 higher education employees had a formal investment plan for their retirement. Among other survey findings: younger participants were often using the same asset allocations as their older counterparts, and more than half of survey respondents considered themselves "beginners" when it came to investing.   

Higher Ed Employees Not Preparing Well for Retirement - Plan Sponsor 


Building an Investment Menu That Helps Participants Make Good Choices 

Plan sponsors are building their investment menus to help participants make good decisions in their investment selection. Many plans are using a tiered approach to their investment menu, grouping investment options to make fund selection easier for each participant based on their investment knowledge. One of the most common approaches is a two-tier array of target date funds alongside the familiar broad market mutual funds. Participants with less investment knowledge, or less inclination to actively manage their retirement portfolio can be steered towards the first tier of target date funds, while participants who desire a more customized portfolio can select from among the broader mutual fund array.  

More Sponsors See Benefits in Investment Tiering - Vanguard 


Key Administrative Deadlines for Calendar-Year Defined Contribution Retirement Plans

Milliman Employee Benefits Research Group has released a calendar of key administrative dates and deadlines for 2012.   

Key Administrative Dates & Deadlines for 2012 Calendar-Year Defined Contribution Retirement Plans - Milliman, Inc.

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