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Are Your Participants Experiencing a Fee Imbalance?

Subsequent to the 2012 implementation of ERISA fee reporting regulations (ERISA 408(b)(2) & 404(a)(5)), the Department of Labor (DOL) began to consider the appropriateness of the allocation of plan fees among participants in order to address fee imbalance. This is a subject that generally had not been on the radar screen of many plan fiduciaries, but once identified, tends to generate considerable traction due to its obvious validity. Ironically, advisors’ diligent attention to obtaining the lowest accessible share class…

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HSA: A Tax Trifecta Investment Opportunity

When it comes to fiscally frugal health insurance options, health savings accounts (HSA) aren’t exactly new to the game. They’ve been around since 2003 and have only increased in popularity among employers, politicians and certain types of employees. In recent years, however, the growth in popularity of HSAs is due less to the accounts’ function from a cost-saving benefit plan and more to its utility as a wise choice for investment opportunities. It’s time to look beyond the traditional…

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Improving Automatic Enrollment

Our research shows that the vast majority of plan sponsors recognize that automatic enrollment has been effective in improving plan success and simplifying internal plan administration. Could automatic enrollment’s success be improved upon? When automatic enrollment first began gaining popularity, about 20 years ago, its typical design served a number of purposes. It improved plan enrollment and made for more efficient administration (no more “herding the cats” every year during open enrollment periods). For the majority of plans it…

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Do You Send Participant Notices via Email — And Should You?

rules regulations waivers

The number of notices and disclosures required to retirement plan participants has increased while methods to access information changed drastically. Many people receive their news and information on  electronic devices through apps and social media. What remains the same is the Department of Labor’s (DOL’s) guidance about permissible methods to provide notices electronically. There is a disconnect between how people are accustomed to receiving information (electronically) and what is permissible under ERISA. What Disclosures May be Distributed Electronically Under…

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Auditing Recordkeeper Statements — A Fiduciary Duty?

Adhering to prudent standards includes auditing quarterly statements from the recordkeeper. However, there is no explicit requirement for plan fiduciaries to do so. With regard to plan assets, fiduciaries have the explicit duty to ensure that: employee deferrals are contributed in a timely manner; the plan does not engage in prohibited transactions; and plan assets are used exclusively to pay plan benefits and defray reasonable plan expenses. Fiduciaries must act prudently in carrying out these duties. A bright-line test…

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Women in Retirement: 60 Percent Not Saving Enough

In November 2016, the Texas Conference for Women surveyed attendees about their retirement savings and found that almost a whopping 60 percent weren’t socking away enough. In fact, many weren’t even sure if they were going in the right direction. One person responded, “I don’t know if I’m on track, and that’s the worst part.” Many women are doubtful that they can retire comfortably, if at all. Consider these results of the 17th Annual Transamerica Retirement Survey: Women believe…

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Portfolio Patriotism—Domestic Market Optimism or Inadvertent Asset Allocation?

Globalization of the world economy has increased exposure to international investments, yet equity portfolios in general remain largely home biased today. This may be a good time for participants to reevaluate their asset allocation to see if they may be exhibiting a home country bias— or displaying overly optimistic expectations about the domestic market and/or pessimism about foreign markets. After years of mediocre growth from developed international equity markets, we are finally starting to see signs of life abroad….

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Benchmarks Are Not Created Equal

Because benchmarks are an important part of investment due diligence, a plan fiduciary should carefully consider their selection. Two of the most common are FTSE Russell1 and Standard & Poor’s2. The RPAG Scorecard3 utilizes Russell and here’s why: Russell ranks each company in the investable universe according to its total market capitalization. The market cap is the primary tool to determine where a company belongs in the Russell Index. S&P uses a committee to make these decisions. Russell indices…

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Fixed Income: A Sinking Ship or Much Ado About Nothing?

Time is a powerful modifier of perception and purpose. No need to look any further than the frequent rumblings surrounding fixed income in the current rising interest rate environment. That isn’t to say the frequently touted “bond bubble” and rising interest rate topics are unimportant or overstated, it’s merely a reaction to the volume and misappropriation of focus often exhibited in these ongoing conversations. Monitoring the trajectory of rising interest rates is a good idea, however letting it affect…

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May Any Employee Join the Retirement Committee?

Upon first blush, to the extent an employee from the general populace can and wishes to make a contribution as a committee member, there seems to be no reason why they shouldn’t participate on the committee. In practice, most committees consist of executives from finance (preferably the CFO), benefits and human resources. Due to the potential personal liability exposure, if there is interest from other lay people who wish to represent the vote of the participant base, they are…

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