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Nevin Adams

Nevin Adams

Nevin Adams

By Nevin Adams10/24/2012 • 0 Comments

Like so many of our assumptions about retirement, the withdrawal rule of thumb — the rule of thumb that many financial advisors rely on as a formula for how much money can be withdrawn from retirement savings every year (generally adjusted for inflation) without running out of money — has drawn additional scrutiny, especially in the aftermath of the 2008 financial crisis. What’s not clear is whether adhering to that guideline produces an income stream in retirement that will be enough to live on. READ MORE

By Nevin Adams10/19/2012 • 0 Comments

was asked recently about the so-called “4% rule.” That’s the rule of thumb that many financial advisors rely on as a formula for how much money can be withdrawn from retirement savings every year (generally adjusted for inflation) without running out of money. At the time, my comment was that the 4% guideline is just that — a guideline. What’s not as clear is whether adhering to that guideline produces an income stream in retirement that will be enough to live on. READ MORE

By Nevin Adams10/17/2012 • 1 Comments

There’s been a lot of talk lately about the need to fix the “broken” 401(k) plan. As often as not, this sentiment arises as part of a discussion where folks, including retirement plan advisors, wistfully talk about the “good old days” when everybody had a defined benefit pension, and people didn’t have to worry about saving for retirement. The only problem is: Those “good old days” never really existed, nor were they as good as we remember. READ MORE

By Nevin Adams10/11/2012 • 0 Comments

If you think it’s complicated trying to determine an individual’s retirement funding needs, imagine trying to do so for all American workers. When EBRI modeled the retirement savings gap of Baby Boomers and Gen Xers earlier this year, we found that in terms of the gap between retirement savings and anticipated post-retirement expenses, American households are better off today than they were nine years ago—even after the financial and real estate market crises in 2008 and 2009. READ MORE

Fred Barstein

Fred Barstein

Fred Barstein

By Fred Barstein10/31/2012 • 0 Comments

In what they are calling “Worksite Financial Solutions,” LPL Retirement Partners has rolled out a program designed to engage plan participants in designing and implementing a cradle-to-grave financial planning program using a combination of technology and personal advice delivered by advisors. READ MORE

By Fred Barstein10/25/2012 • 1 Comments

Like many things in the DC world, “fiduciary” has become a commodity that providers are offering — in some cases, for as little as three basis points. Clearly there is massive confusion and misuse of a term that was intended to distinguish well-intentioned advisors and help improve outcomes. I’m not advocating that the industry drop the term, but I do think it’s time to move to a more holistic, less technical term that does not come with baggage for advisors that do the right thing for clients. READ MORE

By Fred Barstein10/18/2012 • 3 Comments

Many of the problems facing the DC market are caused and epitomized by the 'blind squirrels' — that is, advisors who only have a few 401(k) or DC plans. There’s no doubt that to be a successful DC advisor, you cannot dabble; you need to focus on trying to get at least 10 plans and $30 million in plan assets as quickly as possible. Yet blind squirrels are vital to the continued growth and success of the DC market, as well as the hope that we can help people retire more successfully. READ MORE

By Fred Barstein10/16/2012 • 0 Comments

The DC market has become one of the most important ways for investment managers to gather assets. Since DC assets are sticky and relatively non-cyclical, the DC market can be a hedge when individual investors go to ground. For an Investment Only (DCIO) provider, there are three keys to getting placement with the top record keeping platforms: fund metrics, revenue share and advisor demand. READ MORE

By Fred Barstein10/16/2012 • 0 Comments

What caused almost 100 DCiO executives to travel to Tampa in the middle of the summer on short notice to sit in a windowless room for half a day listening to what a relatively small and little known record keeper was up to? ASPire, formerly 401kASP, seems to have captured the attention of not only the DC industry but also the VC community, with a $25 million investment from a smart and savvy technology-focused firm. READ MORE

By Fred Barstein10/9/2012 • 0 Comments

Most experts are predicting massive consolidation among DC record keepers, with the big push just about to begin — especially with four national record keepers representing more than 100,000 DC plans likely to change ownership in the next few months. The factors in favor of consolidation are mounting. So how can you identify which providers are likely to sell their businesses or will not be able to remain viable? READ MORE

By Fred Barstein10/1/2012 • 0 Comments

Nearly 10 years ago, when there were 120 national 401(k) recordkeepers, it was easy to guess which ones were likely to exit the market next. The hard question was which ones would never exit because of the assets and participants under management built by brand and distribution who are in “401k Heaven.” Today, with fewer than 40 national recordkeepers remaining, the definition of 401k Heaven needs to be expanded to those that are competitive and would surprise most of us if they sold or exited. Fewer than 25 of the nearly 40 recordkeepers, or about 60%, can survive the coming “nuclear winter” in the 401(k) market. READ MORE

Kathleen Beichert

Kathleen Beichert

Kathleen Beichert

By Kathleen Beichert10/29/2012 • 0 Comments

It’s been a couple of months since DC plan sponsors received DOL-mandated fee disclosure statements from their service providers, and participants have had a few weeks to review — or ignore — the fee and performance benchmark information shared with them. And while one potential outcome is more attention to fund options, the fact is plan sponsors have already been active, with nearly two-thirds of 401(k) plans changing their investment offerings in 2011, up from just 19% in 2009. READ MORE

By Kathleen Beichert10/23/2012 • 0 Comments

Why do so many 401(k) plans feature a menu of fixed income options that starts with a stable value fund and ends with a core bond fund? A fixed income portfolio allocated among these two popular fund options guarantees that real returns will be negative for as long as the inflation rate exceeds the high quality bond yields comprising these funds — resulting in a corresponding loss of wealth. READ MORE

Sheri Fitts

Sheri Fitts

Sheri Fitts

By Sheri Fitts10/26/2012 • 0 Comments

It’s evident that financial and retirement plan advisors are wary of the social media platform. Some of the leading reasons include the compliance issues involved, the time it takes to manage social media, and simply getting started. However, research by LinkedIn and Cogent Research points to some compelling reasons for participating in this fast-moving communication channel. READ MORE

By Sheri Fitts10/12/2012 • 1 Comments

Measuring social media results can be an art. But many smart business people know that measuring is what matters. Like marketing, it can be difficult to pinpoint the exact moment a prospect decided to become a client, and ensure that you’re able to recreate that moment again and again. READ MORE

By Sheri Fitts10/4/2012 • 0 Comments

Social media maven (and NAPA Net Conductor) Sheri Fitts explains how advisors can use Google Alerts to proactively keep them informed on relevant topics or news about clients and prospects. Google Alerts are easy to use and set up, but the really good news is that there are no compliance issues. Look for more helpful posts from Sheri and visit her NAPA Net forum, Social Media Strategies – she’s a fount of helpful, insightful information. READ MORE

Rick Meigs

Rick Meigs

W. Michael Montgomery

W. Michael Montgomery

By W. Michael Montgomery10/8/2012 • 1 Comments

Mike Montgomery, an advisor and industry thought leader on MEPs (and NAPA Net’s MEP Conductor), reviews the trends in outsourcing that led to today’s open MEPs, and projects where the market might be headed in light of the 2012 DOL restrictions and the advent of 3(16) administrative fiduciaries. Plan sponsors have outsourced an increasing number of duties and liabilities as they try to back away from managing their 401(k) plans — but given the recent enactment of state-run MEPs, will this trend eventually lead to the nationalization of small-business retirement plans? READ MORE

John Ortman

John Ortman

By John Ortman10/4/2012 • 0 Comments

The pending regulation from the DOL that would expand the definition of investment advice and fiduciary status with respect to retirement plans has disappeared down a rabbit hole that magically appears in Washington every four years: the presidential election campaign. READ MORE

Robert J. Rafter

Robert J. Rafter

By Robert J. Rafter10/16/2012 • 1 Comments

The U.S. Department of Labor is on a mission to provide better information to both plan sponsors and participants about plan expenses. At the heart of the DOL's new rules is the need for plan sponsors and other fiduciaries to discover and clearly understand whether plan fees are reasonable in light of the services provided. The watchword? Caveat emptor — let the buyer beware; or in this case, as the buyer of plan services, fiduciaries and plan sponsors beware! READ MORE

Jason Roberts

Jason Roberts

By Jason Roberts10/3/2012 • 0 Comments

Finally, after months — perhaps years in some instances — of preparation, diligent providers of services to retirement plans have now completed their disclosures in satisfaction of ERISA Section 408(b)(2) and they lie in the hands (or at least the inboxes) of the responsible plan fiduciaries. The final deadline, July 1, has passed. While that milestone may merit a collective sigh of relief, the work is just beginning for the service providers that delivered the disclosures and the plan sponsors that received them. It is critical that both develop sound protocols to maintain compliance and to be prepared for what lies ahead. READ MORE

NAPA Net Staff

NAPA Net Staff

By NAPA Net Staff10/31/2012 • 0 Comments

Despite the weight of anecdotal evidence suggesting that the DOL’s fee disclosure regulations are not achieving at least one of their main goals — educating participants — the rules are here to stay, so everyone concerned must pay attention to them. That message was conveyed by ASPPA’s General Counsel Craig Hoffman at the organization’s annual conference Oct. 30. READ MORE

By NAPA Net Staff10/31/2012 • 0 Comments

The ERISA consultants who serve on the Columbia Management Learning Center Resource Desk regularly receive calls from financial advisors on a broad array of technical topics related to IRAs and qualified retirement plans. In this premiere installment of a new weekly feature on NAPA Net, the tax treatment of an in-kind distribution of employer stock is explained. READ MORE

By NAPA Net Staff10/30/2012 • 0 Comments

Are you using video to connect with prospects, clients, referrals and potential alliances? Video is an incredibly powerful marketing tool. But in order for it to work, you have to get people to watch. Maribeth Kuzmeski, president of Red Zone Marketing, offers eight quick tips for engaging people so they will want to watch your video and connect with you. READ MORE

By NAPA Net Staff10/26/2012 • 0 Comments

3Ethos’ Don Trone, founder of fi360, and Warren Cormier of Boston Research Group, in cooperation with Financial Advisor magazine, have completed the first edition of an annual study intended to benchmark best practices and ultimately measure the rate of adoption and the success of advisors who have adopted those best practices. While success and adoption will have to be measured in ensuing years, there were some interesting findings among the first year’s results. READ MORE

By NAPA Net Staff10/26/2012 • 0 Comments

Think that 401(k) lawsuits are over? Think again. Emboldened by recent successes and armed with more information through the fee disclosure regulations and benchmarking data, plaintiff attorneys’ next target could be advisors, warns Fred Reish of Drinker Biddle. Section 408(b)(2) only details the fees charged, he notes — providing no sense of whether those fees are reasonable without applicable benchmarking data. Reish warns that advisors whose fees are above the norm could become targets of an ever-active plaintiffs’ bar. READ MORE

By NAPA Net Staff10/26/2012 • 2 Comments

The 2012 DCIO Provider List includes the 39 firms actively selling to plan advisors. To be on the list, providers must have dedicated sales people calling on advisors in the DC market and must available on a majority of the platforms of national record keepers. Twelve of these 39 firms are in their own version of “401kHeaven” — as measured either by DC AUM or by annual flow driven by sales people, value add or outstanding performance in a unique category. READ MORE

By NAPA Net Staff10/25/2012 • 0 Comments

Pop quiz time: What’s the percentage of U.S. workers in the moderate income range — that is, those who make $30,000 to $50,000 a year — without access to an employer-sponsored plan who are saving for retirement through an IRA? READ MORE

By NAPA Net Staff10/25/2012 • 0 Comments

Twenty-six years ago today, President Reagan signed a sweeping bipartisan tax reform that chopped the top individual income tax rate from 50% to 28%; curbed special deductions, exclusions and breaks; gave most families a tax cut; left the richest 1% paying a slightly higher share of taxes; and didn’t add to the deficit. In short, the Tax Reform Act of 1986 did much of what Mitt Romney says he will do as president. READ MORE

By NAPA Net Staff10/24/2012 • 0 Comments

Is long term care insurance a long time gone? In the wake of a skeptical report by Moody’s and a dramatic price increase by one of the major carriers (driven by higher-than-expected medical costs and lower lapse rates), the potential buyers’ market has shrunk — as has the number of LTCI carriers. Many people are turning to self-insurance rather than pay higher premiums while facing an uncertain market for carriers. READ MORE

By NAPA Net Staff10/24/2012 • 0 Comments

Investors either get too aggressive — which leads to adviser turnover — or they get too conservative, especially after a crash when the market is at its lowest. There are no proven market timing formulas, especially when investors are constantly turning over funds. The dirty little secret is that a lot of mutual funds shareholders do worse than the fund itself because many funds tank as they get more assets. Investors who are led by emotion tend to react rather than plan, especially when they consume a steady diet of bad news. READ MORE

By NAPA Net Staff10/23/2012 • 0 Comments

The recent recession had a greater impact on adults aged 36-40 than on any other age group, according to a study by the Pew Research Center. Fewer of these adults will be covered by pension plans than their baby boomer parents, and many may be concerned about the viability of Social Security — making them much less confident about their ability to retire than they were just three years ago. READ MORE

By NAPA Net Staff10/23/2012 • 0 Comments

In a simple but complete checklist, T. Rowe Price details all the duties of a plan fiduciary, along with guidelines on how to best complete them. Plan advisors can use the checklist to engage prospects who may not be aware of their roles and responsibilities, may not be complying or don’t have an expert to guide them through the serious repercussions of non-compliance. READ MORE

By NAPA Net Staff10/22/2012 • 0 Comments

Aided by many low-cost providers and proponents of DB plans or a nationalized DC system, the media continue to focus on fees as the main culprit in the so-called retirement crisis. As a result, plan sponsors and participants are hearing the message that lower cost is better. But is there a danger on focusing too much attention on fees, accompanied by an across-the-board proscription about how much plans and their participants should pay? READ MORE

By NAPA Net Staff10/22/2012 • 0 Comments

If you’re taking your company into social media marketing and you want tangible results, and you don’t want to waste either time or money, the one thing you absolutely must have is a social media plan. Here's a six-step plan to guide you. READ MORE

By NAPA Net Staff10/19/2012 • 0 Comments

The Internal Revenue Service announced on Oct. 19 the annual cost-of-living adjustments affecting dollar limitations and thresholds for pension plans and other retirement-related items (i.e., IRAs, SIMPLE plans, etc.) for the 2013 tax year. In general, many of the pension plan limitations will change for 2013 because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment. Increases in the IRS annual limits on contributions and changes in the definitions of key employees and HCEs always represent a good opportunity to touch base with your clients. READ MORE

By NAPA Net Staff10/19/2012 • 2 Comments

Our industry is notorious for churning out large reports for investment committee meetings that, for all intents and purposes, are thrown by the wayside an hour or two after the committee meeting. For our firm, the decision to “go green” in other aspects of our business was an easy one, but for some reason we had been slow to act in our investment committee meetings. We elected for a soft transition to tablet technology, meaning we’ve continued to prepare a small amount of paper booklets, in addition to tablets, for our meetings with a full transition expected soon. READ MORE

By NAPA Net Staff10/18/2012 • 0 Comments

So, what are some early anecdotal results of the 408(b)(2) requirements among plan fiduciaries? That depends on whether the fiduciary is diligent or not, according to new research by the law firm Bryan Cave. Overall, very few plan sponsors were able to determine on their own whether their fees were reasonable, with some relying on conflicting advice from their service providers. Most indicated that that the disclosures were too complex to understand; as a result, not many of them made changes. But diligent fiduciaries relying on experienced third-party advice had a different experience. READ MORE

By NAPA Net Staff10/18/2012 • 0 Comments

Sometimes the biggest risk is not taking enough risk. In a recent survey, Natixis found that market volatility and uncertainty still keeps many investors on the sidelines. Advisors who work with participants and have a sound portfolio construction strategy — one that may include non-correlated investments, like alternatives — may find a receptive (albeit reluctant) audience. These advisors may be able to move some of their clients out of an unreasonable percentage of assets in cash. READ MORE

By NAPA Net Staff10/18/2012 • 0 Comments

Plan sponsors are required by the IRS and/or the DOL to provide notices to eligible employees and plan participants at specific times of the year related to the status of the plan or the participants’ accounts. A list from by Baden Retirement Plan Services (an Ascensus company) provides a quick reference, not a complete list, of notices that a plan sponsor should provide to participants. READ MORE

By NAPA Net Staff10/17/2012 • 0 Comments

What’s driving cost cutting by mutual funds offered to retirement plans? The market is becoming more transparent — driven not just by the DOL disclosure rules, but also by plan sponsors and advisors who want to pay each vendor directly for what they actually do. Plan sponsors are under pressure to select the lowest share class available. With lower share classes now available, savvy plan advisors will look for plans that are not taking advantage of these price cuts, thus wasting money and exposing their fiduciaries to increased liability. READ MORE

By NAPA Net Staff10/17/2012 • 0 Comments

In another sign of the shift from DB to DC plans, former Los Angeles Mayor Richard Riordan has filed a ballot initiative to overhaul the city’s employee pension system. Riordan’s plan would require future workers to enroll in 401(k)-style retirement accounts instead of government pension plans. The plan — which the City Council supports — would also raise the retirement age for city workers hired after July 1st of next year from 55 to 65, cap retirement benefits at 75 percent of what an employee makes, and require workers to pay more toward their retirement benefits. READ MORE

By NAPA Net Staff10/16/2012 • 2 Comments

It appears that benchmarking plan advisors will become as common as benchmarking funds and record keepers. The problem with benchmarking record keepers — and now advisors vs. funds — is that it’s really hard to assess value or outcomes compared with fees. David Witz of FRA Plan Tools outlines the case and the issues surrounding plan advisor benchmarking in a comprehensive article published in the Fall 2012 edition of ASPPA’s Plan Consultant magazine. While it’s getting easier to determine advisory fees and potential services, the question of value will remain until we can benchmark outcomes like we do with funds. READ MORE

By NAPA Net Staff10/16/2012 • 0 Comments

Most DC plans do not even have an Investment Policy Statement (IPS), which is debatedly required. So do we need another document that could potentially create liability? The answer is laid out brilliantly in a Transamerica Retirement Solutions white paper: a resounding “Yes.” In a compelling case for creating an Education Policy Statement (EPS), Transamerica’s white paper lays out the basic drivers. READ MORE

By NAPA Net Staff10/15/2012 • 1 Comments

Many employers get complacent about benchmarking fees, understanding the law and documenting their activities. The Tussey v. ABB case illustrates how one sponsor that was asleep at the wheel paid for those lapses. Advisors can use this to wake up clients and prospects who think it will never happen to them – why take that risk? READ MORE

By NAPA Net Staff10/15/2012 • 2 Comments

In 2012 there is no doubt that the DC record keeping industry is bloated, with 46 national firms in 2012, only 19 of which are in “401k Heaven” as measured by assets and participants under management. Interestingly, record keepers which manage funds that they could put on their platform used to be valued higher than were pure record keepers, but today, the firms which have great technology, are able to keep costs low and are not addicted to the fees generated by proprietary assets seem to be in favor. We've posted a comprehensive DC Record Keeper Consolidation List that details significant deals in the defined contribution market since 1999. The list is provided in three parts: 1999-2002, 2003-2005; and 2006-September 2012. READ MORE

By NAPA Net Staff10/15/2012 • 1 Comments

According to a recent study by Alliance Bernstein, only 63% of all plan sponsors consider themselves to be plan fiduciaries. The cases summarized below highlight the DOL’s commitment to a rigorous enforcement of the law and underscore the need for competent guidance on ERISA compliance. While proactive retirement plan advisors are leveraging new challenges to create opportunities (e.g., educating plan sponsors on requirements, assisting with the implementation and maintenance of policies and procedures, supporting document retention and compliance reporting, etc.), many financial professionals lack the experience or commitment to assist in this regard. Because most plan sponsors rely upon their financial advisor for guidance, he/she may be interviewed as part of the DOL’s investigation. READ MORE

By NAPA Net Staff10/12/2012 • 0 Comments

The Profit Sharing Council of America (PSCA) has released its 55th Annual Survey of Profit Sharing and 401k Plans. The results of the 2012 survey — which reports on the 2011 plan-year experience of 840 plans representing 10.3 million participants and $753 billion in assets — demonstrate continued confidence in the defined contribution system. The most significant finding of this year's survey is that more companies and participants are putting money into their plans, and they are doing so at higher rates than in previous years. READ MORE

By NAPA Net Staff10/12/2012 • 1 Comments

For decades, the only “unsolvable” problem in our industry has been everyone’s most important problem: getting people to save much more so they’ll have enough for a comfortable retirement. It’s ironic that we can solve almost every plan-related issue except higher participation and contribution levels—even though they’re why plans exist in the first place (and drive, in some way, everyone’s revenue model). READ MORE

By NAPA Net Staff10/12/2012 • 1 Comments

It might have seemed like a good idea to offer 401(k) participants a smorgasbord when it comes to designing the right plan to help them retire successfully. But behavioral finance shows us that participants are plagued by inertia and irrationality. Bank of America Merrill Lynch provides a thoughtful white paper detailing concrete steps to design plans that are more likely to improve participant outcomes. READ MORE

By NAPA Net Staff10/11/2012 • 0 Comments

The usual debate about fees charged by mutual funds is about whether to use passive or active funds. The argument for passive funds is that very few active funds beat their benchmark, so why pay more? This may lead to the conclusion that lower-cost funds perform better. Christopher Carosa of Fiduciary News compares whether lower-cost passive funds fare better than higher-cost passive funds, and then does the same for active investments. READ MORE

By NAPA Net Staff10/11/2012 • 0 Comments

Providers, and particularly DCIO’s, spend a lot of money on value-add services to help them distinguish themselves and their services above and beyond record keeping administration and money management — much of which has been commoditized. The array of products, services and tools is virtually endless. READ MORE

By NAPA Net Staff10/10/2012 • 8 Comments

In a scathing report on service provider 408(b)(2) disclosures published Tuesday, the Wall Street Journal detailed the problems that plan sponsors have in two key areas: first, understanding the fees disclosed by providers under the new regulations; and second, trying to determine whether they are reasonable. Most employers have questions about their fees after reading their disclosures, according to a survey by ShareBuilder. In fact, some providers have deliberately made their disclosures hard to understand. There is an opportunity for savvy plan advisors to help these befuddled sponsors understand the fees in the somewhat arcane disclosures and then benchmark them against industry averages. READ MORE

By NAPA Net Staff10/10/2012 • 0 Comments

Guardian Life has hired industry veteran Stephen Davis to run sales at their retirement plan division, replacing Dale Magner, who departed earlier this year. Though Guardian has been on a hiring spree over the last few years under Magner, like many providers they have struggled in a market where there is low record keeper turnover. Price pressure and low turnover are forcing even the largest DC record keepers to retool, acquire or rethink their sales and marketing strategies. The hiring of Davis shows that Guardian has not thrown in the towel — which many suspected when Magner left — but no one believes that it's a panacea. READ MORE

By NAPA Net Staff10/9/2012 • 0 Comments

Batten down the hatches — a perfect storm lies dead ahead. Election-year politics, a struggling economy, a gargantuan federal budget deficit and the push for tax reform will combine soon, and will create a challenge for the retirement planning industry that we haven’t seen since 1986. That’s the bad news. The good news: ASPPA, NAPA’s sister organization, is already engaged in the task of getting a simple message across to Congress: Don’t try to fix the economy at the expense of millions of Americans who are trying to save for their retirement. READ MORE

By NAPA Net Staff10/9/2012 • 0 Comments

RFPs are used by fairly few plan sponsors searching for a new advisor, perhaps partly because there was no industry sponsored RFP template for plan sponsors to use — until now. The Retirement Advisor Council (RAC), led by industry market research professional Eric Henon and a group of industry experts including advisors, providers and broker dealers, has made an RFP template and protocol available. Why would an advisor want plan sponsor clients or prospects to go through an RFP process? Because the more educated the client or prospect is, the better an experienced advisor will appear. For example, RAC’s RFP template lists a fairly comprehensive litany of advisory services which less experienced advisors will be hard pressed to match. This makes the template a wonderful prospecting tool. READ MORE

By NAPA Net Staff10/9/2012 • 0 Comments

You may want to put one or both of these upcoming disclosure-related webcasts on your calendar: "What Plan Committees Must Do with 408(b)(2) Disclosures," featuring Fred Reish and Bruce Ashton of Drinker Biddle; and "404a-5 Revisited – Opportunities for Advisors", from NAPA. The Drinker Biddle webcast, coming up this Thursday, Oct. 11, is free to all. The NAPA webcast, set for Oct. 16, is free for NAPA members. READ MORE

By NAPA Net Staff10/9/2012 • 0 Comments

As stable value investments become more popular in DC plans — falling somewhere between money market funds, where returns are low but so are risks, and mutual funds, where both returns and risks may be higher — advisors need to understand how stable value works. In a simple but comprehensive article, an advisor gives an overview about how GICs and stable value works — explaining, among other things, the difference between funds held in a general account and subject to general creditors vs. separate accounts as well as the various hidden costs above and beyond management fees. The author raises the question of whether these fees are subject to the 408(b)(2) and 404(a)(5) fee disclosure rules and opines about the future of stable value funds given the real possibility of rising costs resulting from lower interest rates. READ MORE

By NAPA Net Staff10/9/2012 • 0 Comments

An Investment Company Institute study released last month, “Who Gets Retirement Plans and Why, 2011”, found that nearly three-quarters of those likely to save for retirement have access to a retirement plan through their employer or their spouse’s employer. Of that group, 93 percent participate. And according to the September edition of “Beyond the Numbers,” a U.S. Bureau of Labor Statistics monthly publication, access to retirement plans differs significantly by occupation, union status and wage level, among other characteristics. For example, the 78.7 million people without access to their own work-based retirement plan includes 61.1 million private-sector workers — but 12.7 million people in this uncovered group are self-employed and 153,000 say that they work without compensation of any type. Of the 52 million people who work for companies that don’t sponsor retirement plans, just 9.9 million, or 19 percent, don’t have access to a plan through their spouses’ employers, the ICI study found. READ MORE

By NAPA Net Staff10/8/2012 • 0 Comments

Plan sponsors are required by the IRS and/or the DOL to provide notices to eligible employees and plan participants at specific times of the year related to the status of the plan or the participants’ accounts. A list from by Baden Retirement Plan Services (an Ascensus company) provides a quick reference — not a complete list — of notices that a plan sponsor should provide to participants. READ MORE

By NAPA Net Staff10/8/2012 • 0 Comments

At the annual National Association of Government Defined Contribution Administrators (NAGDC) conference in San Diego, Phyllis Borzi, head of DOL’s Employee Benefits Security Administration, opined that public plans should follow private plan disclosure rules even though she has no jurisdiction over them. Borzi cautioned administrators about people trying to separate plans from their money and the difference between lifetime income and annuities — all while mourning the demise of (and attack on) DB plans. READ MORE

By NAPA Net Staff10/8/2012 • 0 Comments

Female wealth managers now manage an average of 5% more assets than their male counterparts, according to Fidelity’s 6th annual Broker and Advisor Sentiment survey. Behavioral finance research shows that women take less risk than men and are more realistic, while men tend to be more confident and optimistic. Women make up less than 10% of plan advisors, so advisor firms and broker dealers may be wise to recruit women to help plan sponsors and their participants with financial planning — not only to distinguish themselves but also to gather more assets. READ MORE

By NAPA Net Staff10/8/2012 • 0 Comments

The firm’s second annual study finds that employees are making some positive changes to their retirement planning, but poor money management skills and long-term economic challenges present major obstacles. With looming increases in health care expenses, taxes, inflation and life expectancy coupled with decreases in government and corporate retirement benefits more employees are taking plan loans and making hardship withdrawals. Sounds like a recipe for disaster. READ MORE

By NAPA Net Staff10/5/2012 • 0 Comments

Are state-run MEPs a potential boon for plan advisors? Though there is concern about the government trying to nationalize small-business retirement plans, would state-run plans actually be an opportunity for advisors? Jamie Kalamarides, SVP at Prudential, suggests in an interview that there could be a silver lining in these state initiatives. But small-business DC plans are sold — primarily by advisors and payroll companies — so it is doubtful that a “build it and they will come” mentality will be effective unless state-run retirement plans are made mandatory, which is harder to enact and raises a whole host of other issues. READ MORE

By NAPA Net Staff10/4/2012 • 0 Comments

By NAPA Net Staff10/4/2012 • 0 Comments

As you may have heard, there’s an election coming up in about a month. In a video shot just before the first presidential debate, NAPA’s Executive Director and Washington insider Brian Graff explains his take on the presidential campaign as it enters the stretch run, the likely political balance in the House and Senate, and what it all may mean for plan advisors. READ MORE

By NAPA Net Staff10/2/2012 • 0 Comments

Participants’ concern about their retirement is growing, according to the 4th Annual 2012 DC Participant Experience Study by KK & Company and Greenwald & Associates. To address that concern, participants prefer more proactive steps to increase their retirement readiness and provide them with more analysis. Almost half of participants feel they are behind schedule on saving for retirement, and three in five wish their employer did more to educate them about their retirement plan. Advisors that provide hands on education and advice are better positioned to address these concerns and win new business. READ MORE

By NAPA Net Staff10/2/2012 • 0 Comments

For decades, the defined contribution industry has focused on the performance of individual funds at the expense of other plan metrics. In a recent white paper, W. Van Harlow, Director of Research, Putnam Institute, analyzes a series of variables — fund selection, asset allocation, portfolio rebalancing, and increasing deferral rates — to determine which factors may have the greatest potential impact on an individual’s portfolio. Though it may seem intuitive that deferral and asset allocation have a greater affect than fund selection, the analysis may be helpful to show clients where to focus attention and resources. READ MORE

By NAPA Net Staff10/2/2012 • 1 Comments

California Gov. Jerry Brown (D) signed legislation Sept. 28 that will create the nation's first state-administered retirement savings program for private-sector workers, over the objection of critics who said it creates a new liability for taxpayers. The bill will establish the California Secure Choice Retirement Savings Program for more than 6 million lower-income, private-sector workers whose employers do not offer retirement plans. READ MORE

By NAPA Net Staff10/2/2012 • 1 Comments

Mitt Romney’s reference to the divide between the 47 percent of citizens who don’t pay income taxes and those who do may not be as important the pension divide, between those few who have a guaranteed cushion in the form of defined benefit pensions. How the candidates address this divide, cultural as well as political, is crucial, far beyond November. READ MORE

By NAPA Net Staff10/2/2012 • 0 Comments

With greater fee disclosure and focus on fiduciary issues, it seems logical that RIAs and hybrids would increase 401(k) market share. SageView’s growth might be an indicator of this trend as well as recent data from Cerulli. READ MORE

By NAPA Net Staff10/2/2012 • 0 Comments

A proposal by Sen. Tom Harkin (D-IA) to address what he calls the “retirement crisis” would shore up Social Security and also create a new retirement fund run by the government but funded privately. What appears to be a government-sponsored IRA intended to provide pension like lifetime income benefits called “Universal, Secure and Adaptable (USA) Retirement Funds” seems to be another attempt to fix the DC system by creating another one. READ MORE

Marcy Supovitz

Marcy Supovitz