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Nevin Adams

Nevin Adams

Nevin Adams

By Nevin Adams12/26/2012 • 0 Comments

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

By Nevin Adams12/3/2012 • 0 Comments

The total amount of assets held by private-sector retirement plans increased 14%, to $6.3 trillion, in 2010, according to the Employee Benefits Security Administration (EBSA). Defined benefit plan assets increased 12%, to $2.4 trillion, and defined contribution plan assets increased by 16%, to $3.8 trillion. READ MORE

Fred Barstein

Fred Barstein

Fred Barstein

By Fred Barstein12/21/2012 • 2 Comments

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

John Carl

John Carl

By John Carl12/27/2012 • 0 Comments

Responding to a question from an advisor in Pennsylvania, the ERISA consultants at the Columbia Management Retirement Learning Center Resource Desk addressed a common inquiry involving Roth IRA or Roth in-plan conversions. READ MORE

By John Carl12/18/2012 • 0 Comments

Responding to a question from an advisor in Colorado, the ERISA consultants at the Columbia Management Retirement Learning Center Resource Desk addressed a common scenario involving required minimum distributions (RMDs) from retirement plans. READ MORE

By John Carl12/11/2012 • 0 Comments

Responding to a question from an advisor in Michigan, the ERISA consultants at the Columbia Management Retirement Learning Center Resource Desk addressed a common inquiry related to plan permanency. While plan sponsors reserve the right to terminate their qualified retirement plans, the IRS views “business necessity” as the only legitimate reason for plan abandonment — an important dynamic that plan advisors need to be aware of. READ MORE

By John Carl12/5/2012 • 0 Comments

Responding to a question from an advisor in South Carolina, the ERISA consultants at the Columbia Management Retirement Learning Center Resource Desk addressed a concern that a client who owns several small businesses may face when establishing a Simplified Employee Pension (SEP) plan. READ MORE

Marcus Chandler

Marcus Chandler

Marcus Chandler

By Marcus Chandler12/19/2012 • 0 Comments

With pricing pressures, competition and other factors potentially threatening to commoditize professional retirement plan services, many advisors face a growing challenge: getting paid what they are worth for the expertise and services they provide. To confront this challenge, the dedicated retirement plan practice with the ability to bring real value and effective stewardship to the plan management relationship must be more adept than ever at communicating its unique value proposition in order to win business and retain clients. Formulating and executing an effective brand strategy can play a critical role in achieving this objective. READ MORE

Sheri Fitts

Sheri Fitts

Sheri Fitts

By Sheri Fitts12/28/2012 • 2 Comments

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

Rick Meigs

Rick Meigs

By Rick Meigs12/27/2012 • 0 Comments

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

By Rick Meigs12/6/2012 • 0 Comments

Often we miss some of the simplest and easiest opportunities to enhance our relationships with existing retirement plan clients. That's the premise laid out by Bob Kaplan, national retirement consultant for ING. Kaplan offers six suggestions on how to use the year-end plan review with plan sponsors to lay out your accomplishments, ask about concerns and manage expectations — and possibly find more business as well. READ MORE

Robert J. Rafter

Robert J. Rafter

By Robert J. Rafter12/10/2012 • 0 Comments

The Department of Labor will re-propose its controversial rule to amend the definition of fiduciary under ERISA within several months, Phyllis Borzi told Advisor One on Dec. 7. Borzi indicated that DOL “is not finished” with the rule, and went on to say that agency officials are addressing many of the legitimate issues that were raised in the comment process. READ MORE

NAPA Net Staff

NAPA Net Staff

By NAPA Net Staff12/31/2012 • 1 Comments

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

By NAPA Net Staff12/31/2012 • 0 Comments

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

By NAPA Net Staff12/31/2012 • 0 Comments

Fred Reish, Drinker Biddle’s resident ERISA expert, provides an investment policy guide to plan fiduciaries when selecting and monitoring TDFs. Though TDFS are similar in nature to other plan investments, Reish suggests that they are sufficiently different to warrant different treatment. READ MORE

By NAPA Net Staff12/31/2012 • 0 Comments

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

By NAPA Net Staff12/28/2012 • 0 Comments

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

By NAPA Net Staff12/28/2012 • 0 Comments

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

By NAPA Net Staff12/28/2012 • 0 Comments

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

By NAPA Net Staff12/26/2012 • 2 Comments

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

By NAPA Net Staff12/26/2012 • 1 Comments

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

By NAPA Net Staff12/26/2012 • 0 Comments

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

By NAPA Net Staff12/26/2012 • 0 Comments

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

By NAPA Net Staff12/26/2012 • 0 Comments

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

By NAPA Net Staff12/21/2012 • 0 Comments

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

By NAPA Net Staff12/21/2012 • 0 Comments

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

By NAPA Net Staff12/21/2012 • 0 Comments

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

By NAPA Net Staff12/20/2012 • 7 Comments

A provision in President Obama’s latest proposal to avoid the pending fiscal cliff would penalize small business owners by subjecting them to double taxation, according to Brian H. Graff, CEO/Executive Director of NAPA and ASPPA. The president’s latest offer to House Speaker John Boehner (R-OH) includes a 28% cap on the current tax benefit for itemized deductions and exclusions (35% for charitable contributions). This means that a small business owner with a marginal tax rate of more than 28% will pay a surcharge on elective deferrals to a 401(k) plan in the year in which the contributions are made — and then pay tax again on the full amount when those contributions are paid out at retirement, Graff explains. READ MORE

By NAPA Net Staff12/20/2012 • 0 Comments

At least one life insurer, Sun Life, seems to have answered that question in the affirmative, announcing the sale of its U.S. annuity business to Guggenheim Partners’ Delaware Life Holdings division on Dec. 18. Sun Life’s decision to unload its annuity business likely reflects a shared concern among insurers about the risk that comes with trying to hedge a guaranteed product like variable annuities. READ MORE

By NAPA Net Staff12/20/2012 • 0 Comments

Advisors who don’t embrace technology in their practice will not only be at a severe competitive disadvantage, they will lose out on a generation of investors who live on their mobile devices and the Internet, especially social media sites. AdvisorOne reviews the seven major technology trends affecting advisors in 2013. READ MORE

By NAPA Net Staff12/20/2012 • 0 Comments

With 2012 almost gone, this is a good time to look forward to next year. Vanguard provides a simple 2013 compliance calendar for plan sponsors, including requirements for plan- and participant-level fee disclosure. READ MORE

By NAPA Net Staff12/19/2012 • 2 Comments

Many advisors who are members of the National Tax Sheltered Accounts Association (NTSAA) identify themselves as either K-14 or ERISA advisors. However, there are no absolutes; many K-14 advisors have at least a small percentage of their practice consisting of ERISA clients, or vice versa. However, many concepts that are sound in the K-14 world may be unsound when applied to an ERISA plan. NTSAA's Michael Webb identifies the issues unique to ERISA 403(b) plans that can get practitioners into trouble. READ MORE

By NAPA Net Staff12/19/2012 • 0 Comments

In an era of low interest rates and risky markets, should advisors consider recommending alternative investments like real estate? Before you say yes, consider five practical considerations. And before you say no, have you considered alternatives for certain clients? READ MORE

By NAPA Net Staff12/18/2012 • 0 Comments

With advisors aging, where will the next crop come from? Success rates at major brokerage firms can be as low as 30%, and it can be harder for smaller firms that do not have the resources or time to train newbies. With only 5% of advisors under 30 and 55% over 50 — and a nation with a growing need for financial advice — where are the new advisors going to come from? READ MORE

By NAPA Net Staff12/18/2012 • 1 Comments

Most plan advisors agree that something needs to be done to help people save more for retirement, but debate rages over the effects of moving from nudge to shove, or libertarianism to paternalism. Either way, if some people don’t save enough to retire, the burden will fall on those who have been prudent (who will be forced to pay higher taxes) and on future generations. Both burdens can stifle the economy — just look at what states are facing now with underfunded pension plans. READ MORE

By NAPA Net Staff12/18/2012 • 2 Comments

Though most larger companies and government entities are backing away from defined benefit plans, DBs might make sense for smaller firms where the principals are looking to put away at least $50,000 and have a 5- to 10-year time horizon. With taxes likely to go up and Congress looking at lowering the DC contribution limit, the $200,000 DB annual benefit limit (rising to $205,000 it 2013) might be appealing, especially for Boomers who are behind the eight ball when it comes to retirement. READ MORE

By NAPA Net Staff12/17/2012 • 0 Comments

Retirement planning may be too late for many baby boomers; Gen Xers (age 30-44) are burdened with debt; and Millenials (age 21-30) have low savings and participation rates. It seems like a day does not pass without some research from a retirement provider about the lack of retirement savings and concern on the part of most participants about the deficit. Even if this is true, which is likely, the source is often questionable — so it’s refreshing to read a report by a third-party expert like Financial Finesse. READ MORE

By NAPA Net Staff12/17/2012 • 0 Comments

Though he’s not popular with New Jersey public employees, Gov. Chris Christie (R) seems likely to play the “Constant Gardener” with the state pension scheme in the wake of a report by the State Budget Crisis Task Force headed by Paul Volker and Rutgers professor Richard Keevy. Though recent reforms trimmed the public pension gap from $37 billion to $26 billion, tough choices lie ahead. READ MORE

By NAPA Net Staff12/17/2012 • 0 Comments

The DOL is moving forward with its plan to issue a new proposed regulation on retirement plan benefit statements. Reportedly, the proposed regulation will include the DOL’s initiative on lifetime income by providing for disclosure of an equivalent annuity benefit. This would be in the form of an estimate of what the participant’s current account balance would provide as an annuity benefit beginning at normal retirement age. READ MORE

By NAPA Net Staff12/17/2012 • 0 Comments

New York Times business columnist Gretchen Morgenson lauded the attempt by the EBSA’s Phyllis Borzi to change the rules related to the retirement plans of bankrupt companies. Reviewing the plight of Penn Specialty, whose $4 million plan remained in limbo while the company went through bankruptcy proceedings racking up fees and limiting participants’ access to their money, Morgenson sees hope in the proposed regulations. READ MORE

By NAPA Net Staff12/14/2012 • 4 Comments

Advisors and industry professionals know that training, certification and continuing education are important — not just for personal and professional growth but also because clients value it. In fact, according to industry research, 95% of plan sponsors value advisor credentials, and 90% are more likely to select an advisor with a credential (even as 91% are not sure what they mean). Financial Service Standards (FSS) put together what appears to be a comprehensive and unbiased guide to the many industry designations (even though they sponsor their own designation). READ MORE

By NAPA Net Staff12/14/2012 • 0 Comments

Behavioral Finance, or “Befi,” made famous in the DC world by UCLA professor Shlomo Benartzi, may be one of the most overused and least understood terms in our industry. Professionals from Sibson Consulting, a division of Segal, provide a basic and easy-to-understand guide to Befi, including practical examples. READ MORE

By NAPA Net Staff12/14/2012 • 0 Comments

Are advisors who are not parties in interest or ERISA fiduciaries liable if they knowingly participate in a prohibited transaction and receive compensation from plan assets? The 3rd U.S. Circuit Court of Appeals thinks so. In the case at issue, employers had established a trust within an ERISA-covered welfare plan and would make tax-deductible contributions which would create tax-free, annuity-like payments for the employer’s owners after their retirement. The advisor had directed his plan clients into the scheme and received compensation from the administrative company that had set up the trust, which was compensated by the insurance policies that funded the plan. READ MORE

By NAPA Net Staff12/13/2012 • 0 Comments

Proposals to scale back or eliminate retirement savings incentives in 401(k) plans not only endanger the ability of low- and moderate-income workers to enjoy secure retirements but are based on faulty math, Forbes columnist Jeffrey Brown points out in a Dec. 12 column. This faulty analysis dramatically exaggerates the real cost of the tax incentives for retirement plans. READ MORE

By NAPA Net Staff12/13/2012 • 0 Comments

Bringing about significant change is a three-step process. It begins with awareness, followed by willingness and capped by action. Though the recent plan- and participant-level fee disclosures might have started the industry on the process, clearly we have a long way to go. After interviewing industry experts and plan advisors, Christopher Carosa of “Fiduciary News” takes a look at the practical effects of 408(b)(2) and 404(a)(5) six months into the process. READ MORE

By NAPA Net Staff12/13/2012 • 0 Comments

Should enrollment meetings be limited to 10 minutes or less? A paper authored by Diversified makes a strong case. New employees can be burnt out after days and maybe weeks of new employee orientation, so a 45 minute meeting reviewing plan features like loans, distribution and especially investments may be detrimental. Just get them enrolled — answering other questions as they come up — and schedule meetings about investment education or advice later in one-on-one settings. READ MORE

By NAPA Net Staff12/13/2012 • 1 Comments

Advisors who work closely with their clients on sources of retirement income know that it’s important to include calculations and counsel on Social Security benefits. In an article published in NTSAA's "Market Beat" newsletter, 403(b) and 457 plan consultant Ellie Lowder addresses the 2013 changes in Social Security benefits and addresses some of the more frequently asked questions from advisors. READ MORE

By NAPA Net Staff12/13/2012 • 0 Comments

The death of mutual funds in 401(k) plans is greatly exaggerated, especially in smaller and mid-sized plans, according to a survey conducted by Cerulli with help from the PSCA and data from the DOL. Though collective investment trusts (CITs) are cheaper and offer more flexibility, mutual funds dominate plans with less than $250 million — followed by closely bunched separately managed accounts, CITs and insurance products. In larger plans it’s a much closer race, although mutual funds products are still the most popular investment vehicle. READ MORE

By NAPA Net Staff12/12/2012 • 0 Comments

Curtailing the current tax treatment of contributions that workers and their employers make to 401(k) plans will significantly reduce employers’ willingness to sponsor plans and employees’ ability to save, according to a survey of more than 500 companies conducted by Mathew Greenwald & Associates, Inc. and the American Benefits Institute, the education and research affiliate of the American Benefits Council (ABC). READ MORE

By NAPA Net Staff12/11/2012 • 0 Comments

When you’re trying to help plan participants move the ball on their retirement planning, the first step can be the hardest: “unlearning” mistaken beliefs. A recent consumer-directed article from the Associated Press does a good job of debunking seven myths on saving for retirement and planning for life after retirement — covering basics like Medicare, Social Security, replacement income, target date funds, working in retirement and more. READ MORE

By NAPA Net Staff12/11/2012 • 1 Comments

The U.S Department of Labor's Employee Benefits Security Administration announced Dec. 11 a proposed rule and related class exemption that will make it easier for Chapter 7 bankruptcy trustees to distribute assets from bankrupt companies' retirement plans. The proposal would allow Chapter 7 bankruptcy trustees to use EBSA's existing Abandoned Plan Program to terminate, wind up and distribute benefits from such plans. READ MORE

By NAPA Net Staff12/11/2012 • 0 Comments

Echoing the refrain from the Beatles classic, “Strawberry Fields Forever,” PIMCO’s Bill Gross predicts slower growth of the economy over the next decade, or a “new normal” of 2%. While it’s understandable that “living is easy with eyes closed, misunderstanding all you see,” Gross explains how opening your eyes, though difficult, is essential. In his monthly commentary for December, Gross notes that this is probably why both presidential candidates were vague about economic fixes — because there aren’t any short term ones. READ MORE

By NAPA Net Staff12/11/2012 • 0 Comments

In what is shaping up to be a seminal case addressing whether states can change and reduce their unfunded pension liabilities, Rhode Island state officials asked the courts to dismiss challenges by state employee unions to planned reforms in the state’s pension system. With an estimated $1.4 trillion of unfunded state pension liability across the country, Rhode Island is one of the worst offenders — which is why they took drastic action to reduce their liability, including suspending increases, raising retirement age, and merging pensions into 401(k)-like plans. READ MORE

By NAPA Net Staff12/11/2012 • 0 Comments

Updating recent auto-enrollment research across its retirement clients, New York Life Retirement Plan Services found that over time, plans with auto-enrollment saw steady deferral increases and sustained high participation, versus the opposite in plans without auto-enrollment. Plans employing this feature achieved 93% participation in the first year of auto-enrollment and 87% after four years, compared with 37% and 56% respectively, in plans without auto-enroll. READ MORE

By NAPA Net Staff12/11/2012 • 0 Comments

While the fiscal cliff negotiations are putting tax incentives for retirement savings on the front line, 11 members of Congress have voiced their support for the employer-based retirement system by co-sponsoring a “Sense of the Congress” resolution introduced Dec. 6 by Sens. Richard Blumenthal (D-CT) and Johnny Isakson (R-GA). READ MORE

By NAPA Net Staff12/10/2012 • 0 Comments

With more money moving to passive strategies, there’s a subculture that falls under the rubric of “Smart Beta.” Smart Beta generally refers to non-market-cap-weighted, systematic strategies that aim to add value by improving returns and/or providing lower volatility compared with the market-cap index itself. Dimensional Fund Advisors has been the leader of Smart Beta among advisors, but there are other firms — primarily in the institutional market, like Research Associates — that are using it as well. READ MORE

By NAPA Net Staff12/10/2012 • 1 Comments

Even in the face of research and logic that shows how auto enrollment and auto escalation improve plan outcomes, plan sponsors are still reluctant. In a survey of 118 plan executives (mostly from larger plans) by the Defined Contribution Institutional Investor Association (DCIIA), 69% indicated that they were unlikely to offer auto escalation. READ MORE

By NAPA Net Staff12/10/2012 • 0 Comments

Mistakes are an important part of the employee learning process, but they definitely represent risk to a financial services practice. How you train and manage your employees, including how you handle their mistakes, improves the return on your human capital investment in them and reduces the risk they will make mistakes. Advisor One columnist Kirk Hulett of Securities America Financial offers some helpful guidance (and a checklist) about reviewing areas like training and written procedure updates. READ MORE

By NAPA Net Staff12/7/2012 • 0 Comments

How times have changed. When the market was booming in the 1990s and parts of the 2000s, investors looked for ways to increase returns. Now, based on an online survey of 3,400 people age 55 or older conducted by AIG and Ken Dychtwald of Agewave, it seem that over 80% of investors seek safety. The most popular investment option (at 67%) was one guaranteed not to lose value, followed closely by investments that protect against loss providing income for life. Only 19% selected funds that have higher returns but greater risk. READ MORE

By NAPA Net Staff12/7/2012 • 0 Comments

The “Affluent Investor Confidence Index” compiled by the Spectrem Group market research and consulting firm dropped 11 points in November, marking its lowest reading in a year and biggest plunge since June 2011. Spectrem’s “Affluent Household Outlook,” a survey of attitudes toward financial factors that impact affluent investors’ daily lives, also took a dramatic turn for the worse in November, falling to its lowest reading since August 2011. The October-to-November drop-offs in both indexes are either a further indicator of investors’ concerns about the fiscal cliff or, as Spectrem’s analysis amusingly puts it, “perhaps just a case of PETS (Post Election Trauma Syndrome).” READ MORE

By NAPA Net Staff12/7/2012 • 1 Comments

How does a company reduce their 401(k) match without decreasing or eliminating it? IBM found a way: by holding it until the end of the year — which means that people who retire or leave before the Dec. 15 trigger date don’t get a match that year. While IBM employees are unhappy, the change has little effect on the current work force. READ MORE

By NAPA Net Staff12/7/2012 • 0 Comments

Speaking before the Women’s Institute for a Secure Retirement, Sen. Tom Harkin, D-Iowa, chairman of the Senate Health, Education, Labor and Pensions Committee, pointed out that sometimes in a crisis we can forget another one that is potentially more dangerous. While we focus on the budget deficit, the other one that’s looming — and which might get worse depending on the budget compromise — is the “retirement deficit,” or the difference between what Americans have saved for retirement and what they will need. READ MORE

By NAPA Net Staff12/6/2012 • 0 Comments

Oh, how changes in the market can make people change their minds. For example: When you retire, would you rather have a guaranteed rate of return on your retirement money and a check every month, or a potentially higher return on a lump sum payout subject to the risks of the market? These days, a lot of participants would choose the guaranteed payout because of market uncertainty. Hence the surge in interest in an annuity option within 401(k) plans. READ MORE

By NAPA Net Staff12/6/2012 • 0 Comments

Americans are both curious and competitive, which ING is trying to leverage to help them save more for their retirement. New research data on two new websites allows people to see how they are doing compared with peers across the country and within their state on a wide range of saving, spending, investing, debt and personal finance matters. Users create an anonymous profile by entering some basic information. They can also select categories such as hobbies, interests and where they live to align themselves even more closely with their peer set. READ MORE

By NAPA Net Staff12/6/2012 • 0 Comments

IRS auditors have been asking employers to provide evidence that they provided the safe harbor 401(k) notice to participants as required, the folks at Relius Sungard have learned. This evidence would include a copy of the notice. If a plan is unable to provide such evidence, the IRS is requiring the plan to correct the oversight and, in some circumstances, pay a closing agreement sanction as well. READ MORE

By NAPA Net Staff12/5/2012 • 0 Comments

Providing individual advice to plan participants can be difficult for many reasons. Those who have figured it out, however, have shown great improvement in outcomes. The challenges include scale (working with low-balance participants), technology (moving money from one money manager to another within a closed record keeping system) and conflicts (how the DOL will allow advisors to work with participants in their plans), as well as getting participants to engage. One advisory group, Scarborough Capital, has been working on this problem for almost 25 years. READ MORE

By NAPA Net Staff12/5/2012 • 0 Comments

One thing advisors wonder about is why it’s so difficult for people to save money today in order to ensure a better long-term future. Behavioral finance, so popular in helping DC plans create better outcomes, might explain that our future selves are strangers to us, and we’re not likely to make big changes in our current behavior to benefit strangers. In an effort to make that stranger more real to investors, BoA’s Merrill Lynch has created their version of a time machine to show them an image of what they might look like in 40 years. READ MORE

By NAPA Net Staff12/5/2012 • 0 Comments

Though the nation’s political pundits are talking more and more about going over the fiscal cliff as if it's likely, not just possible, it’s important to maintain perspective. With a deadline of Dec. 31, the fact is that plenty of time remains for negotiators to make a deal. In fact, for both sides, striking a deal early could make them look like they compromised too soon, perhaps leaving an issue on the table that could have been won had they held out just a little longer. READ MORE

By NAPA Net Staff12/4/2012 • 0 Comments

In its recently released 2012 financial report, the SEC indicated that, among other things, it will look to harmonize fiduciary standards for investment advisors and broker dealers that provide the same services. The SEC also plans to hire more examiners — funds permitting — and to continue with other rulemaking under Dodd Frank. With the DOL likely to pursue its own agenda, will the rules covering advisors working with DC plans and retail investors be compatible? READ MORE

By NAPA Net Staff12/4/2012 • 0 Comments

Prudential has been aggressive in buying or taking over larger DB plans, including $7.5 billion of Verizon’s DB plan — which represents 25% of the overall plan. But that whole business model may be in jeopardy in the wake of a lawsuit filed by Verizon retirees to halt the deal with Prudential, claiming that it eliminates the insurance coverage provided by the PBGC. What’s the future of pension buy-outs? READ MORE

By NAPA Net Staff12/3/2012 • 0 Comments

A new online service allows financial advisors to gather detailed information about the growing number of career opportunities throughout the industry. The “Career Center,” launched Dec. 3 by InvestmentNews, contains information on hundreds of broker-dealers and custodians, as well as individual broker-dealer branches and registered investment advisory firms. It’s intended to give advisors the ability to learn more about a range of industry opportunities, including going independent, transitioning to a wirehouse, or joining an existing RIA. READ MORE

By NAPA Net Staff12/3/2012 • 0 Comments

FYI, we’ve updated our list of national record keepers. The National 401(k) Record Keepers list includes vendors that provide record keeping services at the national level. This means that they have significant presence in all regions, whether measured by plans under management or by sales personnel. There are about 600 so-called “Record Keeping TPAs” and other providers (like regional banks) that do not have a national presence and are therefore not included in the list. READ MORE

By NAPA Net Staff12/3/2012 • 0 Comments

The top 10 most-read items on NAPA Net last month included an interesting twist. READ MORE

By NAPA Net Staff12/3/2012 • 0 Comments

As negotiations between the White House, House Republicans and Senate Democrats heat up over the impending “fiscal cliff,” plan advisors should expect numerous ups and downs along the way, says Brian Graff, Executive Director/CEO of NAPA and ASPPA — with the ultimate outcome far from certain. READ MORE

By NAPA Net Staff12/3/2012 • 0 Comments

You can never underestimate the irrationality of participants. Assuming that they will act in their best interests – or even act at all – can lead to bad decisions about TDFs. Based on research utilizing their 1.5 million DC participants, JP Morgan is trying to determine how to best design plans and TDFs. READ MORE

By NAPA Net Staff12/3/2012 • 0 Comments

With growing concern about health care costs on the part of both employers and workers, the popularity of health savings accounts should grow. Unlike Section 125 cafeteria plans where you lose what you don’t use at year end, HSAs offer many benefits, including rollover freedom, investment and some spending flexibility, as well as death benefits. READ MORE

Marcy Supovitz

Marcy Supovitz

By Marcy Supovitz12/19/2012 • 0 Comments

The clock is ticking down, both on the end of 2012 and on the first big event of 2013: the NAPA/ASPPA 401(k) Summit. On March 3, 2013 — just a little more than 60 days — the 2013 Summit will kick off in Las Vegas. By a wide margin, the Summit is the biggest 401(k) event of the year. And thanks to the meteoric rise in NAPA's membership, we’re expecting even more advisors to attend in 2013. The Summit and other important news are discussed in this month's update from NAPA President Marcy Supovitz. READ MORE