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Nevin Adams

Nevin Adams

Nevin Adams

By Nevin Adams4/30/2013 • 2 Comments

Last week, PBS’ “Frontline” program aired a segment on retirement entitled “The Retirement Gamble.” Let's take a close look at the program's perspective and representations. READ MORE

By Nevin Adams4/23/2013 • 0 Comments

The recently released White House budget proposal for 2014 includes a plan to raise $9 billion over 10 years by imposing a retirement savings cap for tax-preferred accounts. While initial reports focused on the aggregate dollar limit of $3 million included in the text, it soon became clear that that figure was merely a frame of reference for the real limit – the annual annuity equivalent of that sum, $205,000 a year in 2013 for an individual age 62. READ MORE

Fred Barstein

Fred Barstein

Fred Barstein

By Fred Barstein4/30/2013 • 0 Comments

The wealth management business, which has grown from a cottage industry in the 1990s into one with $5 trillion in assets under management, is facing challenges over the next 10 years that will dramatically reshape the landscape. Financial Network’s CEO Mark Hurley lays out the challenges for wealth management firms and provides insights into what may lie ahead for retirement plan advisors. READ MORE

By Fred Barstein4/30/2013 • 0 Comments

Laws enacted by states to ensure workers’ privacy on social media sites like Facebook and Twitter are under attack by regulators and the financial services industry. The laws, already enacted by five states and under consideration in many more, are intended to prohibit companies from monitoring their employees’ social media accounts to prevent invasions of privacy. But regulators like FINRA and groups like SIFMA and FSI are lobbying for exemptions — so far, to no avail. READ MORE

By Fred Barstein4/29/2013 • 0 Comments

Could a rise in interest rates create a problem for short term TDFs? With many TDFs moving to bonds for safety as their target dates approach, they’re vulnerable to losses if interest rates rise and bonds slump — which many are predicting. Risk can be determined by calculating the duration of the bond — for example, the value of a bond portfolio with a five-year duration could drop 5% with just a 1% rise in interest rates. READ MORE

By Fred Barstein4/29/2013 • 0 Comments

American investors, waiting for the other shoe to drop after their experience with the Great Recession, continue to spend less on investment expenses. The $151 billion spent on advice, commissions and custody in February 2013 represented 1.3% of personal consumption, equaling the average since the market downturn. Compare that with 1.6% over the previous 12 months and the 16.3% spent on health care. READ MORE

By Fred Barstein4/29/2013 • 0 Comments

Just when you thought you could stop worrying about taxes now that April 15 has passed, there’s another new income tax that took effect Jan. 1, 2013. To fund Obamacare, a new 3.8% tax on investment income applies to couples making more than $250,000 and singles making more than $200,000. Investment income such as dividends, capital gains and interest above the $250,000 threshold for couples is taxed at 3.8% — in addition to any other tax that might be owed. READ MORE

By Fred Barstein4/26/2013 • 0 Comments

In Santomenno v. Transamerica Life Ins. Co., a case that may have a significant impact on small market insurance record keepers, a court in the Central District of California rejected a motion to dismiss and raised serious questions about whether the record keeper’s ability to add and delete funds and change the fee schedule were the actions of a fiduciary. READ MORE

By Fred Barstein4/26/2013 • 0 Comments

In reaction to this week’s “Frontline” program on 401(k)s, EBSA’s Phyllis Borzi reiterated that participants should pay close attention to the fees they’re paying and the type of advisor they’re employing. And in an interesting move, the PSCA offered producer/correspondent Martin Smith free membership in their association. READ MORE

By Fred Barstein4/25/2013 • 6 Comments

Noted thought leader Michael Kitces makes a very interesting point: Advisors who focus on or lead with the fact that they are fiduciaries can actually destroy trust. Advisors who focus too much on their fiduciary status are making the implied statement that clients can trust them — but trust is earned, not demanded. And bashing other advisors who are not fiduciaries — implying that by definition they are not trustworthy, as Martin Smith did on this week’s “Frontline” program — can create distrust for all advisors and the entire system, argues Kitces. READ MORE

By Fred Barstein4/25/2013 • 1 Comments

In the aftermath of the attack by the PBS “Frontline” program on the 401(k) system, which focused on fees and charged that plan participants are being taken advantage of by Wall Street and advisors, ICI has released the results of a study showing that participants in 401(k)s tend to pay less for their mutual funds than the industry investor. READ MORE

By Fred Barstein4/23/2013 • 0 Comments

New research by ASPPA shows that middle- and lower-income Americans benefit more from retirement tax incentives, mostly due to the non-discrimination rules in DC plans. Putting aside the fact that unlike other tax incentives, savings that taxpayers get by taking advantage of the retirement tax rules are deferrals, not permanent exclusions, the research shows that 71% of the tax benefit from DC plans goes to people with an AGI of less than $150,000. READ MORE

By Fred Barstein4/23/2013 • 0 Comments

DC attorney Mark Poerio provides a simple and clear checklist for fiduciaries for monitoring investments, including a separate list for TDFs. Poerio cautions plan fiduciaries not to rely on superficial assumptions — which is also good advice for advisors who think a third-party investment analytical report is all they need. READ MORE

By Fred Barstein4/22/2013 • 0 Comments

In its SEC S-1 filing, ING has set its stock price at $21-$24 per share when it rebrands to Voya. The offering should yield $1.4-$1.5 billion. ING’s Dutch parent will get $600 million in primary proceeds, reducing its ownership to 75%. The IPO will consist of two parts, with the international offering following the sale of U.S. assets. Voya will consist of retirement, investment management and insurance, and will not include ING’s closed VA business or institutional spread products. READ MORE

By Fred Barstein4/22/2013 • 0 Comments

The conventional wisdom is that most small businesses, and even some larger ones, don’t really care about their retirement plan because, unlike health care, they don’t have to write a check. Getting them to care by scaring them about their fiduciary responsibility will only go so far. Forbes guest columnist Steve Parrish of The Principal explains why small businesses should care and outlines how to maximize the retirement benefits they offer. READ MORE

By Fred Barstein4/19/2013 • 0 Comments

Add a new player in the DCIO market. Nationwide, which has a significant presence in the small 401(k) market as well as with other DC and 457 plans, has hired five wholesalers plus a full support team to distribute their funds through advisors. READ MORE

By Fred Barstein4/19/2013 • 0 Comments

PIMCO’s recent consultant survey reviews important trends in the DC market and, though focused on the large market, portends changes for the entire industry. Based on surveys with 51 firms (with a median plan of $75 million), the group included so-called “Tier 2” consulting firms like the Blue Prairie Group, traditional institutional consultants, specialty firms like CapTrust, and traditional FAs that have moved up market like Snook Housey, as well as firms like Morningstar and Mesirow. READ MORE

By Fred Barstein4/18/2013 • 0 Comments

The April 23 Frontline program entitled “Retirement Gamble” looks to blame Wall Street and advisors for the lack of retirement readiness by many Americans. Claiming that money management firms and advisors have been “draining” the retirement savings of many Americans, according to a recent press release, correspondent Martin Smith will try to highlight the problems in the system. READ MORE

By Fred Barstein4/18/2013 • 0 Comments

In response to the Congressional Black Caucus’ concerns about the DOL’s proposed definition of fiduciary, EBSA Assistant Secretary Phyllis Borzi defended her proposal at a congressional briefing this week. Accompanying her at the briefing were representatives from AARP, AFL-CIO and the Plan Sponsor Council of America (PSCA), apparently to show support for DOL’s proposal. READ MORE

By Fred Barstein4/17/2013 • 5 Comments

Now that most plan sponsors (and even a few participants) understand how providers get paid, revenue sharing is an acceptable way for fund firms to pass along to participants the cost of record keeping and administration, as well as some advisory services, in the form of Sub TA and 12b-1 fees. The question now is whether each participant should be charged the same fee. READ MORE

By Fred Barstein4/17/2013 • 0 Comments

Led by TDFs, fees declined for most funds in 2012, according to the ICI, which used an asset weighted average. TDF fees dropped 2 BPs from 2011, to 58 BPs. That’s a decline of 13% since 2008, driven by greater volume — assets have tripled since 2008 to $481 billion — and the greater use of low cost products. READ MORE

By Fred Barstein4/17/2013 • 0 Comments

While NAPA Net has enjoyed great success in a relatively short time, in order for it to grow to its full potential and stay relevant given our limited resources compared with large for-profit media companies, we need to tap our members to help — especially advisors. So led by experienced and respected Morgan Stanley advisor Sam Brandwein, NAPA is in the process of forming an advisory committee. To stay true to its vision of connecting and informing advisors, we need advisors to participate on the committee. READ MORE

By Fred Barstein4/16/2013 • 0 Comments

NFP, a provider of benefits and wealth management services and a broker dealer with a strong presence in the DC market, announced a deal with Madison Dearborn yesterday to take the firm private. The $1.3 billion price is a 25% premium over the $20.05 share price on March 12, when a possible deal was announced and trading was halted. Madison Dearborn also owns Nuveen Investments, which has a significant DCIO presence. READ MORE

By Fred Barstein4/16/2013 • 0 Comments

Once a spokesperson for fiduciary advisors, Matthew Hutcheson was convicted Monday of 17 counts of wire fraud for dipping into two pension funds to remodel his home, buy cars and make a down payment on a failed Idaho resort. Each count carries 20 years. The jury, which took just a few hours to convict, was not convinced by Hutcheson’s defense that the resort was an investment that would ultimately benefit his clients and that the homes and cars were needed to woo investors he was ultimately never able to recruit. READ MORE

By Fred Barstein4/15/2013 • 4 Comments

Lost in the great debate about President Obama’s 2014 budget, which would impose a $3 million limit on retirement accounts, was a proposal to require small employers to offer an auto-IRA for those not currently covered by a 401(k) plan. CFOs generally support the proposal, which defines small employers as those with less than $20 million in annual revenue. They do have some reservations, however. READ MORE

By Fred Barstein4/12/2013 • 0 Comments

ING announced yesterday that it will rebrand to Voya in the next 20-24 months. As part of its bailout package in 2008, ING was required to divest its North American holdings by the end of 2013. While ING Direct was sold to Capital One, the company was granted an extension last November to divest the retirement and investment management group. READ MORE

By Fred Barstein4/12/2013 • 1 Comments

In President Obama's FY 2014 budget proposal submitted to Congress April 10, the SEC is requesting an additional $250 million, much of which would be used to hire an additional 325 examiners. In 2012, the SEC examined only 8% of the RIA firms under their jurisdiction, compared with 45%-55% of the nation’s 4,600 broker dealers that FINRA examined. READ MORE

By Fred Barstein4/11/2013 • 0 Comments

Claiming that TDFs are the biggest prospecting opportunity in today’s DC market, Glenn Dial, head of Allianz’s DCIO team, highlighted questions plan advisors should be asking when evaluating TDFs at this week’s CUNA Mutual/CPI Retirement Academy in St. Louis. Evaluating TDFs is very different than looking at traditional mutual funds, primarily because the TDF manager performs different tasks. The criteria used are also different — glide paths, diversification by asset class and investment type, and hedging vs. inflation risk. Additionally, an advisor might use one small cap growth fund for all clients but will need at least one “to” and one “through” TDF. READ MORE

By Fred Barstein4/11/2013 • 3 Comments

Staying abreast of all the issues facing plan advisors and their clients can seem overwhelming these days, especially with so much attention being paid to retirement issues by so many sectors of our society. How can you keep up with what’s really important? One way is to create categories or “buckets” to keep track of and analyze issues as they arise, and then create a simple acronym to help you remember them. Here's mine: READ MORE

By Fred Barstein4/10/2013 • 0 Comments

Drinker Biddle partner (and former EBSA Assistant Secretary) Brad Campbell covered a wide range of issues that might affect plan advisors at the CUNA Mutual/CPI Retirement Academy in St. Louis on April 9. Along with Obama’s budget proposal to “tax the rich” and the looming debate over the definition of fiduciary, Campbell addressed model portfolios, TDFs, 408(b)(2), lifetime income and abandoned plans. READ MORE

Kathleen Beichert

Kathleen Beichert

Kathleen Beichert

By Kathleen Beichert4/25/2013 • 0 Comments

Take a cue from the “smart money” and encourage do-it-yourself participants to be forward-thinking and invest in a more globalized future. And reevaluate: Are the international equity allocations you’re using in your custom target date or target risk models positioned for the past — or the future? READ MORE

John Carl

John Carl

By John Carl4/30/2013 • 0 Comments

Responding to a question from an advisor in Maine, the ERISA consultants at the Columbia Management Retirement Learning Center Resource Desk addressed a common inquiry involving conversions of 401(k) plans to Roth IRAs. READ MORE

By John Carl4/23/2013 • 0 Comments

Responding to a question from an advisor in Alabama, the ERISA consultants at the Columbia Management Retirement Learning Center Resource Desk addressed a common inquiry involving 401(k) plans and IRS tax levies. READ MORE

By John Carl4/17/2013 • 1 Comments

Responding to a question from an advisor in Texas, the ERISA consultants at the Columbia Management Retirement Learning Center Resource Desk addressed “backdoor” Roth IRAs. READ MORE

By John Carl4/4/2013 • 0 Comments

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

Marcus Chandler

Marcus Chandler

Marcus Chandler

By Marcus Chandler4/10/2013 • 0 Comments

A recent NAPA Net post, “Is Cold Calling Dead?” seemed to answer that question affirmatively, noting that “plans are getting bombarded by sales calls and the level of sophistication of the sponsor and the advisor, especially as you move up market, is growing.” READ MORE

Sheri Fitts

Sheri Fitts

Sheri Fitts

By Sheri Fitts4/18/2013 • 0 Comments

I remember the first days of Twitter. In fact, I recall speaking about Twitter at an ASPPA 401(k) Summit in 2006. People laughed and said there was no way any sensible person would ever tweet. READ MORE

Brian Graff, Esq.

Brian Graff, Esq.

Brian is the Executive Director of NAPA. In this capacity he oversees NAPA’s operations. As a member of the Leadership Council, he charts the strategic direction for the organization. Brian also serves as ASPPA’s Executive Director/CEO — a post he has held since 1996.

He has been named one of 401kWire’s “50 Most Influential Persons in the 401(k) Industry” every year since 2007.

An attorney and certified public accountant, Brian was formerly Legislation Counsel to the U.S. Congress Joint Committee on Taxation. Prior to working on Capitol Hill, he was associated with The Groom Law Group, in Washington, DC, which specializes in employee benefits. He received his doctoral degree in law, cum laude, from the University of Pennsylvania Law School in Philadelphia. He holds a bachelor of science in accounting with distinction from Cornell University in Ithaca, N.Y.

By Brian Graff, Esq.4/24/2013 • 11 Comments

On April 23rd, PBS ran an episode of its “Frontline” program entitled “The Retirement Gamble,” which it touted as an “eye opening investigation of a financial services industry that may be draining your retirement savings with every passing year.” The core thesis of this documentary — or perhaps more accurately, docu-drama — is that for retirement savers, fees are by far the most important factor to be considered when choosing an investment. READ MORE

Jennifer McKibben

Jennifer McKibben

By Jennifer McKibben4/29/2013 • 0 Comments

There’s a misconception out there that ERISA compliance is really more important for larger businesses. But the fact of the matter is that ERISA has significant implications for organizations of all sizes. So, Tom Clark of FRA/Plan Tools notes, it’s vital for small business owners and plan administrators to understand five reasons why they need to pay attention to it too. READ MORE

By Jennifer McKibben4/26/2013 • 0 Comments

The “SaveMy401k” campaign developed by the American Society of Pension Professionals & Actuaries (ASPPA) and Beekeeper Group has won a Telly Award for being an industry leader in media innovation. The campaign won a bronze award out of a group of nearly 12,000 submissions, including advertising agencies, television stations and corporate video departments worldwide. READ MORE

By Jennifer McKibben4/23/2013 • 0 Comments

Amid the hype over providing disclosure to financial consumers, it’s important to identify when disclosure can be helpful and beneficial versus when it can hurt and confuse the client. In an article in the April issue of Research magazine, AdvisorOne’s Bob Clark notes, Michael Finke of Texas Tech argues that disclosure can not only fail to help consumers but also contribute to declines in the quality of the products and advice they receive. READ MORE

By Jennifer McKibben4/22/2013 • 0 Comments

With varying levels of service available in the retirement plan space, business owners have to decide what type of retirement plan is best suited for their employees while considering the pros and cons associated with each. These options range from do-it-yourself to full service. A post on the Benefit Resources blog written for plan sponsors identifies four types of plans. READ MORE

By Jennifer McKibben4/17/2013 • 0 Comments

As the retirement plan environment continues to shift from a defined benefit to a defined contribution system, there is great concern about whether participants will outlive their retirement savings and be unable to maintain a certain standard of living during retirement. A 2012 report by the DOL's ERISA Advisory Council examined income replacement issues in DC plans. READ MORE

By Jennifer McKibben4/16/2013 • 0 Comments

A recent research report from Vanguard breaks down the growth trend for target date funds and their impact on DC plan investment strategies. In 2012, the report found, 27% of Vanguard participants and two-thirds of new plan entrants were invested in a single TDF. Vanguard anticipates that 55% of participants and 80% of new plan entrants will be invested in a TDF by 2017. READ MORE

By Jennifer McKibben4/12/2013 • 0 Comments

In the midst of a leadership change, the SEC is working on proposed new rules to reduce risk in money market funds. The proposal is set to be released in the next two months. SEC staff is working through the technical details of the proposal, which failed to move forward last year under SEC chairman Mary Schapiro. READ MORE

Rick Meigs

Rick Meigs

By Rick Meigs4/16/2013 • 0 Comments

A new report from the Retirement Advisor Council shows plan sponsors continuing to use formal RFP searches to find the right retirement advisor. According to the study, “What Type of Financial Advisor is Right for My Plan?”, plan sponsors ascribe four benefits to the process. READ MORE

John Ortman

John Ortman

By John Ortman4/26/2013 • 0 Comments

In a video interview with NAPA Net, Don Trone, GFS, discusses the new Leadership Center for Investment Stewards and the boot camp program he developed in conjunction with the U.S. Military Academy at West Point. The video is now posted on the new NAPA Network video channel. READ MORE

By John Ortman4/26/2013 • 0 Comments

Highlights of our posts and commentary for the week of April 22 centered around PBS’ anti-401(k) episode of its “Frontline” program that aired Tuesday evening. READ MORE

By John Ortman4/25/2013 • 0 Comments

Recent anti-401(k) stories in the popular media — most recently this week’s “Retirement Gamble” episode of PBS’ "Frontline" show — have promulgated a meme that misrepresents plan advisors’ role in helping plan participants achieve the goal of a dignified retirement. How seriously do retirement plan advisors take their responsibility to help bring about favorable outcomes for individual plan participants? Watch this video interview on the new NAPA Network video channel featuring Michael Coelho, AIF, of SageView Advisory Group and Tim Dougherty, MSFS, CFP, ChFC, CFC, of Windsor Financial Group, and see for yourself. READ MORE

By John Ortman4/23/2013 • 0 Comments

In a video interview with NAPA Net, Marc Robinson, founder of the SaverNation cash-back rewards program, explains how this innovative plan optimization feature helps plan participants and plan sponsors boost plan contributions — and how plan advisors can use it as a door opener and key differentiator. The video is now posted on the new NAPA Network video channel. READ MORE

By John Ortman4/23/2013 • 0 Comments

The 2013 401(k) Advisor Leadership Award was presented to the advisory team at Fiduciary Consulting Group at PSA in Hunt Valley, MD, during a session of the 12th annual NAPA/ASPPA 401(k) Summit in Las Vegas. Jania Stout, Retirement Plans Practice Leader at PSA, received the award on behalf of the team. In a video interview with NAPA Net, Stout shares her take on the importance of a holistic approach to helping plan participants, and comments on how plan advisors can combat negative coverage of 401(k) plans in the popular media. READ MORE

By John Ortman4/22/2013 • 0 Comments

One of the highlights of the 2013 NAPA/ASPPA 401(k) Summit, held March 3-5 in Las Vegas, was a video introduction to the first general session of the conference. In the video, a series of plan advisors addressed the theme of this year’s Summit — “Make an Impact” — as well as what it means to be a retirement plan advisor today, and NAPA’s role in the industry. READ MORE

By John Ortman4/19/2013 • 1 Comments

There’s a new feature on the NAPA Net web portal — a video channel we call “NAPA Network.” The new NAPA Network page currently features six short videos featuring industry innovators and thought leaders like Don Trone, Jania Stout, Paul Mahan and others. READ MORE

By John Ortman4/19/2013 • 0 Comments

Highlights of this week’s posts and commentary on the NAPA Net portal included reactions to President Obama’s proposed $3 million cap on retirement savings, a discussion of fee levelization, coming SEC rules to reduce risk in money market funds, and “backdoor” Roth IRAs. READ MORE

By John Ortman4/18/2013 • 0 Comments

Like a restaurant, a DC plan can structure its investment “menu” in many different ways. The trick is to come up with a menu of investment choices that best suits the plan. While that may sound simple in theory, in practice the complexity of the process of creating the right investment menu can overwhelm many plan sponsors. In a six-page white paper written for plan sponsors, the Defined Contribution Institutional Investment Association does a nice job breaking down the process. READ MORE

By John Ortman4/16/2013 • 0 Comments

In an interview Monday with CNBC's Rick Santelli, Brian Graff, Executice Director/CEO of NAPA and ASPPA, explains the impact of President Obama’s proposal to cap retirement savings accounts at $3 million on small business owners and their 401(k) plans. Graff also notes that the proposed cap would not apply to corporate deferred comp arrangements. READ MORE

By John Ortman4/12/2013 • 0 Comments

During a Senate Finance Committee hearing April 11 to discuss President Obama’s fiscal year 2014 budget, Sen. Ben Cardin (D-MD) grilled Treasury Secretary Jack Lew on the president’s proposed $3 million cap on retirement savings. The complexity of the provision, when added to the array of existing complexities in the tax code and ERISA, “will lead to less people putting away money for retirement, not more,” Cardin told Lew. “Where’s the sensitivity of this administration to helping people save for retirement?” READ MORE

By John Ortman4/12/2013 • 0 Comments

Stable value accounts are a good choice for the most conservative element of a 401(k) portfolio, especially in the current interest-rate environment. At the end of March, the average stable value yield was 2%. By comparison, the average taxable money fund is yielding 0.02%, and diversified portfolios of short-term and intermediate-term bonds are yielding around 0.6% and 1.8% respectively. But interest rates are bound to go back up eventually, Bernanke notwithstanding. What happens then? READ MORE

By John Ortman4/12/2013 • 0 Comments

This week's news and commentary in the NAPA Net Daily featured coverage of President Obama’s assault on retirement savings via his proposed FY 2014 budget, and speakers at the CUNA Mutual/CPI Retirement Academy in St. Louis. READ MORE

George Revoir

George Revoir

By George Revoir4/8/2013 • 0 Comments

EBRI defines adequate retirement income as having enough money to fund basic expenses in retirement. Based on this definition, approximately 44% of boomers and Gen Xers are at risk of running out of money. Clearly, we have a retirement income crisis on our hands. One of the main drivers of this crisis is low deferral rates in 401(k) plans. The average starting deferral rate has hovered at 3% for years — while experts recommend at least 10%. Deferral rates need to be higher because a participant's savings rate determines their real retirement age — that’s the bottom line. READ MORE

NAPA Net Staff

NAPA Net Staff

By NAPA Net Staff4/12/2013 • 1 Comments

According to the team at Drinker Biddle, plan advisors have an opportunity to help their clients with a Form 5500 reporting wrinkle that may catch plan sponsors and plan committees, in their roles as ERISA administrative fiduciaries, off-guard. Here’s the wrinkle: Failure to obtain the required disclosures under ERISA Section 408(b)(2) results in prohibited transactions that must be reported on the form. READ MORE

By NAPA Net Staff4/11/2013 • 2 Comments

In this month's Washington Update video, NAPA's CEO/Executive Director Brian Graff slams two provisions in President Obama’s FY 2014 budget, which was submitted to Congress April 10. The first of these two “retirement plan clunkers” in the budget, Graff notes, would result in double taxation of 401(k) plan contributions made by small business owners making more than $250,000 a year — that is, they would have to pay tax on the contributions in the year in which they are made, and then again (and at the full tax rate) when they’re distributed at retirement. (The same provision was in last year’s budget as well.) The second “clunker” is the new $3 million lifetime aggregate cap on DC plans and IRAs that was leaked last week. Graff's April Washington Update video is posted on the right side of this page. READ MORE

By NAPA Net Staff4/10/2013 • 11 Comments

President Obama’s own pension, based on reasonable actuarial assumptions, is worth at least $5 million — 40% more than the small business retirement savings cap proposed in his fiscal year 2014 budget, according to the American Society of Pension Professionals & Actuaries. A statement issued by ASPPA today raises the question: Is the president saying his own pension is a loophole? READ MORE

By NAPA Net Staff4/10/2013 • 2 Comments

In a move that’s sure to raise concern among advisors, BrightScope is set to release a database that compares fees from RIA ADV forms available to the public on advisors’ websites. While the information is currently public, the fees are found in text, not set apart in tables, which can make it hard for a consumer to decipher them. BrightScope is putting that fee information, along with disciplinary actions and other info about registered reps and IARs, into a database that makes it easy for investors to compare fees and look up complete information about the advisor from multiple public databases. READ MORE

By NAPA Net Staff4/9/2013 • 0 Comments

In the wake of the financial crisis, investors are trusting financial advisors more than banks, insurance companies, investment firms and the government, according to a Fidelity survey of more than 1,150 investors. A third of investors surveyed said they had reached out to a financial advisor during the crisis, and a quarter said they rely on their advisor more than in the past. READ MORE

By NAPA Net Staff4/9/2013 • 0 Comments

Noted economist Peter Ricchiuti of Tulane University is upbeat about the economy and the U.S. stock market, claiming that we’re only in the “middle innings” of our recovery. At the CUNA Mutual/CPI Retirement Academy in St. Louis, where over 200 advisors and 34 DCIO partners gathered, Ricchuiti questioned the press and pundits who are putting a negative spin on the economy. READ MORE

By NAPA Net Staff4/9/2013 • 1 Comments

Public Television’s “Frontline” is the latest media outlet set to attack 401(k) plans and IRAs. In a preview of “The “Retirement Gamble,” a program set to air April 23, 401(k) plans are characterized as a scam and a way for Wall Street to enrich itself at the expense of plan participants. READ MORE

By NAPA Net Staff4/8/2013 • 0 Comments

Achieving plan objectives in today’s environment of constrained budgets and increasingly complex fiduciary requirements is a difficult balancing act. With the right combination of employer match, eligibility and vesting standards and automated plan features, though, a plan’s effectiveness can be improved without busting the plan sponsor’s budget. Using four scenarios to illustrate, a new white paper from T. Rowe Price does a nice job of showing how costs can be managed effectively when adopting various automatic (and other) plan features by altering plan design elements. READ MORE

By NAPA Net Staff4/8/2013 • 0 Comments

In Sunday’s New York Times, noted behavioral finance expert Richard Thaler, a professor at the University of Chicago’s Booth School of Business, lays out some simple ways to attack the looming crisis for people who aren't saving enough for retirement. Thaler’s formula for success: setting people up for success with proper plan features or choice architecture so that they're more likely to make good decisions. READ MORE

By NAPA Net Staff4/8/2013 • 1 Comments

Bloomberg has reported more evidence that three of the largest private equity firms have intentions to enter the retail 401(k) market. As we reported last month, KKR, Carlyle and BlackStone are setting up vehicles that would allow participants to invest in their funds without the usual $5 million minimum or 10-year commitment. READ MORE

By NAPA Net Staff4/8/2013 • 0 Comments

Advisor Matthew Hutcheson’s trial — he’s charged with 17 counts of wire fraud — began last week and is expected to run through the middle of April. Hutcheson, once a spokesperson for fiduciaries in the retirement world who testified before Congress and regulators, is accused of using funds from retirement accounts he oversaw to attempt to purchase a failing luxury ski and golf resort in Idaho, as well as to buy luxury cars and remodel his house. READ MORE

By NAPA Net Staff4/8/2013 • 0 Comments

At the end of 2012, 401(k) participants had allocated 36% of plan assets to diversified equities, 21% to money market funds and 13% to company stocks, according to a new study by Spectrem Group. Current equity exposure is 10% below 2006 levels, when investors allocated 40% of 401(k) assets to diversified stocks, 19% to company stocks and 16% to money market funds. READ MORE

By NAPA Net Staff4/5/2013 • 0 Comments

With the release of the Obama administration’s proposed budget expected next week, some details are beginning to leak out, including proposals that would impose new limits on individual retirement accounts. At least one proposed cap — a cumulative limit on individual tax-favored retirement saving accounts, including IRA rollovers — is reportedly in the budget proposal. According to a Washington Post article, the cap would be set at $3 million. READ MORE

By NAPA Net Staff4/5/2013 • 1 Comments

While most people thought that the battle over the definition of fiduciary under ERISA would be confined to the qualified plan market, it seems that the real battle may be fought over IRAs. Moving to a levelized compensation, fee based model for advising a plan as a fiduciary seems acceptable to an industry that was moving in that direction anyway. But the question is whether that makes sense for IRAs, especially smaller accounts, and whether the DOL rather than the SEC should be taking the lead. READ MORE

By NAPA Net Staff4/4/2013 • 0 Comments

Until very recently, the picture that would come to mind when thinking of the word “retirement” was essentially universal: retire at 65, move to Florida and live comfortably off your pension while spending your days playing golf. Cut to the present day, where the concept of retirement is rapidly evolving, and we find ourselves asking, “What is retirement anymore, anyway?” READ MORE

By NAPA Net Staff4/4/2013 • 0 Comments

Inside the Beltway: Last week's news and commentary in the NAPA Net Daily reflected a raft of news on the legal, regulatory and legislative front. READ MORE

By NAPA Net Staff4/4/2013 • 0 Comments

The younger generation of advisors seems to be doing better than their Baby Boomer peers, according to research conducted in 2012 involving 1,200 plans ranging from RIAs to wirehouses. On average, Gen X and Gen Y advisors had $8 million more in AUM. Reasons included the greater use of technology, not just to streamline tasks but also to meet and communicate with clients electronically. That gives them more time to prospect and build relationships with clients. READ MORE

By NAPA Net Staff4/3/2013 • 0 Comments

The number of claims against fiduciaries has increased threefold since the 1990’s, according to the North American Professional Liability Insurance Agency — with plan sponsors now surpassing the medical profession as targets for litigation. Last year, for example, the ABB, Inc. fiduciary lawsuit resulted in a $37 million judgment against plan fiduciaries, highlighting the importance to plan sponsors of following a prudent process when changing plan funds. READ MORE

By NAPA Net Staff4/3/2013 • 0 Comments

The retirement industry in general and 401(k) plans specifically have been the subject of tough questions and much scrutiny, with many calling 401(k)s “a failed experiment.” Robert Richter, past president of ASPPA, defends 401(k)s in a column published in the Wall Street Journal. READ MORE

By NAPA Net Staff4/3/2013 • 0 Comments

Since the introduction of electronic filing in 2009, the IRS and DOL have been more aggressive in using the Form 5500 and schedules to identify plans for audits and investigations. Last year, for example, within a few months of the Form 5500 filing, the DOL sent thousands of letters or emails to plan sponsors requesting amendments or explanations of responses on the form or schedules. But what responses are likely to trigger an audit or investigation? READ MORE

By NAPA Net Staff4/3/2013 • 3 Comments

Seven out of 30 money management firms encouraged IRA rollovers with misleading statements, according to a GAO report to be released today. The Washington Post’s Michael Fletcher reported Tuesday on the GAO study, which looked into misleading fee disclosure and marketing practices by money management companies regarding IRA rollovers from 401(k) plans. Undercover personnel from GAO contacted 30 money management firms, posing as workers about to change jobs. READ MORE

By NAPA Net Staff4/2/2013 • 0 Comments

There are a number of important lessons for plan sponsors and their advisors in the seminal 9th Circuit Tibble decision outlined by the law firm of Trucker Huss. READ MORE

By NAPA Net Staff4/2/2013 • 1 Comments

It's not surprising that using an adviser can improve a person's odds of having enough money for retirement. What might be surprising is that using an online calculator can help even more. According to EBRI’s latest Retirement Confidence Survey, families in the highest income quartile increased their chances of being retirement ready by 14.7% when using a calculator, compared with 11% who consulted an advisor. Families in the lowest income quartile increased their chances of being retirement ready by 14.6% when using a calculator versus 9.1% of those who used an advisor. READ MORE

By NAPA Net Staff4/2/2013 • 1 Comments

Underscoring the unreliable nature of 5- and 10-year return calculations, a recent market commentary from Vanguard notes the impact of just one year’s worth of data falling out of a rolling period. READ MORE

By NAPA Net Staff4/2/2013 • 0 Comments

In what could be a landmark case, a federal bankruptcy court in California has ruled that the City of Stockton should be allowed to move forward with its Chapter 9 proceeding over the objections of the bond holders. The court didn’t opine on the really critical issue of whether federal bankruptcy law trumps state law — there is little if any legal precedent in this area, since municipal bankruptcies are rare. READ MORE

By NAPA Net Staff4/2/2013 • 0 Comments

When legal experts look at a central element of your business model and compare the possible future to past events like airline deregulation and tobacco and asbestos industry settlements, things are not exactly looking good. A recent Retirement Income Journal article touches on these themes in exploring the likely impact of the rising tide of lawsuits over allegedly excessive fees charged to 401(k) participants. READ MORE

By NAPA Net Staff4/2/2013 • 0 Comments

Innovation in the DC space usually starts in the larger markets because of their resources and clout, so a recent consultant study by PIMCO may portend changes in the mid and smaller DC markets. According to PIMCO’s “7th Annual Defined Contribution Consulting Support and Trends Survey,” which includes 51 consultants with $2.4 trillion and 6,600 clients, there will be a shift away from non-proprietary target date and risk funds, which may include customized investments. READ MORE

By NAPA Net Staff4/2/2013 • 0 Comments

In her latest biweekly update, EBSA’s Phyllis Borzi cautions workers in employer sponsored retirement plans to be wary of hidden fees and conflicts of interests by advisors who may put their own interests ahead of their clients, thereby lowering account balances. READ MORE

By NAPA Net Staff4/1/2013 • 0 Comments

When it came to American Funds, industry insiders and advisors always said that based on their 30-year history, they had a different model that few if any could follow. It seems that now, especially after two years of significant outflow (which has continued in 2013), American Funds is coming back to the industry, adopting services and features most of their competitors have in place. READ MORE

By NAPA Net Staff4/1/2013 • 1 Comments

Based on focus groups commissioned by a number of top DC providers and conducted with plan sponsors by EACH Enterprises, there seems to be considerable concern about state-run retirement plans. Though the California model, which allows companies to choose from private and public options, seems to be getting the most support, plan sponsors are concerned about state-run plans for several reasons. READ MORE

By NAPA Net Staff4/1/2013 • 1 Comments

Add the Congressional Black Caucus to the growing list of groups that oppose the DOL’s expansion of the definition of fiduciary. In a letter to the acting Labor Secretary signed by eight members of the House Financial Services Committee, the Black Caucus expressed concern that the DOL’s expanded definition would drive commissioned brokers from the IRA market, leading to a “disparately” negative impact on African Americans. READ MORE

By NAPA Net Staff4/1/2013 • 0 Comments

The top 10 most-read stories on NAPA Net last month revealed a keen interest in media coverage of 401(k) plans and possible legislative initiatives on both the federal and state levels. READ MORE