May 2012 Archive

DOL issues additional fee disclosure guidance

May 29, 2012

On May 7, 2012, the Department of Labor released Field Assistance Bulletin 2012-02, providing additional guidance with respect to DOL's participant-level fee disclosure regulation. In this article we review the FAB in detail, following (more or less) the order of the FAB Q&As, and focusing on those issues relevant to corporate plan sponsors. Read More

Retirement savings tax incentives and the data

May 29, 2012

Most agree that at some point in the relatively near future Congress will "do something" about the budget deficit, entitlements and tax reform. Many, including, e.g., President Obama's National Commission on Fiscal Responsibility and Reform, have suggested that tax reform should involve a reduction of marginal rates and a broadening the tax base. The idea is that you can increase revenues by lowering rates while closing "loopholes." The big "loophole" targets are the Child Tax Credit, the Earned Income Tax Credit, the mortgage deduction, health care tax benefits and retirement savings tax benefits. In this article we review some of the basic data on just how big the tax benefits for retirement savings are. Read More

April 2012 Pension Finance Update

May 03, 2012

According to T.S. Eliot, “April is the cruellest [sic] month.” For pension sponsors in 2012, this is true so far, although “cruel” may be a bit strong. The combination of a modest decline in stocks and lower interest rates resulted in declines in pension funded status during April for both “model” plans we track . Plan A lost about 2% last month but remains 6% ahead of year-end 2011, while Plan B lost 1% during April but is still up 1% so far this year. Download

Tussey v. ABB: District Court Finds for Plaintiffs in Revenue Sharing Fee Case

May 02, 2012

In Tussey v. ABB, the United States District Court for the Western District Of Missouri held that employer fiduciaries violated their fiduciary duty with respect to company 401(k) plans in connection with a revenue sharing-based fee arrangement with Fidelity Trust. This is the first 401(k) fee case in which the employer has incurred significant liability. In this article we begin with a brief summary of the court's decision on the four issues that relate directly to sponsors and the five "takeaways" that will be important for sponsors considering what this decision means for them. Read More

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