Member News - TIAG

Jay Kessler of Samet & Company (Massachusetts, USA) was a keynote speaker at the July 2014 Boston Fiduciary Summit. This event was held for the benefit of employee benefit plan fiduciaries to learn trends and best practices from experts.

• The DOL focuses more at the participant level. Among many other items, they look for timeliness in terms of deposits, and participant contributions to the plan trust. The definition of timeliness is "as soon as is administratively possible" which leaves some room for interpretation. The best way to be prepared in the case of an audit is to document your processes so you have a point of reference for the steps included in a process and how long each might take.
• The IRS focuses on the plan level. They review the 5500 for late deposits/contributions, and also at the Auditor's letter.

2) 2014: The year of Transparency overload[ii]

• Participants are now so inundated with information, it can be hard for them to prioritize and interpret it.
• Look for simplified communication requirements in 2015 and beyond.

3) Target Date Funds – widely used and widely misunderstood[iii]

• There were $500 billion invested in target date funds in 2013. That number is expected to reach $1 trillion by 2016. By 2020, target date funds are expected to hold 70% of all 401(k) assets.
• Decisions about target date funds should be based on plan participant behavior on retirement. Do participants withdraw funds over 0-3 years of a retirement date or leave a majority of the assets in the plan?
• Fiduciaries should know about the plan's target date funds. Does the fund have an active or passive strategy? Is it proprietary? What is its glide path? What is the equity exposure at age 65?

Read the entire article.