Benefits July 21, 2010
DC Plan Sponsors Respond to Regulator Actions
July 21, 2010 (PLANSPONSOR.com) – U.S. sponsors of defined contribution (DC) plans are focused on responding to Department of Labor (DoL) and Internal Revenue Service (IRS) activities, according to a new Mercer survey of more than 260 DC plan sponsors.
Reported by PLANSPONSOR staff
In response to increased DoL and IRS audit and enforcement activities, nearly 60% of plan sponsors surveyed by Mercer said they intend to take some kind of action in the next 12 months.
According to a news release, actions cited include:
- 65% plan to conduct an internal review of plan operations;
- 27% intend to engage their vendor to review administration; and
- 22% will conduct an independent operational compliance review.
In preparation for pending participant fee disclosure rules, 60% of plan sponsors indicate they will take some kind of action.
Actions cited include:
- 53% will conduct an administrative fee benchmarking study;
- 28% will reevaluate who (participant or employer) pays administrative fees; and
- 21% will change from a nontransparent bundled pricing arrangement to a transparent, fixed administrative fee pricing arrangement.
Other findings, according to the news release, include:
- 77% of plan sponsors intend to maintain their current level of employer contributions, despite the negative impact the market downturn has had on participant accounts;
- 45% of plan sponsors are considering adding some type of annuity option or minimum withdrawal benefit to their DC plan; and
- 25% of respondents intend to add investment advice in response to finalized Labor Department rules.
More information is at http://www.mercer.com.