This year, in addition to event recordings, we’ve put together a brief reference guide to accompany your review of the sessions. On the pages that follow, you will find a list of talking points, links to relevant content on www.plansponsor.com, and – in the case of the “Five Things You Need to Know About…” track, an actual list of the five things, as identified by those panels.
You’ll also find (at the very end) our list of “10 Things You’re (Probably Still) Doing Wrong.
For those of you who were in attendance at PSNC, I hope you find these materials a useful resource as you review the recordings. For those of you not able to join us in 2010, I hope it will inspire you to register for next year’s event.
Thanks, as always, for your continued support!
Professor Teresa Ghilarducci, Bernard and Irene Schwartz Chair of Economic Policy Analysis at the New School for Social Research
See also “The Plot to Kill the 401(k)” at http://www.plansponsor.com/magazine_type3/?RECORD_ID=42562
Professor Ghilarducci’s blog: http://chronicle.com/blogAuthor/Brainstorm/3/Teresa-Ghilarducci/85/
Princeton University Press: Does Teresa Ghilarducci want to “steal our 401(k)s?” at http://press.princeton.edu/blog/2010/07/21/does-teresa-ghilarducci-want-to-steal-our-401ks/
PD: Automatic Enrollment
WN: Target-Date Funds
What is the single most important question in evaluating or selecting a target date fund product/portfolio series?
What is an appropriate benchmark? Or benchmark process in determining how well your product/ portfolio is performing?
What are some challenges in helping participants understand TDFs?
How significant to the overall success of the products are the actual underlying investments?
To vs. Through…which is better and why?
FF: Fixing 403(b) Mistakes
What parts of the new regulations are most likely to trip you up?
Issues with “legacy” vendors
What plan sponsors should have done, and what can they do if they didn’t comply with the new regs
Issues plan sponsors can face when moving to a new solution or terminating a plan
Confusion surrounding the non-ERISA safe harbor for 403(b)s.
FT: Retirement Income Solutions
Evaluating the current market – “in” versus “after” plan options
Pre-Retiree Risks: Hidden Dangers
Evaluation of Effectiveness: What to Look for
Fiduciary Considerations When Adding an In-Plan Solution
Legislative and regulatory issues/concerns
How to educate communicate benefits to participants
Portability and liquidity issues
AA: Building a Better RFP/RFI
Set goals – know what is important
Make sure you understand current processes to use transition opportunity to move to “best practices” for admin processes and plan design.
Find out whatthe vendor can do to help participants achieve better outcomes (i.e. What do they offer in education services: meetings, flyers, webinars, support on their website, asset allocation tools
What can they show in reporting they do to management on the plan and also how easy are participant statements understood.
FF: Best practices for plan fiduciaries
What it means to be a fiduciary
Best practices as a plan sponsor for the plan
Best practices as a plan sponsor for participants
Best practices as a plan sponsor – for you (the plan sponsor)
PD: Cash Balance plans
WN: Fee Disclosure
Three Key Steps to Best Practices on Monitoring DC Plan Fees; benchmarking, understanding revenue sharing, getting to required revenue
Disclosure to participants – how/should it be done
Differences with regard to fee benchmarking or disclosure between 401(k) and 403(b)
FF: Benchmarking the fund menu
Reviewing the core menu – how and how often?
Evaluating target date funds
Specialty and custom funds
Are we asking the right questions?
PD: Roth 401(k)
What is Roth 401(k)?
How are Committees thinking about it?
What are pros and cons of intra-Plan vs extra-Plan conversions?
AA: Building a Better 403(b) Menu
How consolidating to a single provider can help in gaining optimal pricing efficiencies.
The importance of conducting an annual fee/benchmarking study to make sure the investments still fulfill sponsor goals and participant needs.
Conduct a thorough due diligence when selecting target-date or model portfolio options.
Make sure you review fixed income options to ensure adequate exposure in this investment category.
Ensure adequate exposure to investments outside of the U.S.
What else you can do to investment choices that can provide a better 403(b) plan
WN: Liability-Driven Investments
Dynamic LDI policies
Adapting to dynamic LDI
FT: Five Things You Need to Know About...QDIAs (qualified default investment alternatives).
Don’t need to have a QDIA to get 404(c) protection
Notices are important.
You can use a money market option for the first 120 days.
Keep QDIA in perspective – for non auto enroll plans, the impact of QDIA can be relatively minimal.
Who can manage a QDIA
Outside the Box(es)
Defining new investment choices
New choices as core options and in TD funds
Custom and ready-made TD funds
Caveats and lessons learned
When you should use NQDC
How to get the most value of out your NQDC plan
Why this is a great time to offer NQDC
How what you learned with 401(k) can help
Leveraging your consultant’s skill/time
FF: Bonding/Fiduciary insurance
It is a litigious world out there. There are many types of litigation and claims being brought, and new theories are being devised all the time as ways to sue plan fiduciaries. This really could happen to you, and the potential exposure is both significant and personal.
All fiduciaries should consider acquiring fiduciary liability coverage, and should carefully consider the amount of such coverage.
There are some legal issues with regard to fiduciary insurance, particularly if the plan is an ESOP and the plan sponsor is wholly or majority owned by the ESOP.
Such policies are often brokered and sold in conjunction with D&O or EPL coverages, which is fine, but be wary of combined limits.
FF: 10 Things You’re (Probably Still) Doing Wrong…
10 Things You’re (Probably) Still Doing Wrong
Fail to correctly analyze plan expenses to determine if they are legitimately payable from trust assets.
Fail to understand the protection offered under section 404(c) and incorrectly think it extends to the duty to prudently monitor the investment offerings under the plan.
Heedlessly relying on skimpy investment policy statements.
Not following provisions of your plan document.
Not complying with the QDIA notice requirement
Not doing enough Due Diligence on selecting and monitoring this fund option(s).
Not knowing (or making an effort to ascertain) if your plan fees are reasonable.
Failing to separate officer responsibilities from plan fiduciary responsibilities of plan committee members
Not seeking the help of experts when you lack the expertise to make fiduciary decisions impacting the plan.