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Thanksgiving Hero – Grilled & Smoked Turkey

Because it’s Thanksgiving! Last year we had family in for Thanksgiving so we had to cook dinner. Throwing caution to the wind, I decided to try not one, but two new (to me) methods of cooking the turkeys. (This is a somewhat risky strategy because as you know the turkey is the linchpin of Thankgiving dinner – so I was more than a little nervous. I grilled one bird on the Weber, and smoked the other on the Traeger. Drumroll please . . . They came out great. We ate right on time – 4:00 PM and both birds were very well cooked. The smoked turkey on the Traeger took about 5.5 hours. The turkey on the Weber only took 2.75 hours. I cooked both to an internal temperature (instant read thermometer) of 170 degrees and then took them off. Preparation was simple. Two 15 lb fresh organic turkeys (from the local food co-op) brought to room temperature and then dressed with a simple rub of olive oil, salt, pepper and finely chopped fresh sage, rosemary and thyme. I chopped up some apples, drenched them in the rub and put them in the cavities – just for flavor. (No stuffing.) For cooking, I ran the Traeger on

401(k) Investment Menu; Less is More

In the old days, some plan sponsors treated 401k investment menus like a restaurant menu. If somebody (influential) wanted a fund in the lineup it was added. The result of this in many plans were investment menus with too many funds, overlapping funds and dominated funds. Lineups like that are confusing to participants and result in poor(er) asset allocation.

Navigating a DOL Plan Audit

In 2013 the Department of Labor completed 3,667 401k plan investigations. Their audits found violations in almost 75% of the cases. The result (not including 88 criminal indictments) was $1.7 billion in re-imbursments and fines - an average of $618 k per plan.

Jerome Schlichter; Luke Skywalker or Darth Vader?

This excellent article by Darla Mercado provides background and commentary on Mr. Schlichter, founder of St. Louis based Schlichter Bogard and Denton. He is well known within the 401(k) industry for launching (and winning) a volley of lawsuits against 401(k) plan sponsors and providers, focused mostly on breach of fiduciary duty in the form of excessive fees and funds that are not in the plan participant’s best interests.

DOL Retirement Plan Audits to Rise Dramatically

In this article from Benefits Pro the author notes that DOL fines for non-compliance are up dramatically in 2013 and it is expected that this trend will continue in 2014. We have recently learned that the DOL has hired 15,000 new auditors over the last year. In 2013 the DOL collected $1.69 Billion in fines, up from 2012’s $1.27 Billion. As compliance becomes more complex and oversight increases, now is a good time for Plan Sponsors to ensure that their plans are in compliance. See this article for the Top 10 Audit Problems.

Fidelity sued by employees over 401k plan AGAIN

Reported over on the FRA PlanTools blog Fidelity is being sued by their own employees again. "The plaintiffs here generally allege that the fiduciaries to the Fidelity in-house plan violated ERISA sections 404 and 406 because Fidelity failed to rebate back the revenue sharing it collected from the all Fidelity mutual fund lineup in the plan beyond what would have been reasonable and permitted. The plaintiffs claim the plan should have negotiated a direct recordkeeping arrangement with Fidelty, like other large plans do. They claim that all the way back to 2007, a reasonable per head fee would have been $20-$27. Instead, they claim that Fidelity was collecting approximately $335 per head through the revenue sharing from the plan." This is the problem with bundling – even in the new era of full fee disclosure.  It is still way too hard to separate the cost of administration from the cost of investment management.  I can only hope that this continues to force the issue of full, clear and explicit fee disclosure for 401(k) service providers.

Top 10 401k Audit Problems

When the Internal Revenue Service (IRS) launched a series of “LESE [Learn, Educate, Self-correct and Enforce] examinations” last year, one of its intentions was to discover trends in compliance failure among qualified retirement plans. Here are the most frequently cited compliance errors. By avoiding these mistakes, compliance experts say sponsors can go a long way toward navigating—or avoiding—IRS audits. Full article over at Plan Sponsor.   1. Failing to amend plan design to comply with current law in a timely fashion 2. Failing to procure adequate fidelity bonding 3. Not following plan terms for loan and distribution processing. 4. Neglecting to allocate contributions and forfeitures in keeping with the plan terms. 5. Failure to properly run nondiscrimination tests. 6. Failure to deposit elective deferrals into the trust in a timely manner. 7. Using an incorrect definition of compensation per the plan terms 8. Failing to monitor plan contributions to ensure they do not exceed dollar limits or the deductible limit for employers. 9. Distributions of excess deferrals are incomplete, not timely or improperly calculated. 10. Not filing the final Form 5500.   Pro Tip: The IRS chose plans with invalid business codes on their 5500’s – if you can’t get your own business code right, what are the chances you are running your 401(k)

401k Plan Sponsor Focus

401k Plan Sponsor Focus PDF Download Good research from Putnam describing the necessary shift in focus from individual fund investment returns to overall plan performance as measured by retirement readiness.