Retirement Made Simpler News
March 1, 2010
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In the News
EBSA Announces Outreach and Compliance Assistance for 403(b) Plans
The Department of Labor's Employee Benefits Security Administration (EBSA) announced new outreach and compliance assistance efforts for 403(b) pension plans subject to Title I of the Employee Retirement Income Security Act (ERISA). The initiatives are part of the agency's ongoing compliance assistance program to help employers, plan officials and service providers, including the growing number of employers offering automatic features.
Like administrators of 401(k) plans, 403(b) plan administrators now must file basic financial and other compliance information annually with the government on a Form 5500 or Form 5500-SF. The department is sending a letter to administrators of the approximately 16,000 403(b) plans subject to ERISA.
EBSA Press Release
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Auto 401(k) Enrollment Grabs Reluctant Savers
So many things in our lives are automated these days. Your paycheck may be automatically deposited in a bank account, and automatic bill pay has become more widespread. The same ease has come to retirement accounts in a very big way. Auto enrollment, auto escalation, and auto rebalancing are increasingly popular. About 60 percent of companies with 401(k) plans automatically deduct a portion of a new worker's pay and put it in a retirement account. Associated Press/New York Times
Employee Focus: How to Avoid Pitfalls in Automatic Retirement Saving
On long driving trips, I love to use cruise control. I just set the speed once and stop worrying about how fast I'm going. Of course, I still need to steer, and watch out for other drivers. Automation can be good for retirement saving, too—but only up to a point. Huffington Post
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Research and Resources
Workplace Report Finds Workers Highly Receptive to Auto Features
Research by Prudential found that workers are receptive to putting automatic features in retirement plans. The report, "New Economic Reality and the Workplace Retirement Plan," found:
Read the Report
- 74% are positive about automatic enrollment, according to the survey. Similarly 70% are positive about a default savings rate and 65% are positive about automatic contribution escalation
- Close to six in 10 respondents would prefer an automatic approach to asset allocation in their workplace retirement plan
- 71% of younger workers are positive about an automatic retirement income approach, while 64% of older workers are positive.
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