(b)lines Ask the Experts – Getting Rid of Old Plan Documentation

April 17, 2012 (PLANSPONSOR (b)lines) – “We are performing some spring cleaning here at the employee benefits office, and we noticed that we have TON of records related to our ERISA 403(b) plan: old 5500s, old plan documents, old employee censuses and benefit records, etc.

“In fact, it appears that just about anything plan-related has been retained since the inception of the plan back in the 1950s! Can we discard some of this “junk?”  

Michael A. Webb, Vice President, Retirement Practice, Cammack LaRhette Consulting, answers:  

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As bizarre as it may sound recommending that you retain what you, no doubt lovingly, refer to as “junk”, the Experts would respectfully suggest that your turn your attention to cleaning other areas of your office, and keeping your 403(b) file intact!    

The reason is that the Employee Retirement Income Security Act (ERISA) has a relatively restrictive requirement for retention of plan records with a MINIMUM of six years for all records used in developing required plan reports (such as 5500 annual returns) and plan disclosures (such as Summary Plan Descriptions). In addition, all records used to determine benefits for participants in the plan, now or in the future, must be retained for as long as such records are relevant, which could be as long as a participant’s lifetime, or even the lifetime of his/her beneficiaries!    

Even if it were not a requirement, best practice is to retain plan records for as long as possible, especially in an era of increased participant litigation. Historic beneficiary records, qualified domestic relation orders (QDROs), and prior plan documents/benefits statements have become increasingly important as participants and their ex-spouses, alleged beneficiaries etc. make claims for benefits purportedly earned many years prior.   

Thus, that “junk” pile of old plan records might come in extremely handy someday!  

 

NOTE: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.
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Majority of Investors Plan to Work During Retirement Years

April 16, 2012 (PLANSPONSOR.com) – Sixty-nine percent of investors between the ages of 21 and 50 plan to work either part-time or full-time during their retirement years. 
 

Among those who plan to work at least part-time, most (75%) will do so because they want to stay active and involved; only 23% believe they will do so because they will not have saved enough money, according to a survey from T. Rowe Price.

Other survey findings among investors include:

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  • The mean age at which they plan to retire is 62;
  • The mean number of years they expect to live in retirement is 22;
  • Seventy-seven percent expect tax rates will increase between now and their retirement; and
  • Forty-three percent expect a part-time job to be a source of income during retirement.

“Beginning with the Baby Boom generation, a new vision of retirement has emerged—one that includes an active lifestyle and, for many people, continued work or even a second career,” said Christine Fahlund, CFP, senior financial planner with T. Rowe Price. “This survey suggests that many younger investors are ready to adopt this relatively new approach to retirement.”

The survey was conducted online in the U.S. by Harris Interactive on behalf of T. Rowe Price from December 1 to 12, 2011, among 860 adults aged 21 to 50 who have at least one investment account. 

 

 

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