Products November 19, 2009

ICMA-RC Offers Employee Education Campaign for Public Employers

November 19, 2009 (PLANSPONSOR.com) – In response to research indicating that city and state government employees are twice as likely to save for retirement when employers provide support, resources, and education, ICMA-RC has launched a new education campaign called "It Pays to Save."

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According to a press release, the campaign is designed to broaden employer knowledge about saving trends among city and state government employees and provide employers with the tools they need to improve communication with those who are non-savers, and to simplify the enrollment and retirement saving process.

ICMA-RC said it recently partnered with MB&A Market Research to study the motivational behaviors that keep some public employees from saving for retirement and found the average participation rate in 457 plans was 54% when employers were highly supportive and actively involved versus 25% when employers were less engaged.

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“Public sector employees at every level of income become more interested in saving for retirement when their employer takes an active role,” said Keith Sendall, ICMA-RC Senior Vice President of Field Sales, in the press release. “Nearly all public employees who are saving in 457 plans cited employer support as one of the main reasons why they enrolled.”

More information about the educational campaign is at www.icmarc.org/savers.
Compliance November 19, 2009

EBSA Pulls Back Controversial Advice Mandate

November 19, 2009 (PLANSPONSOR.com) – The long saga of the U.S. Department of Labor’s (DoL) hotly debated investment advice rule took another twist Thursday when the DoL’s Employee Benefits Security Administration (EBSA) announced the controversial final rule is being withdrawn.

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The latest move regarding the advice rule follows EBSA’s recent extension of the applicability and effective dates of the January 2009 rule to May 17, 2010 (see EBSA Delays Advice Rule – Again). EBSA said the extension expires on the rule’s withdrawal.

“The department decided to withdraw the rule based on public comments that raised sufficient doubts as to whether the conditions of the final rule and the class exemption associated with the rule could adequately protect the interests of plan participants and beneficiaries,” EBSA commented in a news release.

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The agency said it intends to publish separately a proposed rule that conforms to the Pension Protection Act statutory exemption relating to investment advice.

Former EBSA head Bradford Campbell, who is now associated with the Schiff Hardin LLP law firm, released a statement after the agency announcement in which he blasted the decision.

“The decision to withdraw these regulations in their entirety is a significant loss for the millions of workers who have waited over three years for the Department to provide access to quality, professional investment advice.  I’m very disappointed that the Department did not at least permit the portions of the final regulation implementing the PPA’s independent, computer model-based advice provisions to go into effect,” said Campbell in the statement. “It is one thing for a new Administration to have a policy disagreement with its predecessor about a portion of a regulation; it is another thing entirely to throw the baby out with the bathwater.”

 

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