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Quarterly Considerations – 06/30/2013

Plan Sponsors

Reconsider Re‐Enroll ‐ Plans sponsors that re‐enroll participants typically see a 40% to 60% adoption rate of target date funds. However, over half (56%) of plan sponsors are unaware of the potential fiduciary protection for defaulting assets into the QDIA during re‐enrollment, according to a recent J.P. Morgan study.

A Good Deal ‐ 401(k) participants tend to invest in lower‐cost funds. In 2012, 401(k) plan participants who invested in equity mutual funds paid 0.63%, significantly less than the 1.40% average expense ratio on equity funds offered for sale in the U.S., according to the Investment Company Institute.

Spousal Benefits ‐ Plan sponsors may need to review administrative procedures as a result of the Defense of Marriage Act decision and expected guidance. The Court’s ruling raises a question about the retroactive nature of spousal benefits in those states that recognize same‐sex marriage.

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