defined contribution retirement plans DC plans Roadmap for Improving U.S. Retirement Savings: Make it Easier Read: Employers would not be fiduciaries in Open MEPs Expanded access to employer-sponsored retirement plans - Encourage MEPs by eliminating the next requirement and one bad apple rule whereby a defect by any one employer in the MEP disqualifies the entire MEP
- Reduce reporting and disclosure requirements, including simplifying Form 5500 and allowing electronic delivery of disclosures
- Offer a modified SIMPLE IRA that small employers can establish with relatively low startup and maintenance costs
- Adopt a safe harbor rule that facilitates re-enrollment so that existing employees who don't participate in their retirement plan, for example, can be automatically invested in a qualified default investment alternative (QDIA) such as a target date fund
- Encourage automatic enrollment of employees and automatic escalation of contributions through a more flexible nondiscrimination safe harbor that, for example, eliminates the 10% cap on automatic contributions
- Improve portability of plan assets when employees change jobs. There are currently no standardized requirements, processes or paperwork for this, according to BlackRock.
- Increase access to lifetime income products, such as annuities, in DC plans
- Improve the rollover process to move assets from a 401(k) to an IRA
- Revisit minimum distribution rules for small DC and IRA balances, which mandate distributions starting at age 70-1/2. BlackRock suggests raising the age for RMD to 75 and eliminating RMD for IRA balances below a certain amount, such as $250,000.
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Bernice Napach
Bernice Napach is a senior writer at ThinkAdvisor covering financial markets and asset managers, robo-advisors, college planning and retirement issues. She has worked at Yahoo Finance, Bloomberg TV, CNBC, Reuters, Investor's Business Daily and The Bond Buyer and has written articles for The New York Times, TheStreet.com, The Star-Ledger, The Record, Variety and Worth magazine. Bernice has a Bachelor of Science in Social Welfare from SUNY at Stony Brook.
