This year, the Profit Sharing/401(k) Council of America (PSCA) will be making materials for their annual 401(k) Day available free to plan sponsors. The aim of these materials is to communicate and educate participants on the benefits of long-term savings in their 401(k) plans. In response to the state of the economy, PSCA is making this material available to plan sponsors for free, whereas this material was previously only available to PSCA members.

The Internal Revenue Service has posted a number of video and audio presentations online to explain the provisions of the American Recovery and Reinvestment Act (ARRA) of 2009, and how taxpayers can benefit from them. These presentations are posted on YouTube, iTunes and the IRS Web sites.

As a result of the Tax Increase Prevention and Reconciliation Act of 2005, the income limit for investing in Roth IRAs will be eliminated on December 31, 2009. Beginning on January 1, 2010, those individuals with an adjusted gross income (AGI) of more than $100,000 will be able to invest in Roth IRAs, whereas previously only those below that amount were eligible to do so.

The IRS recently released their Summer 2009 Newsletter addressing specifically employer sponsored retirement plans. Many plan administrators have seen over the past year the request to take out a financial hardship by many of its participants. The newsletter highlights the prerequisites for a requested hardship, the IRS regulations and risks associated with taking out a financial hardship as well as a step by step guide.

With last year’s stock-market losses destroying account balances and many companies cutting employee match contributions, employees of both small and large businesses saw their 401(k) savings take a devastating hit. But it is participants in a small-business 401(k) plan that take an additional hit. Small business plans pay substantially higher plan fees on average, which reduces their investment returns. Many participants are unaware of the enormity of those charges and it is the responsibility of the Plan Sponsor to examine the value of their benefit costs and understand what types of fees they are being charged.

Target Dated Funds needed to be periodically monitored and re-evaluated, just like any other investment option, according to a recent article in “U.S. News and World Report”. The article cautions that in order for your company and your employees to determine if a particular Target Dated Fund is a good investment, a number of factors need to be looked at. Factors such as:

Small businesses need to play close attention to their retirement plan fees, according to a recent article in the “Wall Street Journal” (WSJ). A big reason for this greater scrutiny is due to the fact that small companies have fewer employees to absorb such fees and so participants are often charged higher fees than their counterparts in larger companies. A survey in the WSJ article revealed that of 130 plans polled, small businesses (those with fewer than 100 participants) paid substantially more in fees than larger companies (those with more than 100 participants).

A recent Employee Benefit News article relays a study by the Transamerica Center for Retirement Studies that illustrates the mode and manner that participants prefer to receive information about fees and expenses associated with their 401(k) plans.