The Markets October 15, 2010

Media Firm Makes DB to DC Switch

Journal Communications, a Milwaukee-based media company, is freezing its defined benefit plan and boosting its 401(k) match, effective January 1, 2011.
Reported by

A news release said the Annual Employer Contribution (AEC) also will no longer be a component of the 401(k) plan.

Starting in 2011, Journal Communications will match $0.50 on every dollar up to 7% of eligible pay for a maximum match of 3.5%, the company said. The prior match was $0.50 on every dollar up to 5% of eligible wages for a maximum match of 2.5%. All employer contributions will vest 100% as soon as they are made. In addition, Journal will begin offering a Roth 401(k) option for after-tax contributions.

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In February 2009, Journal Communications temporarily suspended 401(k) matching contributions. Additionally, the company suspended benefit accruals to the pension plan, SERP, and the AEC for an 18-month period beginning July 1, 2009.

The changes do not affect the benefits of retirees, beneficiaries, or terminated vested participants of the pension plan, the company said.

“We believe this decision allows us to maintain our financial flexibility while still offering a solid retirement benefit,” said Steven J. Smith, Chairman, President and CEO, in the news release. “Enhancing our 401(k) matching contributions will help us recruit and retain talented people as competitive 401(k) plans are a valued benefit in today’s workplace.”

Products October 14, 2010

Ala. Firm Releases Index Fund 401(k)

A 401(k) provider has unveiled a bundled 100% index fund 401(k) program where employees pay only the expense ratios of the index funds.
Reported by

A news release from the Mobile, Alabama-based Employee Fiduciary said companies and their advisers can select any index fund from any mutual fund family (meeting fund requirements). Participants pay no transaction fees and nothing but the expense ratios of the index funds, which the company said can be as low as 0.07% per year, and advisers can supplement the index lineup with other funds, if they wish.

According to the announcement, the employer is charged a static itemized fee for recordkeeping and administrative service.

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Employee Fiduciary provides same-day contribution processing, trading, recordkeeping, a participant Web site, and all plan administration (plan documents, required testing, government filings, etc.), the company said.

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