Products March 24, 2008

Russell Adds Six New Funds to Target-Date Series

Russell Investments has added six funds to its LifePoints Funds, Target Date Series.
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The new funds include the 2015 Strategy Fund, 2025 Strategy Fund, 2035 Strategy Fund, 2045 Strategy Fund, 2050 Strategy Fund, and the “In Retirement” Fund, Russell said. Rounding out the current portfolio options (the 2010 Strategy Fund, 2020 Strategy Fund, 2030 Strategy Fund and 2040 Strategy Fund) the new funds enhance the investment choices available to retirement plan sponsors and participants.

“Our intent with these new funds is to make it easier for plan sponsors to offer more portfolio options and for plan participants to be able to immediately identify which of the options is most appropriate for them, based upon their anticipated retirement date,’ said Matt Smith, managing director, Russell Retirement Services, in a company announcement.

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The fixed asset allocation of the In Retirement Fund (32% equity underlying funds and 68% fixed income underlying funds) is consistent with the allocation at the end of the existing target-date glide path, Russell said. The In Retirement Fund is for investors who are no longer working and is intended to support an inflation-adjusted average annual withdrawal rate of 4% of initial investment (before fees) over a long-term time horizon (approximately 20 years) with a portion of the initial investment remaining at the end of that time horizon.

More information can be obtained at www.russell.com.

Compliance March 24, 2008

SPARK Asks IRS for 403(b) Prototype Plan Program

The SPARK Institute has submitted a formal request to the IRS for a “Pre-Approved 403(b) Prototype Plan Program,″ according to SPARK Institute general counsel Larry Goldbrum.
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In a SPARK Institute press release, Goldbrum said the Institute outlined in its letter nine areas for consideration in developing a prototype document to meet its stated goals. According to Goldbrum, some of the key considerations include pre-approval of documents covering governmental 403(b) plans and church 403(b)(9) plans.

“The objective of our comment letter to the IRS is to help in the design of a pre-approved 403(b) plan program which is accessible to employers on a cost-effective basis, is easy to implement and maintain, and is understandable to non-retirement plans specialists,” he said, in the announcement.

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The SPARK Institute also requested that the IRS postpone the compliance deadline for the written 403(b) plan document requirement so that employers could adopt an IRS-approved prototype document at the outset, rather than developing their own document that may later have to be revised in order to comply.

Last week SPARK filed a 13-page comment letter with the IRS asking for an extension of the effective date for compliance and guidance on the treatment of contracts and information sharing agreements (See SPARK Institute Wants Extension for New 403(b) Regs).

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