Compliance September 20, 2012

Groups Recommend Correction for Auto-Enrollment Failures

Industry groups have recommended to the Internal Revenue Service (IRS) a “safe harbor” correction for automatic enrollment failures.
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In a comment letter, the  American  Society  of  Pension  Professionals  &  Actuaries  (ASPPA)  and  the  Council  of Independent 401(k) Recordkeepers (CIKR) said they are writing to request additional enhancements to the Employee Plans Compliance Resolution System (EPCRS) to encourage companies to include automatic enrollment provisions in their plans.  

Specifically, ASPPA and CIKR recommend that the service modify the “safe harbor” correction methods under EPCRS to provide that, in the case of a plan with automatic enrollment, if an employee is inadvertently excluded from the plan or his deferral rate is not automatically increased in accordance with the plan’s provisions, an acceptable correction method would be: 1) to make a  corrective  qualified  non-elective  contribution  (QNEC)  with  respect  to  any  matching contribution failures occurring during the period of exclusion or non-escalated enrollment rate (adjusted for earnings); and 2) to provide affected participants who remain employed with the opportunity to contribute, out of future compensation, make-up elective deferrals for the amounts that were not withheld.  

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The letter is here.

 

Diversions September 20, 2012

Glass Shape Can Influence How Much You Drink

Price and availability both have an effect on alcohol consumption—and, a study found, so does the shape of the glass you drink from. 
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According to researchers at the University of Bristol in the U.K., participants who consumed alcohol from a straight-sided glass drank less than those who were served alcoholic beverages in glasses with curved sides. Social drinkers, both male and female, attended two sessions. They were randomly assigned to drink either beer or a soft drink from either a curved or a straight-sided glass. Next, they completed a task that asked them to identify what they thought was the midpoint of each type of glass.

Participants were significantly slower to consume an alcoholic beverage in a straight glass compared with one served in a curved glass. (Researchers quantified the difference as 60% slower.) This effect was observed only for a full glass and not a half-full one, and was not observed for a non-alcoholic beverage.

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When it came time to judge the halfway point of a glass, participants misjudged the midpoint of a curved glass to a greater degree than that of a straight glass, and—perhaps unsurprisingly—the more time they spent drinking, the greater the degree of error.

The study, “Glass Shape Influences Consumption Rate for Alcoholic Beverages,” was published by the Public Library of Science.

 

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