Investors Express Optimism for Retirement Plan Investing

The John Hancock Investor Sentiment Index score improved in the fourth quarter of 2011 from the annual low measured in the year’s third quarter.

Many of those surveyed feel better about investing in retirement vehicles, like 401(k)s and IRAs. Nearly three-fourths of investors said they believe now is a good or very good time to be investing in retirement products such as 401(k) plans and IRAs (73% each). Both of these figures represent meaningful increases over last quarter’s lows (66% for 401(k)s and 67% for IRAs).   

More than half of all investors surveyed said they expect to be in a better position financially two years from now compared with today. A little more than a third of investors think they are in a better financial position today compared with two years ago, with 41% saying they are in about the same position, and 25% saying they are worse off.   

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Two-thirds of those surveyed (65%) believe that fewer than 10% of Americans actually make and keep New Year’s resolutions. However, those who are employed say that saving for retirement is their top financial priority for 2012. More than one-quarter (27%) say that trimming household budgets and reducing their debt levels are among their resolutions.   

Financial New Year’s resolutions appear directly related to investors’ primary concerns for the new year ahead, which include declining investment values (37%) and not being able to accumulate enough savings for retirement (18%).  

Investors continue to think long-term (95%) and say they are focused on savings (90%).

IRS Answers New Question on Form 8955-SSA

A new FAQ from the Internal Revenue Service addresses when a plan administrator may answer “yes” to Question 8 on the new Form 8955-SSA, affirming that the required information was timely furnished to participants.

Question 8 on Form 8955-SSA asks whether the plan administrator provided an individual statement to each participant required to receive a statement. The instructions to the form add that the plan administrator must, before the expiration of the time for the filing of the form, furnish to each affected participant a statement setting forth the information required to be contained in the form.  

A plan administrator may answer “yes” to question 8 if the required information was furnished in a timely manner to participants in other documentation such as benefit statements or distribution forms. A separate statement designed specifically to satisfy this requirement is not required.   

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A plan administrator may answer “yes” to Question 8 if the statements or other documentation issued to the participants include the following information: 

  • Name of the plan
  • Name and address of the plan administrator 
  • Name of the participant 
  • Nature, amount, and form of the deferred vested benefit to which such participant is entitled.  

Thus, for purposes of completing Form 8955-SSA, the plan administrator’s notice to the plan participant does not need to include the participant’s social security number, the codes on page 2 of the Form 8955-SSA used to identify previously reported participants, or any information regarding any benefits which are non-forfeitable if the participant dies before a certain date.  

The Form 8955-SSA was created because, as part of the redesign on the Form 5500 annual report several years ago, the requirement to report participants with deferred vested benefits on Form 5500 Schedule SSA was eliminated. However, the IRS still wants to gather information about participants who terminate with a deferred vested benefit. The first Form 8955-SSA filing, for the 2009 plan year, may be due as soon as January 17, 2012 (see (b)lines Ask the Experts – Who Is Responsible for Reporting Form 8955-SSA Data?).   

More instructions from the IRS are available at http://www.irs.gov/retirement/article/0,,id=238959,00.html.   

The new FAQ is available at http://www.irs.gov/retire

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