Products July 22, 2008

Prudential Issues 403(b) Guide

Prudential Retirement has issued a new Planning and Resource Guide to help its 403(b) clients manage plan transitions in the new regulatory environment.
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According to a press release, the guide includes an overview of Prudential Retirement’s service solutions for plan document and information sharing requirements, as well as suggestions about how to prepare for the new general administrative responsibilities plan sponsors will face under the new regulations.

To address the most onerous requirement of data sharing among multiple-provider plans, Prudential said it will utilize the data standards developed by the 403(b) Task Force of the Society of Professional Asset-Managers and Record Keepers (See SPARK Updates 403(b) Info Sharing Practices to Reflect DTCC Project).

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Plan administrators and sponsors who wish to learn more about the tools and solutions available should contact their Prudential Retirement service representative. Detailed explanations of specific provisions of the final regulations are available through Prudential Retirement Plan Analyst and Compliance Bulletins at http://www.prudential.com/pensionanalyst.

Products July 22, 2008

Calculator Shows Consequence of Cashing Out 401(k)s

RolloverSystems Inc. now offers an online calculator that workers who are laid off, switching jobs, or struggling financially can use to determine how much money they will receive if trying to withdraw money from their 401(k) accounts.
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By entering his or her current age, projected retirement age, expected return, and current plan balance, 401(k) participants can obtain the amount of penalties and taxes they will pay and what will be left of their distribution from the cash-out calculator.

In addition, the calculator informs participants what the savings will be worth at retirement if left to grow in a qualified retirement account.

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As an example, RolloverSystems said a 35-year-old plan participant wanting to retire at 65, who has a $5,000 balance and expects an 8% return will find she could pay $500 in penalties and $1,500 in taxes, leaving her with only $3,000 in cash. The calculator would also show that if she rolled over the savings into an IRA, the $5,000 would grow to be worth more than $50,000 at retirement.

The cash-out calculator is available at www.rolloversystems.com.

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