Mike Kane's Answers and Guides

We have heard as recently as yesterday that it will not be extended, but nothing is for sure on paper.

Think of it this way though, you are better to go ahead and comply early. If you're ready early, what is wrong with that? But if you aren't and wait until the last minute, you're going to have a lot to do at the last minute. Sure, it isn't finalized, but a modification here and there is much easier than trying to do it all at once.

I am a proponent of Managed Accounts, since most people don't have the time, knowledge or savvy to invest. Most fund managers that I have met, use someone to manage their money. While I share some of your concerns about your ex-employer having the potential to switch service providers, you need to look at the expense. When your money is in a 401(k) plan, you are avoiding many of the fees that you would have to pay when buying retail shares. I understand that discount brokerage could have offer some opportunities, but please take into consideration the expense factor.

The record keeper, in this case Merrill Lynch typically aren't fiduciaries, Neal. They may have a 3/21 limited scope fiduciary. In this case, Rocaton Investment Associates, who appears on the 2010 form 5500 as the advisor. The fiduciary is the Plan Sponsor or Macy's. They can't abdicate their role.

Juanita: You may amend the DB Plan, but you'll likely need some actuarial assistance. David is correct. Most TPA's/Record keepers have actuaries to assist you, although you may run into a couple billable hrs if you are trying to modify your formula to permit more/less contributions in a given year.

We developed our proprietary RFP that has over 30 pages. We have responses by 28 of largest bundled record keepers. We incorporated technology questions six years ago. About half the record keepers are losing money. That is the reason that we continue to see compression e.g Hartford exit Many proudly point to how much money they spend on technology, but if you dig deeply, you'll find most of that is for platform maintenance. Too much old technolgy has to be disguised by many of these record keepers by installing as many of their funds on the platform, and in the lineups, as possible. Think of it as mutual fund companies, posing as record keepers. Most have limited open architecture, although they tout their offerings like it is unlimited. Very few have pure open architecture because their platforms are so inefficient. The best have open architecture, revenue and expense disclosure, provide robust fiduciary support an actually make money. If you don't want to have your clients experience an involuntary conversion, do your homework. In one of our recent RFP's, the cost spread from highest to lowest expense was 400%.