DC briefs: Macy's to reduce 401(k) match for 2009

Cincinnati-based Macy's Inc. plans to cut the amount of its 401(k) matching contribution to its $2.1 billion DC plan in 2009, confirmed spokesman Jim Sluzewski.

Mr. Sluzewski declined to provide specific information on the reduction or how much the retailer currently contributes. He did say the new contribution would be made sometime in the spring.

The reduction is slated only for 2009, and Mr. Sluzewski said Macy's officials would revisit the contribution level in a year.

The 401(k) move was announced Feb. 2 in a news release outlining a broad corporate restructuring.

A Callan survey showed 44% of private and public defined contribution plans expect to replace an investment option for performance-related reasons in 2009, up from 39% who did so last year.

Plan officials also said fund and manager performance and due diligence are their primary focuses for 2009, according to Callan's “2009 Defined Contribution Trends Survey: Impact of Recent Market Volatility on DC Plans.”

Target-date funds were used as the default investment option in 59% of plans surveyed, up from 36.4% in 2007 and 32.5% in 2006.

Also, 76% of those surveyed said they'd be increasing the frequency of investment committee meetings in light of market volatility.

“There is a real focus by plan sponsors on making sure their "I's are dotted and "T's are crossed in their plans,” said Lori Lucas, defined contribution leader at Callan Associates. “Given the events toward the end of last year, sponsors are looking to see if plans need to make changes in their due diligence procedures and in their investment funds. Conversely, with all the energy being spent on nuts-and-bolts due diligence, there is going to be a lot less emphasis on plan features in 2009.”

The online survey was conducted in late November and early December, and results incorporate responses from 107 companies; 80% of respondents offered 401(k) plans while other respondents provided profit-sharing, 457 and 403(b) plans. The majority of plans had more than $100 million in assets and nearly one-third had assets of $1 billion or more.

The Department of Labor proposed delaying by 60 days the effective date of new rules allowing mutual fund companies to provide direct investment advice to defined contribution plan participants, according to a notice on the Federal Register's website. DOL will make its decision based on the comments it gets from the public.

The Labor Department also wants to provide 30 days — during the 60-day delay period — for public comment on whether the agency should “allow the (investment advice) rules to take effect, issue a further extension, withdraw the rules or propose amendments,” the DOL notice said.

The Labor Department is proposing the extension because of a Jan. 20 request from White House Chief of Staff Rahm Emanuel, who wanted to delay Bush administration regulations published in the Federal Register but yet to go into effect pending review by the Obama administration.

The Bush administration's investment advice rules, as published in the Federal Register on Jan. 21, the day after the Obama administration took office, were scheduled to go into effect March 23. The proposed delay would move the effective date until at least May 22, the DOL said in its notice.

The DOL also asked the public to comment on the proposed delay within 14 days of the publication of the latest notice in the Federal Register, according to the Federal Register website.