Kellogg Faces ERISA Managed Account Fee Complaint

The main allegation leveled in the complaint is that the defendants breached their fiduciary duty of prudence by requiring the plan to pay excessive recordkeeping fees and managed account fees, and by failing to timely remove their allegedly high-cost recordkeepers. According to the complaint, the plan contracted with Transamerica Retirement Solutions between 2016 and 2020 before transitioning to Fidelity Investments in 2021. Neither recordkeeper is named as a defendant in the lawsuit.

Source: Planadviser.com, July 2022

How Retirement Plans Can Correct Required Minimum Distribution Errors

When an error in administering required minimum distributions from a defined benefit or defined contribution plan violates Internal Revenue Code requirements, plan sponsors may be able to fix the problem by making corrective distributions under IRS procedures. This article outlines the solutions available when qualified or 403b plans miss or miscalculate RMDs. The coverage includes streamlined procedures for plans applying for IRS approval of a proposed correction and options for requesting a waiver of participants' excise taxes.

Source: Mercer.com, July 2022

2022 Advisory Council Report on Cybersecurity Insurance and Employee Benefit Plans

The 2022 Advisory Council hopes first to gain an understanding of cybersecurity insurers and the current market for cybersecurity insurance. This will include learning about insurers that are writing cybersecurity insurance coverage, the underwriting standards that insurers use for such insurance, and controls that insurers require or recommend that insureds have in place as a condition to underwriting coverage for cybersecurity risk. The Council also intends to investigate the terms of typical cybersecurity insurance policies.

Source: Dol.gov, July 2022

401k Mutual Fund Expense Ratios Continue to Drop

The downward trend in the expense ratios that 401k plan participants incur for investing in mutual funds continued in 2021, according to a new report from the Investment Company Institute. For equity mutual funds, the average expense ratios incurred by 401k investors declined from 0.39% in 2020 to 0.36% in 2021, the ICI notes.

Source: Asppa.org, July 2022

IRA Investors Pay Significantly More Than 401k Participants

Rolling retirement assets into an IRA can result in far higher costs to the individual retail investor than their institutional 401k participant counterpart. "An analysis of fee differences shows that the routine shifting of billions of dollars each year from 401ks -- which are often able to purchase lower-cost institutional shares -- into IRAs in which savers frequently purchase retail shares can translate into significantly higher costs for retail investors, costs that can eat into their long-term savings significantly," a new Pew Charitable Trusts report finds.

Source: 401kspecialistmag.com, July 2022

Automatic Enrollment's Long-Term Effect on Retirement Saving

This paper finds that 401k savings plans are increasingly offering automatic enrollment coupled with higher employee default deferral rates. Automatic enrollment almost doubles plan participation and successfully gets participants who might not have otherwise saved, saving. Automatic enrollment combined with automatic escalation creates better participation and savings outcomes.

Source: Troweprice.com, June 2022

Excessive Fee ERISA Complaint Targets Cook Group

The plaintiffs allege that, instead of using the plan's bargaining power to benefit participants and beneficiaries, the Cook Group defendants selected and retained high-cost investments and agreed to excessively high compensation for recordkeeping, administration, and other fees compared to available alternatives.

Source: Planadviser.com, June 2022

Communicating About Retirement Benefits Crucial to Retention

Employees say retirement benefits are important when deciding whether to leave an employer, but many employers are missing key opportunities to tell them about their benefits. More than 8 in 10 employees (82%) say their benefits -- specifically their retirement benefits (77%) -- are highly important in deciding whether they will change jobs, according to TIAA's 2022 Employee Retention Survey. And this comes as nearly a third of employees say they are considering leaving their jobs this year.

Source: Napa-net.org, June 2022

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