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Daily Article Digest - Updated Regularly

This digest contains a wide variety of the freshest source material dealing with current trends, opinion, news, legislative action, investments, marketing, sales, consulting, and legal issues regarding 401k, 403b and other retirement plans. Each listing contains a headline (hyperlinked to the source document), description, source of the item, and the month and year posted to this digest.

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Chapter 13 Debtors Can Shield Ongoing 401k Contributions From Creditors, 6th Circuit

Wage-earners who contribute to an employer-sponsored retirement plan can continue to do so at the same rate after filing for Chapter 13 bankruptcy protection, a federal appeals court held Monday in a case of first impression nationwide.

Source: Reuters.com, June 2020

Participant Communications Specific to the Pandemic

A recent Buck survey showed that 62% of defined contribution plan sponsors plan to increase their financial education communications. And there is certainly an increased need. Elizabeth Woodburn, with Buck, describes what elements DC plan sponsors may consider including in participant communications during the COVID-19 pandemic.

Source: Plansponsor.com, June 2020

First Hints of Potential New DOL Fiduciary Rule Emerge

The DOL has filed for review a draft regulation with the Office of Management and Budget. The actual language of the proposed rule is not yet available, as it must first be analyzed by OMB, but sources are speculating that this proposal likely represents the DOL's new fiduciary rule and that the "exemption" referenced in the title of the rule will be related to the Regulation Best Interest package currently being implemented by the SEC.

Source: Planadviser.com, June 2020

Appeals Court Upholds Dismissal of Phillips 66 401k Stock Case

A federal appeals court in New Orleans has upheld a lower court's dismissal of a complaint by participants in a Phillips 66 Co. 401k plan that fiduciaries violated their ERISA duties in managing a stock investment within the plan. "Plaintiffs claim that holding a single-stock fund is imprudent per se because of the risk inherent in holding an undiversified asset," the three-judge panel wrote on May 22. "But ERISA contains no prohibition on individual account plans' offering single-stock funds."

Source: Pionline.com, June 2020

Revamped DOL Investment Advice Rule Undergoing OMB Review

If you were wondering what the DOL was planning to do about its reported revision of the fiduciary rule, wonder no more. A proposal has just been submitted to the Office of Management and Budget for review. While the text of the proposal is not yet available, the title, "Improving Investment Advice for Workers & Retirees Exemption," suggests that it involves a prohibited transaction exemption that could potentially replace the Best Interest Contract Exemption (BICE) that was thrown out by the 5th U.S. Circuit Court of Appeals' in June 2018.

Source: Ntsa-net.org, June 2020

Is DOL Making an ESG "Investment"?

The DOL dropped off a proposed rule titled "Financial Factors in Selecting Plan Investments." It's not immediately clear what the focus of the rule is (other than the obvious), though it is flagged as not "economically significant." There's a suspicion that it might have something to do with ESG investing, a topic on which the Labor Department has previously provided some perspective, albeit in the form of Field Assistance Bulletins.

Source: Napa-net.org, June 2020

Tips to Prepare for Your Upcoming 401k Plan Audit

Audit request lists are going out to plan sponsors for the annual audits of their 401k plans. While the receipt of these request lists can cause blood pressure to rise at the plan sponsor, there are some simple tasks the plan sponsor can perform to prepare for the annual audit of their 401k plan. Here are some tips for plan sponsors which will help to make the audit process go smoother.

Source: Linkedin.com, June 2020

DOL Finalizes an e-Option for Delivering Plan Disclosures for Covered Retirement Plans

According to the DOL, there are approximately 137 million participants in approximately 700,000 retirement plans covered by ERISA. Since 2002, plan administrators could rely on a regulatory safe harbor to deliver printed disclosures. The DOL finally agrees it is expensive, a burden, and involves a lot of paper, printing, and mailing costs to comply with the old safe harbor.

Source: Lindquistcpa.com, June 2020

Fifth Circuit Holds That Offering Single Stock Investments in a 401k Plan is Not Per-Se Imprudent

The Fifth Circuit held that although the stock of the former parent was not statutorily exempt from ERISA's diversification because it was no longer a "qualifying employer security," there was no obligation for the plan fiduciaries to force plan participants to divest from the funds. The court explained that ERISA contains no per se prohibition on individual account plans offering single-stock funds.

Source: Haynesboone.com, June 2020

How the Coronavirus Pandemic Is Shaking Retirement Confidence Across Generations

It's no secret that Americans are feeling financially vulnerable in the wake of the coronavirus pandemic. And a survey shows how much their confidence has been hurt when it comes to one long-term goal: retirement. Transamerica Center for Retirement Studies found that 23% of workers who are employed or recently unemployed said their confidence that they will be able to retire comfortably has gone down.

Source: Cnbc.com, June 2020

Feds Double Down on ERISA Disclosure Argument After SCOTUS Look

Nothing in federal benefits law requires corporate insiders to make public disclosures beyond those required by securities law, the DOL and the SEC told the Second Circuit in letters that doubled down on their earlier position. The agencies' letters, filed Monday, come five months after the U.S. Supreme Court ordered the Second Circuit to reconsider a dispute involving a 7% drop in the IBM stock held by IBM's 401k plan.

Source: Bloomberglaw.com, June 2020

Settlement Reached in Emory University 403b Excessive Fee Case

Schlichter Bogard & Denton filed a preliminary settlement approval motion on behalf of Emory University employees and retirees in their suit against the university involving their 403b retirement plan. The plaintiffs in the case, filed in August 2016, sued for alleged breach of fiduciary duty under ERISA. The settlement terms include the creation of a $16.75 million settlement fund for the plaintiffs, as well as substantial non-monetary relief involving changes in the 401k plan.

Source: Streetinsider.com, May 2020*

Deadlines Extended for Employee Benefit Plans and Plan Participants

The DOL and the IRS issued COVID-19 related guidance applicable to employee benefit plans. Specifically, the DOL issued Notice 2020-01, and the DOL and the IRS jointly issued final regulations that temporarily extend deadlines applicable to plans and participants, effective March 1, 2020, and continuing until 60 days after the end of the National Emergency. The extended deadlines are reviewed here.

Source: Slevinandhart.com, May 2020

Labor Department Greenlights Electronic Delivery of ERISA Documents

The DOL finalizes the notice-and-access safe harbor for furnishing ERISA-required disclosure electronically to retirement plans' participants and beneficiaries; leaves out welfare benefit plans. Additional steps will be required for plan sponsors to take advantage of the safe harbor.

Source: Nixonpeabody.com, May 2020

Divorce Seen as Heavy Contributor to Early 401k Withdrawals

Compared to large purchases, Americans were more likely to take early withdrawals from their retirement accounts during a divorce or after losing a job, according to research by the University of Michigan. Mortgage payment distress was also a major factor leading families to withdraw funds, according to a working paper by economists Frank Stafford of the University of Michigan and Thomas Bridges of the University of Delaware.

Source: Napa-net.org, May 2020

Successful Retirement Plans Are Built on These 5 Pillars

Is your retirement plan solid? Check to see if you have all your bases covered, or whether your retirement "structure" is missing a key component. There is so much that goes into preparing for retirement, sometimes it's hard to know where to start. Having a comprehensive plan or blueprint will make the process easier by outlining the major areas you need to address.

Source: Kiplinger.com, May 2020

DOL Issues Final Rule on Electronic Delivery

The DOL published a final rule that allows retirement plan administrators to use an electronic "notice-and-access" method of delivery for required disclosures to participants in employee retirement plans. The final rule is fundamentally similar to the original proposed rule published in October 2019. The rule takes effect on July 26, 2020. It is anticipated that the rule will reduce administrative expenses and make the disclosures more readily accessible for retirement plan participants.

Source: Icemiller.com, May 2020

April 15, 1981: A Snapshot in Retirement Policy History

The author writes, "It's no surprise that politicians and number-crunchers were worried about Social Security in 1981, and state and local governments have been kicking the can with respect to their pension funds for far longer than these 39 years. But it's startling that even on a wholly arbitrary day, there's so much material to illustrate this. And it's still important to bear in mind how very longstanding these issues are when debating them now."

Source: Forbes.com, May 2020

69% of Older Americans Are More Concerned About Retirement Than They Were a Year Ago

It's natural to have retirement concerns under normal circumstances, but during a pandemic, those worries can surely escalate. In fact, 69% of Americans in their 50s are more concerned about retirement today than they were a year ago, according to the May 2020 Simplywise Retirement Confidence Index. If you feel similarly, here are a few important steps to take.

Source: Fool.com, May 2020

Five Ways to Modernize Your Next Recordkeeper RFP

For many advisors, recordkeeper RFPs conjure up thoughts of endless amounts of documents, countless back-and-forth conversations with candidates, and immense amounts of effort and time. While it's true that the recordkeeper RFP is an involved process that requires a generous amount of effort, many advisors fail to take certain steps to help expedite and modernize their RFP process. To help you form a better recordkeeper RFP process, here are five ways you can modernize your next RFP.

Source: Fi360.com, May 2020

DC Plan Response to CARES Act Varied by Industry and Recordkeeper, Survey

Callan conducted a mid-April survey to assess what defined contribution plan sponsors have done in response to the CARES Act and the recent economic turmoil spurred by the pandemic. The survey includes responses from 63 non-government plan sponsors, and in general, found that plan sponsor actions were primarily influenced by the industry they are in and the actions taken by their recordkeeper.

Source: Callan.com, May 2020

Land O'Lakes Faces 401k Excessive Fee Suit

Law firm Capozzi Adler has struck again, this time with a lawsuit against fiduciaries of the Land O'Lakes Employee Savings & Supplemental Retirement Plan. As with the other complaints filed by the firm on behalf of retirement plan participants and beneficiaries, it alleges that plan fiduciaries breached their fiduciary duties under ERISA by failing to objectively and adequately review the plan's investment portfolio with due care to ensure that each investment option was prudent in terms of cost and by maintaining certain funds in the plan despite the availability of identical or similar investment options with lower costs and/or better performance histories.

Source: Plansponsor.com, May 2020

Plan Sponsor, Provider Sued for Adding Untested CITs to 401k

Participants in the Schneider Electric 401k Plan have sued plan fiduciaries and Aon Hewitt Investment Consulting for breach of fiduciary duties and prohibited transactions under ERISA. The 92-page complaint includes several other allegations, including that the plan sponsor was motivated by its relationship with the provider for its defined benefit plans.

Source: Plansponsor.com, May 2020

Advisers Giving Back: Attila Toth and Portfolio Evaluations

Investing in the local community has been an important part of the firm's identity from its founding in 1992, and it makes sure to involve its staff members’ spouses and families to make its giving even more meaningful.

Source: Planadviser.com, May 2020

Retirement Plan Cyberfraud Suit Moves On With Claims Against Both Parties

Jess Leventhal, The Leventhal Sutton & Gornstein 401k Profit Sharing Plan, and Leventhal Sutton & Gornstein, Attorneys at Law sued MandMarblestone Group and Nationwide for breach of contract, breach of fiduciary duty under the ERISA and negligence related to cyberfraud against Jess Leventhal's plan account. A federal judge previously moved forward ERISA claims against retirement plan providers and has recently allowed for a counterclaim by the providers against the plan sponsor.

Source: Planadviser.com, May 2020

The HEROES Act: Key Retirement, Health and Welfare, and Tax Provisions

The House of Representatives recently passed the fourth round of legislation in response to the COVID-19 pandemic. The HEROES Act is unlikely to advance in the Senate, and the White House has threatened to veto the bill. However, the Act reflects the House Democratic majority's priorities, and some of the provisions could be included as part of a bipartisan compromise package. This alert first summarizes key provisions of the HEROES Act impacting retirement plans and health insurance. It then discusses other provisions that may impact employers and individuals.

Source: Groom.com, May 2020

DOL Finalizes Safe Harbor Regulation for Retirement Plan Electronic Disclosures

Overall, the rule could greatly expand the electronic delivery of retirement plan notices. Importantly, the rule would allow plans to use mobile applications to deliver notices and disclosures, possibly paving the way for greater overall plan engagement by retirement plan participants. Nevertheless, the rule is not without its challenges, and it remains to be seen whether the administrative demands of the rule will outweigh its usefulness for the majority of plans.

Source: Groom.com, May 2020

E-Delivery Rule Brings Cost-Relief to Retirement Plan Administration

The final rule is effective July 27, 2020, but the DOL announced it will not take enforcement actions against plan administrators who rely on the safe harbor before that date, in light of the government's broader response to the Covid-19 emergency. The final rule is substantially similar to the proposed rule issued in October 2019. Long overdue, this rule should go a long way to reduce the costs and hassles of ERISA-required disclosures.

Source: Findley.com, May 2020

DOL Finalizes New Safe Harbor for Electronic Delivery of Retirement Plan Disclosures

The final regulation will likely provide welcome relief for plan sponsors and administrators frustrated by the limitations of the current DOL safe harbor for employees with work-related computer access or who have consented to electronic delivery. However, there are detailed content, notice, and timing requirements in the new electronic delivery safe harbor that require careful review before implementation.

Source: Erisapracticecenter.com, May 2020

What is a Roth 401k?

A Roth 401k is one of the two major types of 401k plans, and it offers significant tax benefits for workers saving for retirement. The Roth 401k is an employer-sponsored plan, meaning that you can use the plan only if it's offered at your workplace. The other major plan is called the traditional 401k, and it offers significant -- but different -- tax benefits for retirement saving.

Source: Bankrate.com, May 2020

Split Decision in Excessive Fee Suit

A federal judge has rendered a split decision in an excessive fee suit, though it seems fair to say that, at least in the judgment of this court, the Schlichter-represented plaintiffs' experts didn't live up to their "billing." The suit was filed by the law firm of Schlichter Bogard & Denton, LLP representing a class of participants against the fiduciaries of the Banner Health Employees 401k plan.

Source: Asppa.org, May 2020

The State of Stable Value and its Evolving Role in Modern DC Plan Design

Representing approximately $844.3 billion in retirement assets, stable value strategies remain one of the largest allocations in DC plans. Jennifer Gilmore, CFA, Head of Stable Value Portfolio Management at Invesco, discusses how the segment has evolved, what to look for in stable value manager selection and how plan sponsors are effectively using these strategies to help stabilize participants outcomes, both currently and with an eye on emerging trends.

Source: 401kspecialistmag.com, May 2020

What the DOL Giveth, the IRS (May) Taketh Away: Benefits Guidance in the Time of COVID-19

In EBSA Disaster Relief Notice 2020-01, the DOL provided sponsors of DC plans subject to ERISA relief from DOL enforcement action for failure to timely forward participant contributions and loan repayments to the plan during the period from March 1, 2020, and to the 60th day following the announced end of the National Emergency. This DOL relief, however, appears to be limited to ERISA violations and does not appear to protect from the excise taxes under the Internal Revenue Code. This article summarizes the relief provided by the Notice and highlights legal risks that remain for plan sponsors.

Source: Workforcebulletin.com, May 2020

DOL Announces Publication of Final E-Disclosure Rule

The final rule allows employers to deliver participant disclosures primarily electronically. The DOL anticipates this will reduce plan costs by an estimated $3.2 billion over the next decade while making disclosures more readily accessible and useful to plan participants. The final rule also preserves the right of participants to receive disclosures in paper form, if they choose.

Source: Truckerhuss.com, May 2020

Judge Gives Parties in Cornell 403b Suit Options for Proceeding

The ERISA lawsuit against Cornell University could face a time delay due to the COVID-19 pandemic. A federal judge noted that the pandemic will affect civil jury trials in the Southern District of New York "for a considerable and presently unknowable time to come."

Source: Planadviser.com, May 2020

Details of JPMorgan Chase 401k Self-Dealing Suit Settlement Revealed

Parties in a suit accusing fiduciaries of the JPMorgan Chase 401k Savings Plan of self-dealing have filed a settlement agreement and motion for preliminary approval in federal court. A payment of $9 million will be made to "fully, finally and forever resolve, discharge and settle the released claims."

Source: Planadviser.com, May 2020

Appellate Court Calls for Another Look at a 403b Suit

A university that had won a dismissal of claims in an excessive fee suit will now have to confront some of those charges. Noting that, "at this point, the complaint only needed to give the district court enough to infer from what is alleged that the process was flawed," the Eighth Circuit Court of Appeals breathed new life into some of the claims brought against fiduciaries of St. Louis-based Washington University's $3.8 billion 403b plan.

Source: Ntsa-net.org, May 2020

Cash Flow Considerations Related to DC Retirement Plans Under COVID-19

In the last three months, many employers have had significant decreases in their top-line revenue and have attempted to cut costs to offset that revenue decrease. The IRS has provided relief to retirement plans through the CARES's act to assist plan participants to manage through these difficult times. This article shares some strategies for managing cash flows as it relates to defined contribution retirement plans from an employer perspective.

Source: Meadenmoore.com, May 2020

MEPs Costlier Than Similarly Sized 401ks: Study

Multiple-employer plans have been hailed as a cure for the lack of access that at least a third of U.S. workers have to workplace retirement plans, but a recent academic paper highlights the glaringly outsize fees some MEPs charge. The most recent data available from the Department of Labor, for the year 2016, show that MEPs carried higher administrative fees on average than similarly sized plans sponsored by individual employers, according to the paper, written by Natalya Shnitser, assistant professor at Boston College Law School.

Source: Investmentnews.com (registration may be required), May 2020

Email Option Added to Final Electronic Disclosure Rule for Retirement Plans

The DOL finalized a new rule that allows ERISA retirement plan sponsors to provide certain required disclosures to participants and beneficiaries electronically. The final rule adds an option to email covered disclosures directly to recipients, but otherwise is substantially the same as the proposed rule. Employers should start collecting valid email addresses from plan participants, including terminating employees still covered by the plan.

Source: Hansonbridgett.com, May 2020

Secure Act Deep-Dive: Inclusion of Part-Time Employees

Many of the SECURE Act provisions seek to expand retirement plan coverage for Americans. This includes the new requirement for 401k plans to permit long-term part-time employees the right to make elective deferrals. While this is a positive step for employees, for retirement plan sponsors, it is likely to be the SECURE Act provision with the most significant administrative burden.

Source: Cammackretirement.com, May 2020

How Plans May Reduce Costs Using the New DOL Electronic Disclosure Safe Harbor

The DOL has now finalized the electronic disclosure regulations on the new safe harbor -- including a new safe harbor option for email delivery -- that plan administrators may begin using immediately. Plans that satisfy an electronic delivery safe harbor will be deemed to have satisfied the requirement under ERISA to use delivery methods that are reasonably calculated to ensure actual receipt of information by participants, beneficiaries, and other individuals.

Source: Bradley.com, May 2020

Risk Management for ERISA Plans in Uncertain Times

The central tenets of ERISA are to provide as much freedom as possible, within minimal parameters, to draft ERISA plans, and then to honor the terms of the plans. COVID-19 may very well cause increased ERISA plan claim filings, so now is the time for plan sponsors to review their ERISA plans and consider (or reconsider) plan provisions that manage an increased claim risk.

Source: Beneficiallyyours.com, May 2020

COVID-19 Employee Benefits Round-Up

The legal and regulatory response to COVID-19 continues to modify the compliance landscape for employers, and this includes new requirements and options for employer-sponsored health and retirement plans. Read this 2-page review to learn more about some of the recent changes.

Source: Barran.com, May 2020

Ten Things You Might Have Missed About E-Delivery

The much-anticipated final rule was rolled out early on the morning of May 21. While fundamentally similar to the rule proposed last October, it did include some modifications in response to comments received. Chances are you've not yet delved deeply into the Labor Department's final rule on default electronic disclosure. Regardless, here are some things you might have missed.

Source: Asppa.org, May 2020

DOL Issues Final Rule on E-Delivery

Acknowledging that technology has made significant strides over the past two decades -- and that many Americans are working remotely during the COVID crisis -- the Labor Department has finalized a new safe harbor for electronic disclosures.

Source: Asppa.org, May 2020

DOL Finalizes Electronic Disclosure Safe Harbor for Retirement Plans

The final regulation establishes a new, voluntary safe harbor for retirement plan administrators who want to use electronic media, as a default, to furnish covered documents to participants and beneficiaries, rather than providing paper documents through mail or hand delivery. The new safe harbor should be welcome news to virtually all employers who sponsor ERISA-covered retirement plans.

Source: Spencerfane.com, May 2020*

Tips for When the QDRO Process Is Held Up

Retirement plan sponsors and providers have processes in place for qualified domestic relations orders that may be held up right now because the coronavirus pandemic has caused court closures. Plan sponsors may want to consider modifications to qualified domestic relations order processes.

Source: Plansponsor.com, May 2020

DOL Finalizes Electronic Participant Communications Safe Harbor

The new rule dramatically liberalizes DOL's electronic communication rules, which (with certain exceptions) previously required that the individual receiving the electronic communication either had access to the employer/sponsor electronic information system as an integral part of her duties or had affirmatively consented to electronic receipt. This article reviews the final regulation.

Source: Octoberthree.com, May 2020

The SECURE Act: Lifetime Income Provisions

The SECURE Act was signed into law in December 2019 and contains provisions that seek to expand access to lifetime income within retirement plans. The Act seeks to educate individuals on the projected income they could receive from their retirement savings. It also has provisions that should encourage plan sponsors to offer in-plan annuity options by providing a safe harbor for the selection of an annuity provider, as well as expanded portability of the annuity contracts.

Source: Multnomahgroup.com, May 2020

Six Considerations for Plan Fiduciaries During the Covid-19 Pandemic

ERISA fiduciaries may want to identify steps they should be taking and decisions they should be considering to adjust their process in the face of the coronavirus pandemic. This article identifies six such points that could be appropriate for consideration by retirement plan fiduciaries, such as fiduciary committees, as the pandemic and related economic fallout continue to evolve.

Source: Morganlewis.com, May 2020

DOL Finalizes Rule Updating Electronic Disclosure Safe Harbor for Retirement Plans

The DOL has issued final regulations providing a new "notice and access" safe harbor for retirement plans to furnish required disclosures by email or other electronic means to participants and beneficiaries. The NOA Safe Harbor should reduce costs for many retirement plans because it expands the availability of electronic disclosures beyond what was permitted under the DOL's prior safe harbor. The final rule includes some modifications to the proposed rule that was issued in October.

Source: Kilpatricktownsend.com, May 2020

More Than 1 in 4 Americans Are Raiding Their Retirement Accounts

More than 38 million people have filed for jobless claims since the coronavirus pandemic started. Many Americans are raiding their retirement accounts to pay for necessities, including groceries and household bills, according to a survey by MagnifyMoney. More than a quarter of people who've withdrawn retirement funds in the past two months said they did so after a job loss, while only 15% said they'd pulled money out of retirement accounts because they're worried about stock market losses.

Source: Cnbc.com, May 2020

The COVID-19 Pandemic Sheds Light on Questionable Retirement Plan Features

With many optional plan features, plan sponsors have a great deal of choice when it comes to designing their retirement plan. Make the right choice and the plan is attractive to participants without being too difficult to administer. Make the wrong choice and it may lead to the opposite situation. During the COVID-19 pandemic, some optional plan features have come back to haunt plan sponsors. Here are some of the questionable features.

Source: Cammackretirement.com, May 2020

The Time Is Now to Optimize DC Plan Loan Policies

With the passage of the CARES Act, defined contribution plan sponsors face important decisions concerning their plan design, specifically whether or not to adopt the special distribution and loan limit increases for those affected by the coronavirus. It is a good time for plan sponsors to consider additional design changes that could help preserve long-term retirement security, especially ones that address participant challenges related to job loss, given the unprecedented economic fallout from the COVID-19 pandemic.

Source: Plansponsor.com, May 2020

ManTech ERISA Challenge Shows Cases Moving Down Market

The plaintiffs have filed a new class-action ERISA complaint against the ManTech International Corp., alleging several fiduciary breaches in the operation of the firm's defined contribution retirement plan. The plan in question has about $800 million in assets, meaning it is quite a bit smaller than many other employers that have faced fiduciary breach lawsuits.

Source: Planadviser.com, May 2020

401k Plan Sponsor Issues During This Coronavirus Pandemic

As a 401k plan sponsor, it's more likely than not that this pandemic has had a negative impact on your business and probably your retirement plan. As a business owner, there are some tough decisions that you've had to make or will make concerning your business that will also affect your 401k plan. This article is all about important considerations concerning your 401k plan as it relates to Coronavirus.

Source: Jdsupra.com, May 2020

Groom and Chubb Explore Surge in Litigation Against Fiduciaries of Retirement Plans

Groom Law Group, together with Chubb, explores the surge in litigation against fiduciaries of employer-sponsored retirement plans, regardless of size. In the whitepaper, "The War on Retirement Fees: Is Anyone Safe?" Groom principal, Lars Golumbic, and Chubb Senior Vice President, North America Financial Lines, Alison Martin, examine the recent history and trends relating to excessive fee claims. The paper also discusses the plan features that may make it a target of litigation, and the steps fiduciaries can take to potentially reduce exposure to excessive fee lawsuits.

Source: Groom.com, May 2020

The War on Retirement Plan Fees: Is Anyone Safe?

Almost every employer that sponsors a retirement plan should be concerned about potential liability for a type of exposure known as excessive fee claims. Historically filed against only the largest organizations, an increasing number of smaller retirement plans have faced excessive fee litigation over the past couple of years. With this surge in litigation, it's important that all fiduciaries, regardless of plan size, understand the history and recent trends relating to excessive fee claims, the plan features that may make it a target of litigation, and steps fiduciaries can take that may reduce exposure to excessive fee claims.

Source: Chubb.com, May 2020

What's Driving the Fee Discussion Within the DC Market

Fee compression is also being driven by forces outside the market, specifically the rash of fee litigation and settlements that have forced plan sponsors and fiduciaries to consider lower-cost investment options. Complicating the question of asset management fees is the increasing pressure on recordkeepers to drive down administrative costs to plans, or potentially drive more suits.

Source: Schroders.com, May 2020

DOL Finalizes Electronic Disclosure Rule for Retirement Plans

The DOL announced the publication of a final rule that permits default electronic delivery of retirement plan disclosures. The rule allows employers to deliver disclosures to plan participants primarily electronically, which will reduce printing, mailing, and related plan costs by an estimated $3.2 billion over the next decade, the DOL said in a statement announcing the final rule. The rule will also make disclosures more readily accessible and useful for participants while preserving the rights of those who prefer paper disclosures.

Source: 401kspecialistmag.com, May 2020

The DOL Provides Limited Relief to Retirement Plans and Their Fiduciaries in Dealing With the COVID-19 Pandemic

In response to the COVID-19 pandemic, the Employee Benefits Security Administration issued Disaster Relief Notice 2020-01. The Notice addresses the following issues as impacted by the Pandemic: (i) deadlines for providing participant disclosures and notices; (ii) procedures for plan fiduciaries to authorize loans and distributions, and the timing for adopting amendments under the CARES Act; (iii) delays in making deposits of participant contributions and loan repayments; (iv) failures to provide advance notice of a blackout period; (v) extension of certain Form 5500 filing deadlines, and; (6) relaxed enforcement of compliance with ERISA’s fiduciary standards. This article focuses on the impact of the Notice on retirement plans and the relief it provides to plan fiduciaries and their advisers.

Source: Truckerhuss.com, May 2020

Advancing DC Plan Design

The defined contribution retirement plan industry continues to innovate to remold and reshape plans to create real retirement security for participants. As more responsibility has shifted to participants for managing their retirement savings, it has become obvious that they are not as equipped to do so as those responsible for the management of defined benefit. So features of DC plans have begun to evolved to mimic those of DB plans.

Source: Plansponsor.com, May 2020

Top Reason Plan Sponsors Turn to Advisors

In years past, the top reason sponsors decided to use a plan advisor was for help with plan investments, but that has shifted this year, according to Fidelity Investments' Plan Sponsor Attitudes Study. In 2010, the top reason sponsors decided to begin using a plan advisor was because they needed help with plan investments, especially given the market situation (35%). This year, Fidelity found that the top reason was for help with the increasingly complicated process of managing a retirement plan (29%), although plan investments will likely become an area of focus again in the future.

Source: Napa-net.org, May 2020

COVID-19: Recent Extensions and Relief for Retirement Plans

In recognition of the difficulties faced by retirement plan sponsors, participants, and beneficiaries due to the COVID-19 pandemic, new guidance extends the deadlines for notices and disclosures required by Title I of ERISA and extends deadlines for retirement plan participants and beneficiaries to submit benefit claims and benefit appeals. The new guidance also provides some fiduciary relief for electronic disclosures, incomplete plan loan or distribution documentation, as well as delayed participant contributions and loan repayments.

Source: Mwe.com, May 2020

SECURE Act/Inflation Adjustments Leads to Significant Increase in Benefit Plan Penalties

The SECURE Act provided many incentives for Americans to save for retirement, including greater flexibility in contributions, tax credits for new plans, automatic enrollment capability, and more. However, these important benefits also come with a potential price to pay: a substantial increase in penalties for failure to file several forms in a timely manner.

Source: Hallbenefitslaw.com, May 2020

Retirement Plans and the SECURE Act: What Employers Need to Know

The SECURE Act makes it easier for employers to offer a retirement benefit, improves plan design and operation, and affords participants more options and flexibility. While the SECURE Act contains over 30 provisions, employers should focus on specific provisions that affect group benefit plans or enhance current offerings. This article discusses the key provisions of the SECURE Act that are relevant to retirement plan sponsors.

Source: Francisinvco.com, May 2020

How Layoffs Will Impact Your Upcoming 401k Plan Audit

Due to the current coronavirus pandemic, the financial challenges many companies are experiencing are forcing them to lay off employees. If you're a business that serves as a 401k plan sponsor and has had to lay off employees during the pandemic, you must understand how these layoffs will affect your 401k plan audit. Highlighted here is information on what you can expect from your auditor during the next 401k plan audit, as well as what you can do to prepare for it.

Source: Forusall.com, May 2020

Target Retirement Date Funds in Q1 2020

Most exchanges done by target-date investors during the first quarter were done by older participants in vintages closest to retirement. Many factors may be behind this behavior, including investors closest to retirement have larger balances and are more concerned with sequencing risk; older investors have potentially greater experience with market selloffs, or simply those closest to retirement may be naturally "spooked" by volatility spikes. This participant behavior is worrisome to many market observers, as participants who deviated the most from their strategic allocations were those with the largest account balances and the shortest investment horizons.

Source: Fiallc.com, May 2020

Safe-Harbor Leveraging for Small Business, Top-Heavy Retirement Plans - 2020

Many employers are debating how to most efficiently take advantage of the defined contribution limit increase to $57,000. However, few owners of small businesses are aware of the extent to which certain types of "leveraging" are now permitted in qualified retirement plans. The purpose of this article is to illustrate the provisions that allow owners of small businesses to get the most in return for what they are willing to contribute on behalf of their non-owner employees.

Source: Consultrms.com, May 2020

Retirement Preparedness Is Top Concern Among Employers, According to New Fidelity Study

Fidelity Investments announced the results of the 11th edition of its Plan Sponsor Attitudes Study. According to the study, the top concern among 1,500 plan sponsors was whether their plan is effectively preparing employees for retirement financially, consistent with previous years. In late March, in the midst of market volatility and the COVID-19 pandemic, Fidelity also surveyed nearly 1,000 plan sponsors that recordkeep with Fidelity, and their top concern was employee financial well-being.

Source: Businesswire.com, May 2020

Participants Show Surprising Confidence Despite COVID-19

The annual BlackRock DC Pulse Survey, which takes the measure of plan sponsors, participants, and occasionally retirees, was complete by February 2020, just before COVID-19 pandemic-inspired volatility sent the market into a steep drop. This provided a unique opportunity to return to the survey population to discover what, if anything, had changed. This is a look at the key findings.

Source: Blackrock.com, May 2020

House-Passed Stimulus Bill Includes RMD Relief, PPP Clarity

Included among the retirement-based provisions are additional relief from required minimum distributions, clarifications to the retirement provisions enacted under the CARES Act, funding relief for single-employer pension plans, relief for troubled multiemployer pension plans and an assortment of other changes.

Source: Asppa.org, May 2020

What's the Difference Between a File Clerk and a Fiduciary?

The author writes, "What's the difference between a file clerk and a fiduciary? Come June 30th, not much. A clerk is employed to perform menial office tasks. They're told what to do, have little or no discretion, and are not entrusted with critical decision-making. That may describe you in less than 45 days. The SEC's Reg BI is going to cause more harm than good. To illustrate, let's examine the concept of 'fiduciary' in 3D."

Source: 401kspecialistmag.com, May 2020

The Collective Investment Trust: An Important Piece in the Retirement-Planning Puzzle

Learn about the many advantages of considering CITs as investment vehicles in defined benefit and defined contribution plans, including myths surrounding CITs and the benefits for advisors, consultants, and plan sponsors.

Source: Wilmingtontrust.com, May 2020*

Pandemic Highlights Reasons for Reviewing Plan Fees

The events of the past few months have had a dramatic impact on nearly every business. Now, more than ever is a time to review expenses and cut back where possible. One possible area to explore cost savings is in your 401k or other related retirement savings plan. Plan sponsors might start here for a variety of reasons. Here are some insights.

Source: Plansponsor.com, May 2020

401k Investors Show Ongoing Commitment to Saving During Pandemic

Despite uncertain market conditions during the COVID-19 pandemic, Americans continued to save for retirement through DC plans, according to first-quarter data by the Investment Company Institute. Most DC plan participants also stayed the course in their asset allocations, according to the organization’s data.

Source: Napa-net.org, May 2020

New Mexico Enacts Retirement Savings Plan and Marketplace

New Mexico is the latest state to dive into the retirement pool for private-sector and nonprofit employers, enacting legislation to create both a state-run savings program and a retirement marketplace. New Mexico is the first state to try implementing two different arrangements at the same time. The marketplace must begin operating by July 1, 2021, with a six-month delay for the savings program.

Source: Mercer.com, May 2020

Developing a Strategy for Moving From Pension to 401k Benefits

Budgeting for next year's cost of employer-provided benefits can seem daunting, especially when an organization sponsors both a defined benefit pension plan and a 401k defined contribution plan. Is it time to consider moving away from the defined benefit pension plan to avoid volatility and risk? If so, plan sponsors should develop a well-thought-out process for analyzing the alternatives and impact to both employer costs and participant benefits. The overall strategy and objectives should be reviewed.

Source: Findley.com, May 2020

Who Qualifies for Coronavirus-Related Distributions?

Section 2202 of the CARES Act gives favorable tax treatment to certain retirement plan distributions. If a distribution qualifies as a "coronavirus-related distribution," the recipient gets special breaks. The retirement plans charged with administering these rules do not have to worry, they can rely on the employee's self-certification that he or she passes the CRD qualification tests.

Source: Morningstar.com, May 2020

COVID-19 Market Tests Basic TDF Design

Target-date funds saw negative returns across the board during the first quarter, but those with aggressive stock allocations at their target dates hit those nearing retirement hardest, according to a report from Morningstar.

Source: Investmentnews.com (registration may be required), May 2020

Fiduciary Lessons From COVID-19 Crisis

Human resources and finance professionals who are on the front lines, managing their organization's retirement plan, are not stupid, but they juggle many responsibilities and, understandably, can be overwhelmed by ERISA's complexities and anachronistic language. In the wake of the COVID-19 crisis, those advisers and providers that are transparent, providing facts in a clear format, and avoid conflicts will not only be in demand, but they might also be able to command higher fees.

Source: Investmentnews.com (registration may be required), May 2020

DC Plan Participants Continue to Save During COVID-19 Pandemic

Americans continued to save for retirement through defined contribution plans early this year despite uncertain market conditions during the COVID-19 pandemic. The study tracks contributions, withdrawals, and other activity, based on DC plan recordkeeper data covering more than 30 million participant accounts in employer-based DC plans.

Source: Ici.org, May 2020

Improving Investment Outcomes for 403b Plan Participants With CITs

BlackRock provides an overview of the features of CITs, why plan sponsors use CITs in 401k plans, the potential cost savings for 403b retirement savers if CITs were permitted as an investment option in all 403b plans, and ongoing legislative efforts to change the law, including the IRC, to allow all 403b plans to have the option to invest in CITs.

Source: Blackrock.com, May 2020

IRS Issues CARES Act Guidance: Retirement Plan Distribution and Loan Provisions

The IRS recently issued guidance in the form of questions and answers regarding the retirement provisions of the CARES Act set forth in Section 2202. While not addressing all open issues, the Q&As provide retirement plan sponsors with a number of helpful clarifications regarding the CARES Act retirement provisions.

Source: Bsk.com, May 2020

CARES Act Required Minimum Distribution Rules: Helping Your Clients Deal with the Issues

This article outlines CARES Act provisions that affect your plan sponsor clients, plan participants and IRA clients, so you can help them navigate the new rules. It also addresses the rules on required minimum distributions (RMDs).

Source: Brokerdealerlawblog.com, May 2020

COVID-19 and Late Remittances of Employee Deferrals to 401k Plans

What many employers have not focused on doing is ensuring that employee contributions (elective deferrals and loan repayments) to their 401k plans continue to be deposited into the plans in a timely manner. Recently, and in light of COVID-19, the DOL, in EBSA Disaster Relief Notice 2020-01, issued guidance intended to relax the timely remittance requirement for employers unable to satisfy the general rules.

Source: Benefitslawadvisor.com, May 2020

Got Questions About the CARES Act and Retirement Plans?

The IRS released a set of FAQs on its website focusing exclusively on coronavirus-related relief for retirement plans and IRAs. The Retirement Plan FAQs provide much-needed direction for plan sponsors and recordkeepers. This article covers the highlights of the Retirement Plan FAQs.

Source: Wnj.com, May 2020

Evaluating Your Plan's Recordkeeper

Your fiduciary responsibility to your plan participants includes periodically evaluating your plan's recordkeeper to ensure their processes facilitate the correct execution and reporting of transactions, adherence to federal and state regulations, in addition to the reasonableness of fees in relation with the quality of services provided. Learn more in this piece about the role a plan recordkeeper plays and some of the factors plan sponsors should consider when choosing and evaluating a recordkeeper.

Source: Planpilot.com, May 2020

Second ADP ERISA MEP Lawsuit Includes a Dozen Counts

McCaffree Financial Corp., a participating employer in the ADP TotalSource Retirement Savings Plan, filed an excessive fee lawsuit on behalf of the multiple employer plan and a class of similarly situated participating employers against ADP. This week, a second lawsuit has emerged representing the interests of a proposed class of plan participants. The second suit largely mirrors the first in its allegations of prohibited transactions, excessive fees, and other fiduciary breaches, but it is even more comprehensive and stretches beyond 150 pages.

Source: Planadviser.com, May 2020

Vanguard Says DC Losses Not So Bad In Long-Term View

The market declines investors faced in the first quarter as a result of the coronavirus pandemic are much more muted when compared to a longer time frame. That's the key takeaway from a just released Vanguard paper.

Source: Pionline.com, May 2020

Can Plans Rely on Virtual Notarization?

In response to the logistical challenges created by the Coronavirus pandemic, some states are taking steps to authorize virtual notarization. Given the unprecedented circumstances and the various notary-based requirements to conduct business transactions in person, these developments could be particularly important for retirement plan administrators.

Source: Ntsa-net.org, May 2020

Most US Employers Plan to Make 401k Assets Easier to Access During Pandemic

A majority of 816 U.S. companies surveyed in April by Willis Towers Watson said they have made, or plan to make, access to 401k plan assets easier for employees during the COVID-19 pandemic. Nearly two-thirds of respondents (65%) said they increased access to in-service distributions, essentially an employee's ability to take a distribution from an employee-sponsored retirement plan without terminating his or her employment, while another 16% were either planning or considering to do so in 2020. Fewer surveyed employers (12%) said they suspended matching contributions for retirement plans.

Source: Hrdive.com, May 2020

Will COVID-Related 401k Plan Shrinkages Push Companies to Pooled or State Solutions?

We're seeing companies squeezed by the economic shutdown focusing on survival, not retirement. That can change the way all employee benefits are offered, not just retirement savings plan benefits. It may be, however, that it is far easier to radically change the delivery mechanism for retirement savings compared to, say, health insurance. What will those different vehicles look like? Which has the advantage today? Which will likely have the advantage tomorrow?

Source: Fiduciarynews.com, May 2020

Summary Table and In-Depth Analysis of COVID-19 Legislation

To assist employers and public retirement systems with the myriad of changes, Ice Miller has cataloged the provisions of the FFCRA and CARES Act that impacts employer-sponsored retirement plans, health plans, and other benefits in a table format. They have summarized the statutory provisions as well as related regulatory guidance that has been issued as of the date of this publication. The table includes a high-level discussion of the law and practical considerations. For a more in-depth analysis, they have provided a comprehensive discussion of each provision.

Source: Icemiller.com, May 2020

Supreme Court Rules on Plan Communications

ERISA gives a plaintiff three years from the date he or she has "actual knowledge" of an alleged breach to file a claim. The Supreme Court held that plaintiffs do not necessarily have "actual knowledge" if they have not read, or cannot recall reading, the information contained in disclosures. Plan sponsors should review how this recent decision raises the bar for defending allegations of fiduciary breach.

Source: Pnc.com, May 2020*

Advisor Works to Bring Low Fees to 403bs

Tony Isola is on a mission to upend the fee-heavy market for teacher retirement plans. Throughout his career, the Certified Financial Planner has extricated teachers from expensive financial products in their 403b plans, which are tax-deferred retirement vehicles used by public schools and other tax-exempt organizations.

Source: Morningstar.com, May 2020

Suspending 401k Match Raises Compliance Issues

Many employers may be considering a temporary suspension of their 401k matching contributions as a cost-saving measure. This 7-page article identifies several technical compliance issues for employers to consider before reducing or suspending a 401k match.

Source: Mercer.com, May 2020

403b Plan Catch-Up Contributions - Updated

This IRS snapshot discusses catch-up contributions under a 403b plan. A 403b plan may have non-elective contributions (including matching and non-matching contributions) and elective deferrals. A 403b plan may also permit participants to make additional elective deferrals under the age 50 catch-up in IRC Section 414(v) and the special 403b catch-up in IRC 402(g)(3).

Source: Irs.gov, May 2020

When Will My 401k Balance Get Back on Track Again?

We can't predict the future. But we can look at the past, at the bursting of the tech bubble and the global financial crisis. To get a good picture, examine the experience of "consistent participants," workers enrolled in the same 401k every year for several years. When the tech bubble burst, the S&P 500 lost nearly 50 percent. What happened to consistent participants' 401ks?

Source: Ici.org, May 2020

SECURE Act Allows for ADP Failure Relief

The SECURE Act includes provisions designed to encourage more employers to adopt retirement plans and simplifies issues that have bedeviled plan sponsors and taxpayers for years. One key provision amends prior rules for the late adoption of safe harbor plans.

Source: Hallbenefitslaw.com, May 2020

New IRS Guidance Answers Pressing CARES Act Questions for Retirement Plans

On May 4th, the IRS released a set of FAQs focused on the special coronavirus-related distribution and plan loan options under the CARES Act. The FAQs offer helpful guidance for sponsors of retirement plans who are considering adding special distribution and/or loan options for participants affected by COVID-19.

Source: Erisapracticecenter.com, May 2020

What Is the Best Way for Plan Sponsors to Pay Retirement Plan Fees?

Companies are becoming more open and willing to pay retirement plan servicing fees. This article focuses on Non-Settlor fees which typically include the following service providers: Third-Party administration services, investment advisory services, recordkeeping platform services, and employee benefit audit services. There are some compelling benefits for a company to pay these plan fees.

Source: Bpp401k.com, May 2020

Cybersecurity and Retirement Plans: What Plan Sponsors Should Do

Without substantive regulatory guidance and taking into account the increasing threat of cyber criminality to retirement plans, plan sponsors should establish, evaluate, and test their cybersecurity protocols. Plan sponsors might want to take a conservative approach and assume that ERISA's duties of loyalty and prudence do indeed apply to participants' identification data and their plan benefits in case the DOL or the courts conclude such information do constitute plan assets for purposes of ERISA.

Source: Wagnerlawgroup.com, May 2020

IRS Posts Initial Guidance on Coronavirus-Related Loans and Distributions

The IRS posted 14 Questions and Answers on its website regarding the special retirement plan distribution options and loan provisions made available to certain qualified participants under the CARES Act. These Q&As answer many of the questions that plan sponsors and third-party administrators have been grappling with since the CARES Act was enacted.

Source: Spencerfane.com, May 2020

QDIAs the Best Place for Participant Assets During Downturns

QDIAs keep DC plan participants on a path for growth, but the current market volatility plants seeds of new ideas about their construction going forward.

Source: Plansponsor.com, May 2020

Excessive Fees, Conflicts of Interest Alleged in New ERISA Lawsuit

The lawsuit, filed as a class action on behalf of participants and beneficiaries of the Magna Group of Companies Retirement Savings Plans, says the defendants did not try to reduce the plan's expenses or exercise appropriate judgment to scrutinize each investment option that was offered in the plan to ensure it was prudent.

Source: Planadviser.com, May 2020

ADP Multiple Employer Plan Facing Excessive Fee Lawsuit

The lawsuit alleges the ADP defendants "have allowed unreasonable recordkeeping/administrative expenses to be charged to the plan; failed to adequately monitor the plan's recordkeeper and its affiliates, who the ADP defendants have permitted to design an investment menu unreasonably favorable to them despite the recordkeeper's clear conflicts of interest; and, along with NFP Retirement, selected, retained, and/or otherwise ratified high-cost and poorly-performing investments, when more prudent alternative investments were available."

Source: Planadviser.com, May 2020

Is That COVID-19 Distribution Subject to State Taxes?

For many households, COVID-19 distributions from qualified plans and IRAs may be a welcome backstop against the financial challenges of the Coronavirus pandemic. But those receiving those distributions (and those who process them) need to be aware of the potential sting of state tax liability due to differences between federal and state tax rules.

Source: Napa-net.org, May 2020

New Relief for Employee Benefit Plans and Participants

Providing sweeping relief to employee benefit plan sponsors, participants, and beneficiaries impacted by the COVID-19 emergency, the Employee Benefits Security Administration joined with the IRS to extend deadlines to effectively pause the compliance clock for the duration of the outbreak. The guidance was released in three documents.

Source: Foxrothschild.com, May 2020

IRS Answers Some FAQs on Coronavirus-Related Distributions and Loans

On May 4, 2020, the IRS provided guidance on coronavirus-related distributions and coronavirus-related loans and loan payment delays in the form of FAQs. In those FAQs, the IRS answered a few of the questions that many practitioners, administrators, and employers have been asking.

Source: Benefitsnotes.com, May 2020

The IRS Speaks: Retirement Plan Coronavirus Loan Relief

The IRS has issued some initial guidance on the coronavirus-related relief for retirement plans under the CARES Act in the form of Q&As on its website. Most of the Q&As address coronavirus-related distributions, while one Q&A provides some IRS insight relating to the loan relief, referencing an old IRS Notice that answered questions about the loan relief issued after Hurricane Katrina.

Source: Beneficiallyyours.com, May 2020

DC Plan Communications in the Age of COVID-19

Communicating with retirement plan participants is always important. Aside from law and regulation requiring it, such communications can serve participants well and help make a retirement plan more effective and meaningful. But doing so during a pandemic poses challenges and can require adjustments. This article offers ideas on communicating with DC plan participants in times like these.

Source: Asppa.org, May 2020

Average 401k Springs Back in April

In March, the average 401k account for younger (25-34), less tenured (1-4 years) workers, plunged 7.3%. Older (age 55-64) workers with more than 20 years of tenure also shed 7.3%, according to estimates from the nonpartisan Employee Benefit Research Institute. However, April was a different matter. In the best month for the Dow Jones Industrial Average and S&P 500 since 1987, the average 401k for the younger less tenured demographic rebounded 9.8%. The average 401k account of older and longer-tenured workers regained 8.1%, according to EBRI estimates.

Source: Asppa.org, May 2020

Seven Sensible Cybersecurity Steps for 401k Plan Sponsors

When the actual funds in an individual's retirement account are stolen, ERISA's fiduciary protections will apply, and HIPAA responsibilities will also apply if the breach involves unauthorized access to Protected Health Information. The question then becomes, who will be liable when plan assets are stolen and what do fiduciaries need to do to protect themselves from liability.

Source: 401kspecialistmag.com, May 2020

Amid COVID-19, More Employers Are Easing Access to 401k Assets Than Cutting Matching Contributions

A majority of U.S. companies are making it easier for employees to access their 401k plans' assets even as some companies are cutting matching contributions amid the COVID-19 pandemic. These findings are according to the latest pulse survey by Willis Towers Watson. A total of 816 employers participated in the COVID-19 Benefits Survey, which was conducted during the week of April 20, 2020. Respondents employ 12 million workers.

Source: Willistowerswatson.com, May 2020

DOL Filing Deadlines and Fiduciary Relief for Retirement Plans

Fiduciaries and administrators of private-sector retirement plans will be relieved to learn that the Department of Labor has issued guidance in response to the COVID-19 public health emergency. This disaster relief guidance was published on April 28, 2020, in Notice 2020-01 and is reviewed here.

Source: Segalco.com, May 2020

Consider Near- and Long-Term Issues Before Implementing CARES Act Provisions

Plan sponsors are urged to consider factors other than the short-term financial needs of their employees before adopting new loan or distribution provisions. There are several factors plan sponsors should consider in addition to the short-term financial needs of their employees, including whether participants are likely to default on loans in the future, which may result in new tax penalties, and the likelihood that defaulted loans and distributions will permanently destroy hard-earned retirement savings.

Source: Plansponsor.com, May 2020

Pandemic May Stall Implementation of Certain DC Plan Decisions

The effects of the COVID-19 pandemic have plan sponsors contemplating what to do about scheduled re-enrollments, the RFP process, and fund mapping during recordkeeper conversions. Not knowing how long the current market climate will last, many plan sponsors are questioning whether and when they should move forward with such plan decisions.

Source: Plansponsor.com, May 2020

Lawsuit Argues Fees Are Excessive for University of Miami 403b

Another lawsuit has been filed challenging fees for a university's 403b plan, this one against the University of Miami. The plaintiffs say there is additional evidence for their claims, "such as incorrect reporting on mandatory Department of Labor disclosures about the amount of administrative fees paid by [the] participants."

Source: Planadviser.com, May 2020

Lawsuit Says Host International Discriminated Against Tipped Employees in 401k

A proposed class-action lawsuit has been filed against Host International, a provider of meals to various travel and entertainment venues, alleging it and other plan fiduciaries refused to properly defer compensation of certain employees to the HMSHost 401k Retirement Savings Plan and Trust under the terms of the plan document. The complaint notes that the definition of compensation for deferral purposes in the plan document includes tips received.

Source: Planadviser.com, May 2020

So Far, Easing 401k Access Prevails During COVID-19 Pandemic

Many employers are taking steps to make it easier for employees to access their 401k plans under the CARES Act, but some are considering more drastic action, according to new survey results. Nearly two-thirds of respondents (65%) in the latest pulse survey by Willis Towers Watson increased access to in-service distributions from participants' 401k accounts while 16% either plan to or are considering doing so this year.

Source: Napa-net.org, May 2020

ADP MEP Tapped in Excessive Fee Suit

A new excessive fee suit has been filed, one that purports to represent a class of some 5,000 employers participating in a multiple employer plan, or MEP. The suit was filed in the U.S. District Court for the District of New Jersey by McCaffree Financial Corp., individually as a participating employer co-sponsor and a fiduciary of the ADP TotalSource Retirement Savings Plan.

Source: Napa-net.org, May 2020

Form 5500 Preparation and Filing

As a plan sponsor or financial advisor, it is paramount that you maintain an open line of communication with your TPA or recordkeeper responsible for preparing the 5500 filings to avoid potential penalties and fines from both the Internal Revenue Service and the Department of Labor. To avoid delays in the preparation and filing of the form, here are some things you can do as the plan sponsor to assist your service provider.

Source: Legacyrsllc.com, May 2020

Who Participates in Retirement Plans, 2017

Increasing the share of workers who participate in retirement plans has been a primary focus of retirement policy. As the retirement industry and policymakers try to increase participation, it is important to understand which workers currently participate in employer-sponsored retirement plans and why certain employers offer, and certain employees desire, compensation in the form of retirement benefits. This 32-page report uses tabulations of administrative tax data published by the IRS to analyze participation in employer-sponsored retirement plans.

Source: Ici.org, May 2020

Limited Extension of Participant Contributions and Loan Repayments Deadlines

The DOL and IRS have recently issued coordinated guidance that provides relief for benefit plans by extending certain deadlines. This article examines the limited relief granted to retirement plans by extending the amount of time a plan has to distribute participant contributions and loan repayments into participant accounts to still be considered timely.

Source: Graydon.law, May 2020

Dealing With the Pandemic: IRS and DOL Authorized Delays

Both the IRS and the DOL recently issued guidance delaying certain plan-related deadlines while the COVID pandemic is ongoing. Some of these delays apply to the participants, generally giving them more time to perfect benefit claims, and some apply to plan sponsors and administrators. This article outlines what deadlines have been extended and for how long.

Source: Ferenczylaw.com, May 2020

What Retirement Plan Filings and Records Must We Keep?

Are there any issues with getting rid of older filings and distribution records? While Marie Kondo may tell you to throw out something if it doesn't bring you joy, the answer is quite different when it comes to records and reports for your 401k plan. One of the key reasons is that the IRS and Department of Labor have specific document retention rules for retirement plans.

Source: Dwc401k.com, May 2020

DOL, IRS Issue Guidance Further Expanding COVID-19 Relief for 401k Plans

On April 29, 2020, key governmental agencies issued two separate pieces of official guidance further expanding COVID-19-related relief for 401k retirement plans and other employee benefit plans and arrangements. This guidance supplement and expand upon earlier official pronouncements that extended various deadlines concerning 401k plans in response to the global crisis.

Source: Compliancedashboard.net, May 2020

Determining Whether Your Plan Has a Partial Termination

Layoffs and furloughs as a result of COVID-19 can trigger vesting obligations that may surprise plan sponsors unfamiliar with the IRS rules on partial plan terminations. Failure to treat participants correctly can jeopardize the plan's qualified status and, if the employer has been using forfeitures to reduce its contributions, may also have a financial impact. Here is an overview of the issue.

Source: Cohenbuckmann.com, May 2020

Reducing or Eliminating Matching Contributions Mid-Year

Employers wishing to reduce or eliminate a matching contribution during the middle of the plan year must be careful in assessing whether this is possible. Even where possible, there may be special requirements that must be met.

Source: Boutwellfay.com, May 2020

IRS Q&As Provide Some Guidance on Retirement Plan COVID-19-Related Relief

The IRS has issued guidance in Q&A format on the special IRA and retirement plan relief granted in the Coronavirus Aid, Relief, and Economic Security Act. This relief is intended to aid those affected by the coronavirus pandemic that has impacted the health and economic welfare, or both, of many Americans.

Source: Ascensus.com, May 2020

The Cares Act: Things to Consider Before Implementation

We are witnessing an understandable rush to make decisions that provide relief to employees, plan participants, and employers. But it is important to take a brief pause at this time to review the interplay and flexibility of these relief programs and the possible administrative and communication problems.

Source: Smithdowney.com, May 2020*

Coronavirus Fiduciary Investment Claims: A Look at Retirement Plans

The plaintiff bar is seeking recovery on a new and elevated standard of care that has not been articulated by the DOL or fiduciary regulation. Plan sponsors are now subject to expensive litigation and inconsistent standards for retirement plan fees, with results largely based on the proclivities of the judge to whom the case is assigned or in which circuit the case is filed. This is contrary to the stated purpose of ERISA to avoid "litigation expenses" that "unduly discourage employers from offering [such] plans."

Source: Euclidspecialty.com, May 2020

CARES Act Myths

More than one month has passed since the enactment of the CARES Act, yet there are still many widely held misconceptions about the retirement plan-related provisions. This article attempts to dispel some of those myths.

Source: Cammackretirement.com, May 2020

The IRS Extends Retirement Plan Payment and Filing Deadlines

In response to the coronavirus pandemic, on April 10, 2020, the Internal Revenue Service issued Notice 2020-23, extending the deadlines for the time-sensitive actions set forth in Revenue Procedure 2018-58 to July 15, 2020. These extensions apply to certain retirement plan payment and filing obligations that have deadlines on or after April 1, 2020 and before July 15, 2020.

Source: Truckerhuss.com, May 2020

Plan Sponsor Due Diligence in a Demanding Time for Recordkeepers

While recordkeepers are under considerable pressure, they are showing compassion for plan sponsors and participants during the coronavirus pandemic. From waiving fees to offering additional financial help, retirement plan recordkeepers, third-party administrators and advisers, as well as financial wellness providers, are stepping up to assist plan sponsors and employees in several ways. Plan sponsors can, in turn, show compassion for their recordkeepers, while at the same time ensuring their plans are operating smoothly.

Source: Plansponsor.com, May 2020

Can Plans Rely on Virtual Notarization?

In response to the logistical challenges created by the Coronavirus pandemic, some states are taking steps to authorize virtual notarization. Given the unprecedented circumstances and the various notary-based requirements to conduct business transactions in person, these developments could be particularly important for retirement plan administrators.

Source: Napa-net.org, May 2020

Judge Sacks Trader Joe's Excessive Fee Suit

Plan fiduciaries found a friendly judicial ear in their motion to dismiss an excessive fee suit aided by what appears to have been a weak case by the plaintiffs.

Source: Napa-net.org, May 2020

Defined Contribution Plan Participants' Activities, 2019

Defined contribution plan assets are a significant component of Americans' retirement assets, representing more than one-quarter of the total retirement market and about one-tenth of US households' aggregate financial assets at year-end 2019. This 16-page report updates the results from ICI's survey of a cross-section of recordkeeping firms representing a broad range of DC plans and covering more than 30 million employer-based DC retirement plan participant accounts as of December 2019. The broad scope of the recordkeeper survey provides valuable insights about recent withdrawal, contribution, asset allocation, and loan decisions of participants in these plans.

Source: Ici.org, May 2020

SECURE Act: Tenfold Penalty Increase for Retirement Plan Filing and Notice Failures

To help pay for the changes that the SECURE Act will bring to the retirement system, as well as to increase compliance with filing reports and providing notices, the legislature also included a significant increase in penalties for late filing of plan returns and plan notices. These new penalties apply to all returns, plan statements, and require plan notices that must be provided after the end of 2019.

Source: Hallbenefitslaw.com, May 2020

DOL Provides COVID-19 Relief for Retirement Plans

On April 28th, the Employee Benefits Security Administration of the Department of Labor, together with the Department of the Treasury, issued helpful guidance for retirement plans that extends certain deadlines and provides other relief in light of the national coronavirus outbreak. The guidance will significantly affect ERISA-covered retirement plans, plan sponsors, fiduciaries, plan participants and beneficiaries, and plan service providers.

Source: Groom.com, May 2020

EBSA Disaster Relief Notice 2020-01

The Department of Labor recognizes that the COVID-19 outbreak may temporarily impede efforts to comply with various requirements and deadlines under ERISA. This notice provides guidance and relief for employee benefit plans due to the covid-19 outbreak and applies to employee benefit plans, employers, labor organizations, and other plan sponsors, plan fiduciaries, participants and beneficiaries, and service providers subject to ERISA from March 1, 2020, until 60 days after the announcement of the end of the COVID-19 national emergency.

Source: Dol.gov, May 2020

Working Through DC Plan Communications in a Pandemic

In this time of heightened market volatility and economic uncertainty, employees are trying to figure out what to do. They have questions about their retirement savings plan accounts and their finances in general. And because employers are a trusted source of information, their natural inclination is to turn to you for answers. Here are three areas to review as you develop your DC plan communications for the remainder of 2020.

Source: Buck.com, May 2020

DOL Announces Significant Deadline Extensions and Other Disaster Relief for Employee Benefit Plans

The DOL, joined and coordinated in part by the Department of Treasury, Internal Revenue Service, and Department of Health and Human Services, has released several documents providing deadline extensions for employee benefit plans during the COVID-19 disaster period and enforcement relief concerning certain compliance requirements. The changes were described generally in a DOL news release, and more formal guidance was outlined in new final regulations, and EBSA Disaster Relief Notice 2020-01.

Source: Bradley.com, May 2020

ERISA Fee Motions After COVID-19: A Substantive and Procedural Review

Two recent lower court decisions provide a primer on when a prevailing party in an ERISA case may recover fees (as a fee award is not automatic) and a window into the future of video hearings to resolve fee motions.

Source: Beneficiallyyours.com, May 2020

What Is a Solo 401k?

If you're self-employed and looking to save for retirement -- or just get an excellent tax break -- you need to have a look at the solo 401k. It might be the best retirement option for one-person businesses, because of how quickly you can amass money in the plan. Here's what you need to know about the solo 401k.

Source: Bankrate.com, May 2020


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