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Daily Article Digest - Updated Throughout the Day

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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Evaluating Target-Date Funds - A Fiduciary's Guide

Abstract: Whether there are target-date funds in your defined contribution plan lineup or you're considering adding them, evaluation and review are critical to your due diligence process as a plan fiduciary. This guide is focused on the practical steps to take during the evaluation process, which may include comparison and selection of TDFs, understanding their underlying investments, reviewing fees, developing communications, and documenting the process.

Source: Vanguard.com, October 2018

DOL Seeks to Expand Access to Open MEPs, or "Association Retirement Plans"

Abstract: The DOL has published a set of proposed regulations under Title 29 of the Code of Federal Regulations to expand access to retirement saving options by clarifying the circumstances under which an employer group, association, or professional employer organization may sponsor a workplace retirement plan. These plans allow small businesses to join together to offer defined contribution retirement savings benefits.

Source: Planadviser.com, October 2018

DOL Proposes Expanded Access to MEPs

Abstract: The Department of Labor has released proposed rules that would expand access to multiple employer retirement plans for small employers and self-employed workers, while also maintaining fiduciary oversight.

Source: Napa-net.org, October 2018

The Evolution of Target-Date Funds: Using Alternatives to Improve Retirement Plan Outcomes

Abstract: The underlying investments in DC plans need to evolve to improve retirement income outcomes for participants. The strategic use of alternative assets in a TDF structure, or a diversified TDF, demonstrates that including these asset classes can improve expected retirement income and mitigate loss in downside scenarios.

Source: Georgetown.edu, October 2018

Fidelity Workers Want Jury Trial as Firm Fights 401k Fee Suit

Abstract: Participants in FMR LLC's 401k plan are urging a federal judge in Massachusetts to allow a jury to decide whether the investment firm mismanaged their retirement savings.

Source: Bloomberglaw.com (registration may be required), October 2018

Fund Companies Got Sued by Their Own Employees Over Pricey 401k Plans

Abstract: Big fund companies make hundreds of millions of dollars in fees every year from mutual funds and other products they sell to the public, that's the business. But should they be allowed to profit at the expense of their own employees? Several 401k plan lawsuits assert that the answer is no.

Source: Barrons.com, October 2018

DOL Releases Proposed Rules on MEPs

Abstract: The proposed rule would make it easier for small businesses to offer retirement savings plans to their workers through Association Retirement Plans, which would allow small businesses to band together to offer 401k plans to their employees.

Source: 401khelpcenter.com, October 2018

401k Match on Student Loan Repayments: Godsend or Mixed Blessing?

Abstract: In a Private Letter Ruling, the IRS has recently enabled employers to make a matching contribution to their 401k plan on behalf of eligible plan participants who, instead of contributing to the 401k, make certain qualifying student loan repayments instead. What's the catch? Well, it turns out there are lots if you plow ahead and begin offering such a matching program without understanding all the specifics.

Source: Kushnerco.com, October 2018*

Great 401k Plan Features That Can Be a Hit or a Miss

Abstract: When starting a 401k plan, there are so many different features that you need to consider and some that you don't because you should never forget that a plan is supposed to be a way to recruit and retain employees. Some features go a long way in helping that out than others. This article is about 401k plan features that a plan sponsor should consider adding to a plan.

Source: Jdsupra.com, October 2018

Broker-Dealers as Fiduciaries After the DOL Rule Vacatur

Abstract: The purpose of this 14-page article is to explain a broker-dealer's obligation when it provides recommendations to accounts subject to ERISA and the Code post-vacatur. Additionally, it looks at where broker-dealer activities may be headed considering the SEC's proposed Regulation Best Interest and compare that to what is required under ERISA and the Code. Many broker-dealers, particularly if they provide investment advice, will find complying with an SEC "best interest" standard and the fiduciary and prohibited transactions of ERISA and the Code quite challenging.

Source: Groom.com, October 2018

Podcast: 401k Pitfalls and How to Avoid Them

Abstract: Employee Benefit Plans are common among most businesses. But just as common are the small mistakes employers can make that end up creating big problems. This podcast discusses the pitfalls surrounding 401k plans, and the steps you can take to avoid them.

Source: Dgccpa.com, October 2018

Retirement Plan Auto-Portability

Abstract: Retirement plan auto-portability has been popular in retirement media lately, due in large part to the firm that has pioneered the concept, Retirement Clearinghouse (RCH). But what exactly is auto-portability and does its effectiveness live up to the hype?

Source: Cammackretirement.com, October 2018

Appellate Panel Finds Retirement Assets Acquired in Divorce Not Protected in Bankruptcy

Abstract: A three-judge panel of the United States Bankruptcy Appellate Court for the Eighth Circuit has ruled that 401k plan and IRA assets acquired by a former spouse in a divorce proceeding are not retirement funds that qualify as exempt under federal law.

Source: Ascensus.com, October 2018

DOL to Introduce New Fiduciary Rule

Abstract: The never-ending story of the Department of Labor's efforts to implement and enforce a fiduciary rule could soon roar back to life, with the DOL signaling September 2019 as the target. Appearing on the Office of Information and Regulatory Affairs website, the department says it's considering regulatory options in light of the Fifth Circuit opinion, which vacated the DOL's new regulatory definition of a fiduciary.

Source: 401kspecialistmag.com, October 2018

DOL Likely to Address Fiduciary Rule Again Next Year

Abstract: The agency released a regulatory agenda on Thursday that indicates that it will consider "regulatory options" to respond to the U.S. Fifth Circuit Court of Appeals decision in March to vacate the rule, which would have required brokers in retirement accounts to act in the best interests of their clients. The deadline for a proposal is September 2019.

Source: Investmentnews.com (registration may be required), October 2018

IRS to Focus on 403b Plan Rules in 2019

Abstract: A Program Letter from the Tax Exempt & Government Entities (TE/GE) Business Operating Division of the IRS offers a heads up to what retirement plan sponsors can expect from the IRS in 2019. Included is an examination of 403b plans for universal availability, excessive contributions, and proper use of catch-up contributions under IRC Section 414(v).

Source: Planadviser.com, October 2018

OMB Finishes Review of DOL Proposal to Establish Open MEPs

Abstract: The text of the regulation is still forthcoming, but the Office of Management and Budget has completed its review; so far, we know the regulation is viewed as "major" and "economically significant."

Source: Planadviser.com, October 2018

Strong Market Returns Fail to Reduce Workers' Financial Stress

Abstract: After two years of strong stock market returns, people are significantly more likely to say they are in excellent financial health and ahead of schedule in saving for retirement than they were in 2016. Despite this optimism, however, they also report significantly more stress, especially financially related stress, driven primarily by growing debt. Savings-related benefits like 401ks and health savings accounts help employees feel better about their financial well-being, but the data indicate many either do not fully understand the benefit or have overestimated their success using it.

Source: Lockton.com, October 2018

401k Recordkeepers Seek New Revenue Streams

Abstract: Recordkeepers of defined contribution plans have begun seeking new sources of revenue, largely to defray relentless fee compression that's squeezing their bottom line, according to retirement plan advisers.

Source: Investmentnews.com (registration may be required), October 2018

Form 5500 Instructions: Five Steps to Filing Correctly: Updated

Abstract: If you're searching for Form 5500 instructions, you're probably newly responsible for your company's 401k. Or you're just looking for a quick refresher to help you properly file your form, so you can get back to more important things. This article will walk you through five easy-to-follow steps for successfully submitting Form 5500. By the end of this post, you should be well equipped to quickly get your Form 5500 out the door.

Source: Forusall.com, October 2018

Top Five 401k Compliance Mistakes and Best Practices

Abstract: A series of articles discussing the five most common compliance mistakes made by 401k plan administrators and fiduciaries, the potential liability associated with such mistakes, and steps you can take to avoid making them yourself.

Source: Benefitsbclp.com, October 2018

Multiple Employer Plans Could Change Retirement

Abstract: Multiple Employer Plans are making a comeback as regulators and legislators are focusing on methods for having more Americans gain access to retirement savings plans. While multiple employer plans can help to make life easier for smaller employers who want to offer a 401k plan by allowing them to offload responsibilities, they have disadvantages as well as advantages.

Source: 401ktv.com, October 2018

What's Next for 401k MEPs?

Abstract: The president's executive order put multiple employer plans front-and-center. Pentegra's Pete Swisher fills us in on what happens now.

Source: 401kspecialistmag.com, October 2018

What's Your 401k Plan's Retirement Income Philosophy?

Abstract: Corporate communications around retirement plans may soon become more complex, as plan sponsors decide how, and whether, to support participants as they move from work into retirement. The first step for many plan sponsors may be developing a policy or philosophy that will guide plan decisions for retired participants and retirement income solutions.

Source: 401kspecialistmag.com, October 2018

Businesses Play Pivotal Role in Preparing Workers for Retirement, Study Shows

Abstract: A new report from Wells Fargo Institutional Retirement and Trust details the specific features of a well-designed 401k plan that are most effective in helping employees amass the savings they need to replace 80 percent of their income in retirement.

Source: 401khelpcenter.com, October 2018

Standards of Conduct for Investment Professionals - Overlapping Protections for Broker-Dealer Retirement Customers

Abstract: The legal standards for broker-dealer firms and their representatives, particularly in the retirement market, continue to be in flux. BDs were among those most affected by the promulgation in 2016 of the DOL fiduciary rule under ERISA, which undertook to switch their legal status in the retirement market from securities selling firms to unconflicted fiduciary advisers. Thus, BDs are among those most affected by the vacatur of that rule. With the SEC "best interest" standard of care proposal, however, the regulatory environment continues to evolve. Article looks at the overlapping layers of regulation to which BDs could be subject in the retirement market.

Source: Eversheds-sutherland.com, October 2018

Perspectives to Help Drive Better Retirement Outcomes

Abstract: This 44-page report draws on data about the behaviors of more than four million retirement plan eligible employees. This analysis, in conjunction with key findings from the behavioral finance field, provides useful guidance for how plan sponsors can be effective in helping their employees achieve a more successful retirement.

Source: Wellsfargomedia.com, October 2018

The Value of the 401k

Abstract: Does a successful 401k plan influence a company's profitability? This research determined that there are significant correlations between 401k plan design and corporate financial performance existing within and across industries, regardless of company size.

Source: Troweprice.com, October 2018

Seven Attributes of an Excellent DC Plan

Abstract: How does our retirement plan compare to others? This is a common question when an organization evaluates key characteristics of its defined contribution retirement plan. Plan sponsors and their advisors often benchmark their plans against industry averages to see how they measure up. But, is that what they should strive for -- being average -- or should they aim higher?

Source: Russellinvestments.com, October 2018

2018 Year-End Checklist for Plan Sponsors

Abstract: As the end of the year approaches, plan sponsors must ensure that they are preparing for proper adherence to regulatory and legislative requirements. ERISA compliance can be a tedious, complicated, and time-consuming process. This checklist will help cover some of the most important aspects that all sponsors should keep in mind to make the year-end process less challenging.

Source: Planpilot.com, October 2018

Boomers Express Confidence in Their 401k Plans

Abstract: Recognizing the fact that November will mark the 40th anniversary of the legislation that paved the way for 401k plans, Charles Schwab conducted a survey of Baby Boomers' attitudes towards their 401k plans. Schwab notes that Boomers are the first generation to have access to a 401k plan for a majority of their career. Seventy-five percent of Boomers said they believe their 401k plan is in better shape now than ever before.

Source: Planadviser.com, October 2018

Kaleida Health Faces 403b, 401k Plan Fee Lawsuit

Abstract: The complaint specifically calls out the 11 T. Rowe Price target-date funds offered by the plans, saying they are all adviser or retail class funds, as opposed to investor or institutional class funds.

Source: Planadviser.com, October 2018

Bonding Requirements for ERISA Plans

Abstract: If you are working with ERISA plans, you will need to respond to questions from your employer clients about meeting the mandatory bonding requirements which must cover any employee handling assets of the plan. Once you tell your employer client that ERISA requires that such employees be covered under a bond, the employer will ask a number of questions reviewed here.

Source: Ntsa-net.org, October 2018

IRS Lays Out Employee Plan Program Priorities for 2019

Abstract: A program letter from the heads of the IRS's Tax Exempt & Government Entities (TE/GE) division provides an update on the compliance, data, process and casework strategies the division plans to focus on in the coming year.

Source: Ntsa-net.org, October 2018

Providing Incentives for Annuities Within Retirement Plans

Abstract: For decades, the higher education sector and others in the nonprofit world have offered plans that provide guaranteed income in retirement that continues to grow when employees change jobs. For that reason, the not-for-profit sector has insights on how to improve income security in retirement with the broader industry.

Source: Investmentnews.com (registration may be required), October 2018

Can Participants Invest Their 401k Accounts in Real Estate?

Abstract: This question can be a pretty challenging one to answer. The reason is that regardless of what anyone thinks about how good of an investment real estate might be, there are several additional requirements that apply when the real estate will be held inside a retirement plan. Complying with those extra requirements can get expensive, which can eat away at the returns and make things somewhat less attractive.

Source: Dwc401k.com, October 2018

Why Hire an Unbundled Service Provider?

Abstract: The perceived disadvantages of "unbundling" recordkeeping and administrative services generally fall into two areas: 1) the belief that adding more parties adds more cost, and 2) the belief that adding more parties adds more complexities for the employer. This article examines these perceptions and then considers some added benefits of an "unbundled" arrangement.

Source: Consultrms.com, October 2018

Putnam 401k Row Sent Back to Trial Court

Abstract: Investors in Putnam Investments LLC's 401k plan will get another chance to show the company profited at the expense of their retirement savings by putting Putnam-affiliated mutual funds in the plan.

Source: Bna.com, October 2018

Millennials Give Retirement Saving a Low Priority

Abstract: Retirement clearly is not a priority for far too many young working adults. Large minorities of the 22- to 37-year-olds who responded to a recent LendEdu survey said their retirement saving every month amounts to less than they spend on various categories of consumer goods. Nearly half of them report they spend more on dining out than on retirement saving. Almost one in three spend more on alcohol or new clothes, and one in four spend more on streaming services such as Netflix and Spotify. What that indicates is that a lot of them aren't saving very much.

Source: Bc.edu, October 2018

Projected 2019 401k Plan Limits

Abstract: Based upon the actual and projected CPI, there is little doubt that we will see increases in the pension limits for 2019. Here are our projected changes. Remember, these are unofficial projections. The IRS hasn't officially announced the 2019 limits and will not do so until later in October.

Source: 401khelpcenter.com, October 2018

IRS Issues Update to Qualified Plan Correction Guidance

Abstract: EPCRS allows retirement plan sponsors to correct compliance failures that may adversely affect the tax-qualified status of a plan. The primary purpose of the new Revenue Procedure is to update how plan sponsors may submit these Voluntary Correction Program applications to the IRS.

Source: Seyfarth.com, October 2018

Which Side of the Retirement Savings Statistics Are You On?

Abstract: According to recent statistics, most Americans are alarmingly unprepared for retirement. No matter where you are on the retirement savings spectrum, there are some basic things that you can -- and should -- do to put yourself on the positive side of the stats.

Source: Schwab.com, October 2018

Fidelity Sued Again for 401k Plan Mismanagement

Abstract: Fidelity Investments Inc. has been sued by participants in its company 401k plan for alleged self-dealing that caused the firm to profit at the expense of its employees saving for retirement. The lawsuit filed against Fidelity is similar to a separate case filed against the firm about five years ago, which was settled for $12 million in 2014.

Source: Investmentnews.com (registration may be required), October 2018

Why the SEC Will Never Enact a Meaningful Fiduciary Standard

Abstract: The author writes in this opinion piece, "I continue to enjoy reading analyses on the SEC's BI proposal. These are analyses from industry leaders, people who I greatly admire and respect. When people ask my opinion, I just tell them it is all just a cruel game, that the SEC has never intended to protect the public with a meaningful universal fiduciary standard, that the SEC will never do so, as it would jeopardize their own careers and risk incurring the wrath of Wall Street."

Source: Iainsight.wordpress.com, October 2018

The Marshmallow Test for Retirement

Abstract: For those who aren't familiar with the famous "Marshmallow Test," a young girl or boy sits at a table with a single marshmallow on a plate. The tester tells the child that he or she can eat the marshmallow right away, but waiting to eat it until the tester comes back into the room will bring a big payoff: a second sweet, puffy morsel. Watching the children in this video squirm as they wrestle with their decisions brings to mind the adult equivalent. A desire for immediate self-gratification can come at the detriment of any number of personal financial decisions.

Source: Bc.edu, October 2018

House Flip Could Fuel Focus on Retirement Policy

Abstract: Rep. Richie Neal, the ranking Democrat on the House Ways & Means Committee, and the man in line to become chairman of that powerful committee, has cited three priorities on which he even thinks he might align with President Trump, and two of them -- shoring up retirement savings and protecting multi-employer pension plans -- deal with retirement, according to a report in The Hill.

Source: Asppa.org, October 2018

401k Recordkeeper Consolidation Affecting the Industry

Abstract: Recordkeeper consolidation has been active for years, with shrinking margins and economies of scale serving as driving forces behind the trend. Some firms are responding to the impact of consolidation, as well as this greater awareness of fiduciary responsibilities, with new solutions.

Source: 401kspecialistmag.com, October 2018

This Scares Americans More Than Dying

Abstract: What's scarier than death? Money issues, apparently. More than 40 percent of people worry about paying for health care and right around a third fear finances in general more than dying, according to a new study. It's a morbid by-product of something most people are otherwise excited about: on average, we're living longer than ever before.

Source: 401kspecialistmag.com, October 2018

The $210 Billion Risk in Your 401k

Abstract: Annual defaults on loans taken against investors' 401ks threaten to reduce the wealth in U.S. retirement accounts by about $210 billion when the lost savings are compounded over employees' careers, according to an analysis by Deloitte Consulting LLP.

Source: Wsj.com, October 2018

Why Auto-Enrollment Matters for Plan Sponsors

Abstract: Aside from employee benefit, companies have myriad incentives to give their employees automatic enrollment. Even companies that hold out may soon be legislated to provide it, so companies that implement it now will be ahead of the curve.

Source: Planpilot.com, October 2018

Possible Retirement Savings Legislation in Lame Duck Session

Abstract: This article begins by briefly discussing the changes made to the FSA when it passed the House and the political outlook for retirement policy legislation before the end of the year. It provides an inventory of some of the key retirement policy proposals that may be included in any year-end 2018 retirement policy legislation.

Source: Octoberthree.com, October 2018

Crucial Questions Retirement Plan Provider Should Ask When Defining Its Growth Strategy

Abstract: Slightly more than 50% of plan sponsors indicated that they are very likely or somewhat likely to renegotiate recordkeeper fees. Competing in a market focused on fee compression and the need to enhance the overall participant experience, retirement plan providers need to step up their game to remain competitive. Is your business up for the challenge?

Source: Fisglobal.com, October 2018

ERISA University Excessive Fee Cases Take Another Hit

Abstract: Excessive fee complaint dismissed because the diverse selection of funds available to plan participants negates any claim that Defendants breached their duties of prudence simply because cheaper funds were available.

Source: Erisa-employeebenefitslitigationblog.com, October 2018

DC Plan Advisors Are Leveling Up

Abstract: The DC plan market is increasingly dynamic with a variety of industry forces and innovations at play, and so, too, is the makeup of the DC advisor population. Findings from our newly released Retirement Plan Advisor TrendsTM report reveal important changes in the profile of financial advisors who are active in the DC space, affecting the business relationships these advisors have with plan providers and investment managers.

Source: Marketstrategies.com, October 2018

What Is Auto Enrollment?

Abstract: "Auto-enrollment" is a plan design feature that takes advantage of the common human tendency towards inertia to help employees save for retirement and other purposes. In plans where auto enrollment is used, employees do not need to make an affirmative election to participate in an employee benefit plan. Instead, eligible employees are enrolled at a pre-established level of contributions and then allowed to "opt-out" of the default election.

Source: Boutwellfay.com, October 2018

What Happens When the Retirement Honeymoon Is Over?

Abstract: People spend their entire career working in a system that lays out their priorities, guides their actions, and provides clear, measurable goals. Retirement means freedom, but it also means leaving that system and the comfort of certainty it has provided. "Many retirees experience a lack of purpose without a fulfilling job while others simply do not have the savings or good health to pursue the dream they once held," says Stephen Heitzmann. "What's missing," he says, "usually falls into these three buckets: Finances, health, purpose."

Source: Marketstrategies.com, October 2018

Only One in Three Workers are on Track to Retire Comfortably by Age 67

Abstract: If current employee savings trends continue, half of workers will need to wait for retirement until at least age 70 to be considered financially prepared, according to findings from The Real Deal: 2018 Retirement Income Adequacy study released by Aon.

Source: Aon.com, October 2018

How Low Expected Returns Impact 401k Participant Behavior

Abstract: How workers will react to its next resurgence, specifically in retirement saving, is the subject of a new paper from three highly-regarded academics, Vanya Horneff, Raimond Maurer and Wharton's Olivia Mitchell.

Source: 401kspecialistmag.com, October 2018

Employees Struggle With Allocating Money to HSAs and Retirement Plans

Abstract: Eighty-two percent of employees see medical costs as their biggest challenge now and in the future, according to the Willis Towers Watson 2018 Health Accounts Employee Attitudes Survey. Yet only 25% rank contributing to a health savings account (HSA) as a top current financial priority, falling below saving for retirement in a 401k, paying for essential day-to-day expenses and paying off debt. The survey found the majority of employees (69%) who didn't enroll in an HSA said they chose not to because they didn't see the benefit, understand HSAs or take the time to understand them.

Source: Plansponsor.com, October 2018

Open MEPs Could Create Many Opportunities for Advisers

Abstract: Should Congress or federal regulators eliminate the common nexus and bad apple rules that have held back open multiple employer plans, experts anticipate many more small businesses will jump in.

Source: Planadviser.com, October 2018

Student Loan Repayments or Retirement Savings? Maybe Both

Abstract: Recent statistics show that approximately 70 percent of college graduates will leave college with an average of at least $30,000 in student loan debt. Cumulatively, the national student loan debt is approximately $1.5 trillion. This burden is causing millennials to wait longer than previous generations to buy houses, start families, and save for retirement. Although student loan indebtedness is not an issue employers can solve alone, a few are finding ways to recruit and retain talent by offering a helping hand to employees dealing with massive debt burdens.

Source: Ogletree.com, October 2018

Are Advisors Actively Making a Passive Shift?

Abstract: Amidst what seems the perennial debate of active versus passive options, are retirement plan advisors "voting" with their recommendations? Well, according to a survey of more than 500 advisors, the clear majority (78%) opted for the equivalent of "it depends," more precisely "sometimes - depending on the situation" in terms of their active/passive recommendations.

Source: Napa-net.org, October 2018

Benchmarking the Features of a 401k Plan

Abstract: Reviewing an existing plan represents a tremendous opportunity for practitioners to offer value-added services to their clients and for finance employees to serve their employers. These questions can be used to benchmark a plan against others and to learn more about the important features of a retirement plan.

Source: Journalofaccountancy.com, October 2018

Will Student Loans and 401k Plans Be a Match?

Abstract: On the surface, helping employees save for their retirement while they pay off their student loans makes sense. It's hard to argue with the message to a prospective new employee, you pay down your student loans and we will help you start saving for retirement. With the current competition for talent, it is easy to see a why this could be popular with recent graduates as seven in ten leave college with student loans. Who would say no to that? What could possibly go wrong?

Source: Forbes.com, October 2018

The Ins and Outs of ERISA Fiduciary Insurance

Abstract: Fiduciary liability insurance is an important, but often overlooked, aspect of a company's risk management plan. This article discusses the use of fiduciary insurance in protecting fiduciaries from liability when governing or providing services for employee benefit plans subject to the Employee Retirement Income Security Act.

Source: Ckrlaw.com, October 2018

Sidecar Savings Accounts Add to Peace of Mind and Improve Productivity

Abstract: Sidecar savings accounts are now being discussed as a topic that will strengthen the private retirements system. Emergency savings plans, such as "sidecar savings accounts" could soon become a part of workplace benefits packages if some legislators, policymakers, and employers get their way. These Sidecar Savings Accounts would allow employees to set aside funds to cover financial emergencies, with help from their employer.

Source: 401ktv.com, October 2018

Playing the Game of 401k Audit Roulette: The Odds Are Getting Shorter

Abstract: If you're in the retirement plan business, you've heard the term "audit roulette." It refers to the belief by some employers that the odds of their retirement plan getting audited by the IRS are in their favor. Well, those odds are getting worse. The IRS is taking technology to the next level using "data driven decisions."

Source: Retirementplanblog.com, October 2018

Neuberger Berman Dismissed as Defendant in 401k Self-Dealing Suit

Abstract: A federal judge has pulled apart a lawsuit against Neuberger Berman and other defendants alleging they violated ERISA by maintaining the Value Equity Fund, which it says "was larded with high fees and has suffered from consistently abysmal performance," in its 401k plan.

Source: Planadviser.com, October 2018

As a Plan Provider It Won't Matter If You Can't Fix This

Abstract: This article is citing some of the problems that you may experience as a plan provider that you have to clean up before you can even think about marketing your services to potential clients.

Source: Jdsupra.com, October 2018

DOL on Verge of Issuing MEP Guidance

Abstract: The DOL is set to formally propose a rule seeking to expand access to workplace retirement plans, less than a month after President Donald J. Trump issued an executive order calling on the agency to do so. The DOL just dropped off a proposed rule to the Office of Management and Budget.

Source: Jdsupra.com, October 2018

The Fiduciary Duty of Loyalty

Abstract: The duty of loyalty has been cited as the highest known to law. The Supreme Court in Pegram v. Herdrich stated that the duty of loyalty requires fiduciaries to make decisions with a single eye towards participants and beneficiaries.

Source: Wagnerlawgroup.com, October 2018

What Hat Are You Wearing?

Abstract: In today's organizations, many employees are asked to take on multiple roles and responsibilities. This is especially true when considering the management of a corporate retirement plan. To better understand what role each person plays in the management of a 401k (or any other corporate retirement plan), we have to understand what roles there are to play.

Source: Pension-consultants.com, October 2018

ERISA Tips: Investments and Processes

Abstract: Fiduciaries aren't held to delivering a particular level of investment return, but they are expected to act in an informed and prudent manner. Having a process in place can help fiduciaries achieve better results, and it can help demonstrate fulfillment of their Duty of Care obligations.

Source: Ntsa-net.org, October 2018

DOL Clarifies Guidance on Socially Responsible Investing

Abstract: Socially responsible investing often sounds like an intriguing idea, but investing plan assets in a socially responsible manner is a notoriously tricky proposition. Earlier this year, the US Department of Labor issued additional guidance clarifying existing DOL guidance applicable to socially responsible investment of plan assets. However, the clarifications included in FAB 2018-01 may further limit the scenarios in which socially responsible investing could be considered prudent under ERISA.

Source: Mwe.com, October 2018

Improving Retirement Readiness: Is the Answer SIMPLE?

Abstract: A recent Pew study uncovered misconceptions that may cause small business owners to make poor decisions regarding workplace retirement plans. Business owners are unfamiliar with existing plan options that were created specifically to meet the needs of small businesses. One example, the SIMPLE IRA, a low-cost payroll deducted plan, overcomes almost every objection business owners expressed.

Source: Mtrustcompany.com, October 2018

The Unique and Varied Challenges Women Face Planning and Preparing for Retirement

Abstract: Planning for retirement is not a one-size-fits-all model. While savings, health, cost of living, and lifestyle expectations are major factors, research shows that gender can play a large role in retirement planning and that women may have additional challenges that should to be considered. These factors exacerbate the current challenges of living a longer life with inadequate savings and can create a greater sense of retirement insecurity for women.

Source: Georgetown.edu, October 2018

What Is the Baseline for a Committee to Act in the Best Interest of Its Participants?

Abstract: Retirement plan committees should have formal programs for fiduciary education. The fiduciary education should cover, at the least: Who is a fiduciary and what are the fiduciary responsibilities? How do fiduciaries fulfill those duties in the real world? How do fiduciaries review and examine the advice that they receive? And, how do fiduciaries monitor the costs and compensation related to their service providers and plan investments? That education should be reinforced at least annually, together with updates on current developments.

Source: Fredreish.com, October 2018

ETFs Still Missing From 401ks

Abstract: ETFs may show up in small-sized plans, or if a plan allows a brokerage account, but when it comes to midsize and large plans, ETFs are largely absent. This discrepancy is really a tale of two types of plan sponsors: larger plans and smaller plans that can’t get the institutional pricing offered to larger plans. It's also a tale of how plans process investments, whether they use new recordkeeping technology that makes it easier to use ETFs, or if they still use legacy products.

Source: Etf.com, October 2018

Why You Should Conduct a Retirement Plan Recordkeeper RFP

Abstract: Despite the time, money, and employee disruption, there are just too many benefits to an RFP to go for long without doing one. Three benefits are reviewed in this short article.

Source: Cammackretirement.com, October 2018

Ready for a Government-Run 401k?

Abstract: Legislation has been introduced in the U. S. House of Representatives that would create a parallel government-run retirement savings program, and one that could undermine the 401k, particularly for small business owners.

Source: Asppa.org, October 2018

Retirement and Beyond: Congress Considers Changes to the Way Americans Save

Abstract: It's increasingly possible that Congress could approve substantive retirement reform in the coming weeks. The House of Representatives passed the Family Savings Act of 2018 (FSA) on September 28 as part of a broader push that some are calling Tax Reform 2.0. While the FSA contains many provisions that are also in the Retirement Enhancement and Savings Act (RESA), which was first introduced in the Senate in 2016 and reintroduced in March 2018, it also contains some new provisions.

Source: Alliancebernstein.com, October 2018

Tech Tools Significantly Boost 401k Savings Habits

Abstract: Technology is altering almost all areas of modern life. New research aimed to track tech's impact in the financial space, particularly the effect automated financial advice can have on savings patterns. The results were impressive, according to data from Wealthfront, Redwood City, Calif.-based creators of financial planning and investing software.

Source: 401kspecialistmag.com, October 2018

How to Capitalize on 401k Industry Consolidation

Abstract: Modeled off market forces in employee benefits and property/casualty, the retirement plan industry is about to take its turn, with pundits and prognosticators predicting massive change in the next five years. A new firm, Wise Rhino, recently crashed the space to capitalize on the trend.

Source: 401kspecialistmag.com, October 2018

When Must a Fiduciary Say No to No-Fee Funds?

Abstract: Fidelity recently debuted two "no fee" mutual funds, a domestic and an international index fund. This concept raises significant fiduciary questions. Beyond the fact they have no investment performance history, the very concept of the business model has no history. No mutual fund has ever been offered that has been fully subsidized by the management company.

Source: Fiduciarynews.com, October 2018

Determination of Proper Earnings When Correcting a Qualification Mistake

Abstract: The determination of proper earnings may seem like a small issue when correcting a qualification mistake. However, both the IRS and the DOL treat this part of your correction seriously, so you should, too.

Source: Ferenczylaw.com, October 2018

Private Sector Workers and Access to DC Retirement Plans

Abstract: 51 percent of private industry workers had access to only defined contribution retirement plans through their employer. An additional 13 percent had access to both defined benefit and defined contribution retirement plans at their workplace, while 4 percent of private industry workers had access to only defined benefit retirement plans.

Source: Bls.gov, October 2018

Portable Retirement and Investment Account Act Introduced

Abstract: Congressman Jim Himes introduced the Personal Retirement and Investment Account (PRIA) Act. The current retirement savings system is not working for most Americans. It is too reliant on employers and leaves too many people behind. Most accounts are employer-sponsored, but not every business offers a plan and more often than not, part time and contract employees are not eligible for these accounts.

Source: 401khelpcenter.com, October 2018

Court Deems Principal Not a Fiduciary in Lawsuit Over GICs

Abstract: The U.S. District Court for the Southern District of Iowa has ruled against plaintiffs in an ERISA lawsuit. The court granted the Principal defendants' motion for summary judgment on all counts in a case questioning guaranteed investment contract arrangements.

Source: Plansponsor.com, October 2018

Understanding the Participant Mind

Abstract: Obtaining data on participants from retirement readiness tools, recordkeepers and aggregation tools is important in order to tailor effective communications.

Source: Planadviser.com, October 2018

DC Plan Customization to Drive Next Wave of Innovation

Abstract: The defined contribution world is poised for change. It will take time -- $20 trillion systems aren't transformed overnight -- but don't let that fool you into underestimating just how big the change will be. This article reviews some of the themes to watch for.

Source: Pionline.com, October 2018

Judge Dismisses 401k Fiduciary Breach Lawsuit Against Gannett

Abstract: A U.S. District Court judge in Alexandria, Va., dismissed a 401k plan participant lawsuit against Gannett Co. and plan executives alleging they violated their fiduciary duties for holding too much stock in Gannett's former parent company in the 401k plan.

Source: Pionline.com, October 2018

Helping Employees to Financial Wellness: An Innovative Approach

Abstract: Employers take different viewpoints when addressing requests of employees for assistance in managing personal financial obligations. As an example of a very clever (but not original) idea, Abbot Laboratories1 received an OK from the IRS in Private Letter Ruling (PLR) 201833012 on the question of an employer's use of a 401k plan as an incentive for employees to reduce their student loan debt.

Source: Milliman.com, October 2018

Another 403b Plan Sponsor Beats Back Fee Lawsuit

Abstract: Washington University in St. Louis has won the dismissal of a lawsuit alleging it caused employees participating in the school's 403b plan to pay excessive fees for recordkeeping and investment management. Judge Ronnie L. White dismissed the lawsuit with prejudice, meaning it can't be brought back at the district-court level.

Source: Investmentnews.com (registration may be required), October 2018

What You Need to Know About Borrowing from Your 401k

Abstract: As your 401k account grows, it can be tempting to tap into it, especially if you're in need of extra cash. But, considering that it's a means to fund your retirement, it's important to understand the pros and cons of borrowing from your 401k.

Source: Intuit.com, October 2018

How to Avoid Hidden 401k Fees

Abstract: When you're saving in your 401k retirement plan, it's easy to keep tabs on your returns and your account balance. These numbers are often prominently displayed on your plan's website or in the statements you receive. But when was the last time you looked closely at how much you're paying in 401k fees? Follow these steps to lower your retirement plan costs and boost your savings.

Source: Consumerreports.org, October 2018

Why Teachers' Retirement Plans Aren't Making the Grade

Abstract: While total costs for 401k plans hit an average of 0.88 percent, annuity-based 403b plans that are not subject to federal protections can have annual fees of around 2.5 percent. That's because while there's been a trend of falling fees and plaintiffs' lawsuits against too-costly 401k plans, public school teachers are dealing with a different saving regime. Here's what you need to know about 403b plans for public school workers.

Source: Cnbc.com, October 2018

IRS Updates the EPCRS Plan Correction Procedure

Abstract: Through Revenue Procedure 2018-52, the IRS has just updated its system of correction programs for retirement plans known as the Employee Plans Compliance Resolution System (EPCRS). The principal change in the new procedure is to require that submissions under the Voluntary Correction Program (VCP) be made online through the www.pay.gov website.

Source: Bradley.com, October 2018

No Stomach for Stock-Market Swings? Consider Stable Value Funds

Abstract: For risk-averse investors, there seems to be nowhere to hide these days. High volatility and high valuations make stocks an unsavory option, and bonds don't look much better in the face of rising interest rates. And cash still pays next to nothing. But if you have a 401k, you have an oft-overlooked option, stable value funds.

Source: Barrons.com, October 2018


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