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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New DOL Proposal Would Allow Fiduciaries to Self-Correct Certain Errors

The DOL has proposed a rule, released on November 21, that aims to simplify and expand its Voluntary Fiduciary Correction Program. If adopted, the rule new would allow fiduciaries to self-correct for participant contributions that are not invested or participant loan repayments that are not repaid and then notify the DOL after the fact. Other erroneous transactions must continue to be fixed under current rules.

Source: Plansponsor.com, December 2022

Momentum is Growing to Educate Advisers on Plan Options for Lifetime Income

Three years after the "Setting Every Community Up for Retirement Enhancement Act" made it easier for companies to add annuities to their retirement plan options, the momentum is growing for educational programs in this area that are tailored to the needs of advisers. Retirement industry groups are ramping up efforts to help advisers understand and compare annuities for plans and consider how to communicate those options to plan sponsors and participants.

Source: Planadviser.com, December 2022

ERISA Fiduciaries May Consider ESG Factors in Selecting Investments and Exercising Shareholder Rights

This final rule effectively overturned two rules published in the last months of the Trump administration, which essentially prohibited the consideration of ESG factors when ERISA fiduciaries selected investments or exercised shareholder rights. In effect, the Biden administration has now enabled fiduciaries managing ERISA funds to consider "factors [that] may include the economic effects of climate change and other ESG considerations on the particular investment or investment course of action."

Source: Mintz.com, December 2022

DOL Finalizes ESG, Proxy Voting Regulation

The DOL recently finalized a regulation amending the rules under ERISA, related to the selection of plan investments and the exercise of shareholder rights. The Rule -- entitled "Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights" -- is largely consistent with historic DOL positions, but it endeavors to provide fiduciaries with more latitude when considering environmental, social, and governance investment factors and voting proxies.

Source: Groom.com, December 2022

The Retirement Income Challenge in 401k Plans: Overcoming Legal Obstacles

Many participants in 401k plans would benefit from guaranteed retirement income to protect them from risk factors. Before the SECURE Act, perceived fiduciary liability and practical constraints were barriers to the inclusion of guaranteed retirement income contracts in 401k plans. The enactment of the SECURE Act, with its fiduciary safe harbor, its expanded distribution option to address portability, and the requirement to educate participants on the retirement income their accounts will provide, has been a significant step in removing those barriers.

Source: Dciia.org, December 2022

The DOL Issues its Final Word on ESG and Proxy Voting

The final regulations create a framework within which an ERISA fiduciary may take ESG into account in a manner that complies with ERISA. They largely track the DOL's proposed regulations issued in October 2021 with two notable additions.

Source: Debevoise.com, December 2022

For Second Consecutive Year, IRS 2022 Required Amendments List Does Not Affect 401k Plans

On November 21, 2022, the IRS released Notice 2022-62, its annual list of required amendments for individually designed qualified retirement plans, including 401k plans. Notably, for the second consecutive year, the RA List contains no provisions directly applicable to 401k plans and, in fact, contains no changes affecting retirement plans at all.

Source: Compliancedashboard.net, December 2022

Roth 401k Remains Underutilized Despite Potential Benefits

A well-designed Roth 401k may be an attractive option for many plan participants, and it is important for plan sponsors considering such a feature to design the plan with the needs of their workforce in mind. It is also critical to communicate the differences between the pre-tax option, the specific timing rules required, and the tax-free growth it offers. Additionally, plan sponsors should be mindful of potential administrative costs and other compliance requirements in connection with allowing the Roth option.

Source: Berrydunn.com, December 2022

2022 Required Amendments List Includes No Changes in Qualification Requirements

While this year's IRS Required Amendments List does not specify changes, that does not necessarily mean that 401k plan sponsors have no amendments to adopt. The RA List does not cover discretionary plan amendments, which generally must be adopted by the end of the plan year in which discretionary plan design or operational changes are implemented, except for certain discretionary amendments that must be adopted before they are implemented.

Source: Thomsonreuters.com, December 2022

DOL Proposes to Amend Its Voluntary Fiduciary Correction Program

The proposed amendment and restatement of the VFC Program and related PTE 2002-51 to incorporate self-correction of the transmittal of delinquent contributions and loan repayments is a mixed bag at best. Although delinquent contributions are the number one failure corrected through the VFC Program, the $1,000-or-less limit on lost earnings may limit the self-correction component's utility.

Source: Thomsonreuters.com, December 2022

DOL Final Regulations Authorize Plan Fiduciaries to Consider Climate Change and Other ESG Factors

The final regulations purport to clarify that fiduciaries may consider the potential financial benefits of ESG funds when selecting investments and that doing so may not violate ERISA. However, it is unclear whether this will be the case in operation.

Source: Thomsonreuters.com, December 2022

DOL Reframes ESG Investing and Proxy Voting for ERISA Fiduciaries

The Final Rule clarifies that ERISA-regulated fiduciaries may take into account ESG factors that are relevant to an investment's expected risk return and other financial factors. While the Final Rule gives a thumbs up to ESG investing in certain circumstances, when considered against the proposed version of the rule published by the DOL in October 2021, it deemphasizes ESG factors specifically and instead provides a more principles-based gloss on appropriate fiduciary decision-making processes in general.

Source: Morganlewis.com, December 2022

DOL Proposes Updates to the Voluntary Fiduciary Correction Program

The DOL proposes what it calls a "Self-Correction Component" concerning delinquent participant contributions and loan repayments, subject to several conditions discussed below. It is important to note that the self-correction contemplated by the VFCP update differs from the self-correction afforded under EPCRS because it would still require a submission to the DOL, albeit a streamlined one.

Source: Wagnerlawgroup.com, November 2022

Judge Dismisses Charge of "Unreasonable" 401k Fees by Electronics-Maker Ricoh

A federal district court bounced two fiduciary breach claims brought by participants against Ricoh USA, saying plaintiffs failed "to plausibly allege the committee breached its ERISA-imposed fiduciary duty by charging unreasonable recordkeeping fees."

Source: Planadviser.com, November 2022

2023 US Defined Contribution Plan Compliance Calendar

For calendar-year defined contribution plans, this retirement plan compliance calendar list key IRS, Pension Benefit Guaranty Corp., and Labor Department reporting and disclosure deadlines.

Source: Mercer.com, November 2022

Retirement Benefits Nearly as Important as Salary, Survey Finds

The COVID-19 pandemic thrust retirement savings into the limelight as workers looked for ways to secure financial stability during uncertain times.

Source: Hrdive.com, November 2022

401k Plan Asset Allocation, Account Balances, and Loan Activity in 2020

Key Findings: 401k plans draw in many young retirement savers and new hires. Younger 401k plan participants tend to be invested more in equities than older 401k plan participants. Ownership of investments in equities is widespread among 401k plan participants. Target date funds continue to be an often-used investment option among 401k plan participants. 401k plan loans are widely available but rarely taken. The average 401k plan account balance tends to increase with participant age and tenure.

Source: Ebri.org, November 2022

Are Retirement Plans Too Complicated and at Risk of Becoming Even More So?

Albert Feuer, who writes frequently on the technical aspects of ERISA compliance, has published an interesting new article in Bloomberg Tax's Tax Management Compensation Planning Journal on the latest proposed legislation to alter retirement savings. Albert points out that the changes would help in allowing employees to increase their retirement savings, but would fail to either address the complexity of the system or the extent to which it allows a small percentage of taxpayers to use retirement accounts to shelter massive amounts of wealth far beyond that needed to fund retirement.

Source: Bostonerisalaw.com, November 2022

PODCAST: DOL's Cybersecurity Guidance for Retirement Plans

On April 14, 2022, the Department of Labor outlined a range of practices for combatting the growing threat of cybercrime to ERISA-covered retirement plans. Co-hosts Beth Garner and Joanne Szupka sit down with Greg Schu, Partner, Cybersecurity - National PCI Compliance Lead, BDO Digital, to discuss the implications of guidelines and what steps plan sponsors can take to help safeguard plan assets and participants' vital information.

Source: Bdo.com, November 2022

DOL Proposes Adding Self-Correction Component to VFCP

The DOL proposed updates to the voluntary fiduciary correction program, including a provision that should help plan sponsors and providers. More specifically, the addition of a self-correction component for employers that fail to send employee salary withholding contributions or participant loan repayments to retirement plans on time.

Source: Asppa.org, November 2022

ARA Presses DOL for Changes to QPAM Exemption Proposal

The American Retirement Association is calling on the Department of Labor to make changes to its proposed amendments to the Qualified Professional Asset Manager exemption, arguing that, as currently drafted, the proposal would needlessly disrupt plan relationships and increase costs.

Source: Asppa.org, November 2022

Younger 401k Participants Favor Investment in Equities

Younger 401k plan participants tend to favor equity investing more than older participants. That's a key finding from a new joint study from EBRI and ICI which found that at year-end 2020, 42% of 401k plan participants' account balances were invested in equity funds, on average, in line with recent years. Another 35% of 401k participants' account balances were invested in balanced funds, largely target-date funds.

Source: 401kspecialistmag.com, November 2022

DOL Proposes Changes to the Voluntary Fiduciary Correction Program and Related Prohibited Transaction Exemption

On November 18, 2022, the DOL issued proposed amendments to the Voluntary Fiduciary Correction Program and Prohibited Transaction Exemption 2002-51. The VFCP provides relief from civil liability and an exemption from excise taxes under the Internal Revenue Code to employee benefit plan fiduciaries if they voluntarily report and correct certain transactions that breach their fiduciary duty under ERISA.

Source: Westlaw.com, November 2022*

DOL Proposes Self-Correction of Delinquent Contributions and Loan Payments Under Qualified Retirement Plans

Self-corrections would be allowed for certain low-level delinquent participant contributions, which is significant since delinquent participant contributions are the most common problem corrected through the VFCP.

Source: Sidley.com, November 2022

DOL Final Rule Embraces Principles-Based Approach to ESG Factors in Investments and Proxy Voting: Initial Reactions

Here is a high-level overview of the Final Rule, which includes the key changes the DOL has made from the proposal. Notwithstanding the changes, the Final Rule retains the DOL's core principle that the duties of prudence and loyalty require ERISA plan fiduciaries to focus on relevant risk-return factors and not subordinate the interests of participants and beneficiaries (such as by sacrificing investment returns or taking on additional investment risk) to objectives unrelated to the provision of benefits under the plan.

Source: Ropesgray.com, November 2022

Year-End Compliance Issues for Single-employer DB and DC Retirement Plans

By year-end 2022, sponsors of calendar-year single-employer retirement plans must adopt necessary and discretionary plan amendments to ensure compliance with statutory and regulatory requirements of ERISA and the tax code. This piece looks at key areas, including administrative compliance issues, that DB and DC plan sponsors should address by December 31, 2022.

Source: Milliman.com, November 2022

DOL Adopts Final Rule Allowing Fiduciaries to Consider ESG Factors for ERISA Plans

The DOL adopted a final rule allowing ERISA plan fiduciaries to consider environmental, social, and governance factors when selecting investments and exercising certain shareholder rights.

Source: Findknowdo.com, November 2022

401k Annual Administration - A Checklist for Business Owners

Annual 401k administration shouldn't be stressful or time-consuming for employers. A qualified 401k provider will do most of the heavy lifting by completing the many technical tasks, making the employer's role simple. Employers should use a checklist like the one provided here to ensure their 401k plan's annual administration tasks are completed on time. A 401k administration checklist can also help employers monitor their plan provider's job performance.

Source: Employeefiduciary.com, November 2022

New Determination Letter Program for 403b Plans

The IRS recently issued Revenue Procedure 2022-40, which permits the submission of determination letter applications for individually designed 403b plans used by certain public schools, churches, and charities. Beginning June 1, 2023, plan sponsors maintaining individually designed 403b plans will be able to request a determination letter for initial plan qualification, upon plan termination, or for other limited circumstances to be announced by the IRS.

Source: Buck.com, November 2022

Judge Recommends Dropping Most of $4.2B Retirement Plan Suit Against Nestle

A U.S. District Court federal magistrate judge in the Eastern District of Wisconsin mostly sided with Nestle USA Inc. on Monday in recommending the dismissal of a class action lawsuit alleging fiduciary negligence and self-dealing in Nestle's $4.2 billion 401k savings plan but left room for two charges to be amended and refiled.

Source: Planadviser.com, November 2022

DOL Rule Greenlights ESG, but Questions Remain

The DOL published the final rule on ESG investment in ERISA-governed plans Tuesday, solidifying long-awaited permission to use environmental, social, and governance analysis in retirement investing, but not making it mandatory. Even as the decision came down, however, there are still details to be worked out for real-world implementation, according to multiple ERISA attorneys.

Source: Planadviser.com, November 2022

Share Class Choice Criticized in 401k Excessive Fee Suit

For the fourth month in a row, a relative newcomer to excessive fee litigation has brought suit against a multi-billion-dollar 401k plan. The allegations are familiar -- that the fiduciary defendants breached their duties under ERISA by "selecting and retaining imprudent share classes and investments for the plan" -- in this case the $2 billion Old Dominion 401k Retirement Plan and on behalf of its 24,000+ participants.

Source: Napa-net.org, November 2022

Loans and Hardship Withdrawals From 401ks on the Rise

More Americans are tapping their 401ks for financial emergencies, with the percentage of retirement savers pulling money for hardships spiking 24% in the 12 months through Sept. 30, according to new data.

Source: Investmentnews.com, November 2022

ERISA Fee Complaint Dismissed in Pennsylvania District Court, Extending Favorable Trend

In Krutchen v. Ricoh USA, a Pennsylvania district court dismissed an ERISA excessive fee complaint for failing to provide enough information about alleged comparator plans that allegedly paid less for recordkeeping services. The decision is notable for delivering defendants a victory in the Third Circuit, which previously allowed excessive recordkeeping claims to survive dismissal, and for citing favorably to recent defendant-friendly opinions from the Sixth, Seventh, and Eighth Circuits.

Source: Erisapracticecenter.com, November 2022

DOL Releases Final ESG Rule

On November 22, the DOL released its final rule designed to clarify a path forward for retirement plan fiduciaries wishing to incorporate environmental, social, and governance factors into their investment selection and monitoring process.

Source: Captrust.com, November 2022

ESG Rule Reactions Rolling In

Comments on the Department of Labor's final ESG rule keep rolling in. Early responses on the final rule have been overwhelmingly positive, with many praising the DOL for allowing retirement plan fiduciaries to consider climate change and environmental, social, and governance factors. Large organizations continued to voice their approval as many processed the final rule.

Source: 401kspecialistmag.com, November 2022

Plan Advisers Value Trustworthiness, Personal Touch From DC Recordkeepers

Retirement plan advisers value trustworthiness, reliability, and customer service when it comes to working with DC recordkeepers, according to the results of an annual survey by Cogent Syndicated. Among the key drivers of how retirement plan advisers valued a DC plan provider was having a human representative to support them and consistent and reliable service for themselves as well as their plan sponsors and participants.

Source: Planadviser.com, November 2022

DOL Finalizes Rule Opening Door to ESG Investing in Retirement Plans

The DOL announced a final rule that retirement plan fiduciaries can consider climate change and other environmental, social, and governance factors when they select investments for retirement plans like 401ks, reversing a rule enacted under former President Donald Trump that restricted ESG offerings.

Source: Planadviser.com, November 2022

What's Shaping the U.S. Retirement Landscape in 2023?

A new T. Rowe Price U.S. retirement market outlook examines three broad trends the firm expects to continue to shape the retirement outlook for millions of Americans who are saving and investing for retirement.

Source: Napa-net.org, November 2022

Fiduciaries May, But Not Must Consider ESG: DOL

The DOL has unveiled its much-anticipated final ESG rule that it says will allow "plan fiduciaries to consider climate change and other environmental, social and governance factors when they select retirement investments and exercise shareholder rights, such as proxy voting." The operative word for plan fiduciaries is may, not must consider ESG factors, a concern that had arisen in the wake of the proposed regulation previously issued.

Source: Napa-net.org, November 2022

Strange Things That 401k Plan Sponsors Should Be Aware Of

Here are some strange things that go on in the retirement plan business that plan sponsors need to be aware of.

Source: Jdsupra.com, November 2022

DOL Proposes Self-correction for Retirement Contribution Mistakes

The program would enable employers and other plan officials to notify the DOL that they have self-corrected certain failures to send employee salary withholding contributions or participant loan repayments to retirement plans on time, according to a statement from the agency.

Source: Hrdive.com, November 2022

ICI Defends Revenue Sharing and Higher-Fee Share Classes in the Tenth Circuit Barrick Gold Case

The Barrick Gold case is noteworthy because the Investment Company Institute filed an amicus brief in which they defend the use of revenue sharing and actively managed investment options. The article's author thinks it is the best argument they have seen explaining how rampant excessive fee litigation is causing plan fiduciaries to limit their investment choices in retirement plans by avoiding investments with higher potential returns because of the fear of litigation. ICI argues that defensive investment selection will harm participant outcomes.

Source: Euclidspecialty.com, November 2022

IRS Expands Determination Letter Process for Certain Individually Designed 401k Plans

On November 7, 2022, the IRS released Revenue Procedure 2022-40 which generally updates the determination letter submission process for qualified retirement plans, including 401k plans. In particular, among other changes, the program expands the eligibility for requesting determination letters for certain individually designed plans, extends the "remedial amendment period" for certain new plans, and revises the scope of IRS review generally applicable to the determination letter process.

Source: Compliancedashboard.net, November 2022

Today's Retirement Plan Advisories Require Specialization

An evolving small business market, increased regulation, and shifts in client needs all lead to more specialized retirement plan advisement, according to a panel held by American College.

Source: Planadviser.com, November 2022*

What Deadlines Apply to 403b Plans

Whether you are a school business official or a human resources employee of a nonprofit organization, chances are that you are juggling so many responsibilities that your time is at a premium. Knowing deadlines for amending your employer's 403b plan document helps keeps that plan compliant. Here is a good review.

Source: Ntsa-net.org, November 2022

DOL Proposes Adding Self-Correction Component to VFCP

On November 18, the DOL proposed updates to the voluntary fiduciary correction program, including a provision that should help plan sponsors and providers More specifically, the addition of a self-correction component for employers that fail to send employee salary withholding contributions or participant loan repayments to retirement plans promptly.

Source: Ntsa-net.org, November 2022

IRS Signals Employers Will Have Less Discretion Over Discretionary Match

Employers offering discretionary matching contributions have less discretion to set the terms of those contributions outside of plan documents. The IRS recently noted that 403b plan documents submitted for preapproval must include provisions on the computation period and allocation formula for a discretionary match. This likely means that going forward, all employers using preapproved documents for their defined contribution plans -- 403b and qualified plans -- should expect to specify these terms in newly adopted documents.

Source: Mercer.com, November 2022

New 403b Plan Determination Letter Program

Continuing a recent trend to more closely align 403b plans with tax-qualified 401k plans, the IRS recently issued Revenue Procedure 2022-40 to create a limited determination letter program for individually designed 403b plans. For the first time, 403b plan sponsors can request an IRS determination letter for their "individually designed" 403b plans on initial plan qualification, on plan termination, or in other limited circumstances to be established by the IRS.

Source: Groom.com, November 2022

Participants Admit Auto-Enrollment Kickstarts the Retirement Savings Journey

As more employees ask for retirement planning vehicles in their employer-sponsored plans, a Principal study finds automatic features help participants achieve their largest share of retirement income. The latest research from Principal shows that over half (51%) of 725 respondents attributed auto-enrollment to kickstarting their retirement savings journey, and 81% said it helped them begin saving even sooner.

Source: 401kspecialistmag.com, November 2022

Fidelity 401k Balances Drop 23%, But Default Savings Hold

Recent market volatility contributed to at least a 21% drop in the average retirement account over the last year among 35 million of Fidelity Investment's retirement plans. The average retirement account balance for 401k plans dropped 23% from $126,100 at the end of the third quarter in 2021 to $97,200 in Q3 2022, Boston-based Fidelity said in a quarterly view into participant activity. Individual retirement accounts fell 25% to $101,900, and 403b balances were down 21% to an average of $87,400.

Source: Plansponsor.com, November 2022

DOL Rejects ForUsAll's "Tactical Retreat" in Crypto Retirement Case

The DOL is fighting back against the latest move by retirement provider ForUsAll in an ongoing dispute over DOL guidance. The DOL shot back at 401k provider ForUsAll's offer to drop its suit if the court confirmed a DOL warning about crypto in a retirement plan as "not binding."

Source: Planadviser.com, November 2022

Proposed Settlement Would Cost Juniper Networks $3 million

Juniper Networks, Inc. has agreed with plaintiffs to settle for $3 million in a lawsuit brought in August 2021 under ERISA. The settlement was submitted in September and motioned for preliminary approval last week, although it is still subject to U.S. District Court approval. Juniper, a networking hardware company based in California, admitted no fault or wrongdoing as part of the settlement.

Source: Planadviser.com, November 2022

SEC Swing-Pricing Proposal Could Impact 401k Savers

A proposal by the SEC to alter the way open-end funds operate could have a detrimental impact on retirement savers if implemented. The Investment Company Institute cautioned that the "SEC's proposed "hard close" "...is likely to make it impossible for 401k plans to place trade orders for their participants."

Source: Napa-net.org, November 2022

Tackling Beneficiary Designations

The majority of beneficiary designation issues affecting plan sponsors and administrators arise after a participant has passed away and is no longer able to make changes. To prevent costly and time-consuming, competing claims and potential litigation related to 401k account balances, plan sponsors and administrators should strongly consider investing more time in developing and following through with best practices related to beneficiary designations that are intended to avoid any future, competing claims and potential litigation.

Source: Foley.com, November 2022

IRS Provides Extension to Certain Retirement Plan Amendment Deadlines

On Aug. 3, 2022, the IRS issued Notice 2022-33 which extends the deadlines for certain plan sponsors to adopt amendments under the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act), the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), and the Bipartisan American Miners Act of 2019 (Miners Act) until Dec. 31, 2025. This extension applies to non-governmental qualified retirement plans, 403b plans as well as collectively bargained plans, and IRAs.

Source: Bsk.com, November 2022

Canadian Employees Delaying Retirement Due to Rising Cost of Living: Survey

Nearly two-thirds (62 percent) of Canadian pre-retirees say the rising cost of living is preventing them from retiring when they'd like to, up from 56 percent in 2021, according to a new survey by Fidelity Canada. The survey, which polled more than 1,900 Canadians aged 45 and older, found 55 percent said a lack of savings is holding them back from retiring, while 45 percent cited the performance of their investments.

Source: Benefitscanada.com, November 2022

How Engaged 401k Participants Are Saving Significantly More

When it comes to 401k participant savings rates, engagement matters, a lot. Engaged participant savings rates are a remarkable 56% higher than rates for unengaged participants, according to Empower's just-released second annual research study, Empowering America's Financial Journey: How People Save, Invest and Get Advice.

Source: 401kspecialistmag.com, November 2022

Americans Are Increasingly Directing Attention to Retirement Plans

New findings from Voya Financial show that a workplace retirement plan is just as important for employee retention as a competitive salary and flexible work arrangements. Sixty percent of employees surveyed said they were more likely to stay with their current employer if they offered an employer-sponsored retirement plan, compared to 64% who said they would stay for a competitive compensation package and 63% for flexible work hours.

Source: 401kspecialistmag.com, November 2022

Workers React to Retirement Language and Imagery

Organizations are taking a psychological approach to analyze the way Americans think about their retirement. New research from Capital Group studied close to 2,500 American adults and how they respond to retirement language and imagery, confirming a finding that the industry has understood for some time, there is no one-size-fits-all approach to retirement communications.

Source: 401kspecialistmag.com, November 2022

Impact on Plan Sponsors of Higher IRS Retirement Plan Limits

As a result of sustained high rates of inflation over the past several months, the 2023 retirement plan limits recently announced by the IRS reflect unprecedentedly large increases over the 2022 limits. This article examines the implications of the 2023 limit increases for retirement plan sponsors from a variety of different perspectives to help them better prepare and manage the potential impact points for next year.

Source: Segalco.com, November 2022

What Responsibilities and Liabilities Come With Signing the Form 5500?

You are wise to check on what the responsibilities associated with signing the 5500 are. Here's a quick review.

Source: Plansponsor.com, November 2022

SPARK Releases Updated Data Security Best Practices

The SPARK Institute released Monday its Plan Sponsor and Advisor Guide to Cybersecurity, laying out its specific data security "Best Practices and seventeen Control Objectives." Developed by its Data Security Oversight Board, SPARK's best practices and control objectives establish a base of communications between recordkeepers and the public through third-party audits of cybersecurity control objectives.

Source: Planadviser.com, November 2022

Recordkeeper Consolidation Leads to Drop in Proprietary Product Share, Opening Door for Asset Managers

The consolidation of DC plan providers may not be as much of a threat to asset managers as some have thought, with recordkeeper integration needs and legal risk meaning less focus on proprietary investment options, according to new research from ISS Market Intelligence.

Source: Planadviser.com, November 2022

Takeover Target Targeted in Excessive Fee Suit

An excessive fee suit involving proprietary funds claims that fiduciary breaches not only undermined participant retirement security but played a role in a recordkeeping acquisition. The suit alleges that a "flawed process resulted in a series of outcomes that caused the Plan and its participants and beneficiaries to sacrifice retirement savings to poor performance and swollen costs which inured to the benefit of MassMutual's bottom line."

Source: Napa-net.org, November 2022

Three Million Dollar Settlement Struck in Managed Accounts Suit

The suit, which had alleged that "...many managed account services merely mimic the asset allocations available through a target-date fund while charging additional unnecessary fees for their services," has announced a cash settlement.

Source: Napa-net.org, November 2022

A 401k Plan Sponsor's Guide to Hiring a Financial Advisor

There are so many varieties of financial advisors that it can be confusing what you should be looking for. This article is intended to act as a guide for you as you select a financial advisor for your retirement plan or review the current advisor as part of your fiduciary responsibility.

Source: Jdsupra.com, November 2022

IRS Opens Determination Letter Program to 403b Plans

The IRS recently announced the expansion of its determination letter program to individually designed 403b plans beginning June 1, 2023. This presents a significant and welcome opportunity for sponsors of 403b plans -- such as universities, schools, tax-exempt organizations, and churches -- to secure long-awaited assurance from the IRS on plan document compliance.

Source: Icemiller.com, November 2022

Employee Benefit Plan Year-End Deadlines

This year, with the delay of the deadline for amending qualified plans, 403b plans, and governmental 457b plans to comply with the SECURE Act and CARES Act, year-end to-dos are on the light side; however, there are still a few deadlines to be aware of depending on what types of plans an employer sponsors, including the first item mentioned below, a disclosure that applies to the majority of employers.

Source: Frostbrowntodd.com, November 2022

Crypto Craze Cracks, Raising Potential 401k Fiduciary Liability?

Oops! That didn't go as planned. A major player in the cryptocurrency world took a spectacular nosedive amidst celebrity, politics, and intrigue. This happened as the hard-to-understand virtual currency has already suffered from a series of negative headlines. The collapse of FTX only makes it worse.

Source: Fiduciarynews.com, November 2022

Resilient Retirement Savers Shifting Focus to Short-Term Needs: Study

Rising prices and inflation are certainly affecting American workers but despite the economic environment, Americans remain resilient. More than 63 percent of Americans are confident they are financially on track for retirement. The study analyzes the behavior of approximately 4.3 million active DC participants to better understand their savings habits and levels of involvement with retirement planning, particularly during a highly challenging economic and financial environment.

Source: Businesswire.com, November 2022

The "Entity" Difference Between 403b and 401a Plans

Think about this: the tax-favored status of the contributions to a 401a plan, and the earnings on the fund held by the plan, are derived from the tax-exempt status of the trust which receives and holds those funds. Compare this to the 403b plan. The favorable tax status granted to 403b plan participants does not derive from the tax-exempt status of any particular organization or entity. Instead, the statutory language makes it clear that it is derived from the contributions being made to an annuity contract, a custodial account, or a retirement income account.

Source: Businessofbenefits.com, November 2022

Report Urges Pension Plan Fiduciaries to Focus on Finance When Considering ESG Factors

A new report from the C.D. Howe Institute says pension plan fiduciaries shouldn't ignore climate change and other environmental, social, and governance factors that are relevant to financial purposes. However, when plan fiduciaries use ESG factors to prioritize social or environmental concerns, such as those expressed by plan members, they put themselves on shaky legal ground, said the report.

Source: Benefitscanada.com, November 2022

How Does Local Cost of Living Affect Retirement for Low and Moderate Earners?

This paper uses the Health and Retirement Study to explore how the local cost of living affects Social Security replacement rates and household behavior. In theory, labor markets with a high cost of living also offer more compensation. If this compensating differential is paid in wages, rather than benefits, it reduces the share of earnings replaced by Social Security due to the progressive benefit structure. This paper examines how important the cost of living penalty is, in practice, and whether it impacts household' saving or labor supply.

Source: Bc.edu, November 2022

SPARK Institute Releases Updated Cybersecurity Standards for Plan Sponsors and Advisors

Recordkeepers and retirement industry consultants are banding together to beef up cybersecurity. A collaborative effort between recordkeepers and consultants leads to updated Data Security Best Practices and a new Plan Sponsor and Advisor Guide to Cybersecurity to strengthen the retirement industry's defenses against cyber criminals.

Source: 401kspecialistmag.com, November 2022

What Retirement Plan Sponsors Need to Know About SECURE 2.0

Federal legislation that would substantially impact retirement plan sponsors, service providers, and plan participants appears likely by year-end. Although the contours of a final bill still need to be refined, certain provisions are likely to be included in enacted legislation, dubbed SECURE 2.0. It is not too early for plan sponsors to begin preparations. Here are some steps plan sponsors may want to consider now and when legislation becomes reality.

Source: Troweprice.com, November 2022*

FTX Bankruptcy Has Chilling Effect on Crypto Use in Retirement Plans

The rapid collapse of the cryptocurrency exchange FTX has some in the retirement industry second-guessing a recent push toward including cryptocurrency in 401ks and other defined contribution retirement plans.

Source: Planadviser.com, November 2022

When Is Spousal Consent Required Under a Qualified Retirement Plan?

Spousal consent for qualified retirement plans has been in the spotlight recently as a result of the COVID-19 pandemic. In response to the temporary lockdowns in 2020 and the extended period of social distancing that followed, the IRS began to permit electronic consent rather than the standard requirement for a consenting spouse to sign in the presence of a notary public. Spousal consent is only required in certain situations which are reviewed here.

Source: Klblawgroup.com, November 2022

New IRS Revenue Procedure for 403b Plans

The IRS has now issued Revenue Procedure 2022-40, allowing the sponsor of an individually designed 403b plan to submit a request for a determination letter. Under this program, for the first time, an individually designed 403b plan will be able to rely on the IRS' approval that the form of the document meets all IRS requirements.

Source: Boutwellfay.com, November 2022

Participant Loans: Important Considerations

Many retirement plans allow participants to take loans from their accounts. But that entails more than simply deciding to allow participants to do so. That is only the beginning. Some procedures must be followed, and important considerations that flow from that initial choice. Here are some questions and matters concerning plan loans.

Source: Asppa.org, November 2022

Coming Soon to a 401k Plan Near You: Personalized Target-Date Accounts

Managed accounts are the second most popular choice of QDIA. But before you switch to a managed account you should consider an emerging disruptive innovation that combines managed accounts with TDFs, providing the better characteristics of both. We call this innovation Personalized Target Date Accounts.

Source: 401kspecialistmag.com, November 2022

Plan Approval Program Expands to 403b Retirement Plans

The IRS and Treasury will let the churches, public schools, and charities that have 403b retirement plans take advantage of some of the same individually designed retirement plan determination letter program used by qualified retirement plans, beginning in June 2023.

Source: Thetaxadviser.com, November 2022

Senators Toomey and Cotton Write Warning Letters to ESG Industry

Senator Pat Toomey wrote a follow-up letter to twelve ESG ratings and analytics providers on October 31 requesting that they keep documents related to the methodologies for their environmental, social and governance ratings. Six of the twelve provided responses. The other six either have not responded or provided responses that the Toomey considered "incomplete". Senator Cotton sent a more threatening letter to 51 law firms that counsel investors and other actors in the ESG sector.

Source: Plansponsor.com, November 2022

A DOL ESG Investigation Story

An adviser's message to his peers is to not fear including ESG factors in investment analysis.

Source: Planadviser.com, November 2022

Webcast: Current Trends in Target-Date Fund Litigation

Litigation of 401k plan fees and investment fund performance is on the rise. This webcast provides a review of recent 401k litigation cases, trends involving both active and index/passive target-date funds, and fiduciary best practices to avoid litigation.

Source: Fiducientadvisors.com, November 2022

The SECURE Act: Changes for Long-Term/Part-Time Employees

The provision concerning long-term/part-time employees applies to all 401k plans. Effective for plan years beginning after December 31, 2020, the SECURE Act requires that long-term/part-time employees who are non-union employees must be permitted to make elective deferrals under an employer's 401k plan after three consecutive 12-month periods during each of which the employee has worked between 500 and 999 hours per year.

Source: Consultrms.com, November 2022

2022: Gender Lens in DC Plans

The adverse economic consequences of the pandemic disproportionally affected women. Women have dropped out of the workforce at record numbers to take on additional caregiving responsibilities. The study analysis shows that the participation rates of women remain lower than those of men, that women and men contribute at the same rates, women continue to invest more conservatively, women continue to claim hardship at greater rates and have higher loan-to-balance ratios than to men, and 401k balances of women continue to lag those of men.

Source: Bofa.com, November 2022

Arbitration of ERISA Plan Disputes

This article discusses the general enforceability of arbitration clauses in certain disputes, including class actions, with a particular focus on the enforceability of arbitration clauses involving legal claims made under ERISA. It also specifically analyzes the advantages and disadvantages of arbitration provisions for retirement plan sponsors.

Source: Wagnerlawgroup.com, November 2022

What Kind of Payments Can a Hardship Request Cover When Buying a Home?

Can a hardship request cover costs directly related to the purchase of a principal residence for the employee including the payoff of outstanding debts if that is what is required for the participant to qualify for the mortgage loan? Experts from Groom Law Group and CAPTRUST answer the question.

Source: Plansponsor.com, November 2022

Midterm Election Results Could Delay SECURE 2.0

A shift in Congressional power in Washington to Republicans could delay passage of SECURE 2.0 and push Democrat's ESG and cryptocurrency efforts to administrative tactics, experts say.

Source: Planadviser.com, November 2022

A Rollover Recommendation Is a Securities Recommendation

The SEC and FINRA are in alignment with the DOL's position that a recommendation to roll over is, in effect, a securities recommendation. This may explain why the DOL, SEC, and FINRA all expect broker-dealers and investment advisers to have information about the investments held in a participant's account, that is, how can a "sell" recommendation be made without knowing the investments that the recommendation covers?

Source: Fredreish.com, November 2022

Orphan Accounts Pose Fiduciary Liability to 401k Plan Sponsors

It's so easy to pay it no mind. Employees leave the firm but don't take their 401k account with them. Many argue this is the prudent thing for the employee to do since the plan will often pay institutional rates for mutual funds while rolling the assets over into an IRA may be subject to higher retail rates. But what about from the plan sponsor's perspective?

Source: Fiduciarynews.com, November 2022

401k End of Year Reminder Checklist - 2022

This 401k plan checklist will help you end your plan year smoothly.

Source: Consultrms.com, November 2022

Rollover Recommendations: Do the SEC and DOL Requirements Align?

There are a few differences between the SEC and the DOL guidance that broker-dealers and their registered representatives should know about, including that the SEC rollover guidance applies to a much broader array of retirement plans and accounts, and also that the SEC guidance does not require disclosure about the best interest reasons for the rollover recommendation as does the DOL under PTE 2020-02.

Source: Brokerdealerlawblog.com, November 2022

What Midterm Election Results Could Mean for Retirement Policy

The Nov. 8 midterm election will likely shape the future for Social Security and Medicare programs.

Source: 401kspecialistmag.com, November 2022

October a Light Trading Month for 401ks: Alight

October was another light trading month for 401k plan investors, according to the latest iteration of the Alight 401k Index. With just two above-normal trading days, the index revealed stable value funds accounted for over 80% of net inflows, while outflows were primarily from target date funds (37%), company stock (35%), and large U.S. equity funds (12%).

Source: 401kspecialistmag.com, November 2022

A Boon for the 403b: IRS Expands Tax-Favored Approval Process

The IRS announced the expansion of one of its programs for approving retirement plans, allowing 403b plans -- which are used by certain public schools, churches, and charities -- to apply for the same tax-favored treatment as qualified retirement plans. As of June 2023, the IRS will allow 403b plans to use the same individually designed retirement plan determination letter program used by 401ks.

Source: 401kspecialistmag.com, November 2022

Callan: DC Plan ESG Use Drops in '22 on Backlash, Rule Confusion

Pushback against ESG investing by state governments and some in the investing community led to a drop in use among institutional investors this year, according to research released by fund consultant Callan. In annual surveying of 109 institutional investors on environmental, social, and governance implementation, Callan found just 35% of respondents incorporated ESG factors into investment decisions this year, down from 49% in 2021.

Source: Plansponsor.com, November 2022*

Self-directed Retirement Plan Participants Allocate Few Assets to In-Plan ESG Funds

Self-directed retirement plan investors infrequently allocate to environmental, social, and governance investments, new research finds. The research, by PGIM and the Employee Benefit Research Institute, examined the allocation decisions of 9,324 new defined contribution plan participants, across 108 DC plans, who are directing their accounts and where there is at least one ESG fund available in the core menu.

Source: Plansponsor.com, November 2022

DOL Clarifies Bonding Requirements for Pooled Employer Plans

A DOL information letter clarifies how ERISA's bond requirements apply to a pooled employer plan. A PEP is a type of multiple-employer plan created by the SECURE Act to make it easier for unrelated employers to participate in group retirement plans.

Source: Mercer.com, November 2022

2022 Retirement Plan Year-End Amendments and Operational Compliance

As the end of 2022 approaches, it's again time for plan sponsors to review their plan documents and plan operations to ensure compliance with increasingly complex qualification requirements and moving deadlines. While there are few, if any, required plan amendments for 2022, plan sponsors must remain diligent about amendment deadlines, operational compliance with changes in law, and ensuring later-adopted plan amendments accurately reflect plan operations.

Source: Groom.com, November 2022

Auto-Portability Receives Bipartisan Backing With House Bill

A new bill that would allow for automatic 401k rollovers has received support from the U.S. House of Representatives, officially securing bicameral legislative backing. The Advancing Auto-Portability Act of 2022 (H.R. 9252) was introduced on October 28 and is aimed at reducing leakage in defined contribution retirement plans.

Source: 401kspecialistmag.com, November 2022

Adviser CEO Faces Up to 45 Years for Fraud, Keeping Employee 401k Contributions

The CEO of a financial advisory firm pled guilty last week to charges including embezzling more than $313,000 from clients and using employee contributions to the firm's 401k plan for both personal and company use. He also pled guilty to two counts of wire fraud and one count of making a false statement to the IRS in connection with schemes to defraud clients and failing to pay the employees' retirement contributions. He faces up to 45 years in prison.

Source: Planadviser.com, November 2022

Political Pressure Aside, Asset Managers Stand Pat on ESG Integration

Regardless of the divided political pressure surrounding environmental, social, and governance investing, asset managers remain committed to considering such factors, with climate change remaining a top priority for firms, a new Cerulli report suggests.

Source: Napa-net.org, November 2022

Crypto Keeper Presses Court to Hold DOL to Its Word(s)

ForUsAll, a recordkeeper that has sued the Labor Department based on its comments regarding cryptocurrency in defined contribution plans, has told a federal judge it's fine with dismissing its suit if the court will hold the agency to its previous statements.

Source: Napa-net.org, November 2022

Retirement Plan Committee Best Practices

Each time the retirement plan committee meets, does it feel like there is a new rule or legislation your plan is required to comply with? While at the same time, participants are demanding more of you and your organization to be successful because the defined contribution plan is likely the only savings vehicle these individuals will ever have for retirement. If these feelings resonate with you, so will the committee best practices we discuss in this guide. This paper will help you understand what ERISA (and similar state laws) requires for plans, how committees have typically functioned, and how committees will need to function to be successful and sustaining for years to come.

Source: Multnomahgroup.com, November 2022

Seventh Circuit Still Skeptical of Excessive Fee Claims After High Court Ruling

The 7th US Circuit Court of Appeals recently upheld the dismissal of a participant's claims that DC plan fiduciaries imprudently allowed excessive administrative and investment fees (Albert v. Oshkosh Corp.). The court was unpersuaded by the participant's request to vacate the original district court decision dismissing his lawsuit in light of the Supreme Court's decision in Hughes v. Northwestern University. The 7th Circuit's decision, in this case, extends a growing trend of federal appeals courts expressing skepticism toward some of the most common allegations in many ERISA excessive fee lawsuits since the high court's Northwestern ruling.

Source: Mercer.com, November 2022

Tech Stocks Weigh on Funds Popular With 401k Plans

Some of the most popular retirement funds have large holdings of big-tech stocks like Meta, Amazon, and Apple. That boosted their performance in 2021 as shares surged to record highs, but turned into a drag this year as the broader stock slump hit high-flying technology companies particularly hard.

Source: Investmentnews.com, November 2022

Plan Amendment Deadline for SECURE and CARES Amendments

This Tax Magazine article by Groom principals Elizabeth Dold and David Levine contains a summary of the key SECURE, Miners, and CARES Act amendments, in chart format, for both defined benefit and defined contribution plans, along with a look at the amendment deadlines that apply to these provisions.

Source: Groom.com, November 2022

How to Use Your 401k Funds to Start a Business

One of the biggest challenges entrepreneurs face, after coming up with their idea, involves financing that new business. If you've been working for some time, you've no doubt had the opportunity to set aside some money to use for this purpose. On the other hand, that savings may not be enough. Did you know there might be a source close to home? It's sitting right there in your 401k plan. This strategy is referred to as "Rollovers As Business Startups" or "ROBS."

Source: Forbes.com, November 2022

Iowa Court in the Hy-Vee Case Calls Out Credibility of Defense "Playbook" of Filing Indiscriminate Motions to Dismiss in Every Excessive Fee Case

Plan sponsors have had good recent success in excessive fee and performance lawsuits, with three federal circuit courts of appeal upholding motions to dismiss. But before we start reaching any conclusions as to whether the tide has changed in the long war in excessive fee cases an Iowa court in Rodriguez v. Hy-Vee, Inc. has applied the recent appellate case law and come to mixed conclusions on familiar claims of excessive investment and recordkeeping fees.

Source: Euclidspecialty.com, November 2022

Navigating Common Retirement Savings Pitfalls

When most people start on their retirement savings journey, the path can seem straightforward. However, life often throws up obstacles along the way. Understanding the impact of those pitfalls can help your retirement investors make more informed decisions as they look to make the most of their retirement savings journeys.

Source: 401kspecialistmag.com, November 2022

Delaware Law Expands Access to Retirement Plans

Delaware is joining a growing list of states that require employers to automatically enroll their workers in a state-sponsored retirement savings plan unless the employer already provides retirement benefits. The state is taking steps to implement the new law, which Gov. John Carney signed in August. Covered employees can begin to participate and make contributions on Jan. 1, 2025.

Source: Shrm.org, November 2022

SECURE 2.0 Likely to Pass This Year

Three separate bills, dubbed SECURE 2.0 when taken together, are likely to be passed into law by this December, according to Washington insiders.

Source: Planadviser.com, November 2022

Is Retirement Saving "Wasted" on the Young?

In a paper provocatively titled "The Life-Cycle Model Implies that Most Young People Should Not Save for Retirement" no fewer than four of them take 48 pages to make that case. Like most research, the conclusion is a premise based on assumptions. Here the most basic is that this thing called a "life-cycle model" is worth considering in the first place.

Source: Napa-net.org, November 2022

Excessive Fee Suit Settles in 18 Months

The parties in another excessive fee suit have come to terms six months after getting the green light to go to trial. In the U.S. District Court for the Eastern District of Wisconsin the parties noted that on Sept. 13, 2022, they "...mediated before private mediator Bob Meyer of JAMS, and reached a settlement in principle to resolve this matter."

Source: Napa-net.org, November 2022

Should 401k Loans Be Allowed, Encouraged, or Forbidden? A Fiduciary Perspective

As interest rates increase, the cost of borrowing money has increased. It's not surprising if more people begin to look at borrowing from their own 401k retirement savings accounts versus borrowing from more traditional sources. Is this a good idea? Indeed, is it not just a good idea, but something that should be encouraged? Or is it the path to retirement ruination and should it not even be allowed?

Source: Fiduciarynews.com, November 2022

Goldman Sachs Successful in Getting 401k Fee Class Action Dismissed

A New York district court recently summarily dismissed, with prejudice, a 401k plan participant's putative class action complaint alleging breaches of fiduciary duty. The Plaintiff alleged that the Plan fiduciary-Defendants breached their duties of prudence and loyalty under ERISA by (1) failing to adopt an Investment Policy Statement, and (2) making decisions regarding the choice to remove or retain certain underperforming investment options based on their self-interest.

Source: Erisalitigationadvisor.com, November 2022

ESG Considerations for Retirement Plans: A Moving Target

For those with an eye on ERISA and its fiduciary rules, the past few years have caused whiplash when it comes to environmental, social, and corporate governance investments in retirement plans. With a new rule from the Department of Labor imminent, this article reviews where we are, how we got here, and what's next.

Source: Benefitslawadvisor.com, November 2022

Advisers Turn to Managed Accounts as Demand for Customized Plan Design Options Grows

As demand for customized plan design options continues to grow, plan sponsors are increasingly embracing managed accounts as a solution within their plans. More than a quarter of plan sponsors queried by Fidelity Investments said they were planning to introduce more managed account options into their fund lineup this year. Some plan sponsors are going even further, making managed accounts the qualified default investment alternative for some or all participants. Fully 87% of recordkeepers had managed accounts available on their platform, and another 7% planned to offer them in the next two years, according to Cerulli.

Source: Planadviser.com, October 2022*

Half of Americans Say They're Reducing or Stopping Retirement Savings Due to Inflation

Managing rising inflation is causing 54% of Americans to reduce or stop socking away retirement savings, according to a new survey by Allianz Life. Allianz heard from 1,004 respondents that 43% of them had to dip into retirement savings to meet rising costs. Meanwhile, 75% said they're worried the cost of living will impact their overall retirement plans, according to the September poll.

Source: Planadviser.com, October 2022

Three Things Employees Want Now From Their 401k

A new Mercer report about employee financial stress also revealed some interesting findings concerning what workers think about, and want most from, their 401ks.

Source: 401kspecialistmag.com, October 2022

How Can Fiduciaries Serve Safely in Their Highly Regulated Role?

The DOL has called for increased training for people who occupy the primary position of trust for employer-sponsored retirement plans. While a good heart is a desirable trait in fiduciaries, the DOL stresses the vital role that knowledge plays for executives and managers who typically lack academic or formal education in the prudence principles that dictate fiduciary conduct under ERISA.

Source: Rolandcriss.com, October 2022

2022 Participant Survey

Against a backdrop of rising inflation and global instability, many employees are feeling the pressure of meeting their day-to-day financial needs. That sentiment was evident in the 2022 PLANSPONSOR Participant Survey. This year, 2,301 American workers responded to questions about their financial behaviors, preferences, and attitudes; of this group, 774 full- or part-time employees were counted for being active participants in an employer-sponsored defined contribution plan.

Source: Plansponsor.com, October 2022

IRS Extends Deadline for Plan Amendments Under Certain Provisions of the CARES Act and the Relief Act

On September 26, 2022, the Internal Revenue Service issued Notice 2022-45, extending the deadline to amend eligible retirement plans (including nongovernmental qualified plans and 403b plans and individual retirement arrangements) to reflect relief provided under certain provisions of the Coronavirus Aid, Relief, and Economic Security Act and the Taxpayer Certainty and Disaster Tax Relief Act of 2020 to December 31, 2025.

Source: Pbwt.com, October 2022

403b Plan Fiduciaries Fend Off Excessive Fee Claims

Yet another excessive fee suit has been dismissed for failing to make a "plausible" case. The plaintiff, in this case, is Kaila Gonzalez, a participant in the Northwell Health 403b Plan, who filed suit against Northwell Health, Inc., the Northwell Health 403b Plan Committee, and 10 other unidentified Plan fiduciaries. She alleged that the defendants here allowed the Plan to be charged excessive recordkeeping fees and imprudently retained certain investment options in the Plan's investment menu in violation of ERISA.

Source: Ntsa-net.org, October 2022

Young Workers Cast Wide Net for Retirement Savings Opportunities

While the 401k remains the top retirement savings vehicle for today's workers overall, Gen Z and Millennial workers are more likely to seek out a wider range of resources, from investment options and vehicles to financial wellness tools and advice. According to Schwab Retirement Plan Services' annual survey of 401k plan participants, unlike older generations, other types of investments are likely to play a greater role in Gen Z and Millennial workers' long-term wealth plans, including investing in cryptocurrency, real estate, annuities, and small businesses.

Source: Napa-net.org, October 2022

Among Higher-Ed, DC Plans Viewed as Top Benefit for Attracting Talent

Findings from a bi-annual survey of retirement plan decision-makers in the higher education sector show that the DC plan is the No. 1 most important benefit for attracting and retaining talent. What's more, 90% also agree that a DC retirement plan helps attract high-quality employees, and 87% agree it helps retain high-quality employees.

Source: Napa-net.org, October 2022

Yale 403b Plaintiffs Move Ahead to Jury Trial

Plaintiffs in one of the first university 403b suits to be filed will get their day in court. The suit against Yale University was one of the first to be filed in this area by Schlichter Bogard & Denton LLP in August 2016. As has been the case with most in this genre, it alleged that employees paid excessive recordkeeping fees in addition to selecting and imprudently retaining funds which the plaintiffs claim have historically underperformed for years.

Source: Napa-net.org, October 2022

Federal Court Orders Company and Its Owner to Repay 401k Plan

A federal court in Illinois has found David Rine and Julieta Mitra, president and owner, respectively, of Home Bound Healthcare, in default after they failed to respond to a complaint the Department of Labor filed on March 31 concerning the company's 401k plan. The court ordered Rine, Mitra and the company to repay $85,402 to the company plan.

Source: Investmentnews.com, October 2022

Court Finds No ERISA Liability for Plan Provider Who Delivered Self-Interested Rollover Advice

A New York federal court recently held that a service provider for employer-sponsored retirement plans was not liable as a fiduciary under ERISA when it used participant information to encourage certain plan participants to roll over assets into its more expensive managed account program.

Source: Erisalitigationadvisor.com, October 2022

Is Cryptocurrency Too Risky for 401k Plans? The Controversy Continues

Regardless of whether the DOL prevails against ForUsAll in the pending lawsuit, cryptocurrency is here to stay. Industry participants can help the DOL develop a more nuanced position about cryptocurrency that takes these differences into account if they are given the opportunity.

Source: Cohenbuckmann.com, October 2022

Can Participants Certify Electronically That They Have a Financial Need for Which a Hardship Distribution Can Be Made?

If you carefully follow a procedure authorized by the IRS in 2017, your plan could elect to have participants provide summaries instead of the source documents that substantiate their immediate and heavy financial needs. This article outlines the procedure and then reviews the rules that led to your current practice.

Source: Thomsonreuters.com, October 2022

401k Errors That Should Require a Plan Provider Change

Change for the sake of change is a bad idea, you need a reason for it. There are certain plan errors where 401k plan sponsors should consider change and that change is a change of their plan providers. Here is a list of 401k errors that should get the plan sponsor to consider making such a change.

Source: Jdsupra.com, October 2022

New ERISA Retirement Plan Court Cases Pending

ERISA class action lawsuits, alleging that plans have charged excessive fees or provided poorly performing investment selections in retirement plans, have continued in recent months. The U.S. Supreme Court's January 2022 ruling in Hughes v. Northwestern University has not stopped the deluge of these filings, even as summer rulings in the Sixth Circuit have potentially narrowed the pleading standards for these types of lawsuits.

Source: Hallbenefitslaw.com, October 2022

What DC Plan Sponsors Should Know About Recent Litigation Trends: Part 1

Callan reviewed 165 lawsuits filed against mid- to mega-sized defined contribution plans ($175 million to $10 billion-plus) between January 2019 and August 2022, to provide an analysis of trends in litigation centered on the fiduciary duties outlined in ERISA. For ERISA litigation, 2020 was a bumper year, with 73 new cases filed. After the U.S. Supreme Court agreed to hear Hughes v. Northwestern in September 2021, the rate of new lawsuits slowed. As a result, 2021 saw only 39 lawsuits. After the decision was issued in January 2022, the rate of litigation resumed. As of August 15, this year has seen 32 new lawsuits.

Source: Callan.com, October 2022

What DC Plan Sponsors Should Know About Recent Litigation Trends: Part 2

Callan reviewed 165 lawsuits filed against mid- to mega-sized DC plans ($175 million to $10 billion-plus) between January 2019 and August 2022, to study trends in DC plan litigation centered on the fiduciary duties outlined in ERISA. The first article on this topic outlined some major findings. This article discusses the four key themes identified in Callan's analysis of these suits.

Source: Callan.com, October 2022

401k Study Finds Millennials and Gen Z Take Advantage of Broader Range of Retirement Resources Than Previous Generations

Young workers are relying on more than their 401ks to save for retirement as other types of investments play a greater role in their long-term wealth plans, according to the annual nationwide survey of 401k plan participants from Schwab Retirement Plan Services. While the 401k remains the top retirement savings vehicle for today's workers overall, Gen Z and Millennial workers are more likely to also invest in cryptocurrency, real estate, annuities, and small businesses, unlike older generations.

Source: Businesswire.com, October 2022

Annuities as Part of Target-Date Funds Grow in Popularity

For plan sponsors considering an in-plan retirement income option, defined contribution plan consultants are most likely (68%) to recommend target-date funds with a guaranteed income component, followed by a TDF with an income vintage (50%), a new report shows. The report from Cerulli Associates finds the target-date options were followed by a managed account (36%), as the next most likely recommendation from defined contribution consultants for in-plan retirement income offerings.

Source: Planadviser.com, October 2022*

Managed Accounts Fraught With Issues for Employers

More employers are adding managed accounts to their workplace retirement plans despite what industry experts say is ambivalence about these products. While employers are looking to help workers achieve a more personalized retirement investment portfolio, they're troubled by what some observers described as a "money grab" by recordkeepers seeking to boost revenues.

Source: Pionline.com, October 2022

Maintaining Plan Documents and Procedures for Retirement Plan Required Minimum Distributions

Various types of tax-qualified retirement plans and individual retirement accounts must pay required minimum distributions to participants at their required beginning date. Retirement plan participants that do not timely obtain the required minimum distributions of their benefits can face excise tax penalties for these failures, and plan sponsors can face plan disqualification. Plan sponsors and fiduciaries should clearly communicate plan rules and update their documents and procedures to ensure that required minimum distributions are timely taken, especially since the rules have changed in recent years.

Source: Mintz.com, October 2022

SECURE 2.0's 403b PEP Rules Will Be, Well, Different

With so much change continuing to be in the air, it seems all too rare to be able to take the opportunity to step back to broadly reflect on all of these moving pieces. The changes from CARES and SECURE, for example, are just working their way through the system, and now we expect to see SECURE 2.0 bring several further changes to the market. 2.0 is fascinating in many ways, especially given that right now it is just a mashing together of three different legislative efforts- plus some.

Source: Businessofbenefits.com, October 2022

How Well Are 401k Advisors Adhering to PTE 2020-02?

Several industry insiders worried that advisors were unprepared for the July 1, 2022, Prohibited Transaction Exemption 2020-02 enforcement deadline. Yet initial results seem to confirm the regulation is working as the DOL intended.

Source: 401kspecialistmag.com, October 2022

401k and Retirement Plan Limits for the Tax Year 2023

On October 21, 2022, the Internal Revenue Service announced that employees in 401k plans will be able to contribute up to $22,500 next year. The IRS announced this and other changes in Notice 2022-55. This guidance provides cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2023. Chart and details here.

Source: 401khelpcenter.com, October 2022

The Importance of Maintaining Retirement Beneficiary Forms

A new employee has a variety of forms to complete when hired. One of the most important forms new employees must complete is a beneficiary form for the company's retirement benefit plans. The plan sponsor must provide a beneficiary form to keep on file upon enrolling a new employee in a retirement plan. Plan sponsors should also update or confirm beneficiary information annually.

Source: Watkinsross.com, October 2022

ERISA Section 404(c) Protection: A Refresher for Fiduciaries

Section 404(c) of ERISA relieves fiduciaries from liability for participants' and beneficiaries' investment decisions in participant-directed individual account plans (like 401ks) if four requirements are met. They are reviewed in this article.

Source: Verrill-law.com, October 2022

Invesco DC Study Reveals Majority of Employees Feel Alone in Identifying Best Retirement Strategy

Invesco released findings from a new study exploring employee and employer preferences for generating long-term retirement income. The survey of more than 1,000 retirement plan participants and 100 large plan sponsors uncover concerns about generating long-term retirement income and considerations for bridging the income gap.

Source: Prnewswire.com, October 2022

A Look at Proposed Regulatory Changes to Crypto and Retirement Plans

A bill from earlier this year that seeks to provide comprehensive regulation to digital assets and aims to clarify the way cryptocurrencies are regulated was discussed at a conference hosted by Georgetown's Psaros Center for Financial Markets and Policy. The environment for crypto could change as it becomes more accepted in retirement products.

Source: Plansponsor.com, October 2022

ESG Adoption Slow Among DC Plans

The growth in the number of ESG funds and their assets supports the case for strong investor interest. Nonetheless, participants' interest and the segment's growth aren't reflected in many retirement plans, and the availability of ESG options varies widely among plan types. One factor hindering ESG's adoption is the lack of ESG-focused target-date funds, though several firms are starting to introduce them.

Source: Planadviser.com, October 2022

Empower Managed Account Participants File Suit

A new lawsuit claims that one of the nation's largest recordkeepers designed a program that -- with the help of advisors -- encouraged retirement plan participants to move those savings into a managed account offering "to benefit themselves at participants' expense...."

Source: Napa-net.org, October 2022

Failure to Identify Sound Comparisons Sinks ERISA Fee, Investment Claims in Eighth Circuit

Plaintiffs must plead a "sound basis for comparison -- a meaningful benchmark" to sustain their claims of imprudent investment and excessive fee against a 401k plan, the federal appeals court in St. Louis has held, dismissing a class action lawsuit for breach of fiduciary duties under ERISA. The U.S. Courts of Appeals for the Sixth and Seventh Circuits reached similar conclusions in dismissing cases before them.

Source: Jacksonlewis.com, October 2022

Best Practices for 401k Plan SPDs

To help employers properly administer their 401k plans, Foley & Lardner LLP has been authoring a series of monthly "401k Compliance Check" newsletters. This latest article includes some tips for drafting a best-in-class 401k plan summary plan description.

Source: Foley.com, October 2022

IRS Issues Limited Relief for Certain Required Minimum Distributions That Were Due in 2021, 2022

On October 7, 2022, the IRS issued Notice 2022-53 which grants limited relief concerning certain new requirements for required minimum distributions from qualified plans (including 401k plans). Specifically, the notice provides relief for 401k plans that failed to make RMDs in 2021 or 2022 to beneficiaries under a new 10-year payment rule that came into effect under the SECURE Act and provides related excise tax relief to affected beneficiaries.

Source: Compliancedashboard.net, October 2022

IRS Provides Relief for Certain 2021 and 2022 RMDs

The IRS has addressed criticism of its proposed regulations on required minimum distributions by providing that a final regulation will not be effective before 2023, including a new proposed interpretation requiring certain beneficiaries to take distributions in each of the 10 years following a participant's death, rather than by the end of the tenth year.

Source: Segalco.com, October 2022

Cybersecurity: Insights and Action Steps

Cybercriminals are creative and resourceful and they're not just after bank accounts. Industry experts in a recent webinar cautioned that retirement plans are in their sights as well. This article outlines some concrete steps that can be taken to address and protect retirement plans against cybercrime.

Source: Ntsa-net.org, October 2022

Latest Excessive Fee Target is a MEP

Most of the claims we are familiar with (as was the plaintiffs' attorney), but there were some interesting nuances in the arguments in the latest excessive fee case, which happens to involve a multiple employer plan, or MEP.

Source: Napa-net.org, October 2022

IRS Guidance Signals RMD Rules are Here to Stay

Looking for a 401k for your startup? This article will help you understand everything you need to know about selecting a 401k provider designed to meet a startup's needs.

Source: Graydon.law, October 2022

401ks for Startups: How to Choose the Right Provider

Looking for a 401k for your startup? This article will help you understand everything you need to know about selecting a 401k provider designed to meet a startup's needs.

Source: Forusall.com, October 2022

Growing Number of Courts Rejecting Common ERISA Fee and Investment Claims

In Matousek v. MidAmerican Energy Co., the Eighth Circuit joined the Sixth and Seventh Circuits in affirming the dismissal of ERISA breach of fiduciary duty claims alleging that the plan fiduciaries allowed the plan to pay excessive recordkeeping and administrative fees and offered imprudent investment options.

Source: Erisapracticecenter.com, October 2022

Financial Challenges Prevent Saving for Retirement

Many U.S. workers must grapple with a "financial vortex" of challenges blunting their retirement savings, research shows. The Goldman Sachs Asset Management Retirement Survey and Report find that every generation of respondents -- Gen Z, Millennials, Gen X, and Baby Boomers -- face significant effects, from competing financial priorities to life events, that distract from the ability of many to save for retirement.

Source: Planadviser.com, October 2022*

ERISA Industry Committee Comments in Opposition to New DOL QPAM Rule

The ERISA Industry Committee submitted a comment letter in opposition to a proposed Department of Labor rule that would change the way qualified professional asset managers are regulated. The new rule is opposed by industry participants due to the new ways in which QPAMs can be disqualified, the onerous new contract agreements, and the inadequate transition and winding down periods.

Source: Planadviser.com, October 2022

Two More District Courts Reject ERISA Fee and Performance Claims as Insufficient

Two recent district court decisions add to the growing number of courts granting motions to dismiss putative ERISA class actions challenging defined contribution plan fees and investment performance. These decisions from the Eastern District of New York and the Eastern District of Wisconsin are the latest victories for defendants at the motion to dismiss stage in this arena and come on the heels of multiple similar decisions in the Sixth and Seventh Circuits.

Source: Erisapracticecenter.com, October 2022

Four Generations of Workers Are Preparing for Retirement Amid an Uncertain Future

Seventy-six percent of workers say their life priorities changed as a result of the pandemic and 56 percent cite saving for retirement as a financial priority, according to Emerging From the COVID-19 Pandemic: Four Generations Prepare for Retirement, a survey report released by the nonprofit Transamerica Center for Retirement Studies in collaboration with Transamerica Institute.

Source: Transamericainstitute.org, October 2022

Providing Meaningful Access to, and Features in, Retirement Savings Plans to Address Savings Gaps and Boost Retirement Savings

Mintz Of Counsel Michelle Capezza authored this chapter in New York University's Review of Employee Benefits and Executive Compensation examining some of the ways that employers can provide their employees with meaningful access to retirement savings plans to address retirement savings gaps.

Source: Mintz.com, October 2022

Cybersecurity Breach Suits Raise Questions About Liability for Benefits Plans

Cybersecurity breaches concerning workers' personal information and retirement savings have increased liability risks for benefit plans and third-party administrators under federal benefits laws. In February 2021, the GAO issued a report warning about these increased legal risks for ERISA plan fiduciaries due to cyber breaches. The GAO also warned that outsourcing various functions involving retirement plans to third-party administrators could increase the potential for unauthorized access to participants' information. In recent years, the GAO's warnings have become a reality.

Source: Hallbenefitslaw.com, October 2022

Is It Time for ERISA to Be Amended to Cover Cyber Crimes?

It is no surprise that cyberattacks are a grave concern for sponsors of retirement plans. Under ERISA fiduciaries and persons handling funds must be bonded to protect against fraud and dishonesty. This article discusses this required ERISA bond and the interplay of other types of insurance coverage and concludes with a recommendation that Congress amend ERISA to require insurance to address cyber crimes.

Source: Foxrothschild.com, October 2022

Common Myths of Cyber Insurance for Employee Benefit Plans

Cyber insurance is a critical component of the cyber security risk management program necessary to protect employee benefit plans and participant retirement assets. But the current way plan fiduciaries seek cyber and crime coverage needs to change and this article explains why.

Source: Euclidspecialty.com, October 2022

Canada's Retirement System Remains Strong, but DC Pension Plans Facing Inflation Risks: Report

While Canada's pension system continues to rank well globally, the current economic environment poses particular risks for defined contribution pension plan sponsors and members, according to a new report by the CFA Institute and Mercer.

Source: Benefitscanada.com, October 2022

IRS Issues Update on Required Minimum Distribution Rule

The IRS has issued Notice 2022-53, providing guidance on final regulations related to required minimum distributions under section 401(a)(9) of the Internal Revenue Code that will apply no earlier than the 2023 distribution calendar year. The notice also provides guidance related to certain provisions of section 401(a)(9) that apply for 2021 and 2022.

Source: Planadviser.com, October 2022

ERISA Suit Brought Against Quanta Services

Two former employees of Quanta Services in late September brought a class action suit against the company under the Employee Retirement Income Security Act, alleging that Quanta had maintained underperforming and expensive investment options in its sponsored retirement plan. Quanta Services, an electrical power company, sponsored a retirement plan that covered 16,317 participants, with $1.21 billion in assets as of December 21, 2020, according to the lawsuit.

Source: Planadviser.com, October 2022

IRS Extends Helpful RMD Rule Transition Relief

In recognition that RMDs may not have been made in 2022 in compliance with the Proposed Rule, or in 2021 consistent with what the IRS would consider a good faith interpretation of the SECURE Act, the IRS issued Notice 2022-53 to provide transition relief for 2021 and 2022. Additionally, Notice 2022-53 states that the final RMD rule will not apply to RMDs any earlier than 2023.

Source: Icemiller.com, October 2022

DOL Regulations Expand Liability for Financial Advisors Giving Pension Rollover Advice

The DOL began fully enforcing its Prohibited Transaction Exemption 2020-02 as of July 1, 2022. These regulations apply to and expand liability for financial advisors giving clients pension rollover advice. Some aspects of the rule were already in effect. Still, advisors must now provide clients with a mandatory written explanation of why the investment professional or financial institution believes the rollover is in the client's best interest. Financial institutions must adopt policies and procedures to ensure compliance with the Impartial Conduct Standards and mitigate conflicts of interest.

Source: Hallbenefitslaw.com, October 2022

IRS Extends Deadline to Amend Plans for Additional Cares Act, CAA Disaster Relief Provisions

On September 26, 2022, the IRS issued Notice 2022-45 which extends the deadline for amending retirement plans, including 401k plans, to comply with recent legislation. The applicable legislative provisions, which have now expired, were enacted as part of a wider effort to provide temporary relief in response to the global COVID-19 pandemic, and generally require plan documents to be amended, as further explained below.

Source: Compliancedashboard.net, October 2022

IRS Extends More Retirement Plan Amendment Deadlines

The IRS announced on September 26, 2022, that it would extend the deadline for amending retirement plans or IRAs to reflect coronavirus-related distributions and certain qualified disaster distributions. Notice 2022-45 extends the deadline by three years, generally to December 31, 2025. The deadline extension also applies to retirement plans that allowed expanded participant plan loans during 2020.

Source: Bdo.com, October 2022

In Cybersecurity Enforcement Action, Seventh Circuit Rejects Service Provider's Challenges to DOL Subpoena

In an enforcement action involving an administrative subpoena seeking documents from a service provider for employer-sponsored health and retirement plans, the Seventh Circuit held that the DOL's investigatory authority under ERISA is not limited to ERISA plan fiduciaries. The Seventh Circuit also concluded that the subpoena was not too indefinite or unduly burdensome.

Source: Westlaw.com, October 2022*

Insurer the Target of an ERISA Lawsuit

Retirement plan participants have brought a class action lawsuit against Mutual of America Life Insurance Company for an alleged breach of fiduciary duty under ERISA. Plaintiffs have alleged Mutual of America 401k plan fiduciaries breached its fiduciary duties of loyalty and prudence to participants by selecting a proprietary, closed architecture recordkeeping platform and for failing to monitor or control the plan's administrative expenses, the complaint states.

Source: Planadviser.com, October 2022

ERISA Lawsuit Against Associated Bank Dismissed

A federal judge has dismissed a lawsuit seeking class action certification against fiduciaries of the Associated-Banc Corp. 401k and employee stock ownership plan. Plaintiffs alleged plan fiduciaries engaged in self-dealing and retained proprietary investments that underperformed their benchmarks.

Source: Planadviser.com, October 2022

Retirement Plan Sponsors Have Short 2022 Year-End Amendment List

With IRS recently extending several plan amendment deadlines, retirement plan sponsors now have few (if any) plan amendments to adopt before 2022 draws to a close.

Source: Mercer.com, October 2022

DOL Set to Finalize ESG Rule for Retirement Plans

The DOL has effectively finished its ESG rule for retirement plans and sent it to the White House Thursday for final approval. The final version of that rule, which has been in the works since last year, likely will not be published until next month.

Source: Investmentnews.com, October 2022

Auto-Portability: A Guide for Retirement Plan Sponsors

This Q&A is geared toward plan sponsors who are curious about the auto-portability process and how it might prove beneficial to their plan participants. Auto-portability can prove especially useful in industries with lower wages and high employee turnover, which may include retail, transportation, hospitality, and restaurants because this can often lead to numerous account balances of $5,000 or less being involuntarily rolled to default IRAs.

Source: Eforerisa.com, October 2022

IRS Notice 2022-53: Certain Required Minimum Distributions for 2021 and 2022

This notice announces that the Internal Revenue Service intends to issue final regulations related to required minimum distributions under section 401(a)(9) of the Internal Revenue Code that will apply no earlier than the 2023 distribution calendar year. In addition, this notice provides guidance related to certain provisions of section 401(a)(9) that apply for 2021 and 2022.

Source: Irs.gov, October 2022

The SEC Is 'Coming After' RIAs That Fail to Track Client Chats by Text, Whatsapp, and Social Media, Experts Say

The smartphone's advance took life one giant step forward for RIAs, but they can't fight the law of unintended consequences and it may already have won. Smartphones make our business and personal lives porously one. Yet from the SEC's perspective, no such blurred line exists, and every mobile chat with a client pertaining at all to business is subject to compliance.

Source: Riabiz.com, October 2022

New Bill Seeks to Encourage 401k Investment in Alternative Assets

The Retirement Savings Modernization Act aims to clarify ERISA to incentivize retirement investment in assets such as real estate, private equity, and cryptocurrencies.

Source: Planadviser.com, October 2022

House Approves Bill Banning Arbitration Clauses in ERISA Plans

Shortly before recessing for the mid-term elections, the House of Representatives approved legislation that would prohibit arbitration and discretionary clauses in employer-sponsored benefit plans under ERISA. The proposed changes were passed as part of the Mental Health Matters Act (H.R. 7780), which the House approved on Sept. 29.

Source: Napa-net.org, October 2022

Stable Fund Focus in Another Excessive Fee Suit

The latest excessive fee suit targets "wildly excessive compensation," an allegedly imprudent stable value offering, and the unmonitored use of "float" income. More specifically, the participant-plaintiffs of Miami, Florida-based Lennar Corp. are raising issues with the recordkeeping/administrative fees paid by the plan, the prudence of retaining Prudential's stable value fund, and the use of float income by Prudential (the plan's recordkeeper).

Source: Napa-net.org, October 2022

Two District Courts in the Seventh Circuit Grapple with Pleading Standards in ERISA Excessive Fee Cases

In Baumeister v. Exelon and Coyer v. Univar Sols. USA Inc., two Illinois district courts became the first courts in the Seventh Circuit to rule on motions to dismiss ERISA fee and investment claims following the Seventh Circuit's ruling in Albert v. Oshkosh, which affirmed the dismissal of similar ERISA claims. In a familiar slate of allegations, plaintiffs in both cases claimed that plan fiduciaries breached their fiduciary duties under ERISA by permitting their respective plans to pay excessive recordkeeping fees.

Source: Erisapracticecenter.com, October 2022

Why Plan Sponsors Should Allow Independent Fiduciaries to Manage Employer Stock in Retirement Plans

The biggest value to using an independent fiduciary in this context is that it dramatically increases the likelihood that a plan fiduciary, sued for the drop in value of employer stock held by employees in a benefit plan, can end the case at the motion to dismiss stage. Author reviews why this is.

Source: Bostonerisalaw.com, October 2022

Four Ways an Independent Recordkeeper Benefits an Advisor

Advisors have a primary choice between partnering with companies who sell insurance or investments and offer 401k plans as part of their financial services lineup and independent recordkeepers who tend to be local or regional specialists who focus on actively collaborating with financial and tax advisors to design and operate retirement plans tailored to their clients. This piece reviews four ways an independent recordkeeper can help you grow your retirement plan practice.

Source: Abgnational.com, October 2022

Economy Forcing Cutbacks in 401k Contributions: Morgan Stanley

Because of the economic impacts related to inflation and/or concerns about a recession, 62% of employees report that they've needed to reduce contributions to their savings, with nearly a third (31%) reducing contributions to their 401k plans. That's a key finding from the latest research released today from Morgan Stanley at Work's second annual State of the Workplace Financial Benefits Study.

Source: 401kspecialistmag.com, October 2022

IRS Extends Time to Amend Retirement Plans

The IRS has extended the deadlines by which retirement plans must be amended to comply with provisions in several laws passed in the last few years. No amendment for the covered provisions will be required before December 31, 2025. In addition, the IRS is extending anti-cutback relief for most, but not all, of these amendments.

Source: Segalco.com, October 2022

PSCA Releases 2022 403b Survey

As employers everywhere continue to recover from the long-term impacts of the COVID-19 pandemic and compete for talent, employer contribution rates to 403b plans rose almost 24% year-over-year from 4.6% in 2020 to 5.7% of gross annual pay in 2021, according to an annual 403b Plan Survey from the Plan Sponsor Council of America, part of the American Retirement Association.

Source: Psca.org, October 2022

Evolution of the QDIA. Is Your Plan Due for a Review?

A QDIA review can be looked at as a gateway for your plan committee to clarify plan objectives. This article encourages plan sponsors to lift their heads and consider (or reconsider as the case may be) if your committee is due for a deeper look at your QDIA given marketplace evolution and changing plan needs.

Source: Planpilot.com, October 2022

Retirement Experts Identify Possible Fixes to the Retirement Savings Gap

Professionals invited by the IAA discuss obstacles to retirement savings, and what can be -- and has been --done about them. Opt-out policies are the best way to increase retirement plan enrollment, according to the retirement experts.

Source: Planadviser.com, October 2022

IRS Extends More Retirement Plan Amendment Deadlines

Newly released IRS Notice 2022-45 extends the plan amendment deadline for provisions of the CARES Act that allowed retirement plan sponsors to offer special penalty-free distributions, set a higher plan loan cap, and suspend loan repayments for participants affected by the COVID-19 pandemic. The extension also applies to provisions of the Taxpayer Certainty and Disaster Tax Relief Act of 2020 that allowed penalty-free distributions to participants affected by certain disasters.

Source: Mercer.com, October 2022

Fiduciary Status for Rollovers Not a Given and New Developments in Uses of Plan-Related Data Under ERISA

A September 27, 2022, decision by the Southern District of New York addresses several key theories recently advanced by the plaintiffs' bar in ERISA-based lawsuits against plan service providers. The Court also rejected fiduciary liability claims concerning alleged uses of plan information available to the Provider in its plan service provider role. The decision includes a reasoned analysis of the DOL's "shifting perspective" on defining investment advice fiduciaries under ERISA.

Source: Groom.com, October 2022

Searching for Solutions to Participant Account Theft When the Recordkeeper Disclaims Liability

Most of us have heard that a plan participant in the Colgate-Palmolive 401k plan suffered a cyber theft of her entire account balance, and sued the plan fiduciaries, the recordkeeper, and the bank custodian, all three of which are disclaiming fiduciary liability. There has to be a better answer than saying "I’m sorry" to a plan participant who has lost his entire account balance. This article explores these issues after a summary of the case and the positions of each defendant in their respective motions to dismiss.

Source: Euclidspecialty.com, October 2022

Eighth Circuit Holds Principal Did Not Breach Its Fiduciary Duty to 401k Plan Participants

The U.S. Court of Appeals for the Eighth Circuit recently affirmed a District Court's finding that Principal Life Insurance Company did not breach its fiduciary duties regarding its stable value contract for 401k plans.

Source: Erisalitigationadvisor.com, October 2022

Safe-Harbor Leveraging for Small Business, Top-Heavy Retirement Plans - 2022

Many employers are debating how to most efficiently take advantage of the defined contribution limit increase to $61,000. 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, October 2022

Financial Wellness: Is It the Right Prescription for Your DC Plan?

Employee benefits offerings are generally subject to inertia, change comes slowly and the effort to deploy new or revised benefits may be daunting to employers and confusing to participants. But the pandemic, the "Great Resignation," and significant legislative interventions have changed that dramatically. This combination of forces has made the topic of "financial wellness" and its deployment more timely and important. This article reviews the scope of financial wellness as an employee benefit, its utilization, its evolving capabilities, and the risks that these expanded services and tools could pose to employers and fiduciaries.

Source: Callan.com, October 2022

Retirement Plan Notice Delivery Requirements

Providing your employees and plan participants timely access to retirement plan documents is required by law. In May 2020, the DOL finally agreed the internet is here to stay and, at long last, has made it easier to fulfill that requirement electronically. With the rise in technology and the use of electronic devices, the DOL has learned to appreciate the benefits that come with recognizing electronic delivery as an acceptable medium for communicating these required documents to employees. Regardless of delivery method, Plan administrators must still take measures to reasonably ensure the confidentiality of personal information is protected, the documents are received and reviewed, and the process remains free of charge to the participant.

Source: Benefit-Resources.com, October 2022

CalSavers Program Expanding for Small Employers

CalSavers currently applies to eligible employers with five or more employees. As amended by S.B. 1126, CalSavers will expand to eligible employers with one or more eligible employees by December 31, 2025. Accordingly, California employers with less than five employees may need to carefully consider the questions outlined here.

Source: Swlaw.com, October 2022

Extended CARES and SECURE Act Plan Amendment Deadline

The IRS has now issued Notice 2022-45, which extends the plan amendment deadline for the optional CARES Act provisions that were not addressed by the previous extension. As a result, all changes under the CARES Act, Miners Act, and SECURE Act have the same plan amendment deadlines of December 31, 2025.

Source: Spencerfane.com, October 2022

Home Depot Victorious in ERISA Suit

A federal judge for the U.S. District Court for the Northern District of Georgia ruled in Home Depot's favor in an ERISA lawsuit last Friday. Plaintiffs Jaime Pizarro and Craig Smith brought the class action lawsuit in April 2018. They alleged that Home Depot offered imprudent investment options for their retirement plans and failed to monitor their performance in violation of ERISA over a class period beginning in April 2012.

Source: Planadviser.com, October 2022

TIAA Prevails in Rollover Recommendation Suit

A case involving allegations of a fiduciary breach related to a rollover recommendation provides some interesting perspectives on several operational issues. The variety of claims notwithstanding, Judge Katherine Polk Failla of the U.S. District Court for the Southern District of New York said it was "predicated in large measure on the Court finding that Defendants were not ERISA fiduciaries during the relevant timeframe."

Source: Napa-net.org, October 2022

Most Americans Financially Unable to Retire at 65

Yet another study has found the majority of retirees and pre-retirees are not financially prepared for retirement and lack sufficient savings to fully retire at age 65. Retirement solutions provider Finance of America Reverse today announced the release of "Disconnected: Perceptions vs. Reality in Retirement Planning," a new study from the Stanford Center on Longevity that examines the challenges and concerns facing retirees and pre-retirees as they plan for retirement.

Source: 401kspecialistmag.com, October 2022

Rash of Recent Lawsuits Focus on BlackRock Indexed Target-Date Options: Even Low-Cost Funds Are Being Attacked

Over the past several weeks, a single law firm, Miller Shah, LLP, has filed nearly a dozen lawsuits against fiduciaries of defined contribution plans that offer the BlackRock LifePath Index target date funds. The cases represent a shift in approach relative to earlier waves of ERISA litigation.

Source: Truckerhuss.com, October 2022*

Limited Plan Audits Are History: What 401k Plan Sponsors Should Know

Two types of 401k plan audits exist, limited and full-scope audits. In a limited scope audit, an independent auditor does not have to audit any plan asset information if a bank, an insurance company, or a regulated trust company holds the 401k plan's assets. Limited scope audits are changing and plan sponsors should understand how these changes impact their 401k plans.

Source: Sequoia.com, October 2022

ERISA Self-Dealing Lawsuit Targets Wells Fargo and Ex-CEO Sloan

Plaintiffs have brought an Employee Retirement Income Security Act lawsuit seeking class certification against Wells Fargo, former CEO Tim Sloan, GreatBanc Trust Company, and the employee benefits review committee for alleged breaches of fiduciary duty to participants saving for retirement in the Wells Fargo 401k and employee stock ownership plans. The lawsuit, filed in the U.S. District Court for the District of Minnesota, alleges that Wells Fargo 401k plan fiduciaries engaged in "corporate self-dealing at the expense of the retirement savings of company employees."

Source: Plansponsor.com, October 2022

Retirement Income Is Front and Center. Should Your Committee Consider the Pursuit?

Retirement income services and solutions have remained an overarching theme in the DC space for many years, yet to date, implementation and traction have remained limited. The need to help plan participants translate retirement savings into income is real and well understood. In equal form, the layers of complexity and variation in approaches have influenced the tepid pace of adoption thus far. This article offers a backdrop of complicating factors, summarizes key retirement service and solution concepts, and provides suggested activities for plan sponsor consideration.

Source: Planpilot.com, October 2022

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