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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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TriNet ERISA Lawsuit Latest to Clear Dismissal Motion

The U.S. District Court for the Middle District of Florida has issued a ruling against the defense's dismissal motion in an ERISA lawsuit filed against TriNet HR. In considering the defense's dismissal motion, the District Court engages in a substantial discussion regarding the fiduciaries' duties prescribed by ERISA, as well as the various precedents that have been set in such matters in the relevant federal court circuit and by the U.S. Supreme Court.

Source: Plansponsor.com, January 2022

Courts Expand on Rules Regarding the Protection of Retirement Plan Assets

Most people in the retirement plan industry know that, in general, funds in qualified ERISA plans are protected from creditors. However, recent court decisions have expanded on the protections provided in some more specific circumstances.

Source: Plansponsor.com, January 2022

Retirement Plan Advisers Might Help Lessen ERISA Lawsuits by Adding Defensive Provisions

Plan sponsors can apply a trio of defensive provisions to their retirement plan documents that aim to lessen exposure to participant claims brought under ERISA, according to retirement industry experts. Many plans use a basic provision whereby participants must first exhaust whatever the plan's claims procedure is before a lawsuit can be filed. Retirement plan sponsors and advisers should consider adding to the plan limitation periods, implementing mandatory arbitration clauses, and including class action waivers and venue provisions to reduce exposure to lawsuits.

Source: Planadviser.com, January 2022

Tick, Tock, the DC Restatement Clock Is Running Out

Chances are that if you have a 401k plan, the document is on an IRS pre-approved form. One of the "costs" of having a pre-approved plan is that it must be re-stated every six years onto an updated pre-approved document that incorporates recent changes in the law. For DC plans, such a 401k, the current restatement deadline is July 31, 2022. A restatement is generally not something that can be done in a week or two, and vendors are under a great amount of stress trying to get all of their clients restated by this looming deadline. This is why it is so important that the restatement process be started as soon as possible.

Source: Erisadc.com, January 2022

A District Court Weighs in on Private Equity and Hedge Funds in 401k Plans

On January 8, 2022, in a case with a long and complex procedural history dating back almost seven years, the U.S. District Court for the Northern District of California granted a motion to dismiss amended claims brought by participants in two DC plans sponsored by Intel Corporation. The plaintiffs alleged violations of ERISA because the plans offered investment choices with significant allocations to alternative investments including hedge funds, commodities, and private equity.

Source: Debevoise.com, January 2022

ERISA Update and Outlook for 2022

Employers have spent the last two years dealing with many challenges and disruptions, and they are now looking to move forward in 2022 against a backdrop of economic and pandemic-related uncertainty and market volatility. To help plan sponsors navigate the challenging road ahead, this short article outlines four themes those plan sponsors should be keeping a close eye on in 2022.

Source: Bdo.com, January 2022

DC Retirement Plan 2022 Compliance Calendar

Retirement plan sponsors are responsible for compliance with any ongoing reporting, disclosure, and notice requirements. This 4-page Retirement Plan Compliance Calendar summarizes the major requirements that apply to DC plans for 2022. Due dates are based on a calendar year plan year and apply to plans subject to the ERISA.

Source: Usicg.com, January 2022

Can Retirement Plan Service Providers Be Trusted?

Organizations that sponsor employee benefit plans are generally responsible for ensuring that their plans comply with federal law, including ERISA. Many sponsors rely on service providers to advise and assist them with their employee benefit plan duties. But service providers to retirement plans are changing their stripes. That makes the job of selecting and monitoring them more challenging than ever.

Source: Rolandcriss.com, January 2022

Bridging the Gap Between the Retirement Plan Fiduciary Committees and IT

Technology-empowered threats to the security and confidentiality of retirement plan assets and data are exploding. Current fiduciary management methods largely lack a formal interface with the information technology function and its storehouse of expertise. These two realities demand that fiduciary committees embrace their enterprises' information technology departments in a new era of collaboration.

Source: Rolandcriss.com, January 2022

Who to Invite to a Plan Review

Who should be invited to a plan review? The following are parties who can be invited to a plan review. Caveat: keep in mind that options vary according to how a plan is set up.

Source: Ntsa-net.org, January 2022

Running a Plan Review Meeting

What are some tips for running a plan review meeting? One can keep a plan review meeting on track by taking the following steps outlined here.

Source: Ntsa-net.org, January 2022

Opinion: The Real Retirement Fraud

The author writes, "A new paper rehashes (and embraces) some old beliefs, blatantly ignores the full impact of workplace savings, disregards the reality that deferrals are temporary, and kills a lot of trees in the process. The diatribe's author, perhaps because he's affiliated with a law school, perhaps because the paper (provocatively titled 'The Great American Retirement Fraud') is so long (82 pages), managed to get what amounts to a long-winded pontification published by the Social Science Research Network, a network that normally publishes research."

Source: Napa-net.org, January 2022

The Perilous Move From One 401k TPA to Another

Transitioning from one third-party administrator to another can be as traumatic a move as going from home to another. There is a lot to consider in order to avoid the headaches that can develop if you miss any of these points.

Source: Jdsupra.com, January 2022

PTE 2020-02 Compliance: Avoiding Five Common Mistakes

It may be a New Year, but 2022 is going to seem very familiar to Broker-Dealers and their Registered Representatives who advise retirement plans and IRAs. They are going to be spending a lot of time working to comply with new exemptions and new ERISA rules coming from the DOL. As some of these deadlines are right around the corner, this article reviews the five common pitfalls and problems, and how to better address them in disclosures and policies and procedures.

Source: Brokerdealerlawblog.com, January 2022

Considerations for Plan Sponsors Mulling SDBAs

While SDBAs provide retirement plan participants with access to numerous investment options, the resulting investments can also create potential risks to those participants and plan sponsors, according to findings from Cerulli.

Source: Asppa.org, January 2022

Guide to ERISA Individual Prohibited Transaction Exemptions

One of the distinctive features of ERISA is its prohibition of a wide range of specified transactions between a covered ERISA plan or IRA and a far-reaching group of ostensible "insiders" to those arrangements. Since 1996, the US Department of Labor granted more than 1,200 individual exemptions from the ERISA prohibited transaction rules. This guide summarizes and collects individual prohibited transaction exemptions for this period.

Source: Eversheds-sutherland.com, January 2022

Participants Must Follow a Plan's Beneficiary Designation Procedures

When it comes to a beneficiary designation, the only thing that matters is what the participant wrote down. If the participant was clear and followed the plan's procedures for naming a beneficiary, the fiduciaries of the plan are bound by ERISA to follow that result. Of course, the fiduciaries must first determine what the plan's procedures are. The plan language may have requirements or exceptions. Any specific rules or exceptions found in the plan language must be followed scrupulously by the fiduciaries.

Source: Employeebenefitslawblog.com, January 2022*

Ten Steps for DC Plan Sponsors to Consider in 2022

This 7-page paper first reviews strategies to navigate the onerous legal and regulatory issues faced by DC plan fiduciaries today. The paper then shifts to examining tactics to better fund future "liabilities," including increasing savings and creating more efficient investment strategies for both active participants and retirees, with an overall objective of increasing the likelihood that employees will have successful retirement outcomes.

Source: Russellinvestments.com, January 2022

Is a PEP Right for You?

More employees need to be able to contribute to retirement plans, and many employers without plans would like to offer 401k plans to their employees. This article discusses a new option for outsourcing fiduciary responsibility and why more employers should consider PEPs.

Source: Rpaconvergence.com, January 2022

CPAs Shift Audit Risk to Plan Fiduciaries

SAS 136 transfers a significant amount of liability for an audit's accuracy from an auditor to a plan's fiduciaries. SAS 136 intends to enhance the quality of audits of ERISA plans by adding new procedures to CPAs' audits beginning December 15, 2021. The burden for producing the added plan-related documentation required will likely fall to employers' human resources departments.

Source: Rolandcriss.com, January 2022

Finalized Form 5500 Changes Add to Plan Sponsors' Responsibilities

Some updates to the Form 5500 implement changes called for by the SECURE Act, and others will require more review from plan sponsors to ensure completeness and accuracy.

Source: Plansponsor.com, January 2022

Practical Implications of DOL's Latest Private Equity Statement

The DOL's supplemental statement is a tonal shift rather than a substantive change that reflects the continuing courtship for defined contribution plans and private equity investments. For plan sponsors, the clarifying statement's practical implications were to reaffirm that the duties of plan fiduciaries must be executed prudently and that they must always act in the best interest of participants and beneficiaries.

Source: Plansponsor.com, January 2022

Plaintiffs Refile ERISA Lawsuit, Adding Adviser to Defendant List

The plaintiffs in an ERISA fiduciary breach lawsuit known as Fleming v. Rollins Inc. have refiled their complaint in federal court, this time also proposing claims against multiple financial advisory firms that serve their retirement plan.

Source: Planadviser.com, January 2022

401ks Substantially More Costly Than Pensions

401k retirement accounts are substantially more costly than pension plans, according to a new analysis from the national institute on retirement security. Economic efficiencies unique to pensions enable plans to deliver retirement benefits at half the cost of 401k accounts, with four-fifths of the cost differential occurring post-retirement.

Source: Nirsonline.org, January 2022

401k Lawsuit Names LPL, Alliant

A new 401k lawsuit against a nationwide pest-control company stands out from most others by questioning the investment guidance of an adviser to the plan. It also names LPL Financial and Alliant as defendants, in addition to the plan sponsor -- Rollins Inc. -- and the plan committee.

Source: Investmentnews.com (registration may be required), January 2022

How the ERISA Landscape May Shift in 2022

2021 was another busy year for litigation under ERISA, with more than 125 new ERISA class actions filed, more than were filed in 2018 or 2019, but down from the all-time high in 2020, which saw more than 200 class actions filed for the first time in the 45-year history of the statute. As 2022 begins, several key issues working their way through the courts are likely to reshape the landscape of ERISA litigation.

Source: Groom.com, January 2022

Retirement Assets Held Steady in Third Quarter

Despite a number of challenges, total U.S. retirement assets were down only slightly at the end of the third quarter of 2021, according to new data from the Investment Company Institute.

Source: Asppa.org, January 2022

IRS Updates Procedures for Determination Letter Requests

The new procedures are outlined in Revenue Procedure 2022-04. Rev. Proc. 2022-04 is a general update of Rev. Proc. 2021-4, published in Internal Revenue Bulletin 2021-01.

Source: Asppa.org, January 2022

Auto-Enrollment Retirement Plans in OregonSaves

This new study looks at the impact of the first state-sponsored auto-IRA program on those who previously lacked access to a plan. It analyzes participation choices, inflow and outflow data between August 2018 and April 2020, and the evolution of account balances.

Source: Umich.edu, January 2022

2022 DC Retirement Plan Compliance Calendar

For defined contribution plan years starting Jan. 1, this retirement plan compliance calendar lists key IRS and DOL reporting and disclosure deadlines.

Source: Mercer.com, January 2022

401k and IRA leakages May Be More Severe Than Previously Believed

Researchers from the Treasury and Congress' Joint Committee on Taxation have provided new estimates of how much money "leaks" out of 401ks and IRAs based on restricted tax data. The author states that "It's a welcome addition to the literature because the existing range of estimates is enormous."

Source: Marketwatch.com, January 2022

DC Plan Design Can Be Creatively Used to Get Participants Back on Track

Many individuals didn't have a choice but to lower their DC plan savings rates, stop contributing or take loans or withdrawals out of their plans because of the economic impact of the pandemic. A recent podcast, "Plan Designs During Challenging Times," hosted by Bill Harmon, chief client officer, and Heather Lavallee, CEO of wealth solutions at Voya, addressed what employers can do to help participants get back on track with their retirement savings after events like the pandemic or economic recessions.

Source: Plansponsor.com, January 2022

Biden's EBSA Nominee Back on the Docket

While it appeared the nomination of Lisa Gomez to serve as Assistant Secretary for EBSA at the DOL was in jeopardy after having been included in a list of nominees that would not carry over to the new year, the Senate Health, Education, Labor, and Pensions Committee has now scheduled a January 12 nomination hearing for her, along with several other nominees.

Source: Napa-net.org, January 2022

DOL Waves Caution Flag for 401k Private Equity Investing

The DOL delivered a surprise holiday gift on December 21, 2021, to fiduciaries of participant-directed 401k plans subject to ERISA, issuing a supplemental statement to a June 2020 Information Letter regarding the use of private equity investments in investment options. The thrust of the Supplement is that fiduciaries should not read the Letter as endorsing or recommending private equity investments in such plans and should proceed with caution in the use of such investments in a participant-directed 401k plan.

Source: Morganlewis.com, January 2022

The Pension Is Dead: Is the 401k Next?

If you're younger than 40 years old, you may not even know what a pension is. Also called defined benefit plans, pensions used to be the primary source of retirement funding for American workers. Starting in the 1980s, pensions rapidly began disappearing, as the defined contribution 401k plan dominated. Although the 401k plan isn't likely to go the way of the pension plan, there may be significant changes ahead.

Source: Yahoo.com, January 2022*

Opinion: The Great American Retirement Fraud

The author writes, "Despite the benign but misleading rhetoric about enhancing retirement security for everyone, the real beneficiaries of the retirement-reform legislation have been higher-income earners, who would save for retirement even without tax subsidies, and the financial-services industry, whose lobbyists have driven the retirement-reform legislative agenda."

Source: Ssrn.com, January 2022

What to Expect for Retirement Savings Plans in 2022

With a new year often comes new rules. Here's what the federal government has planned for retirement savings plans in 2022.

Source: Smartspublishing.com, January 2022

Avoiding the Rule That Will Cause You Trouble as a 401k Plan Sponsor

There are so many pitfalls that a plan sponsor needs to avoid. And certain rules plan sponsors need to avoid if they want to avoid potential liability as a fiduciary. This article lets 401k plan sponsors know which paths and rules they need to avoid if they want to stay out of trouble.

Source: Jdsupra.com, January 2022

More Employers Put 401k Savings on Autopilot

Employers are increasingly putting retirement savings on autopilot for their workers. About 62% of businesses with a 401k plan used automatic enrollment in 2020, up from 60% the year prior and 46% a decade ago, according to the Plan Sponsor Council of America, a trade group. Auto-enrollment leverages worker behavior (inertia, in this case) to their advantage. Workers receive a paper or digital notification ahead of time and can opt out, but most do not.

Source: Cnbc.com, January 2022

Employers Adding Roth 401k Option at a Fast Clip

The share of employers allowing Roth 401k savings has surged, giving more workers access to the financial benefits that accompany such contributions. But there are some roadblocks to employee use, such as automatic enrollment and the structure of 401k matching contributions.

Source: Cnbc.com, January 2022

2021 Form 5500 Series Informational Copies Released

The DOL, IRS, and the Pension Benefit Guaranty Corporation jointly released the 2021 Form 5500, Annual Return/Report of Employee Benefit Plan, 2021 Form 5500-SF, Annual Return/Report of Small Employee Benefit Plan, and their respective instructions. The IRS likewise released the 2021 Form 5500-EZ, Annual Return of a One-Participant Retirement Plan or Foreign Plan, and instructions.

Source: Ascensus.com, January 2022

403b Plans and RMDs at Age 72

This post includes basic information about tax-deferred investing, RMDs, and IRS tax regulations concerning RMD tax payments and tax penalties. It also describes research findings on how many investors make RMD withdrawals and new life expectancy tables that debut in 2022. It concludes with six take-away action steps.

Source: 403bwise.org, January 2022


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