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January 2018 Digest

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, 403(b) 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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Americans on Target to Have 80% of the Income They Will Need in Retirement

Abstract: Americans' retirement score has reached a high of 80, meaning that they will have 80% of the income they will need in retirement, according to a survey of 3,100 people by Fidelity Investments. This is a marked improvement from 2005, when the score was 62. However, Fidelity ranks the score of 80 as fair, meaning that there is still a good amount of work that needs to be done.

Source: Planadviser.com, January 2018

DOL Extremely Active in Enforcement, With Terminated Vested Participant Investigations a High Priority

Abstract: The DOL compiles statistics every year to measure its activities as the agency responsible for investigating and enforcing the fiduciary duties under ERISA. Statistics for the agency's 2017 Fiscal Year enforcement activities are now available. These statistics affirm that the DOL's enforcement program remains extremely active, with a particular focus on terminated vested participant investigations.

Source: Morganlewis.com, January 2018

Three Reasons Plan Sponsors are Considering CITs - or Should Be

Abstract: CITs are often misunderstood, and many sponsors don't know where to begin when comparing mutual funds and CITs. Admittedly, it's a technical topic, but it's a topic that is increasingly important.

Source: Manning-Napier.com, January 2018

Lower Fees May Not Mean Added Retirement Savings

Abstract: Advisors are adopting software and investment platforms geared to help them find the cheapest, low-fee retirement products for their clients, but that might not necessarily equate to added savings in retirement, new research says.

Source: Financial-Planning.com, January 2018

Five Most Important Financial Concepts a Fiduciary Must Teach

Abstract: A good fiduciary will always look for opportunities to teach and test for understanding of clients and savers. The author asked financial experts from around the country what they felt it was important to convey to retirement savers. Here are the top five.

Source: Fiduciarynews.com, January 2018

Are Advisors Becoming Fee Litigation Defendants? What to Do About It

Abstract: A 403b lawsuit against New York University has been amended to include Cammack LaRhette, the plan's investment advisor, as a defendant in addition to the plan committee. There are some actions that would put an advisor and a co-fiduciary plan committee in a better position to defend plan choices.

Source: Cohenbuckman.com, January 2018

Fidelity, Vanguard Fee Arrangement Causes Stir in the 401k Industry

Abstract: Fidelity's move to charge new 401(k) plan clients (with $20 million or less in assets) a 0.05% fee on any Vanguard funds held in their retirement plans has raised a few eyebrows in the industry, causing concern retirement fee arrangements might become the new norm.

Source: Benefitnews.com, January 2018

Opt-Outs Running High in OregonSaves Program

Abstract: The nation's first state-run retirement plan for private sector workers is picking up steam, but the opt-out rates are a bit of an eye-opener.

Source: Asppa.org, January 2018

ARA Pushes Back on New VCP User Fee Approach by IRS

Abstract: The American Retirement Association has taken issue with the new VCP fee structure and approach taken by the IRS, stressing that it is "unfair to small employers, and will have an adverse impact on plan participants."

Source: Asppa.org, January 2018

IRS Releases Listing of Required Modifications for Pre-Approved DC Plans

Abstract: The Internal Revenue Service released a revised Listing of Required Modifications for pre-approved defined contribution plans with sample plan provisions that have been found to satisfy certain provisions in the Internal Revenue Code and the 2017 Cumulative List of Changes in Plan Qualification Requirements (Notice 2017-37).

Source: Westlaw.com, January 2018

401k Plan Administration Pitfalls

Abstract: Business Owners often weigh the pros and cons of offering many types of employee benefits, from health care coverage to weekly lunches. These benefits are crucial to the health and happiness of your employees, but a health care plan adds administrative burden and requires some understanding of the health care system. The same goes for sponsoring a qualified retirement plan.

Source: Tristarpension.com, January 2018

Tax Cuts and Jobs Act -- New Rules for Retirement Plans and IRAs

Abstract: Although the main feature of this legislation is a significant reduction in the corporate federal income tax rate, the Act also makes several significant changes to the tax treatment of employee benefits. This article addresses the new rules governing employer-sponsored retirement plans and individual retirement accounts.

Source: Spencerfane.com, January 2018

Millennial Benefit Trends Report

Abstract: Research found that the types of benefits that millennials are seeking include the standard insurance coverage, retirement plans, and vacation policies. However, this generation's interests also extend well beyond those cornerstone concerns, both when they are identifying companies that they would like to work for, and when weighing an offer of employment.

Source: Pentegra.com, January 2018

2017 Retirement Plan Mobile Enhancements

Abstract: Over the course of 2017, multiple Retirement Plan Monitor coverage group firms launched new mobile apps and revamped existing apps, integrating more account data, introducing transaction capabilities and harnessing new mobile technologies to add app features. These are all welcomed enhancements as Americans continue to increase their already-high level of dependency on mobile devices for internet access.

Source: Corporateinsight.com, January 2018

Three-Quarters of Americans Are in the Dark When it Comes to 401k Fees

Abstract: A new TD Ameritrade survey of 1,000 investors shows that 96 percent of people know how much they pay each month for streaming media services like Netflix, Hulu and Spotify and yet just 27 percent know how much they're paying in fees on their 401k accounts.

Source: Businesswire.com, January 2018

Employee Benefit Plan Best Practices

Abstract: With the new Department of Labor fiduciary rules further pushed back to go into effect on January 1, 2019, plan fiduciaries have more time to review employee benefit plan best practices.

Source: Bsllp.com, January 2018

Mutual of Omaha Sued Over Affiliated Funds in 401k Plan

Abstract: The proposed class action accuses Mutual of Omaha of filling its 401k plan with affiliated investment funds that were essentially funds offered by third parties plus an extra layer of fees that went to the Nebraska-based insurer. The company also tacked on extra layers of fees to unaffiliated funds in the 401k plan, according to the complaint.

Source: Bna.com (registration may be required), January 2018

What Are the Most Common Errors Found in Plan Audits?

Abstract: A conversation between Trucker Huss' Callan Carter and Diane Wasser of the CPA firm EisnerAmber LLC spotlights errors commonly found in a retirement plan audit.

Source: Asppa.org, January 2018

Definition of Compensation Failures

Abstract: Compensation is used for many different purposes in a 401k Plan including the calculation of employee and employer contributions. During 401k audits, definition of compensation issues are among the most prevalent failures.

Source: 5500audit.com, January 2018

Woman Sentenced for Retirement Plan Embezzlement

Abstract: A former bookkeeper at Zenith American Solutions in Oklahoma City, was charged last year with wire fraud. In June, she pleaded guilty, admitting to making the fraudulent transfers to her own bank accounts between July 2014 and January 2017.

Source: 401kspecialistmag.com, January 2018

Five of the Biggest 401k Changes of This Decade

Abstract: Over the past few years, the 401k industry has seen several sweeping changes take place, each of which has altered the core dynamics of how employees' retirement plans are managed. New government regulations have modified how the industry is monitored for betterment of employees. Here are five of the biggest changes that have affected the responsibility, litigation strategies, fees and overall practices for providers.

Source: Forbes.com, January 2018*

Oregonians Start Saving With Auto-Enroll Retirement Plan

Abstract: A growing number of employees in Oregon are stashing away some of their earnings under a state-run retirement savings program, and four other states are set to follow.

Source: Bna.com (registration may be required), January 2018

Hardship Availability Due to Modification of Deduction for Personal Casualty Losses

Abstract: The recently enacted tax reform legislation, commonly referred to as the Tax Cut and Jobs Act, made a change to the types of personal casualty losses that qualify for a casualty deduction under Section 165 of the Internal Revenue Code. This change affects many 401a, 401k, and 403b plans that permit hardship distributions to be made available to their participants and beneficiaries.

Source: Voya.com, January 2018

Court Sets Method for Determining Damages Due to Breach of Loyalty in Fund-Mapping Case

Abstract: In a case that began 12 years ago, the trial court has again determined the method it will use to calculate damages for a breach of the duty of loyalty. The breach was committed by the fiduciaries of two 401k plans who replaced one of the plans' investment funds with funds that produced more revenue sharing.

Source: Thomsonreuters.com, January 2018

Mike Alfred Exits BrightScope and Into Cryptocurrency Sphere

Abstract: Mike Alfred is out at BrightScope Inc. in pursuit of a shinier future and a reunion with his brothers. he moves by both brothers -- who always boldly proclaimed that an IPO was BrightScope's destiny -- reflects a burning sense of unrealized success in their quest to build a truly large and dynamic organization.

Source: Riabiz.com, January 2018

Self-Dealing Lawsuit Targeting Capital Group Routed in District Court

Abstract: In a dense dismissal decision, the district court offers a reminder of the exacting pleading standards of ERISA and statues of limitations before roundly rejecting the plaintiff's allegations for failing to state an actionable claim.

Source: Planadviser.com, January 2018

Norton Healthcare Faces 403b Plan Excessive Fee Suit

Abstract: Plan fiduciaries have been charged with breaching their fiduciaries duties under ERISA by selecting more expensive share classes of investments than were available to the plan.

Source: Planadviser.com, January 2018

Avoid Sending Gifts to Plan Sponsors, It Just Doesn't Look Right

Abstract: Like Don Fanucci in Godfather Part II, there will always be plan sponsor representatives that would like their beak wet. This type of bribery is something that will always be available in the retirement plan marketplace, but it's up to the plan sponsor and its providers to make sure that any gifts are de minimis to avoid any prohibited transactions and under the board conduct that could put the plan sponsor in danger.

Source: Jdsupra.com, January 2018

How New Leadership at DOL Could Address Retirement Rules

Abstract: By all accounts, the administration of Donald J. Trump is slashing regulations across government. However, there are some exceptions to the rule, and a less ambitious deregulatory regime seems likely under new leadership at the Department of Labor.

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

The Fiduciary Rule: Mistaken Beliefs

Abstract: The myth is that broker-dealers and RIAs -- and their advisors -- must only recommend the lowest cost investments. For example, mutual funds with the lowest expense ratios. That is not correct.

Source: Fredreish.com, January 2018

The Plan Committee: Appointing and Removing Committee Members

Abstract: This is an aspect of committees where there is generally a woeful lack of understanding of the commitment that is being made. This article discusses making a committee position offer (what plan sponsors should be thinking about), formalizing appointments, removals, and resignations.

Source: Fiduciaryplangovernance.com, January 2018

The Saver's Credit

Abstract: The saver's credit is an income tax credit of up to 50% of 401k employee contributions that is available for certain taxpayers with income that does not exceed $63,000.

Source: Consultrms.com, January 2018

Tax Reform and a Retirement Plan Surprise

Abstract: The Tax Cuts and Jobs Act passed at year end contained relatively few retirement plan-related provisions. However, upon closer review of the more than 1,000-page bill, some of the provisions were found to indirectly affect retirement.

Source: Cammackretirement.com, January 2018

New Ground(s) Emerge in NYU Excessive Fee Suit

Abstract: An amended claim in an excessive fee litigation treads some new ground, including naming the plan's investment advisor as a defendant. New York University was one of the first of the university 403(b) excessive suits filed in August 2016, and representing the plaintiffs then (and now) was the law firm of Schlichter, Bogard & Denton.

Source: Asppa.org, January 2018

Auto Features May Hold the Key to Improving Plan Participation Rates

Abstract: The Director of Administration of a 50 employee law firm discusses some of the challenges associated with mobilizing the entire workforce around the tax-qualified retirement plan.

Source: 401ktv.com, January 2018

New Excessive Fee Litigators Emerge

Abstract: A new excessive fee suit has been filed -- this time against a hospital's retirement plan -- and from a different direction. What is most interesting about this litigation is that the plaintiffs are represented by counsel that doesn't appear to have a track record in ERISA litigation.

Source: Napa-net.org, January 2018

Fidelity Pushes Vanguard to Compete on Brand in 401k Plans

Abstract: Fidelity Investments' move to impose an additional fee on Vanguard Group assets is going to test plan sponsors' loyalty to the index-fund giant, according to retirement plan advisers, as employers are forced to choose between sticking with a trusted low-cost brand and paying less money for a similar investment product from a different provider.

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

TDFs Have Improved Participant Diversification

Abstract: About a third of participants across Millennials, Generation X, and Baby Boomers who self-manage the investment of their plan accounts are more conservative than a typical target-date fund appropriate to their age.

Source: Plansponsor.com, January 2018

401k Best Practices: Fees

Abstract: Making sure you are paying reasonable 401k fees for your plan is one of your major fiduciary responsibilities as a plan sponsor, especially if you are using plan assets to pay 401k fees. Unfortunately, the DOL does not define reasonable fees, but there are a number of methods you can use to determine if they are.

Source: Lawtonrpc.com, January 2018

Fidelity Charging New Fee on Vanguard Assets Held in 401k Plans

Abstract: Starting this year, Fidelity will charge all new 401k clients a 0.05% fee on participant assets invested with Vanguard, which has emerged over the past several years as an index-fund behemoth as investors have moved away from active investing.

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

Will Millennials Be Ready for Retirement?

Abstract: It finds that Millennials -- despite high education levels -- are behind previous cohorts on many indicators that help boost retirement preparedness. This difficult start, combined with high levels of student debt, has delayed them from getting married and buying a home.

Source: Bc.edu, January 2018

TCJA Changes Could Affect 401k Hardship Withdrawals

Abstract: In the wake of any new tax law, there are always issues that cause problems when they are actually put into practice. One such issue is that hardship withdrawals from a 401k plan to address a personal casualty loss of a principal residence may no longer be allowed unless the loss is attributable to a federally declared disaster area.

Source: Asppa.org, January 2018

RETIRE Act Promotes Electronic Delivery of Retirement Plan Information

Abstract: A year-end bill could significantly change how retirement plans deliver participant and beneficiary communications. The Receiving Electronic Statements tiiiiidu87yt8o Improve Retiree Earnings (RETIRE) Act would allow plan administrators to use electronic delivery as the default delivery method for virtually any required plan document. Participants and beneficiaries could still opt to receive paper copies of this information.

Source: Ascensus.com, January 2018

Pending Legislation Could Significantly Change the Retirement Plan Landscape

Abstract: A number of bills have been introduced in recent weeks that, in addition to simplifying some of the rules, could encourage employers to set up plans and help increase employees' retirement savings. Many of these changes have been proposed in the past and enjoy bipartisan support. This article is a brief summary of some of the recently introduced bills.

Source: Jpmorgan.com, January 2018

Hunting for Retirement Plan Participants?

Abstract: The DOL has reportedly commenced a national audit campaign targeting plans with missing participants, and just last month, the Pension Benefit Guaranty Corporation issued final regulations expanding its existing missing participant program (previously limited to certain defined benefit plans) to a defined contribution plan.

Source: Foxrothschild.com, January 2018

2018 403b Compliance Calendar

Abstract: This 403b Retirement Plan Compliance Calendar highlights critical compliance deadlines for defined contribution retirement plans. While we have covered all of the major dates, some may only apply to particular plan types (and are noted accordingly) and there may be additional deadlines for specific plans that are not covered here.

Source: Cammackretirement.com, January 2018

2018 401k ERISA Retirement Plan Calendar

Abstract: This Retirement Plan Compliance Calendar highlights the critical compliance deadlines for ERISA 401k defined contribution retirement plans.

Source: Cammackretirement.com, January 2018

SEC Inching Closer to an ERISA Fiduciary Standard

Abstract: Duane Thompson argues that "the SEC's examination and enforcement arms appear to be moving closer to ERISA's fiduciary standard mandating reasonable compensation for investment advice" by focusing on compensation received for rollover advice and on fees that result from the use of mutual fund share classes in retail and retirement accounts.

Source: Asppa.org, January 2018

Optimizing Retirement Income by Integrating Retirement Plans, IRAs, and Home Equity

Abstract: In this 144-page report, the authors present a framework of analyses and methods that financial advisers, financial institutions, plan sponsors, and retirees can use to compare and assess strategies for developing lifetime retirement income.

Source: Stanford.edu, January 2018

How to "Pensionize" Any IRA or 401k Plan

Abstract: American workers face three challenges in a DC world: Inadequate savings, Leakage, and Generating retirement income. This 19-page white paper focuses on solutions to the third challenge while acknowledging the importance of the first two.

Source: Stanford.edu, January 2018

How to Determine if Your Employees Are on a Smooth Path to Retirement

Abstract: While some organizations may measure employees' retirement readiness only as they approach retirement age, a more comprehensive strategy is to utilize a retirement-readiness analysis (described in this article) to track their employees throughout their careers to help ensure they are financially on target to retire when they want.

Source: Sibson.com, January 2018

Tax Reform Impacts Retirement Benefits

Abstract: Certain provisions included in H.R. 1 impact retirement plans. Retirement-related provisions included in the Act apply to taxable years beginning after December 31, 2017. Plan sponsors should review the information contained in this publication and the Act to understand the new provisions and potential impacts to their plans.

Source: Prudential.com, January 2018

Unbundled Plans Gained Significant Ground in 2017

Abstract: Extensive analysis covering a broad range of topics, that includes bundled versus unbundled plan arrangements. It notes that the proportion of plans that are at least partially bundled fell dramatically from 53.8% in 2016 to 44.0% in 2017, a continuation of the unbundling trend.

Source: Plansponsor.com, January 2018

Target-Date Fund Confusion

Abstract: The proliferation of target-date fund varieties can confuse many plan sponsors. One survey found that while nearly two-thirds of plan sponsors consider investment performance the most important selection criterion when choosing a TDF for their participants, more than half are not confident that they have a solid basis for benchmarking the TDFs against other similar funds in the marketplace.

Source: Orbablog.com, January 2018

New Rules Pertaining to Puerto Rico Qualified Retirement Plans

Abstract: Recent changes to Puerto Rico's tax treatment of certain retirement plans have taken effect. Employee benefit practitioners, service providers, as well as the Pension Plan Section at the Puerto Rico Department of the Treasury were taken by surprise by these amendments.

Source: Littler.com, January 2018

A Plan Sponsor's Guide to Selecting Retirement Plan Providers

Abstract: When it comes to evaluating plan providers to consider, it's hard to develop a metric that would gauge whether a provider should be hired or not. This article help evaluate how to select plan providers from every Tom, Dick, Harry, and Jane that wants you to select them to be your plan provider.

Source: Jdsupra.com, January 2018

Lawsuits Push 401k Plan Sponsors to Cut Fees

Abstract: Employers are moving to reduce their 401k plan costs in greater numbers, largely in an attempt to avoid the fate of peers who've been sued for allegedly excessive fees in their defined-contribution plans, new research suggests.

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

Changes to VCP User Fees Result in Mixed Reactions From Plans

Abstract: Revenue Procedure 2018-4 announced significant changes to the user fee structure for submissions under the EPCRS Voluntary Correction Program. While the new fee structure is more simplified, it will result in some significant differences for plans compared to the prior approach.

Source: Icemiller.com, January 2018

Puerto Rico Issues Additional Guidance on Eligible Distributions to Participants Affected by Hurricane Maria

Abstract: The Puerto Rico Treasury Department has issued Administrative Determination No. 18-02 to clarify certain provisions of the previously issued Administrative Determination No. 17-29.

Source: Groom.com, January 2018

The Plan Committee: The Life Phases of a Committee Meeting

Abstract: When considering committee meetings, it's a mistake to think only about the time spent in the meeting itself. In fact, this time is by far the least important part of a committee meeting. In fact, meetings start well before the meeting itself and end well after it.

Source: Fiduciaryplangovernance.com, January 2018

Don't Forget the ERISA Bond

Abstract: One of the basic requirements of ERISA is that all fiduciaries and other persons who handle plan funds must be bonded to protect the plan against losses due to their fraud and dishonesty. The bond is not the same as fiduciary liability insurance. There are special requirements that apply to ERISA bonds and they can only be purchased from approved companies, so even if you have a bond, it might not be compliant.

Source: Cohenbuckmann.com, January 2018

Retirement Plan Sponsor Websites

Abstract: When looking at plan sponsor websites, there are often many issues that plan sponsors would likely wish to correct. Have you checked your own retirement plan website lately? Here are three of the most frequent issues.

Source: Cammackretirement.com, January 2018

The Implication of Tax Reform on Retirement Investing

Abstract: With the new tax bill signed into law and effective as of January 1, 2018, there are several provisions that may affect investors and investments in retirement plans. For months, fears centered on the potential "Rothification" of defined contribution plans. However, the favorable tax treatments of these plans, as well as health savings accounts, were maintained.

Source: Cammackretirement.com, January 2018

2018 Defined Contribution Trends

Abstract: Callan conducted their 11th annual Defined Contribution Trends Survey in the fall of 2017. The survey incorporates responses from 152 plan sponsors, including both Callan clients and other organizations. This 57-page report highlights key themes and findings from 2017 and expectations for 2018.

Source: Callan.com, January 2018

Are Forum Selection Clauses in ERISA Plan Documents Enforceable?

Abstract: The United States Supreme Court allowed a Seventh Circuit decision to remain in effect that determined that a forum choice provision in an ERISA plan is enforceable, despite ERISA's statement that suits "may be brought" in courts tied to the plan or plan beneficiary.

Source: Boomerisablog.com, January 2018

Putnam Gets Industry Support in 401k Fund Appeal

Abstract: Putnam Investments won the support of several industry groups in an appeal by Putnam workers challenging the affiliated mutual funds in their 401k plan.

Source: Bna.com (registration may be required), January 2018

Revised VCP Fees -- Simple Isn't Always Better

Abstract: The IRS has described its recent changes to its Voluntary Correction Program user fees as "simplification." This simplification is achieved by significantly changing the way user fees are determined and by eliminating alternative and reduced fees that were previously available. At first blush, this simplification appears to result in a general reduction in user fees, however, in certain circumstances, the changes will actually result in significantly higher fees.

Source: Benefitsbryancave.com, January 2018

SEC Reportedly Accelerating Work on Its Own Fiduciary Rule

Abstract: Implementation of the DOL's fiduciary rule has been delayed, and the rule may not have the teeth it originally did. But it would be a mistake to assume that means a complete demise for a new fiduciary standard for advisors. That depends in part on what the Securities and Exchange Commission does with its own fiduciary rule, work that reportedly is accelerating.

Source: Asppa.org, January 2018

What Does Tax Reform Portend?

Abstract: The debate over tax reform roiled Washington, and the retirement plan community was among the many parties concerned about the outcome. A recent white paper discusses the new law and its possible effects, including those on retirement plans.

Source: Asppa.org, January 2018

Retirement Plan Education: It's Time to Get Personal

Abstract: While the industry is consistently innovating on participant education and communication -- moving to mobile platforms, creating easier-to-digest video content, and bringing financial wellness to the fore -- we have gotten caught in a rather habitual, one-dimensional way of helping participants understand why and how to save for the future.

Source: 401ktv.com, January 2018

Tax Cuts and Jobs Act Will Present Retirement Professionals With New Challenges

Abstract: While the primary focus of the Act is on the personal and corporate income tax rates, and the law does not uproot pension and benefits arrangements as radically as past legislation, the new rules will present employers, employees, and tax and benefits professionals with potentially difficult decisions in the areas of retirement planning, employee benefits management, executive compensation, and payroll administration.

Source: Wolterskluwer.com, January 2018

Employer Contributions to 401ks Show Steady Increase

Abstract: Ascensus data shows the number of employers funding employer contributions increased from 53% in 2013 to 81% in 2016, and data gathered from Strategic Insight finds the amount of employers contributions have increased from $108.1 billion in 2010 to $139.2 billion in 2016.

Source: Planadviser.com, January 2018

Investment Adviser Named as Defendant in NYU Retirement Plan Case

Abstract: In an unusual turn of events, the investment adviser to New York University's retirement plan has been named as a co-defendant in litigation attacking the plan's allegedly excessive fees. Plaintiffs contend the adviser, Cammack LaRhette Advisors, provided "imprudent investment advice," which enabled NYU to breach its fiduciary duty to plan participants.

Source: Pionline.com, January 2018

Four Reasons Employers Should Use Corporate Tax Cut for Larger 401k Match

Abstract: Amid speculation as to how U.S. corporations will use their tax reductions, employers might consider upping their company match programs for 401k savers on their payrolls. Research has found the 401k match is one of the most important benefits employers can provide to workers.

Source: Cnbc.com, January 2018

The DOL Fiduciary Rule: Charting a Course, Avoiding Collisions & Potential Litigation

Abstract: This Q&A addresses issues raised in the DOL's recent release which provides for an 18-month Extension of Transition Period and Delay of Applicability Dates for the Best Interest Contract Exemption; the Class Exemption for Principal Transactions; and PTE 84-24. In particular, it focuses on the issues the DOL raised regarding the status of "enforcement" procedures during the transition period.

Source: Jdsupra.com, January 2018

Tax Reform: Retirement Plan and IRA Provisions

Abstract: This summary of the tax bill focuses on the rather limited changes made to pension benefits and IRAs. The changes, and next steps for plan sponsors and IRA providers, are summarized.

Source: Groom.com, January 2018

How Do Your 401k Contributions Compare With Your Fellow Earners?

Abstract: Are you putting enough into your 401k? Most Americans aren't. You can find out here how you compare with your fellow earners, and get some tips to help boost your 401k contributions so you can beat the average.

Source: Fool.com, January 2018

Four Reasons Americans' 401k Balances Are Too Small

Abstract: The Center for Retirement Research identified four key reasons why 401k balances are too small for most Americans. This article takes a closer look at these four items, along with some suggestions for individual investors to solve their retirement saving problems.

Source: Fool.com, January 2018

Finance Sector Thinking Long Term With 401k Boosts

Abstract: Several finance and insurance companies have led the charge in increasing their matching contributions to workers' 401k plans in response to the new tax law, and their early responses might just be the beginning.

Source: Bna.com (registration may be required), January 2018

Know About the Roth 401k Surprise?

Abstract: Financial experts and writers often tout the Roth 401k's main selling point: when the money is withdrawn in retirement, it won't be taxed. Well, that's not entirely true. Employer contributions to Roths are different.

Source: Bc.edu, January 2018

New Jersey Legislation Would Require Non-Fiduciary Disclosures

Abstract: Legislation is before the New Jersey legislature that would require certain disclosures by non-fiduciary investment advisors regarding their fiduciary status with clients.

Source: Asppa.org, January 2018

Changing Retirement Plan Administrative Services Providers: Considerations and Pitfalls for Employers

Abstract: An employer's selection of a third-party administrative services provider for its retirement plan is a fiduciary exercise. This means the process by which the employer reaches its decision must be prudently undertaken. It is therefore imperative that an employer pay close attention to the details of, and thoroughly document, the process it follows in selecting or changing its TPA.

Source: Stevenslee.com, January 2018

DOL Sues Retirement Plan Fiduciaries for Misusing Plan Assets

Abstract: A federal district court judge entered a judgment requiring Michael Lewis, former president of Acme Orthotics and Prosthetic Laboratories Inc., to restore $128,535.75 in losses owed to the company's Profit Sharing 401k Plan and Trust.

Source: Planadviser.com, January 2018

Class Action Lawsuit Isn't the Only Fear

Abstract: Most plans aren't big enough to have a class action lawsuit against them, but they have other fears that plan sponsors aren't even aware of. A plan can be targeted by the Department of Labor for an audit, and an audit can be painful and as costly as any lawsuit.

Source: Jdsupra.com, January 2018

Legislation to Promote Retirement Plan Lifetime Income Options Introduced

Abstract: Reps. Tim Walberg and Lisa Rochester have introduced the Increasing Access to Secure Retirement Act (H.R. 4604), which is legislation intended to clarify and simplify rules under which retirement plan sponsors may offer certain lifetime income investments to their plans' participants.

Source: Ascensus.com, January 2018

How to Boost Plan Participation Rates

Abstract: A variety of worker concerns, as well as other factors, could be affecting the participation and retirement readiness of the employees of your organization. Here are a few ways you can address common concerns and increase plan participation rates.

Source: Planpilot.com, January 2018

Advisers Are Apparently Ignoring Cybersecurity Threats

Abstract: Only 27% of RIAs surveyed by TD Ameritrade suggest that cybersecurity issues, even when very broadly defined, are likely to impact client portfolios during 2018; experts suggest this is just wishful thinking.

Source: Planadviser.com, January 2018

Bill to Create Missouri Secure Choice Savings Program Introduced

Abstract: Missouri is the latest state whose legislature has before it a measure that would establish a state-run program for employees whose employers do not offer a retirement plan.

Source: Napa-net.org, January 2018

PBGC Publishes Final Rule on Missing Participant Program

Abstract: Pension Benefit Guaranty Corporation published a final rule that expands its program to track and handle the benefits of missing DC retirement plan participants. The PBGC Rule was issued on the heels of recent guidance by the US Internal Revenue Service on the appropriate steps for qualified plans to take to locate missing participants.

Source: Morganlewis.com, January 2018

Despite an Uncertain Fate, DOL Fiduciary Rule Leaves Its Mark

Abstract: There's no doubt that the DOL fiduciary rule is prompting changes in advisors' practices. Advisors are moving further toward fee-based compensation, and predominantly fee-based advisors and RIAs are the only advisor segments that are growing.

Source: Marketstrategies.com, January 2018

What Are Plan Committees Responsible For?

Abstract: Committees serve at the pleasure of an appointing entity, usually a board of directors that gives them discretionary authority over key aspects of plan operations, investments, and administration. Committees are accountable to that appointing entity for their actions.

Source: Fiduciaryplangovernance.com, January 2018

HP Scores 9th Cir. Win in Challenge to Stock in 401k Plan

Abstract: Hewlett-Packard Co. is the latest major company to defeat a lawsuit by workers who say they lost out on retirement savings by investing in company stock. The workers failed to show that HP executives took steps to conceal a corporate fraud related to the company's controversial acquisition of British software maker Autonomy Corp., the U.S. Court of Appeals for the Ninth Circuit said Jan. 9.

Source: Bna.com (registration may be required), January 2018

Retirement and Financial Wellbeing

Abstract: This paper looks at the relationship between retirement security and financial wellbeing, because, without an appropriate degree of financial wellbeing, retirement solutions like automatic enrollment may be ineffective.

Source: Ebri.org, January 2018

The Impact of Tax Reform on Qualified Plans and Fringe Benefits

Abstract: The Act makes changes to the rules governing qualified plans (such as 401k plans and pension plans) and fringe benefit plans. These changes generally apply to plan years beginning after December 31, 2017. This is a review of those changes.

Source: Drinkerbiddle.com, January 2018

Fiduciary Fundamentals for 2018

Abstract: In both teaching and spirit, Trust Law instructs ERISA. Trusts are characterized by the relationship between the trustee and the beneficiary of the assets dominated by the former's fiduciary duties to the latter. The relationship between the trustee and beneficiary is measured and recognized not by the result of the interaction but the sincerity of the behaviors that yield the result.

Source: 401khelpcenter.com, January 2018

Developing Investment Policy and Structure

Abstract: The challenge for plan sponsors comes when trying to satisfy a wide range of participant investment styles, while also maintaining simplicity to help ease participants' decision-making and minimize overall plan and participant risk. This article reviews four key considerations for your investment policy and selection.

Source: Planpilot.com, January 2018

2018 IRS VCP User Fee Winners and Losers

Abstract: Simplification of IRS' user fees may be easier to memorize, but will be more costly for many common plan errors submitted under the Voluntary Correction Program.

Source: Conduent.com, January 2018

2018 Compliance Calendar for Defined Contribution Plans

Abstract: This is a month-by-month chart of compliance items that a DC plan sponsor should address throughout the year in order to retain the qualified status.

Source: Watkinsross.com, January 2018

IRS Modification of User Fees for VCP Submissions Will Negatively Impact Small Plans

Abstract: The new fee structure is based on a plan's total asset value and represents a significant departure from the historical methods the IRS used to assess VCP user fees. While the new structure will significantly lower the user fee for some applicants, it raises the fees for others (particularly small plans).

Source: Relius.net, January 2018

Bill Would Provide New Safe Harbor for Annuity Provider Selection

Abstract: The bipartisan bill clarifies and strengthens existing rules to make it easier for retirement plan sponsors to provide guaranteed lifetime income products as part of their employee benefits. It intends to amend ERISA and lays out specific criteria for selecting an annuity benefit provider.

Source: Planadviser.com, January 2018

Transfers from a Non-ERISA 403b to an ERISA Plan

Abstract: Can a non-QCCO (qualified church-controlled organization) transfer assets to an ERISA 403b plan from a non-ERISA 403b that is part of a multiple employer plan and is not the lead employer in the MEP but a participating one?

Source: Ntsa-net.org, January 2018

Frequently Asked Questions About 401k Plan Research

Abstract: The Investment Company Institute has updated their FAQ on 401k retirement plans. Some of the questions covered include: What is a 401k plan and how does it work? How have 401k plans grown since their introduction? What are the benefits of investing in a 401k plan? Is there a limit to how much an employee and employer can contribute to a 401k plan?

Source: Ici.org, January 2018

401k Auto-Enrollment Doesn't Stop Workers From Taking on More Debt

Abstract: The auto-enrollment trend has grown increasingly more commonplace in the workforce as companies look for ways to combat growing employee debt, particularly among younger generations (who typically own more student debt, but who also lack extensive financial literacy). But it's not exactly the silver bullet to solving the many complications plaguing retirement overall.

Source: Hrdive.com, January 2018

Retirement Pros Reveal Their Own Best Interests When It Comes to Their Retirement Plans

Abstract: Retirement pros spend a lot of time trying to convince people anxiety is not in the best interest of retirement savers. But what about the retirement professionals own best interest when it comes to their retirement plans? What could retirement savers learn about their best interests when they discover how professionals manage their own personal retirement concerns.

Source: Fiduciarynews.com, January 2018

Why the New IRS VCP Fees Are Bad for Small Business, TPAs, and Retirement Plans

Abstract: At a time when employers need more encouragement to help employees save for retirement, the trend at the IRS does the exact opposite. The increased risk that the employer takes on due to a lack of communication with the IRS, coupled with the increased expense of correcting any failure, is a move in the wrong direction.

Source: Ferenczylaw.com, January 2018

Eaton Execs Win Battle Over Retirement Plan Stock

Abstract: Four Eaton Corp. executives scored an appeals court victory in a case accusing them of wrongly allowing workers to continue investing retirement savings in company stock. The executives didn't have an option that was clearly better than letting workers continue to invest in Eaton stock during a period when its price fell more than 15 percent, the U.S. Court of Appeals for the Sixth Circuit ruled Jan. 8.

Source: Bna.com (registration may be required), January 2018

Vanderbilt Can't Shake Suit Over Retirement Plan Fees

Abstract: Vanderbilt University is the latest school to lose an early round in litigation challenging the fees and investment options in its retirement plan. A federal judge on Jan. 5 largely refused to dismiss a proposed class action accusing the school of running a retirement plan with excessive administrative fees, too many service providers, and high-fee investment options.

Source: Bna.com (registration may be required), January 2018

New Tax Law Provides Additional Breathing Room for Repayment of Retirement Plan Loans

Abstract: One option a terminated employee had with an outstanding plan loan was to "rollover" an offset by contributing to the amount of the unpaid loan balance to an IRA with 60 days of leaving. Effective for tax years beginning in 2018, the Tax Cuts and Jobs Act extends the rollover deadline from 60 days to the due date of the employee's tax return including extensions.

Source: Retirementplanblog.com, January 2018

Dispelling a Mistaken Belief About the Fiduciary Rule

Abstract: There had been a common belief among advisors that fiduciary status could be avoided by presenting a list of investments to plan sponsors. It was thought that since the list did not "recommend" any particular investments, it could not be a fiduciary recommendation.

Source: Ntsa-net.org, January 2018

Technology, Language and Educational Capabilities: Key Levers in the DC Market

Abstract: While DC plan providers are vetted stringently on their respective abilities to provide personalized, proactive client service and customized plan design, there are other factors that are essential to demonstrate in the recordkeeping suite. These include: technology, language, and educational capabilities.

Source: Marketstrategies.com, January 2018

Top 401k Trends for 2018

Abstract: Author identifies 11 changes that many leading-edge employers will make to their 401k plans in 2018. Nearly all of these changes result in little or no cost to plan sponsors.

Source: Lawtonrpc.com, January 2018

Tax Reform Prompts Visa to Raise 401k Match for Employees

Abstract: Visa said on Monday it will strengthen contributions to employees' 401k savings plans, as a result of the recently passed GOP tax reform.

Source: Cnbc.com, January 2018

Health Savings Account vs. 401k, Which Is Better for Savers?

Abstract: Maxing out contributions to a health savings account before contributing the maximum amount to a 401k plan could be a better strategy for some retirement savers. That's because the benefit of tax-free withdrawals could outweigh the benefit of an employer's match.

Source: Benefitnews.com, January 2018

401k Plan Data, Can It Be Hacked?

Abstract: Failure to deal with cybersecurity issues could be a fiduciary breach under these rules and fiduciaries could have personal liability for the resulting losses, for example, if hackers are able to steal plan assets or fraudulently obtain distributions online by pretending to be participants. Participants whose personal accounts are hacked might also have claims against fiduciaries who failed to protect their data.

Source: 401ktv.com, January 2018

DOL Extends QPAM Relief to Five Financial Institutions

Abstract: The DOL has recently extended the relief previously granted to five financial institutions which allows these banks to continue to rely on the QPAM exemption (Prohibited Transaction Exemption 84-14). The QPAM exemption permits ERISA plans and comingled funds to engage in transactions with "parties in interest" to those ERISA clients without running afoul of ERISA's prohibited transaction rules.

Source: Usbenefits.law, January 2018

Liquidity Fees and the Fiduciary Duty of Best Execution

Abstract: Retirement plan fiduciaries must understand the expenses their participants pay to make trades and access investments, but their duty to monitor and ensure reasonableness is not limited to the issue of pricing alone.

Source: Planadviser.com, January 2018

Voluntary Correction Program User Fees Changes

Abstract: The IRS has simplified the user fees charged for most submissions made under the Voluntary Correction Program. The total amount of net plan assets determines the applicable user fee. Most alternative or reduced fees that were part of previous revenue procedures no longer apply.

Source: Irs.gov, January 2018

Tax Law's Pass-Through Provision Could Harm 401k Plans

Abstract: The new tax law's provision on pass-through businesses is proving to be one of the most challenging to dissect, and it's one that some retirement pundits are eyeing with concern. Some industry groups say the pass-through rules could become the most impactful part of the law for 401k plans.

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

Retirement Readiness -- How Do We Compare?

Abstract: This article compares the retirement system of Australia, the United Kingdom, and the United States. The objective is to discover different areas where each country excelled and from which the other two could learn.

Source: Bpsm.com, January 2018

Nationwide Spurred by Tax Law to Give Bonuses, Bump 401k Match

Abstract: Nationwide Mutual Insurance Co. will pay $1,000 bonuses to about 29,000 employees and increase matching 401k contributions for all its associates. The move is a response to the new tax law enacted by Congress and signed by President Donald Trump in December, a Nationwide spokesman told Bloomberg Law.

Source: Bna.com (registration may be required), January 2018

Major Problem Reported With 401k Auto Enrollment

Abstract: The benefits of automatic enrollment in 401ks are all but a given, and a major reason Richard Thaler, a behavioral economist at the University of Chicago, won last year's Nobel Prize in economics. But now new research has arrived that could wreck it all.

Source: 401kspecialistmag.com, January 2018

The Plan Committee: Should You Have One?

Abstract: Plan sponsors are not legally compelled to set up committees. Most standardized plan documents give plan sponsors the flexibility to set one up or not. But just because you are not required to do something doesn't mean it's not a good idea.

Source: Fiduciaryplangovernance.com, January 2018

Lesser-Known Tax Reform Provisions That May Affect Retirement Plan Sponsors

Abstract: President Trump signed into law the Tax Cuts and Jobs Act. While there are few provisions that directly affect retirement plans, there are a few lesser-known provisions of the new law that may indirectly affect retirement plan sponsors.

Source: Cammackretirement.com, January 2018

How Wall Street Hopes to Thwart 401k Hackers

Abstract: The industry-led project, called Sheltered Harbor, already is known to back up data for savings and checking accounts. But quietly, it's wrapping in data on retail brokerage accounts at some of the nation's largest firms, according to participants. And ultimately, the goal is to expand it to an even heftier pool of 401k accounts and pension funds, whose breach could upend global markets.

Source: Bloomberg.com, January 2018

New Yorker Cartoon Considers 401ks

Abstract: A New Yorker cartoon by Trevor Spaulding is cute, but -- spoiler alert -- it's not quite right.

Source: Bc.edu, January 2018

IRS Makes Major Change in Retirement Plan VCP Fees and Other Fees

Abstract: The IRS has issued Internal Revenue Bulletin (IRB) 2018-1, which is this year's annual update describing procedures and user fees for obtaining agency guidance, including opinion and determination letters, private letter rulings, etc. It also updates fees for submissions under IRS correction programs.

Source: Ascensus.com, January 2018

PBGC Issues Final Regulations for Terminating Defined Contribution Plans

Abstract: The Pension Protection Act of 2006 added ERISA Section 4050(d) which authorized the PBGC to establish a program similar to its existing Missing Participants Program for defined contribution retirement plans and professional service organizations with fewer than 25 active participants. On December 22, 2017 the PBGC issued final regulations making the program available to defined contribution plans and small professional service plans terminating on or after January 1, 2018.

Source: Wagnerlawgroup.com, January 2018

Hurricane Relief for Distributions and Loans to Participants in Puerto Rico Retirement Plans

Abstract: The Puerto Rico Treasury Department is providing special relief for distributions and loans from Puerto Rico qualified and dual-qualified retirement plans following Hurricane Maria. Under Administrative Determination No. 17-29, Puerto Rico residents affected by the hurricane may take distributions from their qualified retirement plans at lower tax rates. Additional relief is available for outstanding plan loans.

Source: Towerswatson.com, January 2018

Fiduciary Governance: Doing It Right Matters

Abstract: Any organization that sponsors a regulated retirement plan needs a blueprint for compliance and a system for governing the plan that integrates with its overall business risk strategy. This article presents five tips that are fundamental to an integrated compliance solution.

Source: Rolandcriss.com, January 2018

Some Benefit Limits for Puerto Rico Plans Are Different From U.S. Plans

Abstract: The Puerto Rico Treasury Department issued Circular Letter of Tax Policy 17-02 formally announcing the key pension limits for 2018, as required by the Puerto Rico Internal Revenue Code. Different limits and rules for retirement plans qualified in Puerto Rico may cause some operational issues for plan sponsors.

Source: Planadviser.com, January 2018

Details From the Retirement Plan Simplification and Enhancement Act

Abstract: Alongside numerous proposed changes, employees who work for three consecutive years with at least 500 hours of service each year would have to be made eligible to participate in an employer's plan, but would be excluded from top-heavy and nondiscrimination testing.

Source: Planadviser.com, January 2018

Time for SEC to Take Fiduciary Baton From DOL

Abstract: With the core of the DOL fiduciary rule in place and the rest of it delayed for 18 months, can advisers expect all to be quiet on the fiduciary front in 2018? In a word, no. The regulatory baton has been passed from the DOL to the SEC and it's likely we will see an SEC fiduciary rule proposal by midyear.

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

How Can Fiduciaries Use New Tax Cuts to Nudge 401k and IRA Retirement Savers?

Abstract: There's a chance for savers to increase the odds they'll retire in comfort thanks to the 2017 tax law. Here's how, but the window of opportunity will close fast.

Source: Fiduciarynews.com, January 2018

Annual IRS Revenue Procedure Includes Surprising Change to User Fees

Abstract: This year's update includes a significant fee change surprise for the VCP program; and while changes in past years typically went into effect about a month after they were announced, this year's changes are effective immediately.

Source: Erisapracticecenter.com, January 2018

Five Plan Sponsor Resolutions for 2018

Abstract: Sometimes, you need to step back and see the big picture. This applies to advice to plan sponsors as well, because the recommendations they get are sometimes so detailed that big compliance issues get lost in the shuffle. Here are five resolutions to help plan sponsors get a grip on the most important compliance issues.

Source: Cohenbuckmann.com, January 2018

DOL 2018 Inflation-Adjusted Penalties

Abstract: The DOL has published its final rule to adjust for inflation the civil monetary penalties assessed or enforced in its regulations.

Source: Benefitsforward.com, January 2018

2017 Closes With a Bang for Average 401k Balances

Abstract: An analysis by the nonpartisan Employee Benefit Research Institute found that the average account balance for younger (25-34), less tenured (1-4 years) workers gained 43% in 2017. What about older workers? Well, the average 401k account balance of those aged 55-64 with more than 20 years of tenure ended the year nearly 20% (19.5%) higher than they began the year.

Source: Asppa.org, January 2018

Retirement Plan Trends to Watch in 2018

Abstract: Plan sponsors are ramping up benefits education efforts and increasingly empowering employees to take charge of their healthcare and retirement savings. They're doing this in a variety of ways outlined here.

Source: 401ktv.com, January 2018

Why Auto Portability Makes Everything Better

Abstract: In the realm of retirement savings, auto portability is the public policy equivalent of bacon, great by itself, but even better when mixed with other retirement initiatives. In fact, for many public policy plans to be palatable, auto portability is an essential ingredient.

Source: 401kspecialistmag.com, January 2018


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