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February 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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Missing Participants and Required Minimum Distributions Cause Headaches for Plan Fiduciaries

Abstract: Unfortunately for employers, the DOL has been aggressively challenging the adequacy of employer efforts to locate and contact missing participants. Numerous plan sponsors have received letters from the DOL during missing participant audits that threaten sanctions against plan fiduciaries for alleged violations of ERISA, despite a lack of definitive guidance on exactly how employers should follow up on a variety of challenges.

Source: Winston.com, February 2018

Retirement Offerings in the Fortune 500: A Retrospective

Abstract: The last two decades have witnessed a sweeping shift in retirement offerings from large employers. This study takes a historical look at the primary retirement plans offered by current Fortune 500 companies between 1998 and 2017, thus showing how their retirement programs have evolved over the last 20 years.

Source: Towerswatson.com, February 2018

Mechanisms Behind Retirement Saving Behavior

Abstract: This TIAA Institute study identified the behaviors that influence employees' decisions regarding their retirement plans. In opt-in plans, efforts to get employees to increase their savings above the default rate are likely to be fruitful if they focus on improving financial literacy and understanding of exponential growth. While in automatic enrollment environments, efforts targeted at procrastination tendencies are likely to be particularly effective.

Source: Tiaainstitute.org, February 2018

Improving Participant Outcomes Through Re-Enrollment

Abstract: A defined contribution plan "re-enrollment" has become a retirement plan industry best practice. This 8-page white paper addresses the most common preconceived notions around re-enrollment's and provides fiduciaries the context, data, and legal support to evolve toward an informed embrace of a re-enrollment's value.

Source: Qualifiedplanadvisors.com, February 2018

Compliance Checklist 2018 for Plans That Are Subject to ERISA

Abstract: This 43-page Compliance Checklist incorporates defined benefit, defined contribution, and ERISA 403b requirements and provides information on the materials that will need to be file, filing due dates, and agencies to which the filings should be made.

Source: Prudential.com, February 2018

Georgetown University Hit With 403b Excessive Fee Suit

Abstract: The suit alleges that rather than "...leveraging the Plans' substantial bargaining power to benefit participants and beneficiaries, Defendants failed adequately to evaluate and monitor the Plans' expenses and caused the Plans to pay unreasonable and excessive fees for investment and administrative services."

Source: Ntsa-net.org, February 2018

More Than Half of Americans Want to Save More Money - Retirement a Top Reason

Abstract: A new LIMRA Secure Retirement Institute survey found the top financial priority for 54 percent American household is to save more money. Other financial priorities include paying down debt, creating a long-term financial plan and building better spending habits. Of those who said they wanted to save more money, 56 percent cited retirement as a top reason.

Source: Limra.com, February 2018

Two-Thirds of Millennials Have Saved Absolutely Nothing for Retirement

Abstract: Most U.S. millennials aren't saving for retirement, and those who are saving (only 5%) are falling short of the mark, according to a new report from the National Institute on Retirement Security. The study found that 66.2% of employed millennials have nothing saved for retirement, and only 34.3% of them participate in their employer's retirement plan.

Source: Hrdive.com, February 2018

401k Plan Leakage and the Bipartisan Budget Act of 2018

Abstract: The Bipartisan Budget Act of 2018 (H. R. 1892) contains several provisions that have potential implications when it comes to 401k plan leakage. Certain provisions could increase plan leakage by making it easier to take hardship withdrawals.

Source: Ebriorg.wordpress.com, February 2018

Securing Your Organization's Data

Abstract: Data security is a major concern for all organizations. There are many elements involved in protecting your own employees' and your clients' personally identifiable information. Conducting a self-assessment and developing your organization's internal policies are a good starting point. But it is important to recognize that the job of data protection will never be complete; there will always be new items to add to your security to-do list.

Source: Cammackretirement.com, February 2018

Top 30 401k Plans of 2016 Report

Abstract: BrightScope, a Strategic Insight company, is pleased to announce the Top 30 401k Plans of 2016 report. BrightScope's Top 30 list is comprised of large 401k plans with high overall quality, as measured by the BrightScope Rating.

Source: Brightscope.com, February 2018

Shake Up Financial Education, Paper Says

Abstract: Poor savings rates, high debt levels, and the frequent incidence of living paycheck-to-paycheck are among the ingredients in the recipe for financial stress. Financial education can be an antidote, but not in the traditional ways it is provided suggests a recent study.

Source: Asppa.org, February 2018

Appeals Court Declares Plan Service Provider Transamerica Not a Fiduciary, Not Guilty of Breach

Abstract: The plaintiffs, who were participants in several ERISA-governed retirement plans for which Transamerica provided investments and services, alleged that Transamerica was a plan fiduciary and breached its duties in that role. The breaches allegedly occurred in Transamerica's negotiating with plans the compensation for its services, in withdrawal of fees from participant accounts, and in its receipt of revenue sharing payments from investment managers associated with the plans.

Source: Ascensus.com, February 2018

Retirement Plan Best Practices: Plan Monitoring

Abstract: Monitoring your investment menu managers, your plan providers, and plan fees is an important part of your overall fiduciary responsibility. This white paper looks at best practices and the standards should you be following in your monitoring practices. Throughout the paper, you'll find checklists that may be helpful in building and maintaining your plan monitoring processes.

Source: Arnerichmassena.com, February 2018

Cybersecurity and ERISA Retirement Plans: The Financial Consultant's Role

Abstract: There is no explicit cybersecurity duty that applies to consultants under ERISA. Despite this, plan consultants need to become educated on the cybersecurity landscape surrounding plans, in order to assist plan sponsor clients in fulfilling their fiduciary duties.

Source: 401ktv.com, February 2018

Less Than Half of Workers Contribute to Their 401k

Abstract: Across the board, Americans could be doing better when it comes to saving for retirement. Much better, in fact. According to a study from Edward Jones, only 49 percent of U.S. workers are actively participating in employer-sponsored 401k plans. Just 37 percent are contributing to an individual retirement account.

Source: 401kspecialistmag.com, February 2018

Participants Improving Response to Volatility

Abstract: Data from the February market volatility suggests that retirement plan participants may be improving their response to volatility. Although trading activity reflected significant outflows from equities when the Dow fell 1,175 points on February 5th, a significant amount of that money moved into balanced funds and target date funds. This represents a change from the past, when 80% of the money would go to cash and 20% would go to bond funds.

Source: Qualifiedplanadvisors.com, February 2018

IRI Issues Retirement Security Blueprint

Abstract: The Insured Retirement Institute has issued a Retirement Security Blueprint, meant to guide the group's dialogue with Congress and the Administration about improving Americans' retirement outlook. The detailed report is aimed at expanding opportunities to save and increasing access to lifetime income products, among other efforts.

Source: Planadviser.com, February 2018

SEC Chairman Outlines Goals for a New Fiduciary Standard

Abstract: An SEC fiduciary rule should provide investors clarity about the role of their adviser, enhanced protection and offer regulatory coordination, Chairman Jay Clayton said Friday. The SEC and DOL have promised to work together on investment-advice standards.

Source: Pionline.com, February 2018

Fiduciary Duties Would Expand Under Maryland Bills

Abstract: Legislation before the Maryland legislature would create a fiduciary duty for agents and investment advisers, as well as broker-dealers, to act "primarily for the benefit" of their clients.

Source: Ntsa-net.org, February 2018

More Employers Are Upgrading Their DC Plans

Abstract: Employers are upgrading their defined contribution plans according to a Willis Towers Watson. WTW found that more employers are adding automatic enrollment and Roth plan features to their 401k plans, increasing their contributions, reducing the number of investment choices and being more transparent about recordkeeping fees.

Source: Hrdive.com, February 2018

Massachusetts Brings Enforcement Action Based on Violations of Fiduciary Rule Compliance Policies

Abstract: Although the Complaint alleges violations of state law only, it has the effect of challenging a financial institution's compliance with the Fiduciary Rule and "Best Interest Contract Exemption," which became applicable on June 9, 2017, and raises alarm bells that the states are stepping in to regulate the retirement advice market in the absence of enforcement by the DOL or private litigants to date.

Source: Groom.com, February 2018

Retirement Plan Sponsors Looking to Protect Themselves From Litigation

Abstract: Fee lawsuits have exponentially increased over the past two years. Retirement plan sponsors of all sizes must be vigilant this year to protect themselves from plan litigation relate to high fees, lack of investment options or poor investment options and breach of fiduciary duty.

Source: Benefitnews.com, February 2018

Massachusetts Heats Up Fiduciary Rule Discussion With Cold-blooded Enforcement

Abstract: Financial services firms occasionally implement programs for their representatives to receive incentives in connection with specific product or service offerings. For as long as firms have used such programs, securities regulators have scrutinized them. The latest iteration of regulatory attention to sale incentives signals a shift in strategy that carries broader implications for financial firms.

Source: Winstead.com, February 2018

Fidelity Stable Value Fund Suit Gets Final Dismissal From Appellate Court

Abstract: The court said the plaintiffs claim that Fidelity agreed to overly conservative investment guidelines in a failed effort to lock up all wrap coverage so that its competitors would not be able to obtain such coverage made little sense.

Source: Planadviser.com, February 2018

Bipartisan Budget Act of 2018 Brings Changes for Retirement Plans

Abstract: The Bipartisan Budget Act of 2018 was passed into law on Feb. 9, 2018 and introduces some unexpected changes for retirement plans. The most significant of the Act's changes for retirement plans reduces the existing restrictions on hardship distributions from 401k and 403b plans.

Source: Icemiller.com, February 2018

Tax Reform's Impact on 401k Plan Loan Offset Treatment

Abstract: The recent Tax Cuts and Jobs Act of 2017, enacted on Dec. 22, 2017, contains a few rules that will impact benefit administrators. This article focuses on retirement plan administrators' and HR benefits managers' obligations relating to plan loan offset amounts.

Source: Hklaw.com, February 2018

Funds, Fees, and Annuities, a Guide to 403b Investment Options

Abstract: Unlike qualified plans under Section 401, 403b plans are restricted to only three investment options. This article discusses the differences between these three options (annuities, custodial accounts, and retirement income accounts) including their legal definitions, permitted investments, asset commingling, contract exchanges and transfers, distributions, excise taxes, and fees.

Source: Greensfelder.com, February 2018

Making Sure 401k & 403b Fees are Necessary and Reasonable - Part Three

Abstract: As a plan sponsor, you are required to understand all of the fees that are associated your organization's retirement plan benefit program. This article wraps up the three-part series on the subject.

Source: Fiduciaryplangovernance.com, February 2018

Fiduciary Conduct Is Good for Business

Abstract: The focus on compliance obscures the compelling business case that fiduciary conduct (1) is what clients want, (2) is operationally efficient and reliable, (3) strengthens client-adviser relationships and makes them more enduring, (4) provides the adviser with greater pricing power, and (5) enhances the advisory firm's brand and market valuation.

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

Tax-Reform Changes Lead Some Employers to Raise 401k Matches

Abstract: A handful of large U.S. corporations announced they are raising the employer match for their 401k retirement plans or are making other changes in their benefit plans in the first month after a tax reform law was signed by President Trump. And nearly half of companies surveyed said they are considering taking such an action this year or next.

Source: Blr.com, February 2018

Risk vs. Readiness: The 401k Plan Annuity Conundrum

Abstract: Annuities present some hurdles for plan sponsors when it comes to plan administration and managing costs for the retirement plan and its participants. Fiduciary risk still looms large also. Because annuities must pay out over the lifetime of the purchaser, plan sponsors have to select a provider that will be able to pay benefits for a long time.

Source: Shrm.org, February 2018

Which Employees Are Eligible for a 403b Plan?

Abstract: This is a quick review of which employees are eligible for a 403b plan.

Source: Qbillc.com, February 2018

Risk Exposure: Company Stock

Abstract: PSCA's recent survey shows that 18% of plans still offer company stock, and that 14% of all plan assets are invested in company stock. If you offer company stock as an investment option in your retirement savings plan, you may want to take another look at what you offer and how those investments are communicated to participants.

Source: Psca.org, February 2018

401k Plan Sponsors Must Separate These Fiduciary Rule Facts From Fiction

Abstract: An Interview with ERISA attorney David Levine. Sorting what is fact from fiction is something plan sponsors should focus on right now. His advice to plan sponsors and service providers is "that while there are compliance and litigation challenges for plan sponsors and service providers, the sky is not falling. Yes, there are bumps in the road but as the adage says, an ounce of prevention is worth a pound of cure."

Source: Fiduciarynews.com, February 2018

Managed Accounts: You Can't Always Get What You Want

Abstract: Due to limited product availability on recordkeeping platforms, plan sponsors may not be able to get what they want. But in looking at the choices they do have, they may be able to get plan participants what they need.

Source: Callan.com, February 2018

Expect Unexpected Events and Their Effects

Abstract: Unexpected events can be expected. Or should be. And doing so can help a retiree to be prepared. So suggests a recent report that has implications not only for retirees but also retirement plan professionals.

Source: Asppa.org, February 2018

Investment Committees Misnamed Causing Confusion by 401k and 403b Plan Sponsors

Abstract: Traditionally, the governing committee for 401k and 403b plans have been called "investment committees" which can cause confusion and might even be harmful. They should be called "retirement committees" or even "benefits committees." Here's why.

Source: 401ktv.com, February 2018

Section 404(c) Is the Exception, not the Rule

Abstract: Section 404(c) is a historically misunderstood part of ERISA, with misconceptions rampant even before the 404(a)(5) participant fee disclosure regulations added to the confusion. The general rule is that ERISA plan fiduciaries are liable for all aspects of selection and monitoring of plan investments, and are on the hook for any participant claims for fiduciary breaches should something go wrong. Section 404(c) is a limited exception to this general rule.

Source: Ntsa-net.org, February 2018

How Should We Handle It If We Accidentally Overfund Our 401k Match?

Abstract: This year, when the plan's TPA calculated the total match and profit sharing contributions for the year, it was discovered that employer funded more than was needed. What are the options for applying the amount overfunded? Can it be carried over and apply it to next year's contribution?

Source: Dwc401k.com, February 2018

What Is a Solo 401k Plan?

Abstract: Actually, there is no such thing as a "solo 401k" plan. You won't find it in the Internal Revenue Code. Solo 401k is a marketing term that some plan providers, like financial institutions and recordkeepers, have created to explain what is really a tax qualified 401k plan that meets the IRS definition of a "one-participant plan."

Source: Consultrms.com, February 2018

Fiduciary Liability Insurance, Why You May Need It

Abstract: Fiduciary liability insurance isn't the same thing as your ERISA bond and should never be viewed as a substitute for good fiduciary practices, but it is good to know you have backup if claims do arise.

Source: Cohenbuckmann.com, February 2018

ERISA Class Actions Settlements Cost Employers Nearly $1 Billion in 2017

Abstract: Class action settlements and court decisions related to 401k retirement plans in 2017 significantly affected the direction of ERISA litigation, according to the newest edition of an annual law firm report on workplace class action lawsuits.

Source: Blr.com, February 2018

Safe Harbor 401k Plans Make Sense for Many Businesses

Abstract: According to a 2016 study by SHRM, 68% of 401ks are safe harbor plans. But while the rules are straight forward and the benefits are significant, there are still many plans which have not yet implemented a safe harbor match of any kind. This article explores the requirements and share some examples of safe harbor plans.

Source: Belr.com, February 2018

Target Date Funds: Three Things to Consider

Abstract: This article addresses three major features common to most TDF's structure: asset allocation, management style, and fees. If not evaluated carefully -- on a manager-by-manager basis -- could result in a mismatch between an employer's goals and participant investment results.

Source: Psolve.us, February 2018

401k Investment Menu Best Practices

Abstract: Does your plan's 401k investment menu provide way too many investment options? Do you wonder how your 401k investment menu compares with the marketplace? This article takes a look at best practices regarding 401k plan investment menus.

Source: Lawtonrpc.com, February 2018

The Word on the Street on What 401k Plan Sponsors May Need

Abstract: Thanks to the web and through great materials by plan providers, most plans sponsors are finally understanding what they really need to manage their 401k plan. But, still too many don't, so this article is talking about things that 401k plan sponsor want or may need in running their plan.

Source: Jdsupra.com, February 2018

Fiduciary Rule Myths

Abstract: The best interest requirement may lead some to think that advisors have to meet an essentially impossible standard. As with a lowest-cost recommendation, a mandate to recommend the best investment is a myth...it just isn't true. Even the DOL has said so.

Source: Brokerdealerlawblog.com, February 2018

Firms May Need to Rethink DOL Rule After Scottrade Charges

Abstract: A decision by Massachusetts' regulators to file state charges against Scottrade by claiming it violated the Department of Labor fiduciary rule has surprised many industry analysts. In short, the state claims Scottrade ignored the policies and procedures it put in place starting June 9 to comply with the DOL rule.

Source: Advisornews.com, February 2018

Evaluating Roth and Pretax Retirement Savings Options

Abstract: There are two ways to get Roth account exposure: a Roth IRA or through a retirement plan that has a designated Roth account. While Roth IRAs have income eligibility limits, those do not apply to contributions within a 401k plan. Pretax contributions are generally preferable for people who expect their income tax rate to decrease in retirement. Having Roth accounts may make sense for tax diversification, flexibility and as a hedge against higher tax rates.

Source: Troweprice.com, February 2018

Lawyer Fighting DOL Rule Blasts Scottrade Fiduciary Charges

Abstract: Eugene Scalia, a partner with Gibson Dunn who represents the nine plaintiffs suing the Labor Department over its fiduciary rule, told the U.S. Court of Appeals for the 5th Circuit on Friday that Massachusetts' action Thursday against Scottrade for allegedly violating the fiduciary rule's Impartial Conduct Standards is "without merit," and will spark "private plaintiffs...to exploit the rule to concoct state law claims."

Source: Thinkadvisor.com, February 2018

Class Certified in ERISA Lawsuit Targeting NYU Retirement Plan

Abstract: The U.S. District Court for the Southern District of New York ruled this week to certify a sizable class of plaintiffs in ERISA lawsuit targeting two 403b retirement plans at New York University. The amended compliant explicitly names as a defendant one of the advisory firms supporting NYU's retirement plans.

Source: Planadviser.com, February 2018

Bay State Regulator Files Fiduciary Rule-Related Complaint

Abstract: The Massachusetts Securities Division has filed charges against a firm for knowingly violating its internal policies regarding implementation of the DOL fiduciary rule and taken a shot at the Department of Labor.

Source: Ntsa-net.org, February 2018

Why Defined Contribution Plan Innovation Is So Slow

Abstract: Major change comes with significant risk in the view of most senior managers while providing minimal benefit, not a recipe for success. That, in a nutshell, explains why innovation is so slow for 401k and 403b plans.

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

How to Think About Your 401k Vesting Schedule

Abstract: Your 401k plan's vesting schedule provides another way to tailor employee benefits to produce the combination of incentives and rewards that best fit your business.

Source: Forusall.com, February 2018

Making Sure 401k & 403b Fees are Necessary and Reasonable - Part Two

Abstract: As a plan sponsor, you are required to understand all of the fees that are associated your organization's retirement plan benefit program. This article continues the series on the subject.

Source: Fiduciaryplangovernance.com, February 2018

Recent Tax Acts Impacting Retirement Plans

Abstract: Over the past couple of months, there have been two tax acts signed into law that contain provisions related to retirement plans. This article reviews the tax acts and their impact on retirement plans.

Source: Consultrms.com, February 2018

New Tax Law Causes Uncertainty for Some Hardship Distributions

Abstract: The Tax Cuts and Jobs Act indirectly changed one of the safe harbor bases for hardship distributions. For tax years 2018-2025, the new law limits casualty loss deductions to those occurring in a federally declared disaster area. Plans that use hardship distribution safe harbors that reference this deduction should consider how they will address requests for losses that occur outside of a federally declared disaster area.

Source: Conduent.com, February 2018

Are Your Plan Files Complete? What an Auditor Will Want to See

Abstract: All plan fiduciaries should keep an "audit file" with the documents that determine how the plan is run and required disclosures. This file starts with the plan and all amendments, but should contain lots of other things.

Source: Cohenbuckmann.com, February 2018

Employees Cash Out 401ks in Record Numbers

Abstract: The Bureau of Labor Statistics reports that today's mobile workforce is changing jobs nearly a dozen times. For 35- to 44-year-olds, a little over a third take jobs that last less than a year. It doesn't allow for a lot of time to sock away money in a 401k account and as a result, many workers are cashing out what little they have.

Source: Workforce.com, February 2018

Fee and Industry Shifts Mean Retirement Plan Providers Can Play Hardball

Abstract: A look back at how Fidelity will charge new plan sponsor clients on its platform who choose Vanguard products makes visible the hard-nosed competition that defines the retirement plan recordkeeping and brokerage industries.

Source: Planadviser.com, February 2018

Self-Reporting to SEC of 12b-1 Conflicts of Interest Not Without Risk

Abstract: Offering some preliminary commentary on the SEC's newly announced adviser 12b-1 fee conflict of interest "amnesty" program, as it's being referred to in the trade media, Wagner Law Group attorneys warn of the inherent risks in the self-reporting of violations.

Source: Planadviser.com, February 2018

2018 Key Administrative Dates and Deadlines for Calendar-year DC Retirement Plans

Abstract: This calendar provides key administrative dates and deadlines for defined contribution plans subject to ERISA and the Internal Revenue Code.

Source: Milliman.com, February 2018

How to Sell and Deliver a Financial Wellness Program

Abstract: Financial wellness. Financial literacy. Retirement readiness. These loosely-defined buzzwords have been cropping up across the world wide web in recent years. Whatever the term, more holistic services that were once reserved for private wealth clients have morphed, gained scalability and flowed downstream to participants in retirement plans. In a profession where differentiation is crucial, leveraging a financial wellness program can help you stand out.

Source: Fi360.com, February 2018

GROW Act Before the U.S. House

Abstract: The Give Retirement Options to Workers (GROW) Act, H.R. 4997, is intended to safeguard the multiemployer pension plan system by authorizing the creation of a new type of retirement option that combines key features of defined benefit and defined contribution plans.

Source: Asppa.org, February 2018

DOL Settles with "Fiduciary Firm" Over $16 Million 401k Fraud

Abstract: The DOL announced that it has entered into a settlement agreement with U.S. Fiduciary Services and three of its subsidiaries that provide for payment of more than $7 million to 42 retirement plans that suffered losses because of investments in fictitious loans made by Florida-based First Farmers Financial.

Source: 401kspecialistmag.com, February 2018

How Does Household Debt Affect Retirement?

Abstract: While there is extensive media coverage regarding Americans' lack of retirement savings, a much less discussed topic is the growing amount of debt that Americans carry into retirement. Larger mortgages, higher student loans and a greater overall comfort with debt than displayed by earlier generations has increased the average debt for households approaching retirement by nearly 160%.

Source: Thecapitalideas.com, February 2018

Retirement Planning More a Focus for Those Participating in Retirement Plans

Abstract: An analysis from Pew Charitable Trusts of data from a nationally representative internet survey of private-sector workers shows a correlation between access to and participation in workplace-based retirement savings programs and more planning and saving.

Source: Planadviser.com, February 2018

Workplace Retirement Plans Tend to Sharpen Focus on Financial Futures

Abstract: Are those without access to an employer-sponsored plan -- those who do not participate in available plans -- preparing for retirement in other ways? Are they prioritizing retirement savings outside of the workplace? This analysis of data from a nationally representative internet survey of private sector workers shows a correlation between access to and participation in workplace-based retirement savings programs and more planning and saving.

Source: Pewtrusts.org, February 2018

A (403b) Plan to Resolve Conflicts

Abstract: An employer with a 403b plan must have a written plan that identifies the plan's investment arrangements in order to satisfy the IRS regulatory requirements. But what happens if the terms of the 403b plan document conflict with the provisions of an investment arrangement identified in the 403b plan?

Source: Ntsa-net.org, February 2018

An Annual Retirement Plan Check-Up May be Just What the Doctor Ordered

Abstract: If you work with your employer's tax-qualified retirement plans, such as a 401k or pension plan, now is the time to consider implementing operational checkups for those plans to ensure that the plan is being administered in compliance with the plan's terms as well as applicable law. The article reviews what should be included in a retirement plan checkup.

Source: Laboremploymentperspectives.com, February 2018

401k Plan Sponsors Are Increasingly Hiring Fiduciary Advisers

Abstract: Employers sponsoring a 401k plan, especially small business owners, are increasingly hiring investment advisers who serve as fiduciaries to their retirement plan, new research suggests. About 70% of all 401k plans used an independent investment adviser -- separate from the plan's recordkeeper -- to assist with fiduciary responsibility in 2016, according to a new study from the Plan Sponsor Council of America.

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

401k Loan Policy Best Practices

Abstract: Plans sponsors who want to provide the flexibility of 401k loans while helping their employees avoid savings setbacks can start with good plan design and education. A good loan program encourages employees to think carefully before borrowing against their retirement savings and may even provide disincentives to such borrowing. Here are seven tips for a successful loan program.

Source: Forusall.com, February 2018

Gig Workers Saving for Retirement -- What's in Their Best Interest?

Abstract: If you are an active member of the gig economy, you don't need to wait for Congress to act to start saving for retirement. You can begin saving right now. And, depending on your specific situation, you may just be able to save faster than you think.

Source: Fiduciarynews.com, February 2018

Plan Compliance When the Watchdogs Are in the Dog House

Abstract: The IRS has decreased the number of returns audited to its lowest level since 2004, reduced staffing by 30 percent, and cut the number of criminal investigations initiated. This article focuses on the changes in the relationship of the IRS to the retirement plan administration community over this period of time.

Source: Ferenczylaw.com, February 2018

DC Plans in the US and the UK: Lessons From Across the Pond

Abstract: This 36-page paper addresses the differences between defined contribution plans in the US and the UK and the lessons that can be learned from these programs. The paper is a high-level overview of the legal, regulatory and policy framework governing DC plans in both jurisdictions. It provides an analysis of the shift away from defined benefit (DB) plans in the US and the UK, to the widespread use of DC plans by both countries as the primary way of providing workplace pensions.

Source: Eversheds-Sutherland.com, February 2018

Hardship Withdrawal Changes Under the New Budget Act

Abstract: The Bipartisan Budget Act of 2018 contains changes to the ways in which hardship withdrawals from qualified retirement plans are administered. The changes reviewed here are effective for plan years beginning after December 31, 2018.

Source: Consultrms.com, February 2018

Blizzard of Debt Melts Into Retirement

Abstract: Debt is accumulating like snow in a blizzard, we have long been told. And that load may not melt away quickly, it may linger, extending its chill seasons ahead to retirement. Looks at its longer-term effects.

Source: Asppa.org, February 2018

PSCA Finds Faster Start for Auto Enroll Programs

Abstract: While the most common default deferral remains 3% of pay (used by 36.4% of plans), more than half of those with automatic enrollment now have a default deferral rate higher than 3%, according to a new survey.

Source: Asppa.org, February 2018

Retirement Plans and Cybersecurity

Abstract: Cybersecurity is a topic that is routinely grabbing headlines across industries, and employee benefit plans are not immune to the risks of cybercrime. The best efforts to reduce these risks are multi-faceted approaches to protecting sensitive information, with employers, their plan participants, and their benefit providers all working in tandem to safeguard personal data.

Source: Sentinelgroup.com, February 2018

Hardship Withdrawals -- An Attractive Nuisance Becomes More Attractive

Abstract: President Trump has signed the Bipartisan Budget Act of 2018 into law, avoiding another federal government shutdown. That law includes provisions that make hardship withdrawals more attractive: removing barriers, increasing available monies, and removing the suspension of contributions.

Source: Psca.org, February 2018

Fidelity Finds Increase in Retirement Plan Millionaires

Abstract: The number of 401k savers with at least $1 million in their 401k increased to 150,000 at the end of 2017, up from 93,000 a year ago. The number of investors with $1 million in their IRA account rose to 152,000, an increase from 109,000 at the end of 2016.

Source: Plansponsor.com, February 2018

Many Workers Unaware of Tax Credit for Retirement Savers

Abstract: Nearly two in three American workers do not know about the Tax Credit for Retirement Savers, the Transamerica Center for Retirement Studies learned in a survey.

Source: Planadviser.com, February 2018

Hardship Withdrawal Changes Included in Budget Deal

Abstract: The bill calls for the Secretary of Treasury to amend regulations to delete the six-month prohibition on contributions to a retirement plan following a hardship withdrawal. The allowance of hardship withdrawals is also extended in the bill to contributions to a profit sharing or stock bonus plan, qualified non-elective contributions (QNECs) and qualified matching contributions (QMACs) and earnings on the contributions now allowed.

Source: Planadviser.com, February 2018

Millennials Embrace ESG Option in Bloomberg's 401k plan

Abstract: Millennials are the largest identifiable group that has elected to participate in the ESG-focused fund in Bloomberg's $2.5 billion 401k plan, said Cathy Bolz, global head of benefits at Bloomberg. Just under 1% of the plan's total assets are invested in the Parnassus Core Equity Fund, which focuses on socially conscious U.S. large-cap companies.

Source: Pionline.com, February 2018

Past, Present and Future of the DOL Fiduciary Rule

Abstract: All three branches of government have been engaged on a variety of fronts in determining the future course of the DOL Fiduciary Rule. Those proceedings appear to have reached a temporary lull. This article reviews the current "lay of the land" with respect to the DOL Fiduciary Rule and to look forward to anticipate what may lie ahead.

Source: Klgates.com, February 2018

Retirement Savers Flee Stocks as Market Slides

Abstract: After racing into equities in January, they did an about-face as markets fell. Savers moved into money and fixed-income funds, trading at close to three times the norm, according to Alight Solutions' 401k Index.

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

401k Plan Documents: Keeping All Your Ducks In a Row

Abstract: Many 401k tasks either require documents that should be retained or require documentation for future reference. This table lists several important documents that are smart to keep handy, either in the event of an audit, or to reference during the ongoing administration of the 401k.

Source: Forusall.com, February 2018

Making Sure 401k & 403b Fees Are "Necessary" and "Reasonable" - Part One

Abstract: As a plan sponsor, you are required to understand all of the fees that are associated your organization's retirement plan benefit program. This is a challenge because plan fee structures are often opaque, complicated (needlessly so) and, sometimes, downright misleading.

Source: Fiduciaryplangovernance.com, February 2018

Recordkeepers Kick Off the New Year by Enhancing Online Participant Education

Abstract: For the past two years there has been an industry-wide focus on employee retirement and financial wellness education, and the first weeks of 2018 indicate this trend will continue.

Source: Corporateinsight.com, February 2018

The Educated Fiduciary: How to Up Your Game

Abstract: For those fiduciaries self-aware enough to know there are things they need to learn, here are some suggestions for ways they can raise the bar in fulfilling their fiduciary responsibilities.

Source: Cohenbuckmann.com, February 2018

Retirement Provisions Included in Federal Budget Deal

Abstract: The two-year budget agreement that Congress passed in the early morning hours of Friday, Feb. 9 includes several tax policy changes affecting retirement plans.

Source: Asppa.org, February 2018

Tax Reform Bill Includes Extension of Time to Repay Retirement Plan Loans

Abstract: With sweeping tax reform going into full effect last month, many 401k participants are wondering how and if their plans will be affected. The answer to that question is: not much. The biggest news for 401k owners with regard to the new tax laws is the extension of payback dates on outstanding loans.

Source: Schneiderdowns.com, February 2018

Tips for Keeping Your Plan in Compliance

Abstract: It's important to develop review procedures in order to prevent mistakes in administering your plan. Left uncorrected, mistakes could readily jeopardize your plan's tax-favored status.

Source: Qbillc.com, February 2018

Plan sponsors Need to Google Their TPA's Principals

Abstract: Would you hire a plan provider with possible access to retirement plan assets that was convicted or sanctioned for financial improprieties? Sometimes you ask for trouble if you just don't do something as simple as doing a quick online search of the plan provider you've hired or are about to hire.

Source: Jdsupra.com, February 2018

2018 Pension Plan Limitations Not Affected by Tax Cuts and Jobs Act

Abstract: The Internal Revenue Service announced that the Tax Cuts and Jobs Act of 2017 does not affect the tax year 2018 dollar limitations for retirement plans announced in IR 2017-177 and detailed in Notice 2017-64.

Source: Irs.gov, February 2018

A Simple Guide for Meeting 401k Fiduciary Responsibilities

Abstract: It doesn't need to be difficult for employers meet their 401k fiduciary responsibilities and avoid liability. They just need to understand these responsibilities and take action in six key areas.

Source: Employeefiduciary.com, February 2018

Average Retirement Savings Balances Reach Six Figures in 2017

Abstract: Fidelity released its quarterly analysis of 401k and individual retirement accounts. The analysis reveals that IRA and 401k accounts continue to hit record levels. Increasing contributions and a strong stock market drove both the average 401k and IRA balances over six figures. The average 401k balance rose to $104,300, 13 percent higher than Q4 2016.

Source: Businesswire.com, February 2018

RadioShack Defeats Challenge to Stock Losses in 401k Plan

Abstract: RadioShack executives defeated a lawsuit accusing them of violating federal benefits law by allowing workers to invest in company stock despite knowing of the company's financial decline and impending bankruptcy.

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

401k Plan Nondiscrimination Testing

Abstract: To ensure a 401k plan is not favoring owners or highly paid employees, the IRS requires certain nondiscrimination testing is performed. The ADP measures the employee deferral contributions and the ACP measures the employer matching contributions. ADP/ACP testing must be completed annually. Here is a quick review.

Source: Watkinsross.com, February 2018

Tax Cut Spurs Employers to Boost 401k Contributions

Abstract: Following the Tax Cuts and Jobs Act that passed in December, many plan sponsors are contemplating plan changes as well as revisiting total rewards including wellness programs and benefits packages. Companies are also contemplating whether to issue a one-time bonus, discretionary 401k contribution or increase the plan match.

Source: Voya.com, February 2018

Financial Peace of Mind Is Major Financial Objective of Generation X 401k Savers

Abstract: T. Rowe Price has announced the results of the third installment of its Retirement Savings and Spending survey, revealing that 77 percent of Generation X retirement savers with 401ks view having financial peace of mind as a major financial objective, leading the 16 financial objectives scored in the survey.

Source: Troweprice.com, February 2018

DOL, SEC Fiduciary Rules Likely in Fall

Abstract: The Securities and Exchange Commission and the Labor Department will likely release simultaneously in the fall their fiduciary rule proposals, prominent ERISA attorneys say.

Source: Thinkadvisor.com, February 2018

Retirement Income, Managed Accounts and "Shadow Fiduciaries"

Abstract: New Cerulli research shows the most common reason for which 401k plan sponsors offer participants a managed account service is that it can be positioned as a retirement income solution; also considered is the emergence of so-called "shadow fiduciaries."

Source: Planadviser.com, February 2018

401k Best Practices: Decision-Making and Documentation

Abstract: Not following sound decision-making processes and procedures can result in plan disqualification, fiduciary breaches, lawsuits, and personal liability. This article outlines fiduciary best practices related to 401k plan decision-making and documentation.

Source: Lawtonrpc.com, February 2018

How to Sell an RIA Practice in a Hot M&A Market

Abstract: Jamie Greenleaf recently discussed the benefits of Health Savings Accounts. Tax benefits alone are reason enough to add a Health Savings Account to a company's benefits package.

Source: Financial-Planning.com, February 2018

New VCP Compliance Fees Will Increase the Cost of Correcting Some Plan Errors

Abstract: For many large plan sponsors, the new asset-based fee schedule could significantly reduce the VCP compliance fee for correcting certain plan errors. But, for all plan sponsors, the cost of correcting many of the most common plan errors will increase significantly.

Source: Employeebenefitsblog.com, February 2018

Are HSAs a Better Investment Vehicle Than 401ks?

Abstract: When considering the tax advantages, an argument can be made that HSAs are a better investment vehicle, particularly when used only for qualified medical expenses, a new report claims.

Source: Asppa.org, February 2018

Don't Make Your 401k a Litigation Target

Abstract: You are at risk because no plan is safe when there are so many class action lawyers out there aggressively looking for lawsuits to file. Some plans are more attractive lawsuit targets than others, and there are things fiduciaries can do to lower their risk of being hit with a 401k lawsuit.

Source: 401ktv.com, February 2018

Can 401k Plan Sponsors Continue to Ignore the Benefits of Health Savings Accounts?

Abstract: Jamie Greenleaf recently discussed the benefits of Health Savings Accounts. Tax benefits alone are reason enough to add a Health Savings Account to a company's benefits package.

Source: 401ktv.com, February 2018

'Doing Good by Investing Well' - Pension Funds and Socially Responsible Investment

Abstract: This survey was conducted by Allianz Global Investors and the Centre for European Economic Research among pension experts in France, Germany, Italy, the Netherlands, Switzerland and the United Kingdom on the future of socially responsible investment in pension fund portfolios. The majority of experts surveyed believe the SRI approach will be extended to include asset classes other than equities.

Source: Ssrn.com, February 2018

Why the Match Matters to Employers

Abstract: There's little question that the match does good things for workers and their retirement security, but the employer match that is "free" for workplace savers is anything but for the employers that provide it. Here's why it&'s worth the money.

Source: Asppa.org, February 2018

Financial Wellness: Prescription With Retirement Side Effects

Abstract: A recent paper touches on where retirement readiness fits into the financial wellness equation, and it's not just in the obvious ways. This article mentions on five reasons.

Source: Asppa.org, February 2018

Navigating Distributions

Abstract: The first quarter of the calendar year typically sees an uptick in the number of retirement plan distributions and participant loans. This year may be even busier than most, given the relief announced by the IRS for victims of the recent hurricanes and wildfires. Whatever the reason, participant distributions present a complex set of rules for Plan Sponsors to navigate.

Source: Rpgconsultants.com, February 2018

EBSA Restores $1.1B to Benefit Plans, Participants and Beneficiaries

Abstract: By enforcing ERISA, the DOL's Employee Benefits Security Administration restored more than $1.1 billion to retirement plans, health plans and other welfare benefit plans such as those providing life or disability insurance, in fiscal year 2017.

Source: Planadviser.com, February 2018

Give Plan Participants What they Need to Boost Retirement Confidence

Abstract: Many defined contribution plan sponsors are trying to figure out what they can do to boost savings levels and employee confidence. Education by itself is clearly not enough. Here are key actions sponsors can undertake to better address participant needs and wants.

Source: Planpilot.com, February 2018

Millennial Benefit Trends Report

Abstract: This report provides a look at exactly how millennial job seekers prioritize the variety of employee benefits that may be offered, as well as what the best practices are for this critical stage of the job hunt. The 14-page report aims to provide a resource for employers who want to better understand what this generation wants -- the millennial mindset -- when looking for a job.

Source: Pentegra.com, February 2018

ADP Test Basics 2017

Abstract: The tax code governing 401k plans was written to prevent qualified retirement plans from overly favoring Highly Compensated Employees. The ADP test uses mathematical equations to compare the participation and contribution rates of the HCEs to the NHCEs to determine whether the plan is discriminating in favor of the HCEs. This article reviews the test and how it works.

Source: Legacyrsllc.com, February 2018

American Views on Defined Contribution Plan Saving

Abstract: The survey polled respondents about their views on defined contribution (DC) retirement account saving and their confidence in 401k and other DC plan accounts. Survey responses indicated that households value the discipline and investment opportunity that 401k plans represent and that households were largely opposed to changing the tax preferences or investment control in those accounts. Report is 32 pages.

Source: Ici.org, February 2018

The Plan Committee: Common Problems

Abstract: The author reviews a few key problems he has seen over the years in the operation of retirement plan committees.

Source: Fiduciaryplangovernance.com, February 2018

Preparation and Practice: Keys to Responding to a Cybersecurity Incident

Abstract: Despite constant advances in available cybersecurity measures, there is no such thing as perfect security, and companies must be prepared to respond to a significant cybersecurity incident at a moment's notice. This article describes some key steps companies can take to respond to a cybersecurity incident in a swift, efficient, and effective manner.

Source: Cov.com, February 2018

Benchmarking: It Isn't Just for Fees Anymore

Abstract: When benchmarking a plan, some plan sponsors have concentrated solely on fees to the exclusion of other important measures of the retirement plan's success. Plan sponsors may wish to also look at these other plan metrics.

Source: Cammackretirement.com, February 2018

Those Pesky Plan Documents: What Do They Have to Do With My Fiduciary Duties?

Abstract: Worrying about plan documents probably is not keeping you up at night, but maybe is should. Although most plan fiduciaries are aware of their duties of prudence and loyalty, they may not be tuned into their equally important duty to follow the terms of their written plan documents. This "sleeper" duty could catch you by surprise.

Source: Boutwellfay.com, February 2018

IRS Wants Hurricane Distributions Reported as Penalty Tax Exception on 2017 Forms 1099-R

Abstract: The IRS mandates the use of Code 2 on Form 1099-R to report hurricane Harvey, Irma, or Maria distributions made in 2017, known as "qualified hurricane distributions" under the relief provided to victims by both the IRS and Congress.

Source: Ascensus.com, February 2018


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