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March 2020 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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Retirement Plan Provisions of CARES Act

The third COVID-19 stimulus package has provisions regarding retirement plans, including expanded and penalty-free withdrawal rights, expanded loan rights, extended rights to repay loans and withdrawals, and a deferral of mandatory distributions.

Source: Wagnerlawgroup.com, March 2020*

CARES Act: Retirement Plan Provisions for Employers and Plan Administrators

This legislation contains several important provisions for employers and plan administrators regarding their retirement plans. The article discusses special withdrawal, loan, and required minimum distribution provisions in the CARES Act.

Source: Pbwt.com, March 2020

Deadlines Extended for 403b Plans

The IRS is extending the last day of the initial remedial amendment period for 403b plans from March 31, 2020, to June 30, 2020. Plan sponsors now have until June 30, 2020, to update their pre-approved and individually designed 403b plan documents.

Source: Irs.gov, March 2020

Accessing Retirement Plan Funds Under CARES Act and Existing Law

This publication provides an overview of the frequently asked questions for plan sponsors who want to provide employees with increased access to their retirement funds in light of personal financial challenges caused by the coronavirus outbreak. It addresses options to reduce or suspend elective deferrals and liberalize distribution and loan options to plan participants under existing law as well as under the CARES Act. It is particularly important for plan sponsors to understand how the new distribution provisions under the CARES Act impact their retirement plans.

Source: Icemiller.com, March 2020

The CARES Act and Its Impact on Retirement Plans

The CARES Act is a very extensive piece of legislation that is meant to provide emergency assistance to large and small distressed businesses, to stabilize the U.S. economy that has been hammered by this pandemic. This bill covers a lot more of the highly publicized economy provisions. This article specifically focuses on the provisions that directly impact tax-qualified retirement plans.

Source: Findley.com, March 2020

CARES Act: Employee Benefits Implications

Congress has passed the CARES Act to help combat the impacts of COVID-19. This article is intended as a high-level overview of the employee benefit provisions of the Act. There are ambiguities and clarification on some of the details is still needed.

Source: Clarkhill.com, March 2020

CARES Act Relief Bill: Retirement Plan Provisions and Economic Impact

The legislation contains several retirement plan-related provisions that should prove helpful to plan sponsors in their attempt to deal with the implications of the pandemic. They are highlighted here. Plan sponsors should work closely with their trusted advisers and recordkeepers to discuss efficient implementation of the relevant CARES Act provisions.

Source: Cammackretirement.com, March 2020

Highlights of Employee Benefits Provisions in the CARES Act

The President signed into law the Coronavirus Aid, Relief, and Economic Security Act or "CARES Act." The CARES Act is primarily a stimulus package that addresses the current coronavirus crisis, but it includes several provisions relating to employee benefit plans. This article reviews those employee benefits provisions.

Source: Bradley.com, March 2020

Trump Signs Coronavirus Stimulus Legislation With Retirement Relief Into Law

President Trump signed into law the sweeping $2 trillion stimulus bill that includes retirement relief provisions. the retirement-based provisions stick closely to what was initially proposed by Senate Majority Leader Mitch McConnell, including provisions to ease retirement plan hardship and loan rules to free up funds for individuals impacted by the pandemic and to provide relief from the required minimum distribution rules.

Source: Asppa.org, March 2020

Education Key to Preventing 401k Cashouts

A well-funded 401k might look like a life preserver to retirement plan participants who are struggling to stay afloat amid the coronavirus pandemic, but a bailout now could put their future on the rocks. Participant education should focus on exploring other sources of income first: other savings, credit cards or loans.

Source: 401kspecialistmag.com, March 2020

Hardship Distributions in the Time of COVID-19

As temporary layoffs and furloughs become more prevalent during the COVID-19 outbreak, employers have been asking whether they may allow employees to take hardship distributions under their Section 401k plans for expenses and losses resulting from COVID-19. Guidance is provided in this short article.

Source: Workforcebulletin.com, March 2020

Suspending or Reducing Safe Harbor Contributions in DC Retirement Plans

Many companies have to reduce their expenses and improve cash flow in reaction to the current volatility in the economy due to Covid-19. A number plan sponsors are asking if it is permissible to suspend or reduce required safe-harbor contributions during the plan year. An employer can reduce or suspend its safe harbor contributions during a plan year, but only if certain conditions are met.

Source: Wagnerlawgroup.com, March 2020

Lawsuit Questions Differing Investment Terms for 401k and DB Plan

The lawsuit accuses Nationwide 401k plan fiduciaries of not negotiating terms for a fixed-income contract comparable to that for its DB plan for the purpose of increasing its subsidiary's profits.

Source: Planadviser.com, March 2020

Helping Plans and Participants Respond to the COVID-19 Challenge

The spread of the coronavirus, and the measures to keep it under control, have caused dramatic changes in the financial environment underpinning retirement plans. A recent Plan Sponsor Council of America webinar discussed what it means for plans and participants.

Source: Napa-net.org, March 2020

Senate Approves Coronavirus Stimulus With Retirement Relief

The Senate unanimously approved a sweeping $2 trillion stimulus bill, including retirement relief provisions. As for those retirement-based provisions, the final bill sticks closely to what was initially proposed by Senate Majority Leader Mitch McConnell, including provisions to ease retirement plan hardship and loan rules to free up funds for individuals impacted by the pandemic and to provide relief from the required minimum distribution rules.

Source: Napa-net.org, March 2020

Important Considerations for 401k Plan Sponsors Impacted by COVID-19

As guidance continues to be released and legislation continues to be proposed and enacted into law, it is important for employers who sponsor 401k plans or other tax-qualified defined contribution plans to understand critical stress points and administrative issues that will likely arise as sponsors and participants face these uncertain times.

Source: Mmmlaw.com, March 2020

Companies Cut 401k Contributions Amid COVID-19

Many businesses are doing whatever they can to stay afloat, retirement plan advisers said. Many employers have started cutting back on 401k benefits amid the COVID-19 outbreak, in many cases stopping their contributions to employees' accounts to reduce costs.

Source: Investmentnews.com (registration may be required), March 2020

D.C. Circuit Rules That ERISA Plan Participant's Release Extends to Fiduciary Breach Claims on Behalf of the Plan

The D.C. Circuit Court upheld a district court ruling that an ERISA plan participant's broad release of claims includes breach of fiduciary duty claims against ERISA plan fiduciaries, notwithstanding the release's carve-out for any "claims for vested benefits." The ruling extinguishes a participant's class action claims under ERISA.

Source: Erisapracticecenter.com, March 2020

How DC Plans Should Prepare for Missed Loan Repayments

The significant economic tremors, including income insecurity and job reductions, stemming from the coronavirus pandemic may lead to increased loan defaults and impact long-term retirement readiness. Plan sponsors have some ability to facilitate repayments and minimize defaults for participants who are unable to make loan repayments.

Source: Callan.com, March 2020

COVID-19: Mid-Year Changes to 401k Plans

Employers looking to reduce operating costs in the short term in response to the disruption caused by the COVID-19 pandemic may seek to reduce or suspend their matching or nonelective contributions in their 401k plan. This article summarizes the key issues facing employers in deciding to suspend or reduce safe-harbor contributions.

Source: Benefitsbclp.com, March 2020

401k and 403b Hardship Distributions and COVID-19 Declared Disaster Areas

The Federal Emergency Management Agency has declared several disaster areas around the United States as a result of the spread of the coronavirus. Under final regulations issued in 2019, a federal disaster declaration has become one of the safe harbor reasons that qualifies a 401k or 403b plan participant for a hardship distribution, so it appears that plan participants may now be able to take a hardship withdrawal if they are laid off, put on an unpaid leave of absence or incur other expenses and losses on account of COVID-19.

Source: Beneficiallyyours.com, March 2020

Penalty-Free Distributions From Retirement Plans for Childbirth or Adoption Expenses

The new provision is optional, so plan sponsors will need to amend their plans to permit QBOADs and, as a separate option, to permit the repayment of QBOADs. Although discretionary plan amendments are due by the end of the plan year in which they take effect, the SECURE Act provides that plan amendments for its changes will not be due before December 31, 2022, for calendar year plans, or the last day of the first plan year beginning on or after January 1, 2022, for fiscal year plans.

Source: Belfint.com, March 2020

SECURE Act Video Series: Qualified Birth or Adoption Distributions

This multi-video series will provide a snapshot of retirement-related SECURE Act provisions, included in the Further Consolidated Appropriations Act, 2020. This video covers qualified birth or adoption distributions.

Source: Ascensus.com, March 2020

Ten Marketing Strategies to Win More 401k Clients

This list is specially designed to help you increase your local authority as a retirement plan professional and to attract new plan sponsor clients.

Source: 401k-marketing.com, March 2020

Suggested Administrative Practices in Light of Intel Decision - Ensuring "Actual Knowledge"

What practices may be employed by fiduciaries to ensure that participants are reading communications and disclosures and have the requisite "awareness" of their contents? As of this writing, the best understanding of this requirement is that a plan fiduciary should do what it can to promote effective communication that encourages participants to read plan notices and disclosures. But, there will be an evolution of industry best practices in response to Intel, subject as always to the facts and circumstances of each unique situation.

Source: Wagnerlawgroup.com, March 2020

COVID-19 Employee Benefits FAQs for Employers: Focus on Retirement Plans

This FAQ answers commonly asked plan administration questions, summarize an employer's continued fiduciary duties, and highlight plan amendments that may help ease the burden of the COVID-19 emergency on employees and/or employers.

Source: Troutman.com, March 2020

Reminders About 403b Plans and Hardship Distributions

This is a reminder about two compliance issues that might need plan sponsor attention at this time: the March 31, 2020 deadline for correcting 403b plan documents and the need for operational compliance with hardship distribution procedural changes for 401k and 403b plans.

Source: Segalco.com, March 2020

Lawsuits Reveal the Risk Issues for 403b and 401k Plan Fiduciaries

The underlying theme of that allegation charges executives and managers who hire the plans' service providers with insufficient oversight and breaches of their ERISA fiduciary duty. Hidden beneath the excessive fee complaint, however, are several risk issues that are consistently found to exist in the audits of fiduciary management systems.

Source: Rolandcriss.com, March 2020

Securing Retirement Plans: Cybersecurity Best Practices

Plan sponsors and their fiduciaries should consider taking proactive steps to protect their participants and their plan assets. This article reviews retirement plans cybersecurity best practices plan sponsors should consider adhering to safeguard against cyberattacks.

Source: Planpilot.com, March 2020

Retirees and Investors Watch for Congressional Coronavirus Action

The events of recent days relating to the novel coronavirus pandemic's spread in the United States and around the world have very quickly changed the focus to securing emergency relief for retirement plan investors and employers. To this end, 25 organizations are calling for immediate congressional action to provide relief to employers that offer retirement plans, plan participants and retirees in response to the current crisis created by the outbreak of COVID-19.

Source: Planadviser.com, March 2020

401k Lawsuits Keep Coming, Despite COVID-19

The pace of 401k litigation does not yet appear to be slowing. In the past week, Wells Fargo was sued over the use of proprietary funds in its retirement plan. A case was also filed against BOK Financial, and there was a major development this week in a lawsuit against Walgreens. To help reduce the spread of COVID-19, most federal courts are working remotely. Unless the courts are further hampered by the virus, with fewer judges available, for example, cases filed under ERISA might well not be delayed.

Source: Investmentnews.com (registration may be required), March 2020

2020 Defined Contribution Plan Compliance Calendar

This calendar is designed to provide a general overview of certain key compliance dates and is not meant to indicate all possible compliance dates that may affect your plan.

Source: Findley.com, March 2020

Breaking Down the Secure Act: Required Minimum Distributions

Benefits experts are still pouring through the SECURE Act's various mandated provisions, optional provisions, and effective dates, some of which may be retroactive. This article will focus on the Act's impact on required minimum distributions for both defined benefit and defined contribution plans.

Source: Findley.com, March 2020

How Can a 401k Plan Sponsor Continue to Contribute to a Quarantined Employee's 401k Account?

Depending on the state a 401k plan sponsor is operating in, they may be finding their employees can no longer work on-site. This is done with safety in mind. But, depending on the circumstances, it may harm employees' ability to retire in comfort. This is especially true if the employee is no longer eligible for a matching contribution from the company. While the situation is too recent to get good data, anecdotal evidence suggests at least some plan sponsors are trying their best to keep their employees' best interests in mind.

Source: Fiduciarynews.com, March 2020

Layoffs, Reductions in Force, and the 401k Plan

Many business owners, employment law counsel, and benefit advisors are grappling with reductions in force/layoffs due to the unprecedented business and economic impact of COVID-19. This article briefly reviews a retirement plan compliance issue that these staff reductions can trigger. The rule applies to all qualified retirement plans, not just 401k plans.

Source: Eforerisa.wordpress.com, March 2020

More Than 40% of 401k Plan Participants Lack an Official Source of Retirement Advice

With approximately 10,000 Baby Boomers retiring each day, the need for financial planning and advice is greater than ever, according to Cerulli. The sheer volume of retirees provides an opportunity for advisors to expand their services to more individuals approaching retirement as they navigate the complex set of decisions ahead. Cerulli's research indicates that many 401k plan participants (including half of the participants in their 50s) lack an official source of retirement advice, and this "advice gap" is particularly acute for investors in lower wealth tiers.

Source: Cerulli.com, March 2020

401k Withdrawal Provisions Contained in Coronavirus Bill

In a section titled "Tax-Favored Withdrawals from Retirement Plans" the Coronavirus, Aid, Relief, and Economic Security (CARES) Act establishes special rules for certain tax-favored withdrawals from retirement plans. More specifically, it spells out when and how the 10% early withdrawal penalty can be avoided under Section 72(t) of the Internal Revenue Code.

Source: 401kspecialistmag.com, March 2020

Monitoring Retirement Plan Investments and Participant Communications in the Time of COVID-19

One area where plan fiduciaries are seeking guidance concerns oversight of defined contribution plan investment options and any additional actions that they can take now to monitoring such investments and providing communications to participants. In light of these concerns, plan sponsors and fiduciaries may wish to consider taking action on the items reviewed in this article.

Source: Workforcebulletin.com, March 2020*

401k Hardship Withdrawals Can Help With Employees' Coronavirus-Related Costs

One way that employers can assist employees faced with coronavirus-related costs and expenses today (no Congressional action or immediate employer action required) is that employers can permit employees to take hardship withdrawals from their 401k plan accounts to meet coronavirus-related expenses. The employee will still need to meet the requirement that the distribution is necessary to satisfy the financial need. There are two possible mechanisms for permitting these hardship withdrawals.

Source: Stevenslee.com, March 2020

Reducing or Suspending 401k Safe Harbor Contributions Mid-Year

Under limited circumstances, and according to final Treasury Regulations, a sponsor of a 401k safe harbor plan may amend the plan during the current year to reduce or suspend the company's safe harbor contribution, either the matching or nonelective contribution. Under what circumstances, if any, may a company reduce or eliminate the mandatory safe harbor contribution during the plan year?

Source: Retirementlc.com, March 2020

Senate Bill Expands Retirement Plan Access for Coronavirus Impact

Senate Majority Leader Mitch McConnell, on behalf of the Senate Republican caucus, introduced the Coronavirus, Aid, Relief, and Economic Security (CARES) Act, which includes key provisions advocated by the American Retirement Association affecting hardship distributions and plan loans.

Source: Napa-net.org, March 2020

Tax Credit for Small Employer Start-Up Plans

Many employers are unaware that, in certain circumstances, they may be eligible for a valuable tax credit in connection with their establishment of a retirement plan. Although this particular tax credit has been available for almost two decades, it is still surprising to see the general lack of awareness that most plan sponsors have regarding this tax-saving opportunity. This article is intended to familiarize readers with this tax credit so that they can attempt to evaluate its application to their tax situation.

Source: Legacyrsllc.com, March 2020

Plan Fiduciaries Beware! Strategies for Avoiding Cybersecurity Breach of Benefit Plan Documents

Plan fiduciaries have numerous responsibilities under the law when administering programs and handling participant funds and benefits, including the responsibility to make sure the technology they choose to use is secure. A cybersecurity breach, especially one that exposes personal identification information or leads to a loss of funds, can create significant liability for the plan. Here's what you should do.

Source: Hallbenefitslaw.com, March 2020

Coronavirus Check-Up for Retirement Plans

As 401k plans and other retirement benefits represent significant assets for most employees and retirees, they may look to their retirement plans for assistance. This article looks at some considerations for retirement plan sponsors and fiduciaries as they navigate the process of reacting to the changes in the business environment and helping participants.

Source: Groom.com, March 2020

Are You Looking for Missing Participants?

It's important to be diligent in monitoring the plan for uncashed checks or nonresponsive participants. The DOL has made it clear that this is a fiduciary duty of the plan sponsor. Service providers often can help identify accounts that may need special attention, so sponsors should coordinate efforts to establish proper procedures and designate an individual or team to ensure necessary follow-up efforts are taken.

Source: Findley.com, March 2020

Emerging Coronavirus Issues for Employer Benefit Plans

As employers prepare their workforces for issues related to COVID-19, they should also take steps to ensure that their benefit plans are prepared. The impact of the virus will put a financial and logistical strain on many employees, and they will likely look to employers for guidance on several issues related to benefit plans. This article discusses the following important topics for employers to consider during this time.

Source: Eversheds-sutherland.com, March 2020

Employer Actions for 401k Plans Sickened by Coronavirus

The realities of the Coronavirus pandemic have quickly and dramatically changed the way we work, shop, seek health care, and interact with each other. The employer sponsors of 401k plans and any employer-based fiduciary investment committees should consider taking steps now in response to these developments.

Source: Dickinson-wright.com, March 2020

Suspending Employer 401k Contributions in Response to COVID-19

Businesses adversely affected by COVID-19 may be considering terminating their 401k plans to end their contribution obligations. However, a more measured response would be to temporarily suspend or reduce employer contributions. A temporary suspension does not require full vesting of all employees as a complete termination or discontinuance of contributions would require. How a suspension or reduction of employer contributions works depends on the type of 401k plan currently in effect.

Source: Cohenbuckmann.com, March 2020

Retirement Plan Providers Confront Need for Cybersecurity Measures

Cybersecurity has emerged as a top issue for retirement specialist advisors, 80% rate data security/cybersecurity very important, deeming it the single most important factor when evaluating recordkeepers. At the same time, it represents a growing concern and significant expense for plan providers, particularly recordkeepers and third-party administrators.

Source: Cerulli.com, March 2020

Sharing of Workers' 401k Data "New Frontier" in Litigation

The 1974 law governing employee benefits plans is silent on how that information should be handled when it's transferred to a third-party vendor like a recordkeeper. Courts are being asked if the data constitutes a plan asset that imposes specific obligations on the person or people who manage the plan under ERISA. If the courts agree, it could drastically add to the list of people who could be held liable for a breach of fiduciary duty and lead to increased litigation.

Source: Bloomberglaw.com, March 2020

401k Plans During the Covid-19 Pandemic

Now that it has become clear that the Covid-19 health crisis will result in significant economic disruption, including furloughs and job losses, employers should expect to confront challenges related to their 401k plans. Here are several of the planning and operational concerns that are on the horizon.

Source: Blankrome.com, March 2020

Retirement Plan Fiduciary Action During Events Like COVID-19

As many people shift to work-at-home arrangements and businesses lay off workers due to the uncertainty of the business world in the next few months, it is imperative that retirement plan fiduciaries not allow these conditions to postpone their oversight of retirement plans. Several issues that bear watching are reviewed here.

Source: Barran.com, March 2020

401ks Service Providers and the Coronavirus

Serious times make clear the value of 401k providers that offer the highest level of service. Amidst the coronavirus, market volatility created by investors reacting to the now-named pandemic reminds plan sponsors just how important their plan's advisors are. Consult this list in speaking with current and future advisors to obtain the highest level of advisory service.

Source: Alliant401k.com, March 2020

401ks and COVID-19: What Consumers are Hearing from Financial Experts

The mainstream media has been filled with a variety of financial experts doling out advice to a population generally terrified about what the coronavirus pandemic is doing to their 401k. You'll find some common themes among this quick roundup of comments in the past few days.

Source: 401kspecialistmag.com, March 2020

Equity Funds Crushed in Coronavirus Safety Stampede

Like everything else, mutual fund flows are negatively impacted by the coronavirus (or at least the reaction to it). Overall (and unsurprisingly) investors backed away from U.S. equity funds and turned to perceived safe havens like bonds and cash, after the S&P 500 turned down sharply amid fears of COVID-19 gripping the markets.

Source: 401kspecialistmag.com, March 2020

Next Steps for 403b Plan Sponsors

Now that plan documents will be cleaned up, 403b plan sponsors can focus on strategic tasks such as plan design changes and on complying with new legislation.

Source: Plansponsor.com, March 2020

Considering a Loan Cure Period to Avoid Participant Loan Defaults

The IRS says in a recent Issue Snapshot that a plan sponsor may, but is not required to, allow a cure period during which a delinquent participant loan may be brought back into compliance without triggering a deemed distribution. If allowed, the cure period must be specifically provided for in the written plan document.

Source: Plansponsor.com, March 2020

Judge Moves Forward Suit Over Walgreen Plan TDF Mismanagement

In a concise order, U.S. District Judge Charles Ronald Norgle of the U.S. District Court for the Northern District of Illinois has declined to dismiss a lawsuit alleging fiduciaries of the Walgreen Profit-Sharing Retirement Plan breached their fiduciary duties by selecting and retaining poorly performing target-date funds for the plan. The judge rejected the defendants' argument that the complaint cannot be based solely on the funds' underperformance but must contain more specific allegations.

Source: Plansponsor.com, March 2020

New Lawsuit Accuses Wells Fargo 401k Plan Fiduciaries of Self-Dealing

A proposed class action lawsuit has been filed against alleged fiduciaries of the Wells Fargo & Co. 401k plan alleging violations of ERISA fiduciary duty and prohibited transaction provisions. Motives behind keeping higher cost, underperforming funds in plan alleged in the lawsuit include providing seed money for Wells Fargo to launch new fund products.

Source: Plansponsor.com, March 2020

Coronavirus Concerns for 401k Plan Sponsors

The coronavirus outbreak is starting to become another financial challenge for all of us in the 401k industry and all of us with a 401k balance. As a 401k plan sponsor, the bad news might be worrying you and this article is all about why you shouldn't panic and what you should be considering if the markets remain volatile.

Source: Jdsupra.com, March 2020

COVID-19 Quarantine Question: How Should 401k Plan Sponsors Communicate to Employees Working From Home?

It's starting to happen. City by city, county by county, state by state, businesses are deciding to tell their employees to work from home. One of the disadvantages, however, is the lack of ease of communicating that exists when working proximity is reduced. You simply can't shut over the cubicle to get your coworkers attention. For retirement plan sponsors, communication is not merely a form of social interaction, it's a fiduciary duty. How does the change in work location impact this duty? And what can 401k plan sponsors do about it?

Source: Fiduciarynews.com, March 2020

Is Too Much Choice an Issue in DC Plan Investment Options?

Canadian defined contribution plans offer a range of investment choices, from a single balanced fund, in some cases, to more than 25 options. Many believe in offering more investment choices in a defined contribution pension plan as part of an overall retirement savings plan. Four key factors contribute to this view.

Source: Benefitscanada.com, March 2020

Advisors: ERISA and Fiduciary Process Have Evolved, Have You?

While as a legal matter, ERISA fiduciaries will continue to be measured by their process, rather than results, advisors who can produce measurable results and quantify their value around participant outcomes and process are the leaders who will prosper in the Fiduciary 3.0 world which will build upon Fiduciary 2.0 but with an increased emphasis upon retirement readiness, cybersecurity, wellness and plan participant engagement and education.

Source: Wagnerlawgroup.com, March 2020*

Plan Loan Cure Period

A plan administrator may, but is not required to, allow a cure period during which a delinquent participant loan may be brought back into compliance without triggering a deemed distribution. If allowed, the cure period must be specifically provided for in the written plan document. This recently updated article discusses common scenarios involving the cure period.

Source: Irs.gov, March 2020

Coronavirus Adds to Employer To-Do List, Check Employee Benefits

An employer may wish to consult employee benefits counsel to determine whether an employee who has contracted Covid-19 or who is subject to quarantine could qualify for a hardship distribution under its 401k plan.

Source: Bloomberglaw.com, March 2020

Reminders About 403b Plans and Hardship Distributions

This is a reminder about two compliance issues that might need plan sponsor attention at this time: the March 31, 2020 deadline for correcting 403b plan documents and the need for operational compliance with hardship distribution procedural changes for 401k and 403b plans.

Source: Segalco.com, March 2020

Salesforce Is Latest National Employer to Face ERISA Fee Litigation

The latest ERISA lawsuit filed in federal court is targeting Salesforce for several alleged fiduciary breaches in the operation of its defined contribution retirement plan. The complaint was filed in the U.S. District Court for the Northern District of California and seeks class-action status on behalf of a sizable group of retirement plan participants and beneficiaries. Named as defendants are Salesforce itself, along with its board of directors and its investment advisory committee.

Source: Planadviser.com, March 2020

Legislation Would Allow 403bs to Invest in CITs

The bill introduced to Congress is designed to ensure public sector and nonprofit retirement plans have the same access to low-cost investments as for-profit retirement plans do.

Source: Planadviser.com, March 2020

The Average 401k Balance by Age

This article contains the average and median balances for specific age groups at the end of 2019, according to data provided by Fidelity, which offers employee benefit programs to 22,000 businesses.

Source: Bankrate.com, March 2020

DOL Plans to Weigh in on Lifetime Income Safe Harbor, PEPs

While it's not specifically spelled out in the SECURE Act, a key official with the Labor Department indicated that the agency anticipates issuing guidance to help implement the lifetime income safe harbor provision. They also said that the DOL will issue guidance on other aspects of the SECURE Act, including rules surrounding pooled employer plans.

Source: Asppa.org, March 2020

ERISA Advisory Council Calls for Guidance on Uncashed Checks

In "Voluntary Transfers of Uncashed Checks from ERISA Plans to State Unclaimed Property Programs," the ERISA Advisory Council reports the findings of its review of transfers of uncashed checks from ERISA plans to state unclaimed property funds and the procedures states use regarding those funds. The ERISA Advisory Council provides support and advice to the DOL's Employee Benefits Security Administration.

Source: Asppa.org, March 2020

How to Protect Your 401k From the Coronavirus

Financial concerns stemming from the coronavirus outbreak have rippled through the global economy. The coronavirus has had an undeniable impact on the stock market, which extends to 401ks. Here are some guidelines to make sure your 401k plan stays on track and is protected during this coronavirus-focused time.

Source: Usnews.com, March 2020

Planning Opportunities After the Supreme Court's Intel Decision

In light of the Intel decision, plan fiduciaries of qualified retirement plans may want to consider utilizing the DOL's recently released proposed electronic safe harbor disclosure rule. By delivering required ERISA notices and disclosures under the proposed rule, plan fiduciaries could better track a plan participant's engagement with certain disclosures, including the number of times a plan participant visited said disclosure and the amount of time spent on the disclosure.

Source: Troutman.com, March 2020

Settlement in Invesco Self-Dealing Suit Calls for Additional Plan Investments

Parties in a lawsuit accusing fiduciaries of the Invesco 401k plan of loading the plan with proprietary investments have agreed to settle for $3,470,000.00. Also, the defendants agreed to modify the investment options offered through the plan's self-directed brokerage account so participants will be permitted to invest in non-proprietary exchange-traded funds in addition to the proprietary ETFs offered to participants.

Source: Planadviser.com, March 2020

Judge Finds CalSavers Not Preempted by ERISA

A lawsuit against California's state-run auto-IRA program has been dismissed by a federal judge. The judge decided that granting the plaintiffs leave to amend would be futile.

Source: Planadviser.com, March 2020

More to Come From Department of Labor on ESG Factors?

A hot topic in the world of money management, including the management of assets in retirement plans, is the consideration of environmental, social, and governance factors when evaluating investments. For ERISA plans, one issue is how to consider ESG factors while satisfying the duties of loyalty and prudence under ERISA, including the duty to make investment decisions in the best interests of participants. Based on recent developments, there is reason to believe that more may be coming from the DOL on this topic.

Source: Morganlewis.com, March 2020

Access to Retirement Plan Data: The Next Wave of Fiduciary Litigation?

As retirement plan administration has become more and more digitized over the years, retirement plan sponsors and recordkeepers have become the custodian of a variety of sensitive plan participant data. Often, this information can paint a very accurate picture of a plan participant's financial wellness and retirement strategy. The value of this information is not lost on certain vendors who collect and retain it, and the use of this data is the focus of an emerging area of retirement plan fiduciary litigation.

Source: Mmmlaw.com, March 2020

Best Practices: How to Prep for an Employee Benefit Plan Audit

As with every spring, you are tasked to prepare for your year-end employee benefit plan audit. It seems that our to-do lists at work are longer and longer, so the author has compiled this employee benefit plan audit guide to help you prepare for the audit and make it seamless.

Source: Meadenmoore.com, March 2020

Judge Pulls Plug on Centurylink 401k Lawsuit

CenturyLink has survived a class-action 401k lawsuit brought by a Denver-area personal-injury lawyer known for his television persona. The court granted summary judgment for the telecommunications firm, finding that its $5 billion plan did not violate federal law.

Source: Investmentnews.com (registration may be required), March 2020

After the SECURE Act: Proposed Retirement Plan Legislation for 2020

Paying attention to the long-term needs and goals of constituents is always a top priority for legislators, so there are several further pieces of litigation currently on the table to continue to modify and improve the laws and regulations concerning retirement savings.

Source: Hallbenefitslaw.com, March 2020

Who Are the Top 403b Providers?

Small nonprofit businesses may struggle to find time to even look for a provider, much less handle tasks associated with a retirement plan. Often, this means defaulting to one of the larger 403b providers. The largest 403b providers are shown in this chart.

Source: Forusall.com, March 2020

SECURE Act: What Do Plan Sponsors Need to Do in 2020?

The SECURE Act was enacted last year as part of the Further Consolidated Appropriations Act of 2020. The SECURE Act provisions include a number of changes affecting employee benefit plans. However, most of the changes are either optional or will not affect plans in 2020. This article highlights actions plan sponsors should take in 2020 to comply with required changes in the SECURE Act.

Source: Bradley.com, March 2020

Could Inclusion of Long-Term, Part-Time Employees under the Secure Act Trigger a Financial Statement Audit?

Employees' eligibility to participate in a retirement plan, regardless of their actual participation in the plan, causes them to be counted as participants for purposes of determining whether the plan needs an audit. Actual participation in the form of contributions is not necessary. Eligibility to contribute, not an account balance, is what is considered for active participants until they terminate employment.

Source: Belfint.com, March 2020

Are Your Practice(s) Cyber Secure?

Fraudulent distribution requests are on the rise and it is not always clear who is responsible and/or who is at fault for security breaches that deplete an unsuspecting participant’s retirement savings. Data privacy is an emerging concern for ERISA plan fiduciaries and service providers alike, do you know where your liabilities are?

Source: Asppa.org, March 2020

Questions to Expect From Your 403b Plan Auditor

This document was prepared by the AICPA Employee Benefit Plan Audit Quality Center to provide examples of the types of questions that plan management may be asked by the plan's independent auditor. The plan auditor may also ask plan management other questions that are not on this list.

Source: Schneiderdowns.com, March 2020

Compliance Checklist 2020 for Plans Subject to ERISA

This checklist incorporates DB, DC, and ERISA 403b requirements and provides information on the materials that you will need to file, filing due dates and agencies to which the filings should be made.

Source: Retirepru.com, March 2020

Creating an Effective Investment Policy Statement

Not all investment policy statements are created equal and there are a few topics every IPS should cover. Learn about what should be included in an effective investment policy statement and how a well-crafted IPS can lighten the load of a committee that's tasked with difficult plan decisions.

Source: Planpilot.com, March 2020

Counterarguments Filed in ERISA Lawsuit Targeting Teva Pharmaceuticals

The defense says the lawsuit should be dismissed because the plaintiffs' theory of liability is "antithetical to the discretion afforded to ERISA plan fiduciaries in designing a 401k plan investment menu and contrary to precedent."

Source: Planadviser.com, March 2020

DC Plan Sponsors Increasingly Embrace Auto-Escalation as Default Option

Ten years ago, many DC plan sponsors that offered escalation features required participants to opt-in, but that appears to be changing, according to a new survey. A NEPC survey shows that 76% of corporate plans and 54% of healthcare plans have included an automatic enrollment feature into their plan designs as a measure to help increase overall plan participation.

Source: Napa-net.org, March 2020

Alight, Estee Lauder Settle Case of Plundered 401k

A participant who saw $99,000 vanish from her 401k via unauthorized distributions has reached a settlement with her former employer, Estee Lauder, as well as recordkeeper Alight Solutions.

Source: Investmentnews.com (registration may be required), March 2020

District Court Rules in Favor of Fiduciaries in Recent Prudence, Loyalty Breach Claim

A recent lawsuit argued in the federal appeals court for the Southern District of New York handed a win to plan fiduciaries on a prudence and breach of loyalty claim lawsuit. In the case, Patterson v. Morgan Stanley, the court dismissed an appeal filed by Morgan Stanley stating that, contrary to Plaintiff's claims, ERISA "does not require clairvoyance on the part of plan fiduciaries, nor does it countenance opportunistic Monday-morning quarter-backing on the part of lawyers and plan participants who, with the benefit of hindsight, have zeroed in on the underperformance of certain investment options."

Source: Hallbenefitslaw.com, March 2020

401k Plan Sponsors Fiduciary Duty in Light of Coronavirus Fear

Time will tell if the 2020 Coronavirus becomes virulent that created long-term buying opportunities for alert investors or if it is merely a repeat of the 2002/2003 SARS scare. There's no doubt both strains are deadly, and there's nothing wrong with preparing for the worst in terms of personal choices. Now is the time for 401k plan sponsors to seize their fiduciary mantle and provide the guidance and tools plan participants need to dodge emotional decisions that could ruin their chance for a comfortable retirement.

Source: Fiduciarynews.com, March 2020

IRS Announces Remedial Amendment Periods and Deadlines for Correction of 403b Plan Form Defects

The IRS issued Procedure 2019-39, which finalizes important changes to how sponsors and employers can ensure 403b plan compliance. The guidance is a welcome update from the Service, which initiated a regular system of remedial amendment periods for 403b plans in 2013, with the first period ending on March 31, 2020. This article reviews the most significant aspects of the guidance.

Source: Cov.com, March 2020

Whistleblowing Hits Employee Benefits World

Recently a "whistleblower" leaked that the IRS had internally announced an upcoming modification to the very popular voluntary correction program that would have been a significant disincentive for plan sponsors to use the VCP to report and correct plan disqualification errors. The leak went viral and sent benefits counsel and other retirement plan providers into a tizzy. Well, it seems that the whistleblower may have gotten it wrong.

Source: Beneficiallyyours.com, March 2020

IRS Fact Sheet and Website Posting Highlight SECURE Act Changes

The IRS issued news release IR-2020-50, which contains links to several resources that describe changes contained in the SECURE Act. Included is IRS Fact Sheet FS-2020-04, a web page entitled "New law helps people save for retirement; other retroactive changes impact many taxpayers," as well as links to the latest versions of IRS Publications. Highlights are reviewed here.

Source: Ascensus.com, March 2020

Seven Strategies for Building a Strong 401k Committee

There is so much great information online to help you set up and manage a 401k committee. In the last several months alone there have been over 50 articles on committee best practices. To save you time, in this piece you'll find seven of the best articles for building a strong 401k committee filled with common (and not-so-common) strategies to consider.

Source: 401kbestpractices.com, March 2020

Divorce and Retirement: How to Take Control of Retirement Benefits

One practical issue that women often fail to make a priority is getting a fair share of retirement assets. Retirement funds may be among the biggest assets you have as a couple. It's important to know that these funds are not automatically split in a divorce. Read this paper to learn how you can protect yourself against losing the retirement assets you're entitled to receive.

Source: Wiserwomen.org, March 2020

CenturyLink Wins ERISA Fiduciary Lawsuit Dismissal

The U.S. District Court for the District of Colorado has ruled once again in the case of Birse v. CenturyLink Inc., this time dismissing the lawsuit outright for its failure to state an actionable claim. This ruling comes after a complex procedural history in the case, which saw multiple versions of the complaint filed and various recommendations and orders filed by the court.

Source: Planadviser.com, March 2020

Plan's "Imprudent Preference" for Proprietary Funds Draws Suit

Noting that the plaintiff's "account would have been worth more at the time it was distributed from the Plan had Defendant not violated ERISA," another provider finds itself targeted by a participant in its 401k plan. This time the target is John Hancock.

Source: Napa-net.org, March 2020

Guide to Retirement: 2020 Edition

Updated annually, the Guide to Retirement provides an effective framework for supporting your retirement planning conversations with clients. It includes charts and graphs to help you explain complex issues clearly and concisely. A description and audio commentary are available for every slide.

Source: Jpmorgan.com, March 2020

Market Plunge Tests Performance of Target-Date Funds

If the recent correction is any indication, many of the target-date funds for people close to retirement might be less risky than such products were in 2008. On average, target-date funds with a 2020 vintage had negative returns of 4.1% between Feb. 24 and Feb. 28, according to data from Morningstar Direct. Meanwhile, funds with target years of 2030 had negative returns of 6.3%, and those dated to 2050 returned -9.2%. During that time the Dow Jones Industrial Average dropped by 12%.

Source: Investmentnews.com (registration may be required), March 2020

Retirement Plan Participation Continues to Increase

ICI research shows that most workers who are likely to have the ability to save for retirement and to be focused primarily on saving for retirement participate in an employer-sponsored retirement plan. Among workers who have both the desire and the means to save for retirement, the vast majority -- 78 percent -- participate in a plan either directly or through a spouse.

Source: Ici.org, March 2020

SECURE Act: Relaxed Requirements for Safe Harbor 401k Plans

The SECURE Act eases some of the regulation of 401k safe harbor plans (which are exempt from certain nondiscrimination testing) to provide employer flexibility and make those plans more attractive.

Source: Huschblackwell.com, March 2020

SECURE Act: New Part-Time Eligibility Rules for 401k Plans

The new SECURE Act broadens eligibility requirements for 401k plans. Previously, part-time employees who worked fewer than 1,000 hours per year were excluded from such plans. Under the new rules, long-term, part-time employees who work at least 500 hours in three consecutive years (and have attained age 21) must be allowed to participate in 401k plans. The addition of part-time eligibility does not nullify the 1,000 hours per year rule.

Source: Huschblackwell.com, March 2020

Only "Actual" Knowledge of Disclosure Triggers Three-Year Limitations Period for ERISA

Under Sulyma, the statutory phrase 'actual' knowledge means what it says: the three-year period is limited to circumstances where a plaintiff/participant actually knows of the disclosure evidencing the alleged breach. Absent proof of such knowledge, ERISA's longer six-year repose period applies.

Source: Fiduciarygovernanceblog.com, March 2020

Modernizing the DC/401k Plan System

This 21-page paper details proposed legislative and regulatory changes for defined contribution plans to: reflect changes in workforce demographics and plan designs; promote retirement savings through comprehensive financial well-being; improve plan management and administration; and, enhance retirement outcomes by modernizing distributions options. ERIC will be advocating for the legislative and regulatory changes called for in these proposals, working with our large employer member companies to ensure that policymakers appreciate that now is the time to modernize defined contribution plans.

Source: Eric.org, March 2020

How to Delay and/or Avoid Required Minimum Distributions

While the SECURE Act raised the commencement age from age 70 1/2 to 72 for required minimum distributions, there are several other ways that retirement plan participants can delay and/or avoid minimum distribution requirements if they plan ahead of time.

Source: Cammackretirement.com, March 2020

Fiduciary Responsibility Unclear When Handling Participant Data?

Fiduciary responsibility has blurred-lines around the use of participant data. Can your vendors use participant data to sell participants other products and services? This practice is called cross-selling, and it became a big issue for company fiduciaries after it was raised in some 403b and 401k plan lawsuits. The new focus on this issue reflects growing worldwide concerns over data privacy, but the jury is still out on whether such cross-selling to plan participants violates ERISA.

Source: 401ktv.com, March 2020

Supreme Court's Actual Knowledge Decision Underscores Importance of Plan Administrator Best Practices

To ensure plan participants are aware of investment changes and other revisions to the plan, plan administrators should ensure they have prudent procedures in place to relay plan disclosures and, if electronic disclosures are offered, that those disclosures satisfy the DOL's proposed rule that could become law this year. Such prudent procedures could not only protect against a potential breach of fiduciary claim, but they could also save plan administrators excessive costs in making mandatory plan disclosures by mail.

Source: Wagnerlawgroup.com, March 2020

Supreme Court: Written Disclosures Not Enough to Show Actual Knowledge in ERISA Suits

The United States Supreme Court unanimously decided last week that a plan participant who received written disclosures about the plan's investments, but does not remember reading them, does not necessarily have "actual knowledge" of the content of the disclosures. This is important because ERISA imposes a shorter statute of limitations for suits against a plan fiduciary where a participant has actual knowledge of a breach or violation.

Source: Verrill-law.com, March 2020

What Plan Sponsors May Need to Change for SECURE Act

Many SECURE Act provisions are effective on January 1, 2020. Other deadlines apply depending on the change. Plans have until 2022 to make the necessary plan document amendments so long as they comply with the Act's provisions. This 7-page article summarizes highlights of the most significant changes.

Source: Segalco.com, March 2020

Coronavirus Fears Lead to Spike in 401k Trades

With the markets plummeting at the end of February over fears of the repercussions of a worldwide coronavirus outbreak, 401k investors' trades spiked in the final week of the month, marking it as one of the busiest five-day stretches in the 20 year-plus history of the Alight Solutions 401k Index.

Source: Plansponsor.com, March 2020

Parties in 401k Account Data Breach Suit Announce Settlement

A former participant in the Estee Lauder 401k plan (who sued the plan sponsor and plan providers for failing to safeguard her retirement account), the plan's recordkeeper Alight Solutions, and Estee Lauder have filed a Notice of Settlement in the U.S. District Court for the Northern District of California. Details of the settlement in the first case of its kind to call into question the cybersecurity defenses a plan sponsor and its providers had in place for retirement account fraud have not yet been revealed.

Source: Plansponsor.com, March 2020

The Way to Win an Excessive Fee Suit

There seems to an endless array of 401k plans taken to task for alleged fiduciary breaches and many find it more economical to settle, rather than taking their case to court. But there are lessons to be learned from one plan that didn't settle.

Source: Napa-net.org, March 2020

Vanguard Cements Its Hold on the Target-Date Marketplace

The trend toward lower costs in retirement plans has benefited products across the industry, but Vanguard gobbled up even more of the target-date fund market last year and is nearing $1 trillion managed in those products, according to a report from Sway Research.

Source: Investmentnews.com (registration may be required), March 2020

Retirement Plan Investment Committee Checklist

The fiduciary landscape is changing, and processes once seen as "good enough" no longer check all of the right boxes. Use this straightforward checklist to ensure the investment committee is covering its bases.

Source: Conradsiegel.com, March 2020

Evonik Chemical Corp. Faces ERISA Excessive Fee Challenge

Retirement plan fiduciaries at the specialty chemical company are accused of failing to take advantage of the lowest-cost share class for many of the mutual funds offered within the plan, among other issues.

Source: Planadviser.com, March 2020

Supreme Court Backs Intel Plan Participant in Statute of Limitations Case

Receiving retirement plan disclosures and having "actual knowledge" of the information are not the same thing, the Supreme Court said Wednesday in a ruling against Intel Corp.'s investment policy committee, which had sought to enforce a three-year deadline for filing ERISA claims. There is a six-year limit to file ERISA breach lawsuits if the plaintiff does not have actual knowledge and a three-year limit for those who do.

Source: Pionline.com (registration may be required), March 2020

NEPC's 14th annual DC Plan and Fee Survey

In this report, NEPC continues to focus on measuring financial success for DC plans and participants. While defined contribution plans are inherently participant-directed programs, there are features that plan sponsors and fiduciaries can adopt in order to improve financial success for participants and retirees. This year, their report focuses on the prevalence of plan features relating to increasing savings rates, professionalizing the investment decision, and facilitating the distribution of assets at retirement.

Source: Nepc.com, March 2020

Creating a Superior ERISA 3(38) Appointment Framework

There are myriad products in the marketplace that service providers to 401k plans offer to plan sponsors. These products include so-called "fiduciary warranty" services, "indemnification and hold harmless" services, "fiduciary support" services, and "third-party fiduciary" services. Scott Simon provides a blueprint for the best way to legally protect a plan sponsor when appointing a 3(38).

Source: Morningstar.com, March 2020

Provisions of the Secure Act Affecting Tax-Qualified Retirement Plans

The SECURE Act makes major changes to rules governing retirement savings generally, adopts accompanying administrative improvements, and includes a series of revenue-related provisions that together affect employer-sponsored retirement plans and individual retirement accounts alike. This chart summarizes the law's provisions affecting tax-qualified retirement plans; reports on regulations and other guidance implementing the law; and tracks the contents and required dates of plan amendments.

Source: Mintz.com, March 2020

The SECURE Act's Impact on Employer-Sponsored Retirement Plans, Programs, and Arrangements

These provisions of the SECURE Act collectively modify and generally liberalize the tax rules governing employer-sponsored plans and individual retirement accounts, among others. Set out here is a summary of the key provisions of the Act of interest to employers that sponsor tax-qualified retirement plans.

Source: Mintz.com, March 2020

Study Supports Proposed Tax Credits That Make 401k Auto Enrollment Cost-Effective

One of the key challenges for small businesses is cost and automatic enrollment and escalation increase costs. If an employee is automatically enrolled in a 401k plan when she comes to work, that will often entitle her to a matching contribution, which increases the employer's costs. If the employee were not automatically enrolled, she might not have contributed, thus saving the employer the cost of matching contributions. A number of members of Congress have identified exactly this issue and have introduced legislation to address it very directly. Under those proposals, a small business that adopts a certain level of automatic enrollment and automatic escalation would be entitled to a tax credit to help cover the cost of the matching contributions.

Source: Lpl.com, March 2020

John Hancock Sued Over "Self-Dealing" in 401k Plan Products

A former John Hancock employee is leveling class action claims against the company, alleging it broke the law by packing its 401k menu with proprietary products. The plaintiff, Jennifer Baker, was a participant in the insurance and investment provider's plan between 2014 and 2019. Ms. Baker allegedly suffered financial harm by being invested in John Hancock's products instead of comparable, lower-cost investments from third parties that produced higher returns.

Source: Investmentnews.com (registration may be required), March 2020

Oracle to Pay $12 Million to Settle 401k Lawsuit

Oracle Corp. is settling a long-running 401k lawsuit for $12 million, according to court records filed last Thursday. The settlement comes just before the trial was scheduled to begin. According to the agreement, the deal helps both parties avoid substantial risks that they faced in the process of reaching a court decision.

Source: Investmentnews.com (registration may be required), March 2020

Fidelity Wins Dismissal from ERISA Claims Based on "Infrastructure" Fees

Several highly publicized lawsuits were brought against the Fidelity organization in 2019 in connection with Fidelity's receipt of "infrastructure fees" from mutual fund families and other investment providers made available on Fidelity's "FundsNetwork" investment platform. On February 14, 2020, the District Court dismissed all claims against the Fidelity organization. This article summarizes the claims and the Court's ruling, and offer some initial insights.

Source: Groom.com, March 2020

The DOL's Fiduciary Rule: Will We Get a New Rule?

The Department of Labor has included the proposal of a new fiduciary rule on its Regulatory Agenda. The Agenda indicated that it would be issued in December of last year. But, of course, it hasn't. That raises the question of, if we get a proposed regulation in the near future, will it ever become a final rule?

Source: Fredreish.com, March 2020

Self-Directed 401k Investors Finish 2019 Strong

According to Charles Schwab's SDBA Indicators Report, an industry-leading benchmark on retirement plan participant investment activity within self-directed brokerage accounts, the average account balance across all participant accounts finished 2019 at $294,105, a 19% increase year-over-year and a 6% increase from Q3 2019.

Source: Businesswire.com, March 2020

Supreme Court Toughens ERISA's "Actual Knowledge" Standard

The Court found that plan participants who have access to plan disclosures but do not read them cannot be said to have "actual knowledge" of their contents. This interpretation of "actual knowledge" reduces protections conferred by proper disclosures on diligent fiduciaries, and will raise fact questions in many cases where plaintiffs had access to disclosures that clearly put them on notice of alleged fiduciary breaches.

Source: Beneficiallyyours.com, March 2020

Corona Concerns Cast 'Shadow' on 401ks

It was indeed a wild month for the markets, which at mid-month registered all-time highs, only to suffer, in the last week of February, the worst weekly decline since the 2008 financial crisis. As one would expect that downdraft had an impact on 401k balances. According to estimates from the nonpartisan Employee Benefit Research Institute, in February the average 401k account balance for younger (25-34), less tenured (1-4 years) workers slid 4.3%. Older (age 55-64) workers with more than 20 years of tenure, whose average balance is generally more influenced by market moves than contributions, fared a bit worse, falling 4.4% for the month.

Source: Asppa.org, March 2020

Investment Policy Statements for DC Plans

Fiduciaries are not only re-examining their current investment decision-making practices, but they are also seeking to ensure that those practices allow for enough flexibility in implementation to maximize the likelihood of investment success, while protecting the plan sponsor from potential litigation. Central to the idea of a well-managed program, a clearly articulated investment policy statement serves as the foundation of sound governance and a robust oversight process. This 6-page paper summarizes the key elements of an IPS and discusses the ways great policy design can ultimately drive a successful DC plan.

Source: Russellinvestments.com, March 2020*

Retirement Plan Financial Audit Processes Are Evolving

The main purpose of the financial audits required of retirement plans with 100 or more employees is to give the DOL insight into the plan's operations and whether or not the plan is operating in accordance with the plan documents. New processes and systems for performing these audits can cut costs for plan sponsors, streamline the work and allow for any discrepancies to be caught earlier. Plan sponsors should evaluate the process and system their auditors use to perform the plan financial audit.

Source: Plansponsor.com, March 2020

401k Plan Sponsor Tasks You Can't Afford to Delay

There are certain functions you have as a plan sponsor that you would like to avoid, but you can't because you're responsible as a plan fiduciary to get these things done. This article is about important 401k plan tasks that you can't delay and if you do, it's at your own peril.

Source: Jdsupra.com, March 2020

Ignorance Is Bliss (If You Are an ERISA Plaintiff)

This case is significant because it means that lawsuits challenging an ERISA fiduciary's decision may be brought up to six years after the decision was made unless the fiduciary can prove the plaintiff had actual knowledge of the decision at least three years prior to the filing of the lawsuit. Under this standard, it is not enough that information about a decision was provided to participants and, instead, fiduciaries will likely need to prove participants actually received and read the information, and understood what the information meant.

Source: Hansonbridgett.com, March 2020

Supreme Court Makes It Easier to Sue for Fiduciary Breach

A unanimous U.S. Supreme Court has just ruled in Intel Corp. Investment Policy Committee v. Sulyma that fulfilling ERISA's disclosure obligations is not sufficient to start the clock ticking to determine how long participants have to sue. The issue in this closely watched case was what constitutes "actual knowledge" of a fiduciary breach. The decision has the potential to expand participant protections at the expense of limiting those available to fiduciaries.

Source: Cohenbuckmann.com, March 2020

Supreme Court Sides With ERISA Plaintiff

The ruling in a case against Intel could make it easier for retirement plan beneficiaries to sue administrators for investing plan funds imprudently.

Source: Cfo.com, March 2020

March 31st Deadline for 403b Plan Sponsors

If your organization sponsors a 403b plan for employees and has not adopted an up-to-date written plan document that complies with the applicable regulations, you have until March 31, 2020 to do so. Failure to do could cause substantial negative tax consequences for employees (and the organization) or cause the organization to incur substantial penalties to avoid those consequences.

Source: Benefitslawadvisor.com, March 2020

Revisiting the Delinquent Filer Voluntary Compliance Program After the SECURE Act

A major change that comes with the passage of the SECURE Act is a substantial increase in the penalty amounts imposed by the Internal Revenue Service for a retirement plan's failure to file a return. The increased penalty is part of a provision designed to bring in revenue to the government to offset the revenue loss of some of the other tax-friendly provisions of the Act.

Source: Belfint.com, March 2020

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