March 2023 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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Litigation Trends Remain Steady: Considerations to Help Plan Sponsors Stay Vigilant

The idea of litigation is a daunting one. While there is simply no way to insulate your plan from litigation, there are steps plan sponsors can take to mitigate circumstances. Overarchingly, plan sponsors must be vigilant in their plan oversight. But what does that mean? Here is a list of specific action items to help the plan sponsor community be in good stead should litigation arrive at their doorstep.

Source: Planpilot.com, March 2023

Latino-Owned Businesses May Be Poised for 401k Plan Growth

As state mandates for small businesses take hold, industry players see an opportunity in reaching the underserved Latino population.

Source: Planadviser.com, March 2023

DISH Beats Back Excessive 401k Fee Suit

Another excessive fee suit with participant plaintiffs represented by two active ERISA litigants has been dismissed on several grounds. The defendants in this case -- DISH Network Corporation, the board of directors of that firm, and the retirement plan fiduciaries of the $841 million DISH Networks 401k -- were charged in a suit brought by four former participants.

Source: Napa-net.org, March 2023

2022 Was Rough Year for Near-retirees in Target-date Funds

Last year was a difficult one for mutual funds and ETFs generally, but a category of all-in-one products that serve as the backbone of 401ks -- target-date funds -- offered almost no shelter for people on the cusp of retirement. While stock and bond allocations hurt the performance of TDFs last year, fees declined and assets flowed to collective investment trusts, Morningstar found.

Source: Investmentnews.com, March 2023

How Employers Can Leverage Retirement Law Changes

This article provides an overview of the salient features, as well as plan sponsor considerations, concerning impactful areas of change under the SECURE 2.0 Act, including allowing employers who sponsor a 401k plan, 403b plan, or SIMPLE IRA to make contributions that match an employee's student loan payments; and facilitating new distribution planning options.

Source: Hallbenefitslaw.com, March 2023

Auditing Small Employer Retirement Plans

New rules change the method of counting participants for Form 5500 purposes, possibly both eliminating audits and allowing the use of the abbreviated Form 5500-SF.

Source: Beneficiallyyours.com, March 2023

Missed the 401k Restatement Deadline? Here's Your Plan B for Compliance

The deadline for restating a 401k, profit sharing, or money purchase pension plan has come and gone. So, what can an employer do? It was, after all, the employer's responsibility to ensure that the plan was updated and signed by July 31, 2022. But if an employer did miss that deadline, there is a Plan B.

Source: Retirementplanblog.com, March 2023

Retirement Advisers See Increased Scrutiny on Fees, Services

Retirement plan advisers may be seeing an increase in request-for-proposal evaluations, presenting both an opportunity and a risk for their businesses, according to industry participants. One key driver for plan sponsors in re-considering their adviser team is the wave of consolidation by aggregators, according to industry participants.

Source: Planadviser.com, March 2023

Northwestern Excessive Fee Defendants Win Some, Lose Some

Following a United States Supreme Court directive, a federal court has reconsidered its earlier conclusions in an excessive fee case. April Hughes et al. v. Northwestern University had been dismissed by this same Seventh Circuit back in May 2018, largely on the basis that as long as the participants had access to prudent funds, it didn't matter that all the funds on the menu might not meet that standard. That decision was affirmed by the appellate court in March 2020. In June of 2021, the federal government said that the Court should take on the case and resolve the issues it presents.

Source: Napa-net.org, March 2023

A Changing Recordkeeper Checklist

Whether for good or ill, a change in recordkeepers is one of those "choices" that plan fiduciaries are expected under ERISA to evaluate as a prudent expert. In this podcast, Nevin Adams and Fred Reish cover some key factors.

Source: Napa-net.org, March 2023

All You Wanted to Know About 401k Automatic Enrollment

Automatic Enrollment is one of the most successful features added to a 401k plan in the last 20 years, but even today, it's not a perfect fit for every 401k plan sponsor. Understanding what it is and the history behind it, might give you an idea of it's the right choice for you as a 401k plan sponsor.

Source: Jdsupra.com, March 2023

Coca-Cola Bottlers' Association Reaches Deal to Settle 401k Lawsuit

The Coca-Cola Bottlers' Association settled a class action lawsuit for $3.3 million over claims that its 401k plan breached ERISA laws by charging extreme recordkeeping fees and promoting overpriced investment offerings. The preliminary deal was announced on March 23 in a document filed by the plaintiffs' lawyers in a U.S. District Court in Kansas City, Kansas. Once approved by the court, it is expected to benefit more than 64,000 people covered by the Coca-Cola retirement plan since February 2015, excluding certain defendants.

Source: Investmentnews.com, March 2023

Callan Survey: Legislation, Regulation, and Litigation Driving Change in DC Plans

Callan's DC Survey provides a benchmark for sponsors to evaluate their plans compared to peers, and to offer actionable information to help them improve their plans and the outcomes for their participants. In this year's survey, which was conducted in late 2022, respondents spanned a range of industries; the top were technology, government, and financial services. Of the 99 respondents to this year's survey, 81% offered a 401k plan, 27% a 457 plan, 16% a 401(a) plan, and 9% a 403b plan. Nearly three-quarters of respondents had more than $1 billion in plan assets.

Source: Callan.com, March 2023

Proposed Forfeiture Regulations Provide Clarity and Serve as a Helpful Reminder to Plan Sponsors

The IRS has proposed regulations to clarify the permissible uses of plan forfeitures in qualified retirement plans. This article provides insight into the types of benefit forfeitures permitted in qualified retirement plans, uses of those forfeitures under current law, the IRS's proposed regulations regarding the use of plan forfeitures, and the implications of the proposed regulations on qualified retirement plan sponsors and administrators.

Source: Bsk.com, March 2023

How AI Is Simplifying 401k Plan Comparison

While ChatGPT has been getting most of the attention surrounding artificial intelligence lately, there's another new AI tool out there that 401k plan advisors may find much more useful in their day jobs. That tool -- released in late November 2022 -- is called BenchMine, billed as the first-ever 401k comparative analysis tool that's free and open to the public.

Source: 401kspecialistmag.com, March 2023

Legislation, Regulation, Litigation Driving Change in 401k Plans: Callan

Legislation, regulation, and litigation are the primary drivers for change in DC plans, according to results of Callan's 2023 Defined Contribution Trends Survey, released this week. The survey, now in its 16th year, paints a detailed picture of the challenges and opportunities that are top of mind for DC plan sponsors.

Source: 401kspecialistmag.com, March 2023

Resources for Tracking State and Local Retirement Initiatives

This 15-page article summarizes state and local retirement initiatives for private-sector workers and rounds up relevant Mercer and third-party resources. This listing will be updated periodically and may not always reflect the latest developments in every locality.

Source: Mercer.com, March 2023*

All ROBS Plans Must File a Form 5500

ROBS plans can be a terrific way to fund a new business. But, a ROBS company must make sure to operate the plan as a qualified retirement plan, with all the requirements that entail. One such task is the annual Form 5500 filing. Unfortunately, many professionals within the industry mistakenly tell ROBS owners that they don't need to file a Form 5500. This is incorrect. With limited exceptions, all qualified retirement plans must file a Form 5500 with the DOL each year.

Source: Klblawgroup.com, March 2023

Excessive Recordkeeping Fee Claim Squeaks by a Motion to Dismiss

A federal court in Wisconsin recently allowed a putative ERISA class action in Lucero v. Credit Union Ret. Plan Ass'n to proceed to discovery on the claim that a 401k plan paid excessive recordkeeping fees. This decision highlights an important trend in ERISA litigation. Lucero is part of an ongoing surge of ERISA class actions challenging the recordkeeping costs of 401k plans. Plaintiffs in these cases claim their plans' fiduciaries failed to prudently monitor recordkeeping costs, saddling plan participants with "excessive" fees.

Source: Dorseyerisa.com, March 2023

ERISA Suit Against SeaWorld Advances

A class action lawsuit brought by former SeaWorld employees that alleged participants in the retirement plan -- the SWBG LLC 401k -- were harmed by the defendants' imprudent conduct will proceed, following the ruling of a federal judge in California.

Source: Plansponsor.com, March 2023

Immediate Vesting Is Better for Recruitment Than Cliff Vesting Is for Retention

An Employee Benefit Research Institute research panel focused on employee tenure argued that non-immediate vesting schedules for employer matches are an overrated retention tool. An immediate vest is a smarter recruitment tool, and vesting thresholds can often be outweighed by accepting a higher-paying job elsewhere, according to the panelists.

Source: Plansponsor.com, March 2023

DOL Says It Might Appeal Rollover Ruling

Commenting that "the Florida court's analysis is rooted in a fundamental legal error," the Department of Labor says it may appeal a ruling that upended its guidance on fiduciary duty regarding rollovers.

Source: Napa-net.org, March 2023

What to Do When Young Employees Don't Join the 401k

A lot is competing for your employees' attention, and saving for retirement is often one of the furthest things from people's minds. While this can feel frustrating, it's also an opportunity to help millennials adopt great savings habits and get started early. Here are four strategies that you can implement at your company that could help improve Millennial retirement savings rates.

Source: Forusall.com, March 2023

What Does Consistent Participation in 401k Plans Generate? Changes in 401k Plan Account Balances, 2016-2020

This paper provides an update of a longitudinal analysis of 401k plan participants drawn from the EBRI/ICI 401k database. A few key insights emerge from looking at the 3.7 million consistent participants over the four years from year-end 2016 to year-end 2020.

Source: Ebri.org, March 2023

Florida Court Decision's Impact on Rollover Advice

The court did not change the regulatory definition of fiduciary advice and its application to advice to retirement plans or IRAs. Even if the expanded interpretation for rollover recommendations does not apply, where broker-dealers and their advisors provide ongoing advice to retirement investors they can still be fiduciaries for recommendations to IRA owners, plan fiduciaries, and participants. As a result, broker-dealers and their advisors will still need the relief provided by PTE 2020-02, including the best interest process it requires.

Source: Brokerdealerlawblog.com, March 2023

Five Notable Participant Behaviors Identified in T. Rowe Price 401k Report

While a new T. Rowe Price 2022 Year-End report shows 401k plan participants have largely stayed the course and not significantly changed their loan, distribution, or withdrawal behavior despite the recent turbulent market environment, that doesn't mean there aren't some interesting findings about participant behavior in the research. This article reviews five examples.

Source: 401kspecialistmag.com, March 2023

DOL Reopens Comment Period for QPAM Exemption

The DOL announced this week that it is reopening the comment period for proposed changes to the qualified professional asset manager exemption until April 6. The extension comes as the DOL says that at least one interested party may have additional information to provide that was not submitted by the previous January 6 comment deadline.

Source: 401kspecialistmag.com, March 2023

DC Withdrawal Activity Remained Low in 2022: ICI

Despite market volatility, inflation, and lingering concerns of a recession, recent Investment Company Institute research shows that defined contribution plan participant withdrawal activity remained low in recent years. According to ICI's research report, 4.1% of DC plan participants took withdrawals in 2022, compared with 4.1% in 2021 and 3.8% in 2020.

Source: 401kspecialistmag.com, March 2023

Rethinking 401k Plan Success: The Power of Deferral Rates

From the beginning of 401k plans, the retirement industry has focused on the performance of individual funds as the key driver of retirement readiness. But a study by the Putnam Institute in 2006 and repeated in 2012 concluded that increasing deferral rates have the greatest potential impact on a 401k participant's account balance at retirement.

Source: Retirementplanblog.com, March 2023

Advisers Recommend Fiduciary Outsourcing Services, Mostly for Small Plans

Plan advisers often recommend that clients use fiduciary outsourcing services, alleviating the administrative burden on both advisers and clients, according to new industry research. More than 20% of advisers said clients spend between a quarter and half of their time on plan administrative tasks that could be outsourced.

Source: Planadviser.com, March 2023

Biden's First Veto Keeps DOL's ESG Rule in Place

President Biden on Monday used his first veto to maintain an environmental, social, and governance rule for retirement investing plans that, according to many legal experts and industry participants, has no material bearing on the management of those investments.

Source: Planadviser.com, March 2023

The Top 10 Wrong Ideas That Plan Sponsors Have About Their Retirement Plans

While most employers try to do right by their employees with their retirement plans, the employer's lack of expertise and sophistication in the nuances of retirement plans are often taken advantage of. Since employers delegate plan decisions to these unscrupulous professionals, employers rely on major misconceptions about retirement plans that unwittingly expose them to potential liability. This article is about the ten wrong ideas that plan sponsors have about retirement plans and the retirement plan business.

Source: Jdsupra.com, March 2023

SECURE Act 2.0 Brings New and Improved Self-Correction Opportunities

With each program update, plan sponsors would benefit from additional opportunities to self-correct insignificant errors. When an error was not eligible for self-correction, plan sponsors could file a Voluntary Correction Program application. These were excellent alternatives, but it turns out, everything can always be better. SECURE 2.0's improved self-correction opportunities.

Source: Belfint.com, March 2023

IRS Issues Proposed Regulations Regarding Use of Forfeitures in Tax-Qualified Plans

Some of the IRS regulations dealing with tax-qualified plans predate ERISA and subsequent federal tax legislation and have become outdated. However, sometimes it takes IRS a long time to update its regulations to reflect current laws. On February 24, 2023, the IRS issued proposed regulations addressing one such outdated regulation.

Source: Wagnerlawgroup.com, March 2023*

State Anti-ESG Coalition Clarifies Policy Goals

A coalition of 19 states, led by Florida's Republican Governor Ron DeSantis, signed an open letter declaring their opposition to the use of environmental, social, and governance factors in government investing and outlined legislative priorities to that effect. The alliance highlighted the prohibition of ESG factors in government investing decisions and the use of "social credit scores."

Source: Plansponsor.com, March 2023

District Courts Reach Opposite Conclusions on 401k Excessive Fee Claims

A district court in the Southern District of Ohio and one in the Western District of Wisconsin reached opposite conclusions on motions to dismiss claims for fiduciary breach based on allegations that recordkeeping fees were unreasonably high. Dismissal was granted in Sigetich v. The Kroger Co., but the dismissal was denied in Lucero v. Credit Union Retirement Plan Association. Although the disparate results can arguably be rationalized by the underlying facts in each case, the opinions show that district courts continue to apply inconsistent principles in adjudicating these claims at the motion to dismiss stage.

Source: Erisapracticecenter.com, March 2023

Secure 2.0: Treating Student Loans as Elective Deferrals

SECURE 2.0 was signed into law in December 2022 as part of the Consolidated Appropriations Act of 2023. Effective for plan years beginning after 2023, certain types of plans containing elective deferral features may choose to treat student loan payments as elective deferrals and make matching contributions on those amounts. These optional provisions are available to 401k plans, 403b plans, SIMPLE IRAs, and governmental 457b plans.

Source: Boutwellfay.com, March 2023

Labor Tightness Drives More Immediate Eligibility for Retirement Deferrals

New Vanguard data shows that 72% of employers allowed for immediate eligibility of retirement saving deferrals in 2021, an increase over the past decade from 58% in 2012, according to its research paper, "The Changing Workforce."

Source: Planadviser.com, March 2023

LinkedIn Will Pay Out $6.75 Million for 401k Participant Complaint

LinkedIn Corp. settled for $6.75 million in a 401k excessive fee complaint made in August 2020, according to court filings. The social media company settled over allegations made by participants of its 401k profit-sharing plan and trust that it did not try to reduce plan expenses or scrutinize investment options closely enough within the plan, according to a settlement agreement filed on March 3 in the U.S. District Court for the Northern District of California.

Source: Planadviser.com, March 2023

IRS Proposed Rule: Forfeitures in Retirement Plans

The IRS released a proposed rule on the use and timing of forfeitures in retirement plans. It was published in the Federal Register on February 27, 2023. The proposed regulation provides clarification of the use of forfeitures for retirement plans subject to the minimum funding requirements as well as the deadline for the use of forfeitures in DC plans.

Source: Pkfod.com, March 2023

Florida Gov. DeSantis to Form Anti-ESG State Coalition

Fla. Gov. Ron DeSantis will announce an alliance with 18 states Thursday to "push back against President Biden's environmental, social, corporate governance (ESG) agenda." The Washington Examiner, citing an unreleased press statement it previewed, said each state would commit to "efforts to protect individuals from the ESG movement" and consider divesting state assets and pension funds from companies that adhere to ESG tenets, the paper reported.

Source: Napa-net.org, March 2023

$5 Million Settlement Struck in 401k Excessive Fee Suit

Another excessive fee suit involving proprietary funds has settled a little more than a year after the suit was filed. In this one, plaintiffs filed suit against the Bessemer Trust Company and the Profit-Sharing Plan Committee of Bessemer Trust Company alleging, among other things, that they caused the plan and its participants to invest in expensive and underperforming proprietary Old Westbury mutual funds.

Source: Napa-net.org, March 2023

Hardships Becoming Even Less Hard to Take

SECURE 2.0 has provided several opportunities for plan administrators to assist participants in tackling emergency expenses. Two of these provisions updated the administration of hardship withdrawals to plan participants.

Source: Graydon.law, March 2023

Plan Sponsors Spending Half Their 401k Time on Admin Work That Could Be Outsourced

Nearly 89% of advisors in a new survey said that plan sponsor clients are spending up to 50% of their time on retirement plan administrative work that could be outsourced. That's a key finding from a new study on "Advisor Attitudes Toward 3(16) Fiduciary Outsourcing" released this week by Pentegra.

Source: 401kspecialistmag.com, March 2023

Proposed Regulations on How to Use Forfeiture Accounts

On February 27, 2023, the IRS published proposed regulations on the use of forfeitures in qualified retirement plans. For DC plans, the regulations provide welcome clarity on what forfeitures can be used for and the date by which forfeitures must be used. In addition, they provide a helpful transition rule and, most importantly, serve as a reminder that forfeiture accounts must be used promptly to avoid an operational failure that will place the plan's tax-qualified status at risk.

Source: Verrill-law.com, March 2023

Webinar Recording: DC Plan Trends and Fee Survey Overview

NEPC's DC Practice Group unveils the full results of their 17th Annual DC Plan Trends & Fee Survey. The team highlights current DC plan investment trends, plan features, and how increasing market pressure is transforming DC plan strategies. From the challenges that come with retirement income solutions to the increasing adoption of passive tier options and the growth of the DC plan OCIO market, NEPC's DC consultants break down how they are advising plans to address emerging opportunities.

Source: Nepc.com, March 2023

Social Network Settles 401k Excessive Fee Suit

The terms in an excessive fee suit settlement announced last fall have finally been revealed. The plaintiffs here are two former and one current participant of the LinkedIn Corporation 401k Profit Sharing Plan and Trust. They have filed a notice of a settlement for the court's approval.

Source: Napa-net.org, March 2023

Grocery Chain's Excessive Fee Suit Sacked

An excessive fee suit targeting a $5.9 billion 401k plan has been dismissed, with prejudice. Fending off this particular lawsuit were Kroger and the fiduciaries of the Kroger 401k Retirement Savings Account Plan.

Source: Napa-net.org, March 2023

Canadian Women Are 16% Less Confident About Retiring Than Men: Survey

Just over half (52 percent) of Canadian women say they feel financially confident about retiring at their target age, compared to 68 percent of men, according to a new survey by the Bank of Montreal.

Source: Benefitscanada.com, March 2023

The SECURE 2.0 Act of 2022

The Act strives to increase retirement savings, improve retirement plan operation and correction rules, and decrease the cost of setting up a retirement plan. This is a summary of some of the significant provisions that are most likely to affect plans.

Source: Belfint.com, March 2023

Judge Rejects Mitre's Efforts to Dismiss ERISA Lawsuit

Fiduciary breach allegations against Mitre Corp. will advance, after a federal judge in Massachusetts ruled in favor of the plaintiffs and denied Mitre's motions to dismiss the lawsuit. U.S. District Judge Denise J. Casper ruled in favor of the plaintiffs, ordering the fiduciary breach, brought against Mitre for failing to leverage the bargaining power and size of assets in the plan to negotiate lower fees, to proceed.

Source: Plansponsor.com, March 2023*

Long-Standing 403b Excessive Fee Suit Settles

The parties in one of the first university 403b excessive fee suits -- by participant-plaintiffs represented by the Schlichter law firm -- have unveiled the terms of a big settlement. The suit involved two plans sponsored by the University of Southern California.

Source: Ntsa-net.org, March 2023

'Plausible' Denials -- New Twists and Turns in ERISA Litigation

In this podcast episode, Nevin Adams and Fred Reish take a look at the new litigation landscape for ERISA plans, including an update on suits involving the BlackRock LifePath target-date funds, a surprising decision regarding rollovers and the fiduciary rule, and a flurry of ESG litigation.

Source: Napa-net.org, March 2023

American Views on Defined Contribution Plan Saving, 2022

This survey polled respondents about their views on defined contribution retirement account saving and their confidence in 401k and other DC plan accounts. Survey responses indicated that Americans value the discipline and investment opportunity that 401k plans represent and that individuals were largely opposed to changing the tax preferences or investment control in those accounts. A majority of respondents also affirmed a preference for control of their retirement accounts and opposed proposals to require a portion of retirement accounts to be converted into a fair contract promising them income for life from either the government or an insurance company.

Source: Ici.org, March 2023

Defined Contribution Plan Participants' Activities, 2022

To measure participant-directed changes in DC plans, ICI has been tracking participant activity through recordkeeper surveys since 2008. This report updates results from ICI's survey of a cross section of recordkeeping firms representing a broad range of DC plans and covering more than 40 million employer-based DC retirement plan participant accounts as of December 2022. The broad scope of the recordkeeper survey provides valuable insights about recent withdrawal, contribution, asset allocation, and loan decisions of participants in these plans.

Source: Ici.org, March 2023

Secure Act 2.0 Encourages Employee Participation in Retirement Savings

At the very end of 2022, Congress passed the Securing a Strong Retirement Act of 2022 as part of the omnibus spending bill. The provisions have a broad effect on a range of retirement and other benefit issues with the basic overall goal of increasing access and encouraging employee participation in retirement savings. The various changes will take effect between now and 2025. Here is what the Secure Act 2.0 does.

Source: Hrdailyadvisor.blr.com, March 2023

Nerding Out on Secure 2.0: Long-Term Part-Time and 403b Plans

SECURE 2.0 reduced this eligibility period to only 2 consecutive years of service, starting in 2025. SECURE 2.0 also included language to subject ERISA 403b plans to the LTPT fun, starting in 2025. Questions have arisen as to whether the LTPT rules will override a class exclusion in a 403b for employees working fewer than 20 hours and/or student employees. Some practitioners have opined that the LTPT requirements will not override the exclusion rules.

Source: Ferenczylaw.com, March 2023

Over Half of DC Investors Lack Longevity Literacy: Nuveen

A new report by Nuveen highlights the latest retirement-focused insights in the defined contribution space, including longevity literacy, ESG, and new provisions offered in SECURE 2.0.

Source: 401kspecialistmag.com, March 2023

Self-Directed 401ks Also Fell 20% in 2022, Schwab Report Shows

Yet another report shows 401k accounts generally took a 20% hit in 2022, although it could have been worse if not for a subtle recovery in Q4.

Source: 401kspecialistmag.com, March 2023

401k Participant Drops Data Breach Suit Against Transamerica

A retirement plan participant has dropped a lawsuit filed against Transamerica Retirement Solutions alleging that the retirement plan provider failed to exercise reasonable care in securing and safeguarding personally identifiable information, including names, addresses, Social Security numbers, and retirement fund contribution amounts.

Source: Planadviser.com, March 2023

SECURE 2.0: 403b Plan Expansion and Enhancement

Over the years, 403b plans have been becoming more like their qualified plan cousin, the 401k plan. Despite this trend toward uniformity, legal, investment, and administrative differences have persisted. The SECURE 2.0 Act of 2022 includes several provisions that eliminate some of these remaining differences.

Source: Mcdonaldhopkins.com, March 2023

CA Federal Court Refuses to Dismiss ERISA Safe Harbor 401k Claims Against Calbiotech

A California federal judge has denied Calbiotech's bid to dismiss a former employee's ERISA suit involving a claim that it failed to match contributions to employees' 401k plans. The judge also kept the former employee's retaliatory discharge claim alive but tossed his claims related to a separate employer-sponsored pension plan.

Source: Hallbenefitslaw.com, March 2023

District Court Vacates DOL Interpretation of Investment Advice

Does combining a recommendation to take a rollover from a retirement plan with post-rollover advice mean that advice is being provided on a "regular basis" under the DOL five-part test for fiduciary investment advice status? In American Securities Ass'n v. United States Dep't of Labor, a United States District Court answered No. Recommendations to employee benefit plans must be analyzed separately from recommendations to IRAs to determine whether the regular basis prong of the five-part test has been met.

Source: Groom.com, March 2023

DOL Finalizes Significant Form 5500 Changes for 2023 Year

The Final Rule addresses many of the outstanding reporting issues from the September 2021 proposal. These Form 5500 changes are effective for the 2023 reporting year. Most notably, this package of Form 5500 changes includes reporting rules related to defined contribution "groups of plans" or DCGs, changes to Schedules MB, SB, and R for defined benefit plans, the addition of IRS compliance questions, and a change to the counting method for determining whether a defined contribution plan is subject to audit. The changes are summarized here.

Source: Groom.com, March 2023

Proposed Treasury Regulations on Forfeitures Would Require Changes to Tax-Qualified Retirement Plans

The U.S. Treasury Department issued proposed regulations regarding the treatment of forfeited amounts in tax-qualified defined benefit and defined contribution retirement plans. The proposed regulations, if finalized, would require plans to be amended to specifically address new rules regarding the treatment of forfeited amounts.

Source: Ballardspahr.com, March 2023

The Language of Longevity: How Understanding Prompts Action

Financial literacy, financial wellness, and now longevity literacy. It's the latest phrase in the fight to raise awareness of -- and preparation for -- later-in-life issues, financial, medical, and otherwise, and an idea the TIAA Institute hit upon during its research.

Source: Asppa.org, March 2023

Five Key Themes in J.P. Morgan Asset Management's 2023 Guide to Retirement

New research released today explores top trends in the defined contribution space, including SECURE 2.0 and market uncertainty. J.P. Morgan Asset Management released its annual Guide to Retirement, examining five key retirement themes expected to impact financial advisors, defined contribution plan participants, and clients throughout 2023.

Source: 401kspecialistmag.com, March 2023

Court Overturns DOL Guidance on Rollover Advice

A federal court has vacated part of the 2021 DOL rollover guidance for investment advice fiduciaries. In one of those FAQs, DOL said a recommendation to roll over a participant's retirement plan account to an individual retirement account may be fiduciary investment advice when the advisor expects to give ongoing advice after the rollover. According to the court, this guidance contradicts the agency's current regulation.

Source: Mercer.com, March 2023*

SECURE 2.0: Catch-up Changes and After-Tax Employer Contributions

SECURE 2.0 makes several important changes to catch-up and after-tax contributions in tax-qualified plans. Plan Sponsors will need to evaluate carefully how these changes affect their Plans. Although these changes may bring more opportunity and flexibility to participants, they may also bring challenges to the administration of catch-up and Roth contributions that did not exist before SECURE 2.0.

Source: Kilpatricktownsend.com, March 2023

401ks Increasingly Under Attack in Wake of SECURE 2.0 Passage

Despite SECURE 2.0's passage, 401ks face increasing attacks, with the latest salvo coming from an opinion piece published in Politico. Social Security is just one part of the retirement system, notes the provocatively titled "Before Slashing Social Security, Cut 401ks." Talk of cuts to the others, including defined-benefit and defined-contribution plans, rarely occurs, something author Matthew Bruenig argues should change.

Source: Napa-net.org, March 2023

Congressional Rejection of DOL ESG Rule Casts Pall Over Measure

The regulation is safe thanks to a pending veto of the resolution approved by the House and Senate, but the vote adds some political uncertainty for plan advisors.

Source: Investmentnews.com, March 2023

IRS Proposed Regulation Addresses Rules Relating to Plan Forfeitures

Historically, the topic of forfeitures has raised many questions for qualified plan administrators- specifically, how and when they can be used. But there has been little formal guidance regarding requirements relating to the use of, and timing to use such forfeitures. Treasury took a step toward addressing some of those questions by issuing proposed regulations on February 27, 2023.

Source: Groom.com, March 2023

Proposed IRS Regulations Make Handling Forfeitures Less Burdensome

The IRS issued proposed regulations regarding the use of forfeitures in qualified retirement plans, including 401k plans. The proposed regulations include a deadline for the use of forfeitures in defined contribution plans and clarify the purposes for which forfeitures can be used in a defined contribution plan. The regulations are proposed to apply for plan years beginning on or after January 1, 2024, but plan sponsors may rely on them in the interim.

Source: Graydon.law, March 2023

DOL Issues Final Rules on Changes to 2023 Form 5500

Plan sponsors must generally file 5500 forms on the last day of the seventh month after their plan year ends. The 2023 plan year reports, which will be filed beginning in mid-2024, include changes reviewed here.

Source: Eisneramper.com, March 2023

CPA Dismay Over Form 5500 Changes May be Misplaced

Final changes to Form 5500 reporting requirements were announced that are estimated to result in almost 20,000 fewer retirement plans having to file independent qualified public accountant reports with their Form 5500 returns. The changes, which take effect for reporting for the 2023 plan year, were met with dismay by CPA firms that provide the IQPA reports, often referred to as audit reports. However, their concerns may be short-lived, as certain provisions of SECURE 2.0 will likely increase plan participation levels over the next few years and result in more plans that are of the size that must file.

Source: Eforerisa.com, March 2023

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