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April 2018 Digest

This digest contains a wide variety of the freshest source material dealing with current trends, opinion, news, legislative action, investments, marketing, sales, consulting, and legal issues regarding 401k, 403(b) and other retirement plans. Each listing contains a headline (hyperlinked to the source document), description, source of the item, and the month and year posted to this digest.

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Trends in the Expenses and Fees of Funds

Abstract: Fund expenses cover portfolio management, fund administration and compliance, shareholder services, recordkeeping, certain kinds of distribution charges, and other operating costs. This ICI study found that, on average, fund expenses for long-term mutual funds have declined substantially for more than 20 years.

Source: Ici.org, April 2018

Stable Value Fund Withstands ERISA Challenge

Abstract: The First Circuit Court held that the Plaintiff's claims were based on a type of "hindsight" analysis of past performance and held that those allegations are not sufficient to support a claim that plan fiduciaries were imprudent in making conservative investment decisions.

Source: Hodgsonruss.com, April 2018

The Fate of the Fiduciary Rule: What is Not Affected

Abstract: While we won't know until the end of the month whether the DOL fiduciary rule will survive beyond May 7, there are some activities that won't be affected, regardless of what happens. This article reviews four of these activities.

Source: Brokerdealerlawblog.com, April 2018

SEC Proposes Best Interest Standard

Abstract: The SEC's proposed best interest standard appears to be directed at the same goal as the "impartial conduct standards" included in the Department of Labor's Best Interest Contract (BIC) Exemption. As part of the proposed rule package, the SEC published for comment a short-form customer or client relationship summary (Form CRS) brokers would be required to use in setting out the material facts of the relationship with their clients.

Source: Steptoe.com, April 2018

Passive Target-Date Funds: Separating Myth From Reality

Abstract: The use of passive target-date funds in DC plans continues to grow, in part due to their low-cost relative to other TDF options. While the cost advantages of these TDFs can be attractive, cost represents only one of the factors that plan sponsors and their advisors should consider when selecting a TDF on behalf of participants. This 11-page paper highlights three common myths about passive TDFs to help plan sponsors dig deeper in their due diligence and ensure they follow a prudent selection process based firmly on their specific plan needs.

Source: Schwabfunds.com, April 2018

Ascensus Gets Set to Roll Up a World of TPAs to Create a Small Plan Superpower

Abstract: Sometimes it seems like the DOL rule has affected everything in financial advice except the 401k business. Fidelity rolls on. Yet there's a rush to capture small 401k plans that pre-rule were deemed so small that unless outsized, ugly and hidden fees were charged to make up for the broker's inconvenience in dealing with them, they wouldn't exist. Now, the combination of the new rules curtailing brokerage excesses, an explosion of 401k assets and the better technology being built to handle small accounts cheaply is changing the way people see microplans.

Source: Riabiz.com, April 2018

DOL Secures Prison Time for Two Florida ERISA Fraudsters

Abstract: A pair of former executives of First Farmers Financial are being punished for their involvement in the sale of $179 million in fraudulent loans to a Milwaukee company that provided investment services to 42 retirement plans covered by ERISA.

Source: Planadviser.com, April 2018

Four Tips for Preventing Uncashed Retirement Checks

Abstract: No plan sponsor or TPA likes dealing with uncashed retirement checks. However, when a former employee fails to cash their distribution, the employer still has fiduciary responsibility for the funds. Here are four ways to decrease the burden involving ex-employees and uncashed checks.

Source: Penchecks.com, April 2018

The New 403b Plan Documents: Protecting Your Clients

Abstract: Less than two years remain until the date by which 403b plan sponsors which seek to self-correct plan provisions that violate the Internal Revenue Code can do so. An April 18 NTSA webinar discussed what some employers are doing to correct errors and make restatements by that date certain.

Source: Ntsa-net.org, April 2018

States Step Forward in Fiduciary Fight

Abstract: Three states have now entered the fiduciary rule litigation arena, claiming that they "can no longer rely on DOL to adequately represent their interests." The states involved -- California, New York and Oregon -- have filed two separate motions.

Source: Napa-net.org, April 2018

Wells Fargo Wouldn't Be the First to Push Proprietary Products on 401k Participants

Abstract: The disclosure of an alleged Labor Department investigation of Wells Fargo sales practices -- including those in its retirement-plan services division -- is sure to raise a few eyebrows, but should this sort of thing really be a revelation to anyone in the 401k industry?

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

401k Recordkeeper Consolidation Is About to Heat Up

Abstract: Though there have been a few recent high-profile 401k recordkeeper acquisitions, there has been a lull in the consolidation. That's likely to change soon as a result of escalating costs, low interest rates and the natural maturation of the 401k recordkeeping business.

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

Fiduciary Proposal: Revenge of the SEC

Abstract: This article provides an overview of the core provisions of the SEC's Best Interest Package, as well as high-level observations on how it tracks or departs from the DOL's Fiduciary Rule.

Source: Groom.com, April 2018

DOL and ESG Investing: Evolving Guidance

Abstract: This article describes the key points from FAB 2018-01 and then provide a summary of the ever changing regulatory framework ERISA fiduciaries have been instructed to use when considering proxy voting and investing in ETIs.

Source: Groom.com, April 2018

2018 RCS: Retiree Confidence in Critical Aspects of Retirement Security Declines

Abstract: This year's Retirement Confidence Survey finds only a third of retirees very confident in their ability to live comfortably throughout retirement. While this is comparable to last year, retiree confidence in having enough money to cover basic expenses and medical expenses has dropped: 80 percent say they are very/somewhat confident about covering basic expenses this year compared to 85 percent in 2017; and 70 percent say they are very/somewhat confident about covering medical expenses this year vs. 77 percent in 2017.

Source: Ebri.org, April 2018

How Is Income in Retirement Changing?

Abstract: The RCS shows how workers' expectations of the sources of income in retirement might differ from the sources of income for current retirees: 26 percent of retirees report receiving income from work, while 68 percent of workers expect working for pay to provide them income in retirement; 2-in-3 retirees report Social Security is a major source of income, while only about a third of workers believe Social Security will be a major source; and more than 4-in-10 retirees report income from a DB or pension plan is a major source of income, while only 32% of workers expect a DB plan to be a major source for them in retirement.

Source: Ebriorg.wordpress.com, April 2018

How a 'Mega Roth' Can Help Your DC Plan

Abstract: Plan sponsors who want to allow participants to contribute more Roth monies to a defined contribution plan than the standard limits have an option: An in-plan Roth conversion of after-tax contributions in the same year they are made to the DC plan.

Source: Callan.com, April 2018

QLAC Rules Form Foundation on How 401k and IRA-Based Lifetime Income Works

Abstract: Lifetime income can be a daunting concept for the non-actuarial/non-insurance professional whose practice is focused on defined contribution arrangements. Where does one even start in trying to figure this out. A good place to start to get a fundamental understanding of how DC plans and IRAs can be used to provide lifetime income is to look at the IRS's guidance on the Qualified Longevity Annuity Contracts, the QLAC.

Source: Businessofbenefits.com, April 2018

401k Plan Sponsors in Desperate Need of Fiduciary Know-How

Abstract: Ensuring that Americans are able to retire with dignity (and sustain that dignity throughout retirement) begins with helping 401k plan sponsors realize and fulfill their fiduciary obligations. It's a concept easy enough for an advisor to write on their to-do list, but more difficult than it seems to check off.

Source: 401kspecialistmag.com, April 2018

Wells Fargo Investigated by DOL Over 401k Rollover Practices

Abstract: The Labor Department is looking into whether Wells Fargo & Co. has steered participants in low-cost corporate 401k plans into more expensive IRAs at the bank, The Wall Street Journal reported on Thursday.

Source: 401kspecialistmag.com, April 2018

The SEC's Fiduciary Proposal -- Investment Adviser Standard of Conduct

Abstract: The SEC is intended to enhance investor protections and regulatory clarity while maintaining investor access and choice. This article describes the Investment Adviser Standard of Conduct Interpretation portion of the SEC's fiduciary proposal.

Source: Spencerfane.com, April 2018

DC Plan Participants Looking for Guaranteed Income in Retirement

Abstract: Eight in 10 DC plan participants are very or somewhat interested in an in-plan investment option that would guarantee monthly income for life in retirement, and the same number express interest in taking money out of their plan at retirement and moving it to a financial product that would guarantee them monthly income for life.

Source: Planadviser.com, April 2018

Labor Department Says ESG investments Aren't Always "Prudent"

Abstract: The Trump administration unveiled guidance aimed at the burgeoning socially responsible investment industry that left some investors scratching their heads. The Department of Labor, which oversees retirement-plan funds, published guidelines that said investments based on environmental, social and governance issues aren't always a "prudent choice" and that such factors shouldn't "too readily" be considered as economically relevant by fiduciaries.

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

Litigation, Scale Push Private Colleges to Adopt Multiple Employer Plans

Abstract: Pioneers circled their wagons for mutual protection, and a new trend emerging in the 403b space employs a roughly similar tactic. Small and independent, nonprofit private colleges -- in search of ways to improve the retirement outlook for faculty and staff, and mindful of regulatory and litigation risks -- are banding together at the state level to establish multiple employer plans, or MEPs.

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

403b University Cases Move Forward: Cassell v. Vanderbilt University

Abstract: A lawsuit against Vanderbilt University is moving forward based on allegations that the university and its fiduciaries mismanaged its retirement plan by paying excessive fees and maintaining poor investment options.

Source: Employeebenefitsblog.com, April 2018

What Is the Deadline to Correct a Failed ADP/ACP Test?

Abstract: Every couple of years, our 401k plan fails the ADP/ACP test by a small margin. Since we don't always fail the test, gathering our year-end census information to send to our TPA sometimes isn't as high a priority as some of the other projects necessary to close out the year. Is there a timing deadline to run the tests each year and to make any corrections if there is a failure?

Source: Dwc401k.com, April 2018

Field Assistance Bulletin No. 2018-01

Abstract: DOL Field Assistance Bulletin 2018-01 provides guidance in addressing questions raised by Interpretive Bulletin 2016-11 and 2015-12 regarding the exercise of shareholder rights and written statements of investment policy and relating to economically targeted investments.

Source: Dol.gov, April 2018

Dissecting Retirement Plan Lawsuit Issues

Abstract: The stream of lawsuits filed for alleged mismanagement of retirement plans has been a cause for concern for plan sponsors of all different sizes and industries across the country. This article explores the more frequently cited issues, focusing on the recent lawsuits filed against higher education and healthcare institutions. It also provides some thoughts on how retirement plan sponsors can prepare their plans and protect fiduciaries.

Source: Cammackretirement.com, April 2018

Employers Unprepared for 401k Plan Data Breaches

Abstract: The U.S. retirement model has become of increasing interest to foreign hackers, typically the perpetrators of large-scale data breaches. However, companies, plan sponsors and plan participants are unaware or underprepared for the ramifications of a cyberattack, experts warn.

Source: Benefitnews.com, April 2018

Retirees Get a 401k Withdrawal Headache

Abstract: For those who do have 401k savings, paralysis is the more common reaction when wrestling with the withdrawal question. Much is at stake for typical boomers. Is this even enough money to support their same standard of living after retiring? If deciding how much of the 401k to spend and how fast can be a headache for people in good financial shape, it's a migraine for boomers with less.

Source: Bc.edu, April 2018

Most 401k Consultants Support Additional "Retirement Tier"

Abstract: New survey results show that a significant majority of 401k consultants support additional services in DC plans. Nearly two-thirds (64%) of survey respondents said they believe plans should offer a "separate retirement income tier," which may include retiree-focused services and products, according to PIMCO's 12th annual Defined Contribution Consulting Support and Trends Survey.

Source: Asppa.org, April 2018

Video: Advisor Opportunities With State-Run Retirement Plans

Abstract: Discusses how state-sponsored retirement programs are actually generating new opportunities for advisors to have consultative conversations with prospective retirement plan sponsors.

Source: Ascensus.com, April 2018

DOL Clarifies Stance on ESG in 401ks

Abstract: In its latest Field Assistance Bulletin, the DOL warned that, "fiduciaries may not sacrifice returns or assume greater risks to promote collateral environmental, social, or corporate governance (ESG) policy goals when making investment decisions."

Source: 401kspecialistmag.com, April 2018

Keep Track of 401k Participants So They Don't Go Missing

Abstract: Increased job-hopping and frequently forgetting to update their contact details with previous employers are two reasons why participants in 401k and similar employer-sponsored retirement plans may "disappear." Creating a "missing-participant program" can help plan sponsors comply with the requirement that they make sure former employees can access their savings. A proposed legislative remedy also could be on the way.

Source: Shrm.org, April 2018

AARP Wants Great-West's 401k Victory Reversed

Abstract: The industry group representing Americans 50 and older wants the U.S. Court of Appeals for the Tenth Circuit to revive a class action by 270,000 people who invested in Great-West's guaranteed investment annuity contracts. Investors say that because Great-West kept the difference between the rate of return they received and the returns actually earned by the investment, the company essentially set its own compensation.

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

SEC's Fiduciary Rule Could Erase Question of Labor Dept. Appeal

Abstract: The SEC unveiled its take on a fiduciary rule late April 18, and the proposed rule includes elements that echo the DOL's embattled fiduciary rule. That could make it easier for the DOL to walk away from its own fiduciary rule and not appeal a recent court decision that vacated it, sources told Bloomberg Law.

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

Reporting Delinquent Contributions on the Schedule of Delinquent Participant Contributions

Abstract: There are two different ways to compute the late deferrals to report as prohibited transactions, depending on whether you are completing the Form 5330 (Return of Excise Taxes Related to Employee Benefit Plans) or answering the questions on Form 5500, Schedule H, and its related supplementary schedule. There is a correct way for each situation.

Source: Belfint.com, April 2018

It's Not Deja Vu, It's a Brand New Best Interest Rule Making Debate

Abstract: The release of a thousand-page "best interest" rule making package by the SEC applying to all brokers and investment advisers is being hailed as a victory by some and a deep disappointment by others; either way, it's the start of another long chapter in the epic industry battle over federal conflict of interest regulations.

Source: Planadviser.com, April 2018

401k Plan Participants Challenge Principal's Management of TDFs

Abstract: The lawsuit alleges Principal used proprietary investment vehicles, rather than other investment vehicles, and share classes with higher fees for the underlying TDF investments, to produce more income for itself and its subsidiaries.

Source: Planadviser.com, April 2018

Revenue Sharing -- The Horse and Buggy of the Retirement Plan

Abstract: If you currently handle plans with revenue sharing, take a hard look at other arrangements. As an advisor, if you run across a plan with revenue sharing, bring up the points mentioned here to the plan sponsors. You may have just found a new client.

Source: Nwp401k.com, April 2018

Illinois' State-Sponsored Retirement Program Enters Pilot Phase

Abstract: It's been more than three years since then-Governor Pat Quinn signed legislation creating the Secure Choice program. But the retirement savings program for workers whose employers don't offer one is finally becoming a reality.

Source: Northernpublicradio.org, April 2018

401k ACP Test: Why Your Employees' Actual Contribution Percentage Matters

Abstract: In 401k language, a plan with widespread benefits is non-discriminatory. That is, the benefits are not skewed toward certain employees. A series of annual tests is used to decide whether or not a plan discriminates. If the plan fails a test, the company must take corrective action until the plan is no longer discriminatory.

Source: Forusall.com, April 2018

SEC Proposes Best Interest Standards

Abstract: Addressing themes similar to those in the DOL rule, the SEC proposal aims to better protect retail investors by raising the standard of conduct for broker-dealers providing recommendations to retail investors and reaffirming/clarifying the terms of the relationship between retail investors and investment professionals. The proposed package of guidance is reviewed.

Source: Conduent.com, April 2018

SEC Rolls Out Best Interest, Fiduciary Proposal

Abstract: The SEC voted 4-1 to release for public comment a set of proposals to enhance the quality and transparency of investors' relationships with investment advisers and broker-dealers while preserving access to a variety of types of advice relationships and investment products.

Source: Asppa.org, April 2018

Tips for Handling Combined DB/DC Plan Testing

Abstract: Nondiscrimination testing has been likened to rocket science. And that's in reference to just one flavor of plan. So imagine how exponentially those complexities must increase when the testing involves both defined benefit and defined contribution plans.

Source: Asppa.org, April 2018

Secretary Galvin Slams SEC Fiduciary Rule "Fail"

Abstract: High-profile regulator and Massachusetts Secretary of Commonwealth William Galvin pulled no punches in his view of the SEC's proposed fiduciary rule remake.

Source: 401kspecialistmag.com, April 2018

Plan Design Has Made Us Better Investors

Abstract: Thanks to a decade of advancements in plan design and the rise of target-date investments, plan participants are better investors today than ever before.

Source: Vanguardinstitutionalblog.com, April 2018

Eight Mistakes Advisors Can Make When Approaching a Retirement Plan

Abstract: When approaching a retirement plan, not heeding these eight tips can be a major mistake for retirement plan advisors.

Source: Rixtrema.com, April 2018

Fiduciary Duty Yellow Flags for Proxy Season

Abstract: Proxy voting and company engagement practices are moving from a mere compliance issue to an integral component of investment and risk management. The old "set it and forget it" approach which relies on off-the-shelf proxy voting processes has become a risky practice. Fiduciaries are well advised to re-evaluate how their legal obligations relate to use of proxy voting in this changing environment.

Source: Reinhartlaw.com, April 2018

ESG and Retirement Plans: The Case for Greater Compatibility

Abstract: While considering Environmental, social and governance (ESG) investing strategies, it is an important part of plan fiduciary oversight to assess them thoughtfully and consistent with ERISA's fiduciary requirements. This paper's goal is to provide an assessment to help you understand the impact of ESG solutions and the potential benefits and risks for your retirement investment program now and going forward.

Source: Planpilot.com, April 2018

How Plan Sponsors Can Improve 401k/403b Participant Education Efforts

Abstract: Traditional methods of educating the workforce about the value of saving money for the future are not entirely sufficient. Levels of understanding about investment concepts are not homogeneous. One approach does not work for everyone. So, efforts to improve education for those eligible to participate needs to reach out to them at their level through engaging, relevant and useful information that drives change.

Source: Planpilot.com, April 2018

Brief in University of Pennsylvania 403b Lawsuit Points Out Differences From 401ks

Abstract: An amici curiae brief filed by the American Council on Education and other higher education associations details the history of higher education 403b plans. The Council points out that the retirement system for higher education has always looked different than the system for industrial, corporate America.

Source: Plansponsor.com, April 2018

SEC Proposes Revised Conflict of Interest Standards for Brokers and Advisers

Abstract: It will take time for the fully detailed picture to emerge, but the SEC voted late Wednesday to propose new conflict of interest standards for how broker/dealers and financial advisers label themselves and sell products under various fee structures to retail clients.

Source: Planadviser.com, April 2018

Defined Contribution Consulting Support and Trends Survey

Abstract: PIMCO asked the nation's top retirement consultants: How can defined contribution plan participants and sponsors achieve financial security over the long haul? Download the 24-page report here.

Source: Pimco.com, April 2018

SEC Rolls Out Best Interest, Fiduciary Proposal

Abstract: The SEC release for public comment a set of proposals to enhance the quality and transparency of investors' relationships with investment advisers and broker-dealers while preserving access to a variety of types of advice relationships and investment products.

Source: Ntsa-net.org, April 2018

IRS Updates Substantiation Procedures for Hardship Distributions

Abstract: None of the IRM requirements for substantiating hardship distributions have been set forth in formal regulations that have been subject to notice and comment. But, the IRS believes substantiation that a distribution is for one of the safe-harbor hardships is required to determine that a hardship distribution is deemed to be on account of an immediate and heavy financial need. As a result, plan sponsors seeking to avoid disputes with IRS auditors may wish to follow the hardship substantiation requirements outlined.

Source: Ktserisacorner.com, April 2018

401k Lawsuits Being Brought More Aggressively Against Retirement Plan Advisers

Abstract: Retirement plan advisers are increasingly being drawn into 401k lawsuits, as litigation creeps down market and plaintiffs' lawyers test out new legal theories to ensnare advisers, according to a panel of litigation experts.

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

IRS Requests Input on Possible Expansion of Determination Letter Program in 2019

Abstract: In Notice 2018-24, the Treasury Department and IRS request comments on the potential expansion of the determination letter program for individually designed plans during 2019. As part of their commitment to annually review the scope of the program, they are looking for comments on the types of plans that should be allowed to seek a determination letter as well as specific issues for those plans that would justify the need for review.

Source: Groom.com, April 2018

Three Things to Think About Besides Retirement Plan Investments

Abstract: Plan sponsors often have an unhealthy obsession with assembling the ideal array of plan investments. However, investment array selection, as well as the inherent agonizing over which funds to put on watch, which to replace, etc., should be relatively low on a plan sponsor's list of priorities.

Source: Cammackretirement.com, April 2018

Ignore Those Form 5500 Instructions: 403b Plans Do Not Use Form 5330 for Late Deposits

Abstract: One of the continuing confusions in how 401a rules apply to 403b plan involves the reporting rules related to the correction and reporting on the 5500 of one of the most common errors in any elective deferral plan: the late deposit of those deferrals into the plan. Neither non-ERISA or ERISA 403b plans will ever file a Form 5330. Ever. Even when the VFCP program is being used to correct the late deposit.

Source: Businessofbenefits.com, April 2018

TPA Due Diligence Requires Weighing More Than Fees

Abstract: Engaging a TPA for plan document design, compliance and government reporting services should include more due diligence. If a TPA makes an error, it can be very expensive for the plan sponsor and investment advisor. Another way of stating this issue: If price is the only criteria for investment advisors and plan sponsors, what else do they have on their due diligence files?

Source: Benefitnews.com, April 2018

SEC Fact Sheet on Proposed Best Interest Standard

Abstract: Under proposed Regulation Best Interest, a broker-dealer would be required to act in the best interest of a retail customer when making a recommendation of any securities transaction or investment strategy involving securities to a retail customer. In addition to its proposed regulation, the SEC also issued this Fact Sheet on its proposed best interest regulation.

Source: Benefitsforward.com, April 2018

SEC Proposed Interpretation of Best Interest Standard of Conduct

Abstract: Along with the issuance of its proposed regulations, the SEC is also publishing a proposed interpretation of the standard of conduct and request for comments.

Source: Benefitsforward.com, April 2018

SEC Proposed Rule on Best Interest Standard

Abstract: The SEC has issued a proposed regulation establishing a standard of conduct for broker-dealers and those associated with broker-dealers when making recommendations of securities transactions or investment strategies involving securities to retail customers.

Source: Benefitsforward.com, April 2018

Self-Employed Should Consider a SEP IRA for Retirement Savings

Abstract: How should the self-employed save? One option to consider is a simplified employee pension individual retirement account. A SEP IRA resembles an IRA account for the self-employed, but with some extra perks.

Source: Bankrate.com, April 2018

Is Retirement Plan Participation Underreported?

Abstract: A study confirmed that the apparent underreporting of retirement plan participation in the US Census Bureau's Current Population Survey increased substantially following a recent revision to the household survey's questionnaire. The CPS participation rate dropped sharply beginning in 2014, the first data collected using the new questionnaire. In contrast, the tax data show that the retirement plan participation rate has held steady since 2008, according to ICI.

Source: Asppa.org, April 2018

Protect Your Qualified Plan From RMD Failures

Abstract: Qualified retirement plans are subject to Required Minimum Distribution rules which, very generally, require that a minimum amount of benefit commence no later than April 1 following the year when a participant attains age 70 1/2. It is important to protect your qualified plan from RMD failures to avoid potential tax consequences.

Source: Watkinsross.com, April 2018

American Retirement Association Announces E-delivery Initiative

Abstract: American Retirement Association CEO Brian Graff unveiled plans to address the expensive and outdated ERISA requirement to disclose information to 401k participants in paper form. The ARA's proposal would essentially flip the current orientation of the DOL's ERISA regulations, which emphasize providing paper disclosures to plan participants.

Source: Ntsa-net.org, April 2018

Budget Act Brings Much Needed Hardship Relief for Plan Participants

Abstract: The Bipartisan Budget Act of 2018 brings important relief for plan sponsors and recordkeepers for tax-qualified retirement plans. This relief includes (1) relaxed hardship withdrawal rules, (2) expanded rollover for improper federal tax levies, (3) California wildfire relief for plan distributions, and (4) a special Congressional committee to address the major funding concerns for multiemployer plans.

Source: Groom.com, April 2018

DOL Increases Fines, Conducts Fewer Retirement Plan Audits

Abstract: The DOL has been able to achieve these higher fines with fewer audits mainly due to two factors. One is an increase in the amount for fines. The other is EBSA's use of data algorithms that can scour Form 5500s and other sources (such as filings for bankruptcy, news reports of companies going out of business and complaints from plan participants) to find discrepancies that raise red flags for an audit.

Source: Benefitnews.com, April 2018

Target-Date Fund Benefits -- Beyond Returns

Abstract: Beyond the obvious benefit of having a professional manager and rebalance portfolios, the HR manager believes that target-date strategies relieve employee stress and burden of having to select and manage funds themselves.

Source: 401ktv.com, April 2018

Retirement Income to Last a Lifetime

Abstract: Many approaches may be needed to help future retirees secure lifetime incomes to provide them with the security and dignity of personally managing their retirement. Possible approaches consist of reevaluating federal retirement policies, emphasizing financial literacy and education, and refocusing retirement plan designs.

Source: Actuary.org, April 2018

Retirement's Future Could Rest With Digital Tools

Abstract: When a chatbot and text messages, as well as targeted e-mails, are combined with the principles of behavioral economics -- specifically, nudging people into certain actions -- the effects on retirement savings can be substantial.

Source: Voya.com, April 2018

Missing Retirement Plan Participants -- Employer Risk

Abstract: Former employees will often have account balances or benefits due them under an employer's retirement plan and are still considered to be participants. Regulatory guidance makes it clear that distributing the retirement accounts and accrued benefits of former employees is the employer's responsibility. Employers who maintain retirement plans are required to have procedures in place for finding missing participants.

Source: Stevenslee.com, April 2018

Case Filed Against Home Depot for Alleged Abuses in 401k Plan

Abstract: The suit alleges "that Home Depot violates basic fiduciary duties under ERISA and abuses its employees' trust by mismanaging their 401k retirement plan. According to the complaint, Home Depot has selected multiple poorly-performing funds for its 401k plan, allowed investment advisers to charge its employees unreasonable fees, and turned a blind eye to a kickback scheme between an investment adviser and the plan's recordkeeper."

Source: Prnewswire.com, April 2018

The Future of the ERISA Fiduciary Rule

Abstract: The future of the Fiduciary rule is uncertain, particularly considering the Fifth Circuit's decision vacating the rule. Although recent developments do not require action at this time, plan fiduciaries should continue to keep apprised of the necessity of complying with the Fiduciary rule and, accordingly, continue to monitor the efforts of their service providers who provide investment advice to their retirement plans and plan participants.

Source: Pillsburylaw.com, April 2018

Do Your Plan Fees Outperform?

Abstract: The increased number of 401k lawsuits over the past several years has shaken fiduciary confidence. Most of the litigation involves claims of excessive plan fees. However, a fiduciary can keep their confidence steady by ensuring they're providing a top-performing plan.

Source: Pension-Consultants.com, April 2018

What to Do With Missing Participants and Required Minimum Distributions

Abstract: Issues related to missing and nonresponsive retirement plan participants are causing more problems and creating more uncertainty for plan sponsors and administrators. RMDs and missing participants aren't going away any time soon. This article provides an overview and search steps.

Source: Penchecks.com, April 2018

Strategies to Help HCEs Maximize 401k Contributions

Abstract: When employees aren't participating in the 401k or saving enough, non-discrimination testing can severely limit how much highly compensated employees can contribute. Limits imposed by non-discrimination testing are tough to overcome, but far from impossible. This article walks you through three highly effective strategies for overcoming these limits and acing your non-discrimination tests.

Source: Forusall.com, April 2018

Could "Tontines" Expand the Market for Longevity Insurance?

Abstract: Tontine is a fancy word for betting on how long you'll live, in a good way. Here's the concept in a nutshell: many people pool their money in return for guaranteed regular payouts for life, similar to an annuity. This 6-page paper takes a close look at an idea that is tossed around among finance experts: modifying tontines to use them as a source of retirement income.

Source: Bc.edu, April 2018

SEC Announces Open Meeting on Fiduciary Issues

Abstract: The Securities and Exchange Commission has announced plans for an open meeting to consider the agency's long-awaited and much anticipated fiduciary proposal.

Source: Asppa.org, April 2018

Advances in Auto-Services: Reenrollment

Abstract: Despite progress, the first wave of 401k plan auto-services had one inherent flaw: They were only implemented on newly hired, or newly eligible, employees. From a benefits perspective, plan sponsors were still viewing retirement plan participation/enrollment as a point-in-time decision. Several new and more effective auto-services are being discussed by advisors and implemented by plan sponsors. Two of these new services can be used to help optimize employee savings and investment behavior periodically after the point of eligibility.

Source: Troweprice.com, April 2018

TDF Analysis Highlights Passive Growth, Home Equity Bias

Abstract: In its discussions with TDF managers, Mercer has found many managers say they have not aligned with the ACWI, and have continued with portfolios that display home equity bias for a number of reasons; the research also shows strong growth in passive TDF market share.

Source: Planadviser.com, April 2018

The Benefits of Helping Employees Set a Retirement Budget

Abstract: In order to understand how much to save, the starting point should be determining a retirement budget. Not only will such an exercise help employees better plan for the future, it may well give them a greater understanding of and appreciation for their employer-sponsored savings program and improve their financial wellness.

Source: Benefitscanada.com, April 2018

Assessing the Value of Financial Wellness for Your Employees

Abstract: Given the low unemployment rate in the United States and competition for talented, committed workers, companies are offering financial wellness initiatives that include traditional benefits. To get the most out of financial wellness programs, business leaders should make sure their initiatives follow five criteria reviewed in this article.

Source: Workforce.com, April 2018

No Stone Unturned: Locating Missing Participants Under PBGC's Expanded Program for Terminated Plans

Abstract: The PBGC's missing participants program has been expanded to defined contribution plans, multiemployer defined benefit plans and small professional service defined benefit plans that end on or after January 1, 2018. The revised program provides a helpful alternative for plan administrators of terminating defined contribution plans, and also includes welcome clarifications that enhance the program available to defined benefit pension plans.

Source: Mwe.com, April 2018

Like It or Not, Annuities Are Coming to Retirement Plans

Abstract: Some would argue that annuities and 401k plans should never mix. Brace yourselves, because legislation is being considered in Congress that could clear a path for more employers to offer annuity products in their retirement plans.

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

Who Participates in Retirement Plans

Abstract: Increasing the share of workers who participate in retirement plans has been a primary focus of retirement policy. As the retirement industry and policymakers try to increase participation, it is important to understand which workers currently participate in employer-sponsored retirement plans and why certain employers offer, and certain employees desire, compensation in the form of retirement benefits. This 32-page report uses newly available 2014 data to analyze participation in employer-sponsored retirement plans.

Source: Ici.org, April 2018

Court Ruling Throws Out DOL Fiduciary Rule

Abstract: The rule, which became effective June 9 of last year, was due to be fully implemented on July 1, 2019. While a good amount of retirement advisors have expressed dissatisfaction with many of the bureaucratic hurdles contained in the new rule, the fact that the entire rule was struck down is a surprising development in what seemed a foregone conclusion.

Source: Frenkelbenefits.com, April 2018

Little-Known 401k Trick Can Open the Floodgates to Roth IRA Savings

Abstract: The Roth IRA has very low contribution limits, while those in high-income groups may not qualify to contribute to the account. One strategy to make the most of the account's tax benefits is the backdoor option, which allows clients to make nondeductible contributions to a traditional IRA or contribute after-tax money to a 401k plan and then convert the funds into a Roth.

Source: Fool.com, April 2018

Impact of Plan Size on Workers' Retirement Income Adequacy

Abstract: One apparent result of plan sponsor's focus on fees has been that 401k plan fees have declined overall: by 14 basis points between 2009 and 2015. This reduction has translated into a four percent jump in net retirement savings surplus when they retire. While a four percent increase in retirement income adequacy is good, participants can experience significantly greater increases by simply benefiting from the economies of scale of large versus small plans.

Source: Ebriorg.wordpress.com, April 2018

For Retirement, Employees Prefer Steady Paycheck over Managing Their Own Investments

Abstract: The role a company plays in its employees' retirement security has shifted tremendously in recent decades, as employees take on more responsibility in the planning and saving for their retirement. Yet many Americans prefer predictability and a guarantee in their retirement planning, when asked if they would rather have their employer provide a set retirement paycheck for life or provide them with money to invest themselves, the steady paycheck wins by 58% to 42%.

Source: Businesswire.com, April 2018

TCJA Participant Loan Changes Compel Review of Uncomfortable Loan Fiduciary Obligations

Abstract: The Tax Cuts and Jobs Act's participant loan changes (which delay the account offset on loan defaults related to unemployment or plan termination) trigger something we would all rather not look at: the "uncomfortable" manner in which ERISA's fiduciary rules apply to loans and their administration.

Source: Asppa.org, April 2018

401k Loans: Considerations for a Plan

Abstract: Your retirement account is sacrosanct...until it isn't. Sometimes a rainy day arrives before retirement, and the seemingly untouchable is a tempting source of short-term support and relief. Recent discussions about 401k loans look at the scale of the practice, the consequences and what a plan may consider concerning a policy for them.

Source: Asppa.org, April 2018

More Critical Target-Date Trends to Consider

Abstract: Mercer is out with topical info on target date products, reminding all involved that the fact that so many participants simply default into TDFs does increase the importance of the plan sponsor's selection of the TDF provider.

Source: 401kspecialistmag.com, April 2018

Your Long Life Could Be the Death of Your Retirement Savings

Abstract: A key part of retirement planning is estimating your life expectancy. It's a tough thing to think about. On the one hand, you hope to live a long and healthy life. But what if you live too long? Will you have enough money saved to take care of yourself until the end of your life?

Source: Washingtonpost.com (registration may be required), April 2018

Boomer Expectations for Retirement - 2018 Study

Abstract: Baby boomers -- even the youngest of whom are just a decade or so away from retirement age -- are in large measure unprepared for retirement, having failed both to plan adequately and save enough, according to this 26-page study released by the Insured Retirement Institute.

Source: Myirionline.org, April 2018

U.S. Census Wrong on 401K Coverage

Abstract: Most American workers participate in employer-sponsored retirement plans, but you wouldn't know it from recent Census numbers. A recent ICI study confirmed that the underreporting of retirement plan participation in the U.S. Census Bureau's Current Population Survey increased substantially following a recent revision to the household survey's questionnaire.

Source: 401kspecialistmag.com, April 2018

How Do Gender and Generation Impact Retirement Saving Behavior?

Abstract: April is Financial Literacy Month, so what better time to gauge Americans' prowess in saving money? The degree to which adults have mastered the art of padding personal savings accounts or stashing away money in a 401k or other retirement savings vehicle varies by age and sex.

Source: 401kspecialistmag.com, April 2018

IRS Considering Expanding Determination Letter Program in 2019

Abstract: The IRS announced April 5 that it is considering opening its determination letter program again to certain types of individually designed retirement plans. In Notice 2018-24, the IRS is soliciting comments on what specific types of plans it should consider accepting for determination letters in 2019.

Source: Ktserisacorner.com, April 2018

Six Easy Steps to Getting Sued Over Your 401k Plan

Abstract: Employee benefits lawyers spend a lot of time telling retirement plan sponsors how to follow the law and not get sued, audited, investigated, complained about, or otherwise be forced to endure unpleasant interactions with people who can get you in trouble. But this article switches things up and give you a step-by-step guide laying out the easiest way to get yourself -- and your retirement plan -- into hot water.

Source: Kaufmanandcanoles.com, April 2018

The Fiduciary Rule: Next Steps After Vacatur

Abstract: The nationwide vacatur of the DOL fiduciary rule and related exemptions, by the US Court of Appeals for the Fifth Circuit, did not bring an end to the challenges created by this extraordinary rule making. Both plan providers and plan sponsors will face significant responsibilities in unwinding the programs they had put in place to comply with the rule -- if the vacatur stands -- and reinstating the predecessor ERISA regulation in their compliance programs.

Source: Eversheds-Sutherland.com, April 2018

First Round of Robo-Advisor Fee Litigation Goes to Recordkeepers

Abstract: Despite the recordkeepers' success in this first round of litigation, the courts have not completely foreclosed plaintiffs' claims. In three of the four cases, the courts gave the plaintiffs a chance to replead their claims. In addition, the courts noted the responsibility of plan sponsors or their designees to review fee arrangements for services to ensure that the total amount paid is reasonable.

Source: Erisapracticecenter.com, April 2018

2018 Resolution: Conduct ERISA Fiduciary Training

Abstract: Given the high stakes, it is important that plan fiduciaries understand their duties and how best to fulfill them. For employers who have not yet undertaken the task, training of plan fiduciaries should be a top priority for 2018. This article reviews 10 key topics that should be included in an ERISA fiduciary training program.

Source: Thompsoncoburn.com, April 2018

Rethinking the Digital Experience to Drive Plan Participation

Abstract: Increasing participation rates is vital to your retirement plan. Although you may not have given much thought to the way your employees interact with your retirement plan's web portal, user experience has a significant impact on participant engagement.

Source: Planpilot.com, April 2018

Tax Act's Participant Loan Changes Compels Fresh Review of "Uncomfortable" Loan Fiduciary Obligations

Abstract: The Tax Cuts and Jobs Act's participant loan changes (which delays the account offset on loan defaults related to unemployment or plan termination) triggers something we would all rather not look at: the "uncomfortable" manner in which ERISA's fiduciary rules apply to loans and their administration.

Source: Businessofbenefits.com, April 2018

New Rules for Hardship Distributions

Abstract: The Act directs the IRS to modify the 401k regulations, within one year from February 9, 2018, to remove the six-month prohibition on contributions following receipt of a hardship distribution and to make "any other modifications necessary to carry out the purposes of" the Internal Revenue Code applicable to hardship distributions from 401k plans.

Source: Bradley.com, April 2018

Reporting and Disclosure Requirements Checklist

Abstract: Qualified retirement plans are subject to many reporting and disclosure requirements under ERISA and related regulations. Although there may be additional requirements that apply to special circumstances, the Reporting and Disclosure Requirements Checklist provides an overview of the requirements that typically apply.

Source: Watkinsross.com, April 2018

Individual Account Retirement Plans the Dominant Source of Retirement Income

Abstract: EBRI also found not only do individual account assets make up a large portion of families' financial assets, but those with individual account assets also have substantially higher levels of net worth than those families without them.

Source: Planadviser.com, April 2018

Most Motions to Dismiss Denied in Yale 403b Plan Suit

Abstract: In a case challenging recordkeeping and investment fees for the Yale University 403b plan, U.S. District Judge Alvin W. Thompson of the U.S. District Court for the District of Connecticut moved forward most claims of violation of duty of prudence under ERISA.

Source: Planadviser.com, April 2018

TIAA Wins Dismissal of Most Claims About Its Loan Processes

Abstract: The lawsuit brought by a participant in a Washington University retirement plan challenges TIAA's use of collateral in its loan process and the provider's retention of some interest on the collateral.

Source: Planadviser.com, April 2018

A Closer Look at the 5th Circuit Decision Vacating the Fiduciary Rule

Abstract: After the Fifth Circuit's ruling, a number of US law firms issued client advisories concerning the impact of the Fifth Circuit's decision on the rule. There has been some confusion as to whether the Fifth Circuit's ruling had a nationwide effect or, in light of the decisions upholding the rule, was limited to the jurisdiction of the Fifth Circuit.

Source: Kattenlaw.com, April 2018

First Circuit Dismisses Fiduciary Breach Complaint Based on Mismanagement of a Stable Value Fund

Abstract: In Barchock v. CVS Health Corp. the plaintiffs allege violations of the fiduciary duty of prudence under ERISA by the fiduciaries of an employer-sponsored 401k retirement plan. Specifically, the plaintiffs contend that an investment fund offered through the plan was invested too heavily in cash or cash-equivalents for the years at issue, and thus that the plan was imprudently managed and monitored. The district court dismissed the complaint for failure to state a claim under ERISA.

Source: Erisalawyerblog.com, April 2018

An Analysis of Retirement Models to Improve Portability and Coverage

Abstract: To better understand the portability and coverage challenges of the 401k system and to assess possible strategies to improve it, this report presents a three-part analysis. The objective of the report is to assess and present a wide range of available options by examining and summarizing existing proposals and, where relevant, examples from other countries.

Source: Bc.edu, April 2018

Millennials Need to Hack Retirement Savings

Abstract: As the first true post-pension generation, millennials must squirrel away retirement income largely on their own. That proves especially difficult for young adults today who not only graduate with record levels of student loans and high rental costs, but also face a retirement savings system that puts them at a disadvantage.

Source: Bankrate.com, April 2018

ARA Recommends Expansion of Self Correction Program

Abstract: With the IRS having rebuffed its recommendation to reconsider the disparate impact on small plans of the new pricing structure for the Voluntary Compliance Program, the American Retirement Association has recommended changes designed to expand the program and offset that result.

Source: Asppa.org, April 2018

New York to Establish IRA-Based Private Sector Retirement Program

Abstract: An amendment to New York's state finance law has established an IRA-based retirement savings program for the state's private sector employers and their employees. Full establishment of the program is envisioned within 24 months.

Source: Ascensus.com, April 2018

Loosened Rules at Odds With Efforts to Cut Loans, Hardship Withdrawals

Abstract: The issue of plan leakage through loans and withdrawals is not a new problem. However, the new loan and hardship withdrawal provisions in the federal budget law, which are optional provisions, have given plan executives another reason to examine the issue.

Source: Pionline.com, April 2018

New York State Creates Voluntary Retirement Savings Program

Abstract: New York state became the latest state to officially endorse a voluntary retirement savings program for private-sector workers with the passage of the state budget over the weekend. The New York State Secure Choice Savings Program is contained in the state's $168.3 billion fiscal year 2019 budget, which was passed by state legislators early Saturday.

Source: Pionline.com, April 2018

Eight Tough Questions to Ask Your 401k Investment Advisor

Abstract: Author suggests you ask your adviser these eight questions and then see how the answers compare with the generally desired responses he outlines.

Source: Lawtonrpc.com, April 2018

401k Robo-Revolution Is Underway

Abstract: Tech upstarts are making inroads into 401k plans and that's bad news for some retirement plan advisers. Such fledgling companies as Betterment for Business, ForUsAll, Human Interest and Vestwell, as well as more established players such as Financial Engines, are using technology to deliver services to plan sponsors and participants that traditionally are offered by human advisers.

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

Yale University Must Defend Challenge to Retirement Plan Fees

Abstract: Yale University is the latest college to lose an early round in a proposed class action challenging how it manages its retirement plan. A federal judge on March 30 refused to dismiss most claims against the school, including claims challenging the retirement plan's administrative and investment fees.

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

Labor Department's Benefits Agency Continues to Shrink

Abstract: The Labor Department's employee benefits agency continued to shed workers during the final quarter of 2017, reaching the lowest recorded staffing levels since 2001. The Employee Benefits Security Administration employed 869 people in late 2017, down about 17 percent from its Obama-era peak of 1,043 workers in September 2012.

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


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