April 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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DCIIA Publishes Guide to Fiduciary Models

The Defined Contribution Institutional Investment Association published this month a governance model guide for plan sponsors, "Defined Contribution Plan Governance Models: A Guide for Plan Sponsors." The guide outlines governance and fiduciary structures that plan sponsors can elect to fit their plan's needs.

Source: Planadviser.com, April 2023

How Auto Enrollment Closes the Retirement Savings Gap for Communities of Color

New research put stark numbers to the retirement savings coverage gap for communities of color. Voya Financial uncovered striking differences in overall workplace retirement plan participation, savings rates, and average account balances for underserved employee communities. For instance, Black and Latino employee participation rates were just 53% and 45%, respectively, compared to 66% for White employees and 62% for Asian employees. Yet the analysis also found that employers who implement inclusion best practices within their workplace retirement plan can see positive savings results on underserved employee populations.

Source: Napa-net.org, April 2023

Workers' Retirement Confidence Takes a Big Hit

A new report finds a decline in retirement confidence to levels not seen since the 2008 financial crisis. The report, from the Employee Benefit Research Institute, also finds both workers and retirees are very concerned about inflation and its impact on their savings and spending.

Source: Napa-net.org, April 2023

Are BlackRock's Target-Date Funds the New Fiduciary Battlefield?

A new wave of lawsuits focuses on the alleged underperformance of certain TDFs that many plan sponsors use as their plan's default investment option. In these most recent cases, each of the defendants offered the Blackrock TDFs as the default investments in their DC retirement plans. These new lawsuits allege that investment returns were sacrificed in favor of plan sponsors chasing low fees. The claims are largely that the BlackRock TDFs are inappropriate for institutional plans and that fiduciaries were not prudent in selecting these lower-cost investment options.

Source: Icemiller.com, April 2023

SECURE 2.0 Act: Provisions Related to Early Distribution Penalties

The legislation contained eight provisions that expanded the exemption to the early distribution penalty. These sections of the SECURE 2.0 Act are intended to allow participants to take a distribution in specific situations without penalty. There are so many questions on how to administer the changes which will require additional guidance and clarification to implement all new provisions.

Source: Consultrms.com, April 2023

Improving DC Plans to Serve Participant Behavior

Participants don't all think and behave the same way, but new frameworks can help DC plans better understand the needs of savers and inform solutions that will benefit the individual styles of more and more people.

Source: Blackrock.com, April 2023

Reish Highlights "Remarkable" Government Incentives in SECURE 2.0

There are a few provisions in the SECURE 2.0 legislation that Fred Reish seems particularly excited about. The noted ERISA expert and Faegre Drinker Partner spoke at the Qualified Plan Fiduciary Summit in Overland Park, Kan., and told attendees about some of the more intriguing incentives among the expansive new law's 92 provisions.

Source: 401kspecialistmag.com, April 2023

Research Uncovers How Different Employee Communities Think, Feel, and Act When It Comes to Retirement Saving

Voya Financial is releasing new research detailing how comprehensive diversity, equity, and inclusion initiatives can help close benefits and savings gaps to improve financial outcomes for Black/African American and Hispanic/Latino workers.

Source: Voya.com, April 2023

Auto-Solutions Continued to Positively Influence 401k Savings Behavior: T. Rowe Price

T. Rowe Price released Reference Point, its annual benchmarking report featuring data and analysis related to 401k plan design and participant behavior. The new report is based on the firm's full-service recordkeeping client data for 2022. Auto-solutions, including auto-enrollment and auto-increase, continue to encourage participation and savings rates and drive better outcomes for savers.

Source: Prnewswire.com, April 2023

A 403b CIT "Fix" Gets Closer to Happening

A bill that would allow 403bs to invest in collective investment trusts could be headed for Congressional markup in the next few weeks.

Source: Napa-net.org, April 2023

Quick Settlement Struck in 401k Excessive Fee Suit

The fiduciaries of the 99 Cents Only Stores have come to terms with an excessive fee suit involving their 401k plan for considerably more than 99 cents.

Source: Napa-net.org, April 2023

How to Conduct a Successful Retirement Plan Audit

In the retirement plan industry, conducting regular audits is essential to ensuring compliance and optimizing plan performance. But how can you conduct a successful retirement plan audit and ensure you get the most value from the exercise? By following the tips outlined in this guide, you can plan your audit effectively.

Source: Multnomahgroup.com, April 2023

SECURE Act 2.0 and Its Effects on Employee Benefit Plans

The SECURE Act contains sweeping changes designed to make benefit plans more attractive to employers and employees. While some provisions took effect January 1, 2023, many will continue to roll out over the next few years and plan amendments will generally not need to be made until 2025. This is a summary of some of the effects of the act on employee benefit plans.

Source: Mossadams.com, April 2023

Defined Contribution Plan Profile: A Close Look at ERISA 403b Plans, 2019

The BrightScope/ICI Defined Contribution Plan Profile is a collaborative research effort between BrightScope and the Investment Company Institute that analyzes plan-level data gathered from audited Form 5500 filings of private-sector defined contribution plans, providing unique, new insights into private-sector DC plan design. The report is 68 pages.

Source: Ici.org, April 2023

Study Shows ERISA 403b Plan Sponsors Design Plans to Promote Retirement Saving

The report found that the wide array of nonprofits that sponsor 403b plans design their plans to engage participants and promote retirement savings. Many large 403b plans subject to ERISA automatically enrolled employees into the plan. Four-fifths of large ERISA 403b plans had employer contributions and three-quarters of large ERISA 403b plan participants were in plans that offered employer contributions in 2019. And a majority of large ERISA 403b plans offered the flexibility of plan loans.

Source: Ici.org, April 2023

2023 Highly Compensated Employees: What You Need to Know to Pass Your Non-Discrimination Tests

That's because one of the primary duties of employers offering a 401k is to ensure that it's designed to benefit all employees, not just owners and highly paid employees. In 401k language, a plan with widespread benefits is non-discriminatory. A series of annual tests are 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 2023

The Right to a Jury Trial in ERISA Excess Fee Cases

It sounds crazy, but the first jury trial in an ERISA excessive fee case is scheduled for next month. That's right, barring a last-minute settlement and inevitable scheduling delays, a jury of ordinary citizens from Hartford, Connecticut is going to decide if the Yale University plan fiduciaries committed fiduciary malpractice in choosing the investments and monitoring the fees of its retirement plan.

Source: Euclidspecialty.com, April 2023

SECURE 2.0 Updates to Employee Plans Compliance Resolution System

SECURE Act 2.0 includes provisions addressing the correction of errors in the day-to-day administration/operation of a retirement plan due to the increasing complexity of plan administration. Historically, plan correction issues have been addressed by the IRS through administrative guidance but Congress mandated through the SECURE Act 2.0 provisions that the IRS is to update its plan correction guidance to expand the availability of retirement plan correction opportunities.

Source: Consultrms.com, April 2023

Details of the SECURE 2.0 Act: Student Loan Matching

Secure 2.0 added a new provision allowing any employer to amend their plan to allow a match based on student debt repayments for higher education expenses. This is big news since before the SECURE 2.0 Act, companies were limited to only offering a match based on their employee's deferral contributions.

Source: Consultrms.com, April 2023

SECURE 2.0: New, Penalty-Free Distributions

Life is a balancing act. Regulators strive to fight leakage by imposing penalties on early distributions, but they also don't want to add to legitimate unforeseen and extreme emergencies by imposing penalties when participants are in trouble. At the same time, regulators don't want to impose administrative burdens that would be a deterrent from offering a plan, so most of the new distribution options are optional.

Source: Belfint.com, April 2023

PEPs -- Hot or Not? The Pros and Cons of Pooled Employer Plans: Debate

After underperforming growth for years, value equities finally had their time in the sun in 2022. While both value and growth stocks declined last year, growth stocks fell much further than value thanks in large part to rising interest rates.

Source: Asppa.org, April 2023

Why Advisors Need to Consider Value Equities in DC Plan Investment Menus Now: Invesco's Kevin Holt

After underperforming growth for years, value equities finally had their time in the sun in 2022. While both value and growth stocks declined last year, growth stocks fell much further than value thanks in large part to rising interest rates.

Source: 401kspecialistmag.com, April 2023

Automatic Enrollment Adoption Grew to 85% in 2022: T. Rowe Price

Automatic solutions adoption continued to rise in 2022, finds a new report by T. Rowe Price. The firm's annual Reference Point, a benchmarking report analyzing data on 401k plan design and participant behavior, found that plan adoption of automatic enrollment rose to 85% in 2022.

Source: 401kspecialistmag.com, April 2023

Mandatory Retirement Not Serving Economy, According to Panel on Longevity

Ageism is driving older individuals out of the workforce just when the current economy needs people to work longer, according to the experts at the Founders Summit, an event hosted by AARP AgeTech Collaborative and Primetime Partners.

Source: Planadviser.com, April 2023*

Acting Labor Secretary Su Says SECURE 2.0 Guidance Coming in "Timely Manner"

Su briefly discussed the implementation of the SECURE 2.0 Act in response to a question from Senator Patty Murray. Su said she looks forward to providing guidance in a "timely manner" and specifically highlighted the lost-and-found provision of the legislation, which requires the DOL to create a database in which participants can be matched with old plans they may have lost or forgotten.

Source: Planadviser.com, April 2023

The Top Five Takeaways From SECURE Act 2.0

SECURE Act 2.0 continues to dominate 401k plan conversations as employers wait on administrative guidance from both the IRS and the DOL. However, although employers do not have to adopt amendments to implement either mandatory or discretionary SECURE Act 2.0 provisions until the end of the first plan year that starts in 2025, a handful of provisions are effective before the amendment deadline. This article addresses five SECURE Act 2.0 provisions many employers are asking about.

Source: Sequoia.com, April 2023

Mutual of America Agrees to $2.75 Million 401k Lawsuit Settlement

Mutual of America and retirement plan plaintiffs have agreed to terms of a proposed settlement, possibly closing for $2.75 million a 401k lawsuit brought in 2022, documents show, in Goldstein et al v. Mutual of America Life Insurance Co. in U.S. District Court for the Southern District of New York.

Source: Plansponsor.com, April 2023

Plan Sponsors Have Lots to Prep for SECURE 2.0 Compliance

The sheer size of the Secure 2.0 Act of 2022, which has more than 90 provisions impacting workplace retirement plans, can make compliance feel overwhelming for many plan sponsors. But those provisions go into effect over 10 years, and most of them are optional, rather than mandatory, so the task of updating the plan design to comply may be more manageable than they expect.

Source: Plansponsor.com, April 2023

Proprietary Fund Suit Settles for Cash and Changes

Terms of a proprietary fund suit settlement with Mutual of America have been revealed. The settlement comes in a notably short time (the suit was first filed in September 2022), but the settlement notes that, despite that, several actions had already occurred.

Source: Napa-net.org, April 2023

SECURE 2.0 Changes to Retirement Plan Corrections

The SECURE 2.0 Act included changes to the Internal Revenue Code and ERISA regarding the correction of inadvertent retirement plan errors. The changes are far-reaching and will make it easier for plan sponsors and administrators to fix retirement plan errors. This article dives into the retirement plan correction changes.

Source: Frostbrowntodd.com, April 2023

IRS Requires Most Employee Benefit Plans to File Electronically

The IRS has issued final regulations that will require almost all employee benefit plan filings to be made electronically.

Source: Wagnerlawgroup.com, April 2023

ESG in Retirement Plans: Clarity but no Certainty After DOL Ruling

There were several key themes most were looking for in the DOL's final amendments to the so-called ESG Rule. Now we have the final text, it is more neutral than the version the DOL originally proposed. It was good that the DOL addressed the issue but there are remaining uncertainties around the regulation and its impact on employers offering ESG funds in their retirement plan menus.

Source: Tiaa.org, April 2023

DOL Sues Profit-Sharing Retirement Plan of California Consultant

A California environmental consultant is alleged by the Department of Labor to have neglected to manage or administer the company profit-sharing plan since the late 1990s or early 2000s, effectively barring the distribution of participants' retirement assets. The complaint, Su v. Environmental Instrumentation Co. et al, was filed on Friday in U.S. District Court for the Northern District of California.

Source: Plansponsor.com, April 2023

Increased Cashouts at Job Separation Highlight Need for Auto-Portability

When switching or leaving jobs, many employees are cashing out their 401k savings, despite warnings from financial professionals against incurring the accompanying 10% penalty, according to research recently published in Marketing Science and Harvard Business Journal.

Source: Plansponsor.com, April 2023

Clawbacks -- The Impact on 401k Plans

What the heck is a clawback? How does a clawback affect retirement plan contributions? This article will identify operational problems with incentive compensation clawbacks, review the impact on salary deferrals that have been deducted from that compensation and deposited to the plan (including associated employer matching contributions), and provide solutions to prevent operational headaches before they happen.

Source: Newfront.com, April 2023

DOL Provides Snapshot of ERISA Enforcement Statistics for Fiscal Year 2022

The Department of Labor's Employee Benefits Security Administration has released a fact sheet concerning its ERISA enforcement results for FY 2022. EBSA oversees 747,000 retirement plans, 2.5 million health plans, and 673,000 other welfare benefit plans, covering more than 152 million workers, retirees, and dependents.

Source: Hallbenefitslaw.com, April 2023

Navigating Top-Heavy 401k Tests: Everything You Need to Know in 2023

As a small business owner or HR manager, understanding the 401k top-heavy test is crucial for ensuring your retirement plan remains compliant and avoiding unnecessary penalties and fines.

Source: Forusall.com, April 2023

Understanding How Your Clients Think About Retirement Is Key

In 2022, Envestnet commissioned a national research study with The Center for Generational Kinetics to better understand how different generations think about their finances and financial services in general. Those findings, along with other national research findings, can provide powerful insights into each generation's unique perspective.

Source: Envestnet.com, April 2023

Can Local Small Businesses Offer a Retirement Plan? New Tax Credits Could Make a Big Difference

Retirement plans can provide employers with an essential tool for recruiting and retaining their workforce. Yet, many small employers struggle with the costs of establishing and the complexities of maintaining a retirement plan. With the passage of the Secure 2.0 Act of 2022, small employers have increased tax credits available to cover the startup costs of a workplace retirement plan and to make employer contributions to that plan.

Source: Conradsiegel.com, April 2023

Study Shows State-Built Retirement Programs Complement Private Plans

States that have implemented retirement savings programs for private-sector employees have not crowded out employer-provided plans so far, new research from the Pew Charitable Trusts shows. In fact, state-facilitated retirement savings plans for private-sector workers that do not have workplace plans may have a positive effect on the creation and retention of private plans.

Source: Plansponsor.com, April 2023*

DOL Files Motion/Brief Opposing Preliminary Injunction in ESG Litigation

On February 21, 2023, plaintiffs in Utah v. Walsh filed a motion for a preliminary injunction of the DOL's ESG/proxy voting rule. On March 28, 2023, the DOL filed its motion in opposition. This article, after providing background, briefly discusses parts of this proceeding that may be relevant to the interpretation of DOL's ESG rule or ongoing litigation in this case or that may come up in other ERISA litigation.

Source: Octoberthree.com, April 2023

Implementing SECURE 2.0's Roth Provisions May Tax DC Plan Sponsors

The SECURE 2.0 Act sets the stage to greatly expand Roth savings in defined contribution plans. Agency guidance is needed to implement these provisions, but employers that don't offer Roth features may want to start talking with their ERISA counsel and recordkeeper about doing so.

Source: Mercer.com, April 2023

Applying the New EPCRS Rules Under Secure 2.0

Under Secure 2.0, the opportunities to self-correct "inadvertent" errors in both qualified plans (and now also IRA based plans) have now been expanded. The new Secure 2.0 legislation is thousands of pages long and uses the word inadvertent just 17 times, 15 of those references are found in the new rules for correcting plan errors and overpayments.

Source: Boutwellfay.com, April 2023

State-Mandated IRAs Not Crowding Out Private 401ks: Pew Research

When some states started mandating that companies offer retirement plans or be required to auto-enroll employees into state-sponsored IRA programs, there was plenty of concern that it would prompt some companies to terminate existing 401k plans and go the state route. To date, that hasn't been the case according to a report released by the Pew Charitable Trusts.

Source: 401kspecialistmag.com, April 2023

Missing Participants? Search Efforts Are a Fiduciary Duty

Finding missing retirement plan participants is an ongoing -- and necessary -- challenge for employers. Whether your organization offers a defined contribution or a defined benefit pension plan, you have a fiduciary duty to find missing participants.

Source: Usicg.com, April 2023

Principled Performance Drives Fiduciary Excellence

Principled Performance is an approach to the fiduciary role by which managers reliably achieve objectives, address uncertainty, and act with integrity on behalf of the employees and their beneficiaries who participate in employee benefit plans.

Source: Rolandcriss.com, April 2023

Retirement Advisers Say Long-Term Performance Most Important for Evaluating TDFs

When evaluating a target-date fund, retirement advisers consider long-term investment performance to be the most important factor, with 80% saying it was very important, according to Cerulli Associates research. The second most important factor when considering TDFs is cost, which 76% of advisers consider very important. This was followed by 70% of advisers marking the diversification of underlying asset classes as a very important factor.

Source: Planadviser.com, April 2023

SECURE 2.0 Provides New Tools to Assist Plan Participants in Crisis

In addition to making the hardship distribution rules more flexible, SECURE 2.0 expands on the ability of defined contribution plan sponsors to make penalty-free distributions to participants who have personal emergencies. In some cases, the permanent SECURE 2.0 provisions are modeled on temporary relief granted for specific federal disasters or under the CARES Act.

Source: Penchecks.com, April 2023

Using Data for Participant Goals Optimization

Yaqub Ahmed from Franklin Templeton talks to John Sullivan on the floor of the NAPA 401k Summit on what Franklin Templeton is doing to make life easier for advisors and plan participants with goal optimizations through their new data algorithm.

Source: Napa-net.org, April 2023

Another 401k Excessive Fee Suit Falls Short

Another Midwestern federal court has found that the plaintiffs in a 401k excessive fee suit have failed to make their case. The plaintiffs here claim that the investment committee breached its fiduciary duty of prudence and that Centene and its board failed to adequately monitor the investment committee.

Source: Napa-net.org, April 2023

A (Really) Surprising Reason for High Retirement Plan Leakage

The United States has the most liquid retirement savings system among developed countries, and participants take full advantage, a problem for long-term saving and accumulation, which is the system's intended effect. Surprisingly, researchers found that behavioral rather than economic factors account for high withdrawal rates at job separation, and the employer match might be to blame.

Source: Napa-net.org, April 2023

Large and Mega Plan Sponsors Work to Become the Retirement Destination of Choice

When looking specifically at plans intermediated by institutional investment consultants, 35% actively seek to retain retiree assets and an additional 40% prefer to retain retiree assets but do not actively seek to retain them. Considering the size of the plans that institutional investment consultants advise, this data confirms what many industry stakeholders suspect, that interest in keeping retiree assets in-plan is greater among plan sponsors in the large and mega plan market than those in smaller plan asset segments.

Source: Cerulli.com, April 2023

Large 401k Plan Sponsors Step Up Efforts to Keep Participants In-Plan Post Retirement

More evidence that plan sponsor interest in keeping retiree assets in-plan is increasing comes from the latest Cerulli Edge -- U.S. Asset and Wealth Management Edition. The new research found that more than half (54%) of 401k plan sponsors prefer to keep their retired participants' assets in their plan, as opposed to having participants roll their assets into an individual retirement account or another employer-sponsored plan, a notable increase from just 26% in 2019.

Source: 401kspecialistmag.com, April 2023

As Private Equity Firms Work to Access 401k Market, Plaintiff Lawyers Gear Up to Sue

The ability for Private Equity funds to receive money from 401k plans would be a transformational shift in the US retirement industry, massively expanding the reach of 401k plans to private markets and introducing unprecedented risk to the retirement savings of everyday workers. But it won't happen without a fight. Top ERISA lawyers say they are ready and waiting for the first sign of private equity intermingling with 401ks.

Source: Wagnerlawgroup.com, April 2023

Retirement Now a "Transition" for Many Americans, According to Smart

Because of factors like inflation and the volatility of economic markets, Smart's "Future of Global Retirement" report revealed that around one in five Americans plan to work into their retirement, with 18% saying that income from continued employment will help fund their retirement. Smart concluded that retirement is "increasingly becoming a transition rather than a one-off event."

Source: Planadviser.com, April 2023

Most U.S. Workers Expect to Fall Short of $1.1 Million Retirement Savings Goal

Most working Americans worry a workplace retirement plan will not grow to the level they hoped to achieve, as expressed by 64% of Millennials and 62% of workers 45 and older. The Schroders 2023 U.S. Retirement Survey surveyed 2,000 U.S. investors nationwide. Participants were ages 27 to 79 with a median household income of $75,000.

Source: Planadviser.com, April 2023

Proprietary Fund Suit Strikes Quick Settlement

The plaintiffs had claimed the plan fiduciaries had "an imprudent and disloyal preference for its proprietary funds," but have now come to terms.

Source: Napa-net.org, April 2023

Vermont Close to Passing Mandatory State Auto-IRA Program

Vermont is the latest state to push for a mandatory auto-IRA for uncovered workers. The Green Mountain State's Senate swiftly and unanimously passed the VTSaves public retirement initiative, which was introduced with the support of AARP in March. The bill, S.135, will now move to the House for debate.

Source: Napa-net.org, April 2023

Two BlackRock TDF Suits Seek to Appeal Federal Court Losses

Plaintiffs in two of the recently dismissed suits involving the BlackRock LifePath target-date funds have announced their intentions to appeal those losses.

Source: Napa-net.org, April 2023

Secure 2.0 Creates an Important Opportunity to Improve Retirement Savings Portability

Recent policy reforms, including the passage of the SECURE 2.0 Act, provide an opportunity to significantly improve retirement savings portability to the benefit of participants, employers, and retirement plan providers. As policymakers and industry work to implement these reforms, it is worthwhile to look at the experience of other countries, including Australia, that shows it can be done.

Source: Georgetown.edu, April 2023

SECURE 2.0: Mandatory Automatic Enrollment Coupled With Corrective Contribution Relief

When it comes to choosing to save for retirement, people tend to be short-sighted. Many eligible employees don't choose to participate in their employer-sponsored retirement plans. Behavioral finance studies show that people tend to imagine themselves making the right choices in the future, not today. Procrastination. Inertia.

Source: Belfint.com, April 2023

CITs to Overtake Mutual Funds as Most Popular Target-Date Vehicle Within Two Years

Target-date strategies had $153 billion of net inflows in 2022, of which $121 billion (79%) went into collective investment trusts, furthering the transition from mutual funds as the preferred vehicle for target-date funds. That's a key finding from Morningstar's recently released annual Target-Date Strategy Landscape Report, which examines the latest trends across the target-date industry.

Source: 401kspecialistmag.com, April 2023

DC Plan Sponsors Increased Focus on Cutting Fees, Protecting Against Litigation in 2022

A survey conducted by Callan LLC found that defined contribution plan sponsors were particularly concerned about their governance, DEI efforts, cutting plan fees, and upgrading their plan design over the past year. The survey, conducted at the end of 2022, did not show any dramatic changes to the DC plan landscape, according to Jana Steele, a Callan senior vice president, but here are some of the most notable trends to come out of the survey.

Source: Plansponsor.com, April 2023*

Latest Decision in Hughes v. Northwestern Opens Door to More ERISA Litigation

In reviewing a 2022 case remanded by the Supreme Court, the 7th Circuit Court of Appeals allowed two of the plaintiffs' three claims to continue at the District Court level.

Source: Planadviser.com, April 2023

What is Your Required Minimum Distribution Age

Is it, or will it be age 70 1/2, 72, 73, or 75? Required minimum distributions from qualified retirement accounts started with the passage of The Tax Reform Act of 1986. That law established the date when RMDs were required to begin as the year in which an individual reached age 70 1/2. This remained the compulsory age for RMDs for more than thirty years; however, the compulsory age has now changed twice in the space of three years.

Source: Orba.com, April 2023

IRS Proposes One-Year Limit on Use of Forfeitures in Defined Contribution Plans

The IRS recently issued proposed regulations that would require forfeitures in defined contribution plans to be used to offset employer contributions or pay reasonable plan administrative expenses, or otherwise be allocated to participants, by the end of the year following the year of forfeiture.

Source: Morganlewis.com, April 2023

What Do Plan Sponsors Really Want?

Several chief financial officers and human resource directors showed out for the "'Want' Adds: What Do Plan Sponsors Really Want," panel at the NAPA 401k Summit, where they discussed their workplace plans and what they look for from plan advisors.

Source: 401kspecialistmag.com, April 2023

Morningstar: Pandemic Caused Plan Closures, Creation Slowdown

The pandemic caused defined contribution plan closings to spike and new plan creation to slow down, a fact that may have implications for future economic disruptions, according to a new report by Morningstar.

Source: Planadviser.com, April 2023

Secure Act 2.0: Small Employer Pension Plan Start-Up Credits

The SECURE Act 2.0 increased incentives to encourage small business owners to establish retirement plans, making changes to the start-up credit and adding the contribution credit. By taking advantage of the tax credits, employers who currently do not maintain a retirement plan would be able to provide a low- or no-cost employer-sponsored employee benefit.

Source: Pkfod.com, April 2023

How to "Opt In" to Retirement Savings

A behavioral finance researcher, James Choi, professor of finance at the Yale School of Management, explains how small changes in choice architecture can create better investment decisions for retirement.

Source: Morningstar.com, April 2023

Guidance Issued on the End of the COVID-19 Emergency Periods and Impact on Benefits Plans

The Biden Administration recently announced that it intends to end the COVID-19 emergency declarations that have been in effect since 2020, effective at the end of the day on May 11, 2023. The termination of emergency declarations has several implications for health and retirement plans. In light of this new guidance and the anticipated termination of the emergency declarations, plan sponsors should review their plan documents and prior employee communications to determine what changes and notifications may be required in connection with the end of the emergency declarations next month.

Source: Icemiller.com, April 2023

The Key Role of the Quirky 403b "Master Custodial Agreement"

Many practitioners will point to the 2007 403b regs as being a real seminal moment in the market. However, an even more fundamental development occurred some 7 or 8 years earlier, which still has deep reverberations in the way these plans operate: the quirky 403b master custodial arrangement.

Source: Businessofbenefits.com, April 2023

How the SECURE 2.0 Act Will Impact Your Retirement Plan in 2025 and Beyond

It is no surprise that the SECURE 2.0 Act continues to dominate the headlines. While most provisions will take effect within the next two years, plan sponsors and service providers need to become familiar with the 2025 and later provisions so potential operational roadblocks can be addressed and changes can be quickly implemented when the deadline approaches.

Source: Tri-ad.com, April 2023

Improving Financial Wellness Starts With Understanding Participants

Plan sponsors are exploring the mix of benefits offered to workers like ingredients in a recipe -- tasting the mixture, adding spices here and there -- hoping to bake the best benefits package possible. Recently, the most popular new ingredients -- one can hardly call them a secret -- are financial wellness programs to affect the day-to-day financial behavior of employees and drive greater long-term participant retirement readiness. Key to bolstering participants' engagement with employee benefits programs intended to bolster worker wellness is understanding what their needs are and remaining flexible.

Source: Plansponsor.com, April 2023

Coca-Cola Bottlers' Association Agrees to Settle ERISA Case for $3.3 Million

The multiple employer plan sponsored by the association is composed of 65 independent bottlers for Coca-Cola. As of 2021, it had approximately $973 million in assets under management. The initial complaint, brought in February 2021, alleged that the association had paid overpriced management and recordkeeping fees and had kept an undiversified Coca-Cola Common Stock Fund in its investment menu.

Source: Plansponsor.com, April 2023

Why 401k Advising Alone Isn't Enough

Retirement plan advisers should approach plan sponsors with a holistic conversation around employee benefits and retention methods to be effective in today's market, a group of panelists told an adviser group audience.

Source: Planadviser.com, April 2023

Adviser Group Forecasts Federal, Private Plan "Battle" Over US Retirement System

A bipartisan effort to create a federally sponsored retirement plan is teeing up a multi-year battle with the private defined contribution retirement plan industry, the head of a national adviser association said at its annual conference on Sunday. Separately, a think tank leading the effort countered that the program is not in conflict with private industry, but is aimed at workers left out of the current system.

Source: Planadviser.com, April 2023

Has the Litigation Pendulum Swung Back to Plan Sponsors?

While a flood of lawsuits from the plaintiff's bar continues at an unprecedented rate, top ERISA attorneys at an April 3 workshop session at the NAPA 401k Summit debated whether recent successes from plan sponsors may help finally stem the tide.

Source: Napa-net.org, April 2023

How to Reap the Benefits of Your Small Business 401k Plan

From the employer's perspective, one big benefit of small business 401k plans is that virtually all retirement plans offer significant tax benefits to the business and business owners. These include the ability to deduct contributions from taxable income; the ability for employers to contribute to their retirement at a higher maximum limit and, for certain eligible employers, taking a tax credit of up to $5,000 per year for three years.

Source: Myubiquity.com, April 2023

The Role of 401k Plans in Supporting Financial Wellness

Have you seen the price of eggs recently? If you have, you'll understand why financial wellness is a hot topic. And as a small business owner, you're likely responsible for not just your own, but that of your employees as well. So how can you support your staff through inflation and other financial stressors? A 401k plan can help.

Source: Myubiquity.com, April 2023

Northwestern University's Alternative Explanations Not Strong Enough to Defeat ERISA Excessive Fee Claims

On remand from the U.S. Supreme Court, the Seventh Circuit issued its opinion in Hughes v. Northwestern University, concluding that participants in two Northwestern 403b plans plausibly pled fiduciary-breach claims based on allegations of excessive recordkeeping and investment management fees, but dismissed their claim that too many investment options caused them "decision paralysis."

Source: Erisapracticecenter.com, April 2023

Suggested 402(f) Notice Changes Related to the SECURE 2.0 Act

This document contains suggested edits to the explanation required by Internal Revenue Code section 402(f), to reflect changes made to the Code by The SECURE 2.0 Act of 2022. This document was developed by the SPARK Institute's Government Relations Committee, in collaboration with the Committee of Annuity Insurers. The document uses the most recent safe harbor explanation contained in IRS Notice 2022-62 as a base.

Source: Sparkinstitute.org, April 2023*

Where SECURE 2.0 Comes Up Short

Three months after the passage of the SECURE 2.0 Act of 2022, some observers are looking at the law and considering what SECURE 2.0 left out. Some items have been widely covered, such as the failure to include a provision permitting collective investment trusts in 403b plans. Some technical errors, such as accidentally banning catch-up contributions starting in 2024 have also been widely noted. But observers say some other major omissions from SECURE 2.0 have flown under the radar.

Source: Plansponsor.com, April 2023

DOL Pushes Back on Motion to Halt ESG Reg

Claiming that the suit by 25 state attorneys general "rests on a false premise," the DOL is pushing back on a motion to forestall implementation of the so-called ESG regulation.

Source: Napa-net.org, April 2023

More Legal Counsel Crashing Retirement Plan Meetings, Callan Survey Shows

According to an annual survey by defined-contribution plan consulting firm Callan, there has been a sharp rise in the presence of legal counsel at DC committee meetings, with internal lawyers attending meetings at 49% of the companies in 2022, up from 11% in 2017, and external counsel attending meetings at 36% in 2022, up from 21% in 2017.

Source: Investmentnews.com, April 2023

Court Finds Named Plaintiffs Inadequate to Represent Proposed Class on ERISA Excessive Fee Claims

A recent decision from the Eastern District of Michigan serves as a reminder that, while courts are often quick to certify classes in ERISA cases, plaintiffs must satisfy the requirements of Rule 23 and that courts can (and do) refuse class certification where those requirements are not met.

Source: Beneficiallyyours.com, April 2023

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