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June 2017 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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DOL Issues Request for Comment on Fiduciary Rule to Guide Review

Abstract: The Labor Department on Thursday evening released a request for comment on the agency's fiduciary rule, seeking input on whether to delay the Jan. 1 full implementation date and soliciting suggestions for streamlining major provisions.

Source: Investmentnews.com (registration may be required), June 2017

401k Plan Automatic Enrollment: A Winning Formula

Abstract: Although the number is slowly shrinking, many 401k plan sponsors remain reluctant to institute auto-enrollment and auto-deferral increase features. However, the fact is inescapable: Plans with these features generally have higher participation rates and account balances.

Source: Lindquistcpa.com, June 2017

Launching OregonSaves: Early Lessons From an Innovative Public-Private Partnership

Abstract: With a great deal of local and national engagement and support, Oregon will soon be launching the nation's first state-sponsored auto-enrollment individual retirement account program. The objective of OregonSaves is to improve access and outcomes for workers without a retirement savings option at work by providing an easy, automatic way to save through payroll deduction.

Source: Georgetown.edu, June 2017

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

Abstract: A plan sponsor is required to understand all the fees that are associated your organization's retirement plan benefit program. This is a challenge because plan fee structures are often opaque, complicated, and sometimes, downright misleading. You are also required to ensure the services for which the plan is paying are necessary and reasonable. The most effective way to meet this fiduciary requirement is a Request for Proposals (RFP) process.

Source: Fiduciaryplangovernance.com, June 2017

The Importance of Timely Deposits of Participant Deferrals

Abstract: It is often not clear to many plan sponsors when amounts deferred by employees through payroll become "plan assets." Since it is so important that participant deferrals and loan payments be made promptly, this article highlights the requirements.

Source: Fidelity.com, June 2017

Plan Sponsors Should Offer Passive Investment Options

Abstract: One way to help prepare participants for retirement, and thereby reduce employer costs, is to include several different passively managed index funds in their 401k investment menus. Unfortunately, it's an often-overlooked opportunity.

Source: Cfo.com, June 2017

Should Looming Tax Reform Drive 401k Prefunding?

Abstract: If the corporate tax rate is lowered, funding more future liabilities before the change takes effect could net significant savings for plan sponsors.

Source: Cfo.com, June 2017

Special Report: Retirement Readiness

Abstract: All things considered, companies would prefer to wave good-bye to their most veteran workers. But, if CFOs don't focus attention on workers' financial wellness, they pay a price when elderly employees simply can't afford to retire.

Source: Cfo.com, June 2017

Catching Up With Recordkeeper Technology

Abstract: Recordkeeper technology, for the most part, has become state of the art. However, many plan sponsors are not taking full advantage of this technology.

Source: Cammackretirement.com, June 2017

ERISA Retirement Plans May Not Protect Fraudulent Transfers

Abstract: The federal protections of ERISA protect retirement assets from most creditors under the anti-alienation provision. However, not all retirement plan contributions are protected from all creditors of fraudulent transfers. For example, transfers to a retirement plan specifically to avoid creditors are generally not protected.

Source: Bsllp.com, June 2017

Prohibited Transactions for Fiduciaries After DOL Rule Change

Abstract: A primary component of the new fiduciary rules is the Best Interest Contract Exemption (BICE), which allows otherwise so-called "conflicted compensation" to be paid if the terms of the BICE are met. Understanding and complying with BICE will help advisors and financial services providers avoid liability and ERISA litigation.

Source: Bsllp.com, June 2017

Small Businesses Are Boosting Benefits of Their 401k Plans

Abstract: Vanguard issued its fourth annual 'How America Saves: Small Business Edition,' an extension of its defined contribution publication. The report analyzes small business 401k plans and finds that small business plans, like their large corporation counterparts, are increasingly implementing best-in-class design features to improve the retirement readiness of their employees.

Source: 401khelpcenter.com, June 2017

How America Saves: Small Business Edition

Abstract: In this 36-page report, Vanguard analyzes small business 401k plans and participant behavior based on 2016 recordkeeping data.

Source: Vanguard.com, June 2017

Puerto Rico Law Modifies Retirement Plan Rules

Abstract: The recent changes to the Puerto Rico Trust Act and Internal Revenue Code are focused on the economic security and future of professionals in Puerto Rico. By providing broader, more flexible options and reducing administrative burdens, the Puerto Rico government hopes to encourage small businesses to offer retirement plans and increase participation in existing retirement plans. The new law includes adjusted contribution and employer deduction limits, a revised definition of highly compensated employee, and a new safe harbor rule.

Source: Prudential.com, June 2017

The State of Recordkeeping

Abstract: Recordkeeping is often described as a commodity, and that might be true for the pure administration of participant accounts, but the 55 providers responding to this survey showcase a wide range of investment, technology and servicing options.

Source: Plansponsor.com, June 2017

2017 Recordkeeping Survey

Abstract: The survey profiles 55 leading providers of DC recordkeeping services. These firms account for more than $6 trillion in assets and are estimated to represent approximately 85% of the total DC market. Collectively, results from the survey demonstrate the market's evolution and point up some factors to consider when selecting a recordkeeping partner.

Source: Plansponsor.com, June 2017

The Tools Your Retirement Plan May Be Missing: Auto-Enrollment & Auto-Escalation

Abstract: Are you a plan sponsor reviewing your plan and wondering to yourself, "Why is my plan not performing competitively against others," or even more so, "How do I increase employee participation in my retirement plan?" The answer could be, as we will outline in this post, something as simple as adding auto features to your plan design.

Source: Pension-Consultants.com, June 2017

Cybersecurity: Are Public Defined Contribution Plans at Risk?

Abstract: Given the continuing need for plans to adopt ever-greater levels of technology for administrative efficiency, the risk of inadvertent disclosure of personal information is escalating. Regardless of the investment made in protecting systems and data transmissions, plans remain vulnerable to human error and malicious or criminal actions.

Source: Nagdca.org, June 2017

Your 401k Plan's IPS Should Include These Items

Abstract: Does your 401k plan have an updated investment policy statement? Although you aren't required by law to have one, the investment policy statement is one of the primary documents the IRS and DOL request when they visit employers for plan audits. This article reviews some of the items your IPS should include.

Source: Lawtonrpc.com, June 2017

Pitfalls a 401k Sponsor Can Avoid With Plan Providers

Abstract: There are many plan providers and some of them aren't very good and the not so very good ones cause a lot of headaches and costly bills for the 401k plan sponsors that hire them. This article is about the pitfalls that plan sponsors can avoid in hiring plan providers that could cause liability.

Source: Jdsupra.com, June 2017

Nationwide's 401k Recordkeeping Fees Are Excessive, Lawsuit Claims

Abstract: Nationwide has been sued for allegedly charging 401k plans excessive recordkeeping and administration fees in a lawsuit that also challenges the practice of assessing fees based on the amount of plan assets.

Source: Investmentnews.com (registration may be required), June 2017

Market Forces Could Cause Fundamental Changes to Small and Midsize 401k Markets

Abstract: For years, experts have predicted the small-plan 401k market would have to change. Although prices have come down, they are still high when compared with larger plans, and the market is rife with inefficiencies. However, a series of dramatic industry changes this year could finally cause fundamental shifts and improvements in the small and perhaps even midsize 401k markets.

Source: Investmentnews.com (registration may be required), June 2017

The Three Biggest Service Provider Mistakes 401k Plan Sponsors Make

Abstract: A quick primer on the three biggest service provider mistakes 401k plan sponsors make, why they make them, how to avoid them, and what to do if you discover you've already made a mistake.

Source: Fiduciarynews.com (registration may be required), June 2017

Mutual Fund Trading Costs: The Most Important Fee You've Never Heard Of?

Abstract: What if I told you that there is a fee present in mutual funds that is not included in the fund's published expense ratios and is often not publicly disclosed by the fund companies, since the SEC does not require its disclosure? You might laugh, but it is true.

Source: Cammackretirement.com, June 2017

Video: Tax Reform and Its Potential Impact on Retirement Programs

Abstract: Elizabeth (Beth) Bell, Tax Counsel at U.S. Senate, Senator Benjamin Cardin's Office, discusses the ongoing, bi-partisan interest in tax reform and what it could mean for retirement programs.

Source: Cammackretirement.com, June 2017

Waddell & Reed Sued Over In-House Funds in Its 401k Plan

Abstract: Waddell & Reed Financial Inc. is the latest financial services company accused of filling its workers' 401k plan with high-fee, poorly performing in-house funds, when less expensive, better performing outside options were available.

Source: Bna.com (registration may be required), June 2017

Washington University Sued Again Over Its $3.8B Retirement Plan

Abstract: Washington University in St. Louis was hit with a second lawsuit accusing it of filling its $3.8 billion retirement plan with duplicative, expensive, and underperforming investment options.

Source: Bna.com (registration may be required), June 2017

CITs, What's Old Is New Again

Abstract: With pressure mounting on employers to offer participants reasonable, cost-efficient investment options and also fulfill their fiduciary duty in a world of increasing litigation, CIT use is rapidly growing.

Source: Abglobal.com, June 2017

Fiduciary Frustration Finds Audience in 401k Advisors

Abstract: Not yet three weeks past the June 9 initial implementation/non-implementation date set by the DOL, with rule's full implementation set for January 2018, and advisors and industry watchers are wondering what's changed in the way 401k firms and advisors operate.

Source: 401kspecialistmag.com, June 2017

Survey: Potential Impact of Tax Reform on Employees' Retirement Savings

Abstract: The Plan Sponsor Council of America released the results of a new snapshot survey to gather insights on the impact of possible changes to tax preferences for retirement savings plans.

Source: 401khelpcenter.com, June 2017

Oregon Retirement Savings Program Amends Enrollment Language

Abstract: The Oregon Retirement Savings Program on June 22 filed a temporary amendment to its program rules with the Oregon Secretary of State's office. The amendment modifies language related to enrollment in the program. It comes a little more than a week before the July 1 launch of the ORSP's first pilot.

Source: Ntsa-net.org, June 2017

Fact or Fiction in the Retirement Wellness Media

Abstract: If the large majority of people think lifetime income is important, then we need plans that promote it. Yes, those people can get lifetime income from their 401k, but if they are doing it through a commercial annuity, they have to purchase that annuity at "retail" rates. On the other hand, if they have a defined benefit plan, they can get better lifetime income from the same amount of money because they are getting the annuity at wholesale rates.

Source: Johnhlowell.blogspot.com, June 2017

Retirement Assets Total $26.1 Trillion in First Quarter 2017

Abstract: Total US retirement assets were $26.1 trillion as of March 31, 2017, up 3.2 percent from December 31, 2016. Retirement assets accounted for 34 percent of all household financial assets in the United States at the end of March 2017.

Source: Ici.org, June 2017

Impact of the DOL Fiduciary Rule on Independent Insurance Agents

Abstract: Recommendations of annuities and life insurance to retirement plan participants and IRAs are fiduciary acts under the DOL's new fiduciary definition. This means that independent insurance agents need to engage in a prudent process in making those recommendations. This article addresses the types of recommendations that are covered by the fiduciary rule, describes a prudent process, and discusses the conditions independent insurance agents will need to meet.

Source: Drinkerbiddle.com, June 2017

Auto Features: Inertia Beaters, but May Generate Exhaust

Abstract: Automatic features can help overcome saving gridlock, but they are not necessarily a panacea and can have consequences of their own.

Source: Asppa.org, June 2017

California Secure Choice, Modified, Heads for Governor's Signature

Abstract: The Golden State has modified the legislation regarding its state-run auto-IRA program for private sector workers in place, readying the measure for Gov. Jerry Brown's expected signature.

Source: Asppa.org, June 2017

Targeted Communication Driving Deferral Rates

Abstract: Most Americans are unsure about how much of their pay they should use to fuel a retirement savings vehicle. However, certain steps can be taken to address this issue. Ascensus found that targeted communication, education, technology and auto-enrollment together can have a significant impact on motivating participants to increase contribution rates.

Source: Planadviser.com, June 2017

Retirement Security Is Particularly Challenging for Latino Workers

Abstract: Many Americans struggle to save for retirement. According to a NIRS survey, three-fourths of Americans are worried about their ability to retire securely. One group that is particularly affected by this retirement savings crisis is Latino retirees, who live longer, but have lower savings rates than other groups.

Source: Protectpensions.org, June 2017

2017 Lincoln Retirement Power Participant Study

Abstract: This 12-page study is based on a national survey of 2,509 full-time workers ages 21 to 70 who have been contributing to their current employer's defined contribution retirement plan for at least one year, with data weighted by demographics to mirror the total population. The study seeks to identify forward-thinking ways to help plan sponsors, advisors, intermediaries and participants.

Source: Lfg.com, June 2017

Collective Investment Trusts Getting More Attention From 401k Advisers

Abstract: Mutual funds hold the lion's share of 401k assets, but another investment vehicle -- collective investment trusts -- are quickly emerging as a contender.

Source: Investmentnews.com (registration may be required), June 2017

Voya Scores Win in ERISA Suit Over Robo-Adviser Fees

Abstract: Voya Financial and its subsidiaries convinced a federal judge to dismiss a lawsuit by a 401k investor who says the company overcharged for investment advice provided by robo-adviser Financial Engines Advisors.

Source: Bna.com (registration may be required), June 2017

Millennials Make Greatest Gains in 401k Plan Participation

Abstract: Rates of saving for retirement and investing habits differ from one generation to the next, according to a recent analysis of four million people who participate in 401k plans provided by Wells Fargo. Retirement plan data for Boomers, Generation X, and millennials reveal ways each generation can learn from the others when it comes to saving for retirement.

Source: 401khelpcenter.com, June 2017

Report Finds Retirement, College, and Health Savings Activity Expanding

Abstract: Ascensus has released its annual trends report, "Inside America's Savings Plans." The report highlights the leading trends across the retirement, college savings, and health savings account (HSA) industries.

Source: 401khelpcenter.com, June 2017

Tear Down the Silos Between HSAs and 401ks

Abstract: It's time for health savings accounts and 401ks to get better acquainted. Consigning them to separate silos isn't helping employees save for retirement, which is costing employers a bundle of money.

Source: Shrm.org, June 2017

Texas Board Aims to Kneecap 403(b) Participant Choice, Providers

Abstract: The Texas Teachers Retirement System Board of Trustees published a proposed rule in the Texas Register that could eliminate virtually all of the existing registered 403(b) products in the state from being actively marketed under new salary reduction agreements.

Source: Ntsa-net.org, June 2017

The Importance of Retirement Plan Record Retention -- Whose Job Is It Anyway?

Abstract: The IRS and federal tax regulations require that records be retained as long as their contents may become material in the administration of any internal revenue law. As a result, records for retirement plans should be kept until all benefits have been paid, the trust has been dissolved and sufficient time has passed such that the plan will not be the subject of an audit.

Source: Erisadiagnostics.com, June 2017

The Quandary of Publicly-Traded Employer Stock in a 401k Plan

Abstract: This article examines the quandary that employer stock funds pose for plan sponsors, who must navigate ERISA's careful balance of (1) ensuring fair and prompt enforcement of employee rights under employer-provided retirement plans while (2) encouraging employer creation of these plans.

Source: Employeebenefitsblog.com, June 2017

Putnam Beats Class Action Over In-House 401k Investments

Abstract: Putnam Investments defeated a class action challenging the allegedly high-fee proprietary investment funds in the company's 401k plan.

Source: Bna.com (registration may be required), June 2017

Fidelity Defeats Class Action Over Stable Value Fund

Abstract: Fidelity Management Trust is free of a class action by 401k investors who said the company's stable value fund carried excessive fees and used an unduly conservative investment strategy.

Source: Bna.com (registration may be required), June 2017

Amazon-Whole Foods Merger Likely to See 401k Consolidation

Abstract: Amazons proposal to merge with Whole Foods Market may leave employees of the two companies wondering what will become of their retirement plans. The merger, if it progresses, will involve a decision of whether to consolidate the two companies' sizable 401k plans or keep them separate.

Source: Bna.com (registration may be required), June 2017

DOL Fiduciary Rule Takes Effect

Abstract: Financial advisors who work on commissions, such as brokers and insurance agents, will be impacted the most by the new fiduciary rule. While receiving commissions will not be prohibited, advisors who wish to continue working on a commission basis will be required to provide clients with a disclosure agreement called a Best Interest Contract Exemption (BICE).

Source: Axiaadvisory.com, June 2017

NAPA, CIkR Task Force Develops Small Plan RFP Template

Abstract: Small plans frequently have big service needs, and a special joint NAPA/CIkR task force has developed a template designed to make it easier to obtain a consistent, apples-to-apples comparison of service features from 401k recordkeepers.

Source: Asppa.org, June 2017

Market Gains Drove Highest Quarterly Return for DC Plans Since 2013

Abstract: DC plans were on the receiving end of strong market performance during the first quarter of this year, rising 4.67%, its highest quarterly return since year-end 2013, according to the latest Callan DC Index.

Source: Asppa.org, June 2017

Recalibrating Your Defined Contribution Plan

Abstract: Plan sponsors are eager to improve participants' retirement outcomes. Reenrollment is a powerful way to steer employees into effective investment options. However, some plan sponsors have balked at the idea.

Source: Abglobal.com, June 2017

Revenue Sharing Spurring 401k Lawsuits With More to Come

Abstract: With the focus on 401k and 403(b) lawsuits, it may be time for employers sponsoring a corporate retirement plan to get out of the line of fire by eliminating revenue sharing altogether.

Source: 401ktv.com, June 2017

Valuing DC Choice: Many People Like the Flexibility of 401k Plans

Abstract: Nearly all U.S. households that have a defined contribution retirement plan account agree that "it is important to have choice in, and control of, the investments in their retirement accounts," according to a new survey released by the Investment Company Institute.

Source: Planadviser.com, June 2017

Plan Assets and Prohibited Transactions

Abstract: When analyzing whether a prohibited transaction has occurred, there are certain threshold questions that need to be asked. If the alleged violation is said to be an ERISA Section 406(b) violation, it is necessary to establish that at least one of the parties is a fiduciary and that plan assets were involved. But, determining what are plan assets is not as easy as it seems.

Source: Planadviser.com, June 2017

Advocating for Aggressive Plan Design

Abstract: With one in three Americans having zero saved for retirement and nearly one-third of Americans over the age of 85 having no savings, it is hard to say that we as a nation are preparing people for retirement. Advisers should be advocating for aggressive plan design to help ensure what workers save goes the distance.

Source: Planadviser.com, June 2017

Millennial Retirement Saving Survey

Abstract: This Pentegra survey shows over 80 percent (81.37 percent) of millennials are currently saving for retirement, and over one-third (37.25 percent) are putting at least 5 percent of their salary into a retirement savings vehicle. However, nearly 18 percent (17.65 percent) are saving nothing, while nearly half (45.1 percent) are saving what Pentegra defines as inadequate levels (under 5 percent). In total, 62.75 percent are saving inadequately.

Source: Pentegra.com, June 2017

"Apples to Apples" and Other Investment Return Issues

Abstract: Courts, plan sponsors, and investment fiduciaries in general must be able to differentiate between nominal returns, load-adjusted, and risk-adjusted returns in order to (1) know when each is appropriate, and (2) to be able to properly determine whether a fund is providing commensurate value for higher fees in order to ensure that they are properly comparing "apples to apples" in order to act in the "best interests" of a plan and its participants.

Source: Iainsight.wordpress.com, June 2017

Allianz Workers Get Class Treatment in Suit Over 401k In-House Funds

Abstract: Allianz Asset Management of America L.P. workers won class certification on their lawsuit challenging the allegedly high-fee, in-house mutual funds in their 401k plan.

Source: Bna.com (registration may be required), June 2017

Target-Date Funds Don't Serve Employees Well: Study

Abstract: Most target-date funds aren't serving employees well, argues a paper published earlier this month. While target-date funds are an easy option for employees who aren't comfortable with making investment decisions, the funds don't consider employees' desired retirement incomes or how well the portfolio fares over time.

Source: Benefitscanada.com, June 2017

With the Tip of a Hat, a Fund Manager Can Be an ERISA Fiduciary

Abstract: Some advisors may now find themselves unexpectedly wearing a "fiduciary hat" with respect to benefit plan clients (including individual retirement accounts). While it is expected that the scope of the final DOL fiduciary rule has limited effect for fund managers, there are certain marketing and promotional activities that could implicate the final regulation.

Source: Winstead.com, June 2017

Should You Use Your Retirement Savings to Start a Business?

Abstract: If you're thinking of starting a business, you need money. And if you are lacking investors and lenders knocking on your door, it may dawn on you: You have startup capital sitting in a 401k, IRA or some other retirement account. Should you use it?

Source: Usnews.com, June 2017

Women in Retirement: Are You Part of the 60 Percent?

Abstract: Almost 60 percent of the women surveyed at the 2016 Texas Conference for Women fear they aren't saving enough for retirement! Check out the numbers, common retirement pitfalls, and ways to be proactive and start saving in this article by NFP SVP of Retirement Services Lisa Kottler.

Source: Txconferenceforwomen.org, June 2017

California to Move Forward With Auto-IRA Despite Loss of ERISA Safe Harbor

Abstract: This article addresses the background on auto-IRAs, the history of the California Secure Choice Retirement Savings Program, the impact of the auto-IRA safe harbor and its reversal, and the effect on California employers.

Source: Truckerhuss.com, June 2017

Fiduciary Obligations to Safeguard Plan Participants' Data

Abstract: There have been numerous instances of high-profile cybercrime cases over the past couple of years spurring lively discussions in the ERISA community about the potential threat this type of crime poses to plan assets and personal data of plan participants and beneficiaries.

Source: Truckerhuss.com, June 2017

Terminated Participants' 401k Accounts

Abstract: Spring cleaning. Some look forward to it, others dread it. If we're honest, the more thorough we are with our spring cleaning, the better off we are throughout the year. It's time to take a Swiffer to your retirement plan and clean out the remaining balances of terminated participants.

Source: Tristarpension.com, June 2017

401k Rollovers to IRAs and the DOL Fiduciary Rule

Abstract: The provision in the DOL fiduciary rule that says distribution and rollover recommendations are fiduciary advice was not changed; it was only delayed from April 10 to June 9. Therefore, any rollover recommendation on or after June 9 will be deemed fiduciary advice and will require a prudent process and an exemption from the prohibited transaction rules.

Source: Planadviser.com, June 2017

Fiduciary Reforms Will Impact Expanding HSA Market

Abstract: The DOL fiduciary rule expansion establishes ERISA fair dealing requirements in the sale and service of health savings accounts; employers have a lot of questions about what this means.

Source: Planadviser.com, June 2017

SEC Weighs in on Robo-Advisers

Abstract: In February, the Division of Investment Management of the SEC issued guidance on how RIAs who act as "robo-advisers" may comply with the Investment Advisers Act of 1940. In the guidance, the SEC provided some insights as to what it may view as shortcomings in current robo-adviser program offerings.

Source: Planadviser.com, June 2017

Good Bets by 401k Plan Sponsor That Will Limit Their Liability

Abstract: Retirement plan sponsors can make bets that will pay off in limiting liability by making informed, smart decisions that will pay off in the long run. This article is about good decisions that are sure bets that will help a plan sponsor limit their liability.

Source: Jdsupra.com, June 2017

Good Bets by 401k Plan Sponsor That Will Limit Their Liability

Abstract: Retirement plan sponsors can make bets that will pay off in limiting liability by making informed, smart decisions that will pay off in the long run. This article is about good decisions that are sure bets that will help a plan sponsor limit their liability.

Source: Jdsupra.com, June 2017

Does Front-Loading Taxation Increase Savings? Evidence from Roth 401k Introductions

Abstract: Can governments increase private savings by taxing savings up front instead of in retirement? Using administrative data from eleven companies that added a Roth contribution option to their existing 401k plan between 2006 and 2010, this 43-page Harvard study finds no evidence that total 401k contribution rates differ between employees hired before versus after Roth introduction.

Source: Hbs.edu, June 2017

Welcomed IRS Guidance on Use of Forfeitures and Hardship Distributions

Abstract: The IRS recently issued two pieces of long-awaited guidance to facilitate qualified plan operations. The first was the issuance of proposed regulations that would permit forfeitures to be used to fund safe harbor contributions and other corrective contributions. The second was the issuance of new audit procedures regarding the substantiation of hardship distributions, which permits a method of substantiating hardship distributions without having to review and retain the underlying support documentation to show the immediate and heavy financial need for a safe harbor hardship distribution. The new guidance is summarized in this article.

Source: Groom.com, June 2017

Alternate Fee Calculation/Allocation Models

Abstract: Calculating recordkeeping fees and charging them to participants is a matter that should be carefully considered by fiduciaries, especially in light of emerging methods in this area. The best model for one plan may not be the best model for another due to demographic plan differences, such as the number of small account balances.

Source: Cammackretirement.com, June 2017

401k and 403(b) Lawsuit Update: Two Cases Settled and One Filed

Abstract: In what is becoming common place in the rash of 401k and 403(b) lawsuits, two cases were settled and one new one filed in the span of just one week. Northrup Grumman plan sponsors settled; a case against the Washington University 403(b) plan was filed; and Merrill Lynch settled claims against it by a plan sponsor.

Source: 401ktv.com, June 2017

CFOs Who Partner With a Retirement Plan Advisor Achieve Financial Benefits for the Business

Abstract: According to this 8-page study commissioned by the Retirement Advisor Council, employers that sponsor retirement savings plans are better able to control future labor costs by partnering with a knowledgeable financial advisor.

Source: Retirementadvisor.us, June 2017

401k Self-Dealing Suit Filed Against Capital Group

Abstract: The lawsuit claims that when selecting and retaining investment options in the plan, the Capital Group's benefits committee did not act prudently and solely in the interest of plan participants and beneficiaries, but put the interest of Capital Group and its subsidiaries first by selecting, retaining and failing to remove expensive group-affiliated investment options managed by CGTC, CRMC, and/or CII.

Source: Planadviser.com, June 2017

Mutual Fund Fees Keep Dipping in 401ks

Abstract: Following a long-running trend, the average fees that 401k participants incurred for investing in equity, hybrid and bond mutual funds dropped in 2016 for the seventh straight year, according to the latest study by the Investment Company Institute.

Source: Planadviser.com, June 2017

Nevada Imposes Statutory Fiduciary Duty on Broker-Dealers

Abstract: A new fiduciary duty will become applicable July 1, 2017, for broker-dealers and investment advisers operating in Nevada, and this fiduciary duty has nothing to do with the Department of Labor.

Source: Greensfelder.com, June 2017

Warning, Employers: Liability Lurks in Your 401k Plan

Abstract: A business owner has a legal fiduciary obligation to make sure the plan is set up, monitored and managed for the "sole benefit" of the employees. For most business owners, this is shocking news, as they often think that the provider or local broker is responsible to make sure things run smoothly.

Source: Entrepreneur.com, June 2017

The Economics of Providing 401k Plans: Services, Fees, and Expenses, 2016

Abstract: The cost of investing in equity, hybrid, and bond mutual funds through 401k plans fell again in 2016, according to a research study that the Investment Company Institute just released. The 32-page study also shows that participants who invest in mutual funds in their 401k plans tend to hold lower-cost funds.

Source: Ici.org, June 2017

Popular 401k Funds Are Packed With Tech Stocks

Abstract: Fidelity Contrafund's stake is at a 20-year peak, and other retirement plan favorites are getting close. That is either (a) great, or (b) scary.

Source: Bloomberg.com, June 2017

The DOL's Fiduciary Rule Is Here, Are You Prepared?

Abstract: As a plan fiduciary, the goal is to deliver a top performing vendor plan to your employees with low fees and great service. How does the DOL's new fiduciary rule impact that goal and what should you do as a result? This short article outlines a few steps to take with respect to the rule.

Source: Pension-consultants.com, June 2017

How to Evaluate Your 401k Investment Advisor

Abstract: Assessing the performance of your 401k investment advisor is often difficult. How can you tell if your 401k investment advisor is doing a good job? A few tips are provided in the short piece.

Source: Lawtonrpc.com, June 2017

Key Questions to Ask to Better Understand Your 403(b)

Abstract: While 403(b)s share some similarities with the 401ks offered to corporate employees, these retirement plans are not identical and they can sometimes be confusingly complex in their fee structures and investment options.

Source: 403bwise.com, June 2017

Northrop Grumman Settles Multi-Million Dollar 401k Fee Suit

Abstract: With the sting of defeat still fresh from a federal judge's dismissal of his Chevron suit, tort lawyer Jerry Schlichter bounced back with the announcement of a $16.75 million 401k fee settlement with Northrop Grumman.

Source: 401kspecialistmag.com, June 2017

OregonSaves Edging Closer to Being Live

Abstract: OregonSaves, the state-run auto-IRA program for private-sector workers, is not quite launched yet, but the pieces are falling into place. OregonSaves will begin operation in July 2017. The Oregon Retirement Savings Board has provided a report on preliminary work that is being done in preparation for the system.

Source: Ntsa-net.org, June 2017

Fiduciary Rule: June 9 & Beyond

Abstract: This article provides a high level summary intended to help ERISA Plans and service providers to ERISA Plans and/or IRAs better understand some of the Fiduciary Rule's compliance requirements, as well as those of the Best Interest Contract (BIC) Exemption, an exemption that is expected to be relied upon by many financial advisers.

Source: Kilpatricktownsend.com, June 2017

Defining "Reasonable Comp" Under the DOL Rule

Abstract: The best way for financial advisors to think about "reasonable compensation" in the fiduciary sense is to imagine a scatter graph. And the best place to be on that graph is the dot in the middle of the pack of other dots.

Source: Insurancenewsnet.com, June 2017

The 401k Plan Investment Policy Statement

Abstract: A road map for selecting 401k investments helps keep the plan's offerings consistent. And well-defined criteria for regularly evaluating the investments ensures that the fund managers are investing the plan's assets in a manner consist with your expectations. Once in place, a 401k investment policy statement can provide evidence that the plan sponsor is dutifully acting as a fiduciary when it comes to overseeing the plan's investments.

Source: Forusall.com, June 2017

Washington University Is 15th School Sued Over Retirement Plan

Abstract: Washington University in St. Louis is the latest college to face a proposed class action over the fees and investment options in its retirement plan.

Source: Bna.com (registration may be required), June 2017

Merrill Lynch to Pay $25M in Lawsuit Over Fees in Small 401ks

Abstract: Merrill Lynch, Pierce, Fenner & Smith Inc. will pay $25 million to settle a lawsuit that accused the broker-dealer firm of profiting from excessive fees charged to small 401k plans.

Source: Bna.com (registration may be required), June 2017

Handling QDROs for Your Retirement Plan

Abstract: When couples divorce, one spouse's retirement benefits may be divided as part of a property settlement. Although federal law generally does not allow plan participants to assign or alienate their retirement plan interests, there is a limited exception. Retirement benefits may be assigned to a spouse, former spouse, child, or other dependent to satisfy family support or marital property obligations through a domestic relations order if the plan administrator determines it is a qualified domestic relations order (QDRO).

Source: Pentegra.com, June 2017

Department of Labor's New Fiduciary Rule Effect on Investment Funds

Abstract: The New Fiduciary Rule raises a major concern that investment fund sponsors and others who market investment products to ERISA-covered plans and IRAs could be deemed to be "fiduciaries" in connection with their marketing activities and, therefore, subject to ERISA's prohibitions on self-dealing and conflicts of interest. Consequently, investment fund sponsors need to prepare appropriate measures to avoid becoming ERISA fiduciaries in connection with their marketing activities.

Source: Paulhastings.com, June 2017

Pennsylvania Legislature Passes State Employee Retirement Plan Bill

Abstract: The Pennsylvania legislature has passed Senate Bill 1, a measure that seeks to ease the state's unfunded liability by providing new state employees, including teachers, hired after Jan. 1, 2019 with a choice of one of three retirement benefits. Gov. Tom Wolf is expected to sign the bill into law.

Source: Ntsa-net.org, June 2017

Quantifying the Impartial Conduct Standards Under the DOL's New Fiduciary Rule

Abstract: With a portion of the DOL's new fiduciary rule scheduled to go into effect, there are still some unanswered questions with regard to how some key terms will be interpreted. The key terms in question are primarily located in the rule's impartial conduct standards.

Source: Iainsight.wordpress.com, June 2017

DOL Issues Fiduciary Rule FAQs as SEC Re-Enters Fiduciary Rule Debate

Abstract: Given that the Fiduciary Rule will be implemented on June 9, 2017, with full compliance expected by January 1, 2018, it is expected that mutual fund sponsors will move ahead with plans to introduce clean shares and T shares in order to assist fund intermediaries in complying with the Fiduciary Rule. Mutual fund boards of directors and fund service providers should be prepared for a year of potential share class changes and related filings.

Source: Drinkerbiddle.com, June 2017

What Can You Expect From the ERISA Fiduciary Advice Rule

Abstract: During the transition period, fiduciaries who meet one of the exemptions still need to comply with the Impartial Conduct Standards. This requires fiduciaries to: Provide advice which is in the best interests of their clients; Avoid making misleading statements; and Charge no more than reasonable compensation for services.

Source: Bsllp.com, June 2017

Chicago Bridge & Iron Inflated Stock, 401k Participants Say

Abstract: Chicago Bridge & Iron Co. allowed artificially inflated company stock as an investment option in its retirement plans, causing its employees millions of dollars in losses, the workers allege.

Source: Bna.com (registration may be required), June 2017

Questions 401k and 403(b) Participants Should Ask When the Plan Advisor is Changed

Abstract: The DOL rule will force many advisors to act as a fiduciary which will in turn force many of the over 200,000 advisors without necessary experience or training to either opt out or get serious creating massive turnover. So what questions should plan participants be asking when a 401k or 403(b) change their plan advisor?

Source: 401ktv.com, June 2017

House Republicans Pass "Choice" Act, Block Fiduciary Rule

Abstract: One of the most sweeping financial regulations in recent history took a step closer to destruction on Thursday, as the House of Representatives voted almost along party lines to repeal the Dodd-Frank Act. Part of the legislative package included a block of the DOL's fiduciary rule set for implementation on Friday.

Source: 401kspecialistmag.com, June 2017

Survey Finds Financial Wellness Programs Are Gaining Momentum With Employers

Abstract: A new survey from Charles Schwab reveals that financial wellness programs are quickly becoming a core part of employee benefit and compensation packages. Employers are increasingly finding that financial wellness programs can potentially drive better financial outcomes for employees, promote higher utilization of employer-sponsored savings and investment programs, and lead to productivity gains from a reduction of financial-related stress.

Source: 401khelpcenter.com, June 2017

DOL Fiduciary Rule: Ready, Set, Go! But How Far?

Abstract: As the rule becomes applicable on June 9, including the impartial conduct standards under the exemptions, the DOL's recent guidance seems to support phased implementation as financial institutions move toward the full compliance date, which is currently scheduled for January 1, 2018. Though the scope of potential changes to the rule and exemptions in advance of January 1 is currently unclear, we expect that additional changes may be considered and potentially made.

Source: Morganlewis.com, June 2017

Stepping Out of the Defined Contribution 'Echo Chamber'

Abstract: With the competition among DC plan advisers tough and expected to get even tougher as the DOL's fiduciary rule forces inexperienced advisers to exit the market, plan advisers need to step out of the DC "echo chamber" and bring new ideas to clients. What is the DC echo chamber and how can you exit it?

Source: Investmentnews.com (registration may be required), June 2017

"Last Minute" Fiduciary Rule Check-In: What Plans and Arrangements Are Covered

Abstract: With the DOL Fiduciary Rule, there may still be confusion about exactly which plans and other arrangements are subject to the Rule. This article describes which plans and arrangements are covered, and which are not.

Source: Drinkerbiddle.com, June 2017

Sponsors Implemented Meaningful Changes to 401k Plans Over Past Decade

Abstract: Implementation of automated features in defined contribution plans has skyrocketed over the past decade, driving up plan participation rates, saving rates, and balanced asset allocation strategies, according to the 110-page 'How America Saves 2017' report.

Source: Vanguard.com, June 2017

Commitment to Employees' Retirement Security Goes Beyond Working Years for Many Larger 401k Plan Sponsors

Abstract: In a new study, T. Rowe Price found broad-based commitment to workers' retirement security based on the attitudes and actions of retirement plan sponsors. In addition to taking responsibility for retirement preparedness, plan sponsors are taking steps to offer several automatic programs, matching contributions, stretch matches, and more to drive successful retirement outcomes.

Source: Slideshare.net, June 2017

Hybrids: the Next Generation of QDIA

Abstract: Qualified Default Investment Alternatives (QDIAs) are a fairly recent invention but have already become a central component of the corporate defined contribution retirement system. Although target date funds have been the most popular choice to date, recently-introduced hybrid forms of QDIA represent a notable new variation.

Source: Russellinvestments.com, June 2017

Why Should My 401k Plan Use a Calendar Plan Year?

Abstract: Off-calendar plan years are typically structured to follow the company's fiscal year, with the rationale that the profit-sharing contributions would be tied to fiscal year performance. This logic is somewhat flawed.

Source: Rpgconsultants.com, June 2017

Form 5500 Update

Abstract: As a plan sponsor or financial advisor, it is paramount that you maintain an open line of communication with your TPA or recordkeeper responsible for preparing this filing in order to avoid potential penalties and fines from both the IRS and the DOL. In order to avoid delays in the preparation and filing of the form, here are some things you can do as the plan sponsor to assist your service provider.

Source: Legacyrsllc.com, June 2017

Compliance With the ERISA Fiduciary Advice Rule: Beginning June 9, 2017

Abstract: The DOL's fiduciary rule significantly expands the categories of persons who are deemed a fiduciary when dealing with retirement investors. It is therefore important that financial services entities who deal with employee benefit plans and IRAs, consider the points reviewed here in connection with compliance with the Rule.

Source: Kattenlaw.com, June 2017

Compliance With the ERISA Fiduciary Advice Rule

Abstract: The DOL's fiduciary rule affects a broad range of financial services providers who deal with "Protected Investors." This article provides a brief overview of the specific effects of the Rule on investment managers and sponsors of private funds that accept investments from Protected Investors and on investment advisers that provide managed account services to Protected Investors.

Source: Kattenlaw.com, June 2017

Defined Contribution Plan Participants' Activities, 2016

Abstract: Defined contribution plan assets are a significant component of Americans' retirement assets, representing more than one-quarter of the total retirement market and about one-tenth of US households' aggregate financial assets at year-end 2016. To measure participant-directed changes in DC plans, ICI has been tracking participant activity through recordkeeper surveys since 2008. This 12-page report updates results.

Source: Ici.org, June 2017

Audits and Other Form 5500 Developments

Abstract: Changes are afoot for ERISA-mandated Form 5500 filing requirements, though it is unclear at this time when and which changes will actually be implemented. IRS has once again allowed a pass on their compliance questions by omitting them from the 2017 draft forms.

Source: Conduent.com, June 2017

Another Court Dismisses Conclusory 401k Fee Suit

Abstract: We have now had a second case in Minnesota in which a judge looked under the hood and found no substance there. The Minnesota judge dismissed the case with prejudice (meaning plaintiffs won't have a second bite at the apple.) Is this the beginning of a trend?

Source: Cohenbuckmann.com, June 2017

Fiduciary Rule's Future Even More Uncertain as SEC Steps In

Abstract: SEC Chairman Jay Clayton in his first policy announcement said the SEC would seek comment on a range of issues related to the DOL's Obama-era rule that aimed to reduce the allegedly conflicted investment advice given to retirement savers. Opponents of the rule may be pleased, but this isn't the first time the head of the SEC has expressed interest in tackling the topic.

Source: Bna.com (registration may be required), June 2017

DOL FAQs Guide Compliance Efforts During Fiduciary Rule Transition Period

Abstract: The Department of Labor has issued guidance in the form of 'Frequently Asked Questions' to help firms and their advisers impacted by the Fiduciary Rule know what is expected on and after June 9, 2017, on and after January 1, 2018, and during the period between.

Source: Benefitsbryancave.com, June 2017

Bill Would Repeal Fiduciary Rule, Part of Dodd-Frank

Abstract: A bill repealing some of the major provisions of Dodd-Frank and the DOL's fiduciary rule will move to the House floor for a vote this week, something that did not happen in previous sessions for similar legislation. That said, even if the House passes it, its chances in the Senate are bleak.

Source: Asppa.org, June 2017

Questioning 401k Lawsuits Based on Investment Outcomes

Abstract: No one can predict the excess return relative to a benchmark (Alpha) that is usually associated with active investment management. Then it should come as no surprise that no one can predict the market (beta). Choosing investments is a subjective endeavor. So why are so many legal actions and allegations against Employer Retirement Plans Sponsored Plans based on subjective endeavors with unknown outcomes?

Source: 401khelpcenter.com, June 2017

401k Accounts Need to Be Easier to Move From Job to Job

Abstract: In short, in most cases as employees move from one large employer with a low-fee 401k to another, the smartest move would be to roll over their balances from the old plan to the new plan. But given the enormous hurdles, participants are much more likely to cash out or move their balances into a high-fee IRA. Cashouts and high fees dramatically reduce balances at retirement. This problem is fixable.

Source: Marketwatch.com, June 2017

401k Distribution Rules -- Frequently Asked Questions

Abstract: If you participate in a 401k plan, you should understand the rules for withdrawing money from your account -- otherwise known as taking a distribution -- even if you don't plan to touch this money for decades.

Source: Employeefiduciary.com, June 2017

Tips for Improving Plan Sponsor Homepages

Abstract: A well-designed homepage is among the most essential components of an effective retirement plan sponsor digital experience. As the front door of a plan sponsor portal, a homepage should communicate an assortment of critical plan information and illustrate the overall health of the plans that sponsors administer in a direct and intuitive manner. Contains top tips for improving a plan sponsor homepage.

Source: Corporateinsight.com, June 2017

Adopting a New Pre-Approved 403(b) Document? It's a Good Time for a Plan Compliance Review

Abstract: The restatement of a plan onto a pre-approved document is an opportunity to review the operation of the plan and to make sure that it is being administered in accordance with the terms of the document and applicable legal requirements. Conducting a periodic compliance review is a good idea even if the plan is not being restated, but a plan sponsor certainly wants to make sure that any current errors in the plan's operation are not carried over to a new document.

Source: Boutwellfay.com, June 2017

Plan Sponsors Growing Fiduciary Responsibilities for Cybersecurity

Abstract: This is the slide deck from a presentation on plan sponsors growing fiduciary responsibilities for cybersecurity given at the SPARK Institute's National Conference, June 1-2, 2017.

Source: Winstead.com, June 2017

Retirement Savings Milestones: How Much Should You Have Now?

Abstract: Measuring progress toward your retirement savings goals can be a challenge. This article shares some savings milestones you can use to see how your current savings stack up against your goals. If your savings fall short of where they should be for your age, some suggestions are offered on how to get caught up.

Source: Schwab.com, June 2017

Automatic Savings Plans Drive Better Investment Returns

Abstract: In the U.S., TDFs have consistently had positive gaps because U.S. investors contribute to their 401k savings with every paycheck, and TDFs reduce bad market timing decisions.

Source: Plansponsor.com, June 2017

Technology Reshaping Participant Communications

Abstract: A new study finds plan providers are turning to cloud-based technology and other solutions to enhance targeted communications toward different age groups.

Source: Plansponsor.com, June 2017

Lawsuit Filed for Retirement Plans Using United of Omaha GICs

Abstract: The lawsuit alleges United of Omaha breached its ERISA duties by improperly exercising its discretionary authority "to maximize its own compensation and retain large profits rather than crediting the participants and beneficiaries of the plans with appropriate returns."

Source: Planadviser.com, June 2017

SEC Chair Clayton's Recent Fiduciary Comments Are Revealing

Abstract: The SEC chair issued only a brief statement on his intention to work with DOL officials on reforming conflict of interest regulations, but his language is revealing.

Source: Planadviser.com, June 2017

Managers of Defined Contribution Benefits Regain Steam in 2016

Abstract: Defined contribution money managers posted record assets under management last year of $5.95 trillion, up 8.6% from 2015, according to the latest survey of money managers by Pensions & Investments.

Source: Pionline.com, June 2017

Partial Victories to Two Universities in Their Motions to Dismiss Code Section 403(b) Fee Litigation

Abstract: District courts in Georgia and North Carolina, respectively, ruled on defendants' motions under Henderson v. Emory University and Clark v. Duke University. Although the defendants in these cases has some success in eliminating certain causes of action, other causes of actions involving the payment of excessive fees and use of multiple recordkeepers will continue through litigation.

Source: Mwe.com, June 2017

401k Recordkeepers Making Big Bets on Managed Accounts

Abstract: Fidelity Investments and Empower Retirement are making big bets on 401k managed accounts and competing defined contribution plan recordkeepers are poised to follow suit. What isn't yet clear is if these bets will pay off for retirement plans and their participants.

Source: Investmentnews.com (registration may be required), June 2017

SEC Jumps Back Into Fiduciary Brouhaha

Abstract: The Securities and Exchange Commission announced that it is again seeking public comment on investment-advice standards, restarting its consideration of a fiduciary duty regulation while a similar measure promulgated by the Labor Department is undergoing a reassessment.

Source: Investmentnews.com (registration may be required), June 2017

IRS Proposed Regulations Would Permit Forfeitures to Fund QNECs

Abstract: The IRS published proposed regulations, which amend the definitions of qualified non-elective contributions (QNECs) and qualified matching contributions (QMACs). The questions and answers here explain the importance of QNECs and QMACs and how the proposed changes are beneficial to 401k plan sponsors.

Source: Foxrothschild.com, June 2017

Chevron Again Defeats Lawsuit Over Its $19 Billion 401k

Abstract: Chevron Corp. defeated for the second time a proposed class action accusing it of breaching fiduciary duties by allowing poorly performing investments that allegedly carried high management fees in its $19 billion 401k plan.

Source: Bna.com (registration may be required), June 2017

DC AUM Totaled Nearly $6T in 2016

Abstract: Defined contribution plan assets under management (AUM) reached $5.95 trillion in 2016, says a recent survey of money managers.

Source: Asppa.org, June 2017

Improvement Opportunity Checklist for DC Plan Sponsors

Abstract: While education, financial wellness and improving participants outcomes are top of mind for defined contribution plan sponsors, operations and compliance come first due to increased scrutiny by DOL examiners, new rules and the wave of 401k and 403(b) lawsuits.

Source: 401ktv.com, June 2017

DOL Rule Dramatically Changing 401k Advice, Education and Relationships with Providers and Advisors

Abstract: Now that we know that the DOL fiduciary rule will go into effect June 9th, 401k and 403(b) plan sponsors need to start paying attention to the likely change in the relationship with their recordkeepers and advisors especially those providing investment education and advice.

Source: 401ktv.com, June 2017

How the DOL Created a 401k Fiduciary Monster

Abstract: The linchpin in the whole fiduciary rule mess isn't regulation, but rather deregulation, at least according to Eugene Scalia, son of the late Supreme Court justice. A former solicitor for the Department of Labor under George W. Bush, Scalia took to the pages of The Wall Street Journal to decry what he sees as the department's overreach, referring the fiduciary rule as a regulatory Godzilla.

Source: 401kspecialistmag.com, June 2017


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