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October 2017 Digest

This digest contains a wide variety of source material dealing with current trends, opinion, news, legislative action, investments, marketing, sales, consulting, and legal issues regarding 401k 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.

Use the SEARCH feature to located specific items from this digest and from our ARCHIVE.


    

Fixed Income in DC Plans: What's on the Menu?

Abstract: The fixed-income offerings in a typical defined contribution menu can sometimes seem uninspired, but it doesn't take much to improve the selection. The right combination can enhance core fixed-income allocations, providing diversification and reducing risk.

Source: Alliancebernstein.com, October 2017

Missing Participants With Unpaid Required Minimum Distributions

Abstract: The IRS publicly released guidance, previously provided to its Employee Plan auditors, establishing the criteria that the auditors should use to determine if a plan under audit has a qualification issue when required minimum distributions (RMDs) under Section 401(a)(9) of the Internal Revenue Code have not been timely paid to missing participants.

Source: Sibson.com, October 2017

Missing Your 401k Check? The Government Wants to Help

Abstract: Uncle Sam wants to reunite workers with money they may have left behind in retirement plans over the years. The three government agencies regulating retirement plans -- the Internal Revenue Service, Pension Benefit Guaranty Corporation, and Labor Department -- have all made recent strides to help employers and workers match up money that was left behind.

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

Decumulation in Defined Contribution: The Second Act

Abstract: The 401k era is entering a new and expanding phase: the era of retirement income and asset distributions. A demographic "tipping point" arrived in 2013/2014 with assets leaving 401k plans exceeding assets being contributed or entering plans. This trend is expected to remain until 2030, peaking at $40 billion annually in 2019.

Source: Blackrock.com, October 2017

It's Audit Time -- Do You Know Where Your Participants Are

Abstract: The DOL has announced that it has expanded to the whole country a pilot program in which it asks plan administrators to provide current contact information for selected participants. The DOL considers it a breach of fiduciary responsibility if the plan doesn't know how to reach them. It is an IRS issue, too. On October 19, the IRS issued a memo explaining when examiners will not find a qualification failure if required minimum distributions haven't been made because participants couldn't be located.

Source: 401ktv.com, October 2017

Key Ways to Help Your 401k Participants Become Better Investors

Abstract: Here are some of the 401k investing errors your participants often make and suggestions on what you can do to help them avoid the most common 401k investing mistakes.

Source: Lawtonrpc.com, October 2017

Missing Participants and Beneficiaries and Required Minimum Distributions

Abstract: This IRS memorandum directs EP examiners not to challenge a qualified plan as failing to satisfy the required minimum distribution standards under Internal Revenue Code Section 401(a)(9) in the circumstances set forth in the memorandum.

Source: Irs.gov, October 2017

Clients Facing Late-Career Job Loss Can Tap 401ks Early

Abstract: At 59 1/2, a client can take penalty-free withdrawals from their retirement savings. However, a withdrawal from an IRA or 401k before that age may be subject to an additional 10% penalty, one of the last things an unemployed worker needs. There are some solutions.

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

University 403b Plan Fees and Investments Under Scrutiny

Abstract: Over the past year, 16 private universities became the target of lawsuits alleging breaches of fiduciary duty with respect to 403b plan fees and investment options. This article reviews some of the key topics covered by the allegations in the cases grouped by trends in the district courts' rulings to date.

Source: Hodgsonruss.com, October 2017

Chart: Retirement Saver's Credit Limitations for 2018

Abstract: Taxpayers who make eligible contributions to an employer-sponsored retirement plan or IRA may be able to take a tax credit on their income tax return. They may use this chart to calculate their Saver's Credit.

Source: Transamericacenter.org, October 2017

Research: Few Workers React Negatively to Higher Default Savings Rates

Abstract: Erring on the high side when choosing a 401k savings default-contribution rate won't likely discourage employees from participating in the plan, new research suggests. Plan sponsors' experiences seem to back up this finding.

Source: Shrm.org, October 2017

Watchdog Group Sues DOL to See Records for Fiduciary Rule Rewrite

Abstract: The independent watchdog group American Oversight filed a lawsuit in U.S. District Court for Washington to force the DOL to release records about revisions to the fiduciary rule now being considered.

Source: Pionline.com, October 2017

Massachusetts Bill Sets Sights on a State-Run Open MEP

Abstract: The Massachusetts legislature's Joint Committee on State Administration and Regulatory Oversight considered a bill that would set up a state-run multiple employer plan for private employers. The bill, Senate Bill 1701, requires the treasurer and receiver general of the state to sponsor a qualified defined contribution plan, which would then be available to private-sector employers to adopt for their own employees.

Source: Ntsa-net.org, October 2017

Here's Where an Advisory Firm Gets in Trouble

Abstract: The SEC issued a cease-and-desist order against Envoy Advisory. Envoy agreed to pay disgorgement for failing to offer the lowest-fee mutual fund share classes available and failing to adequately disclose compensation paid to its affiliated broker-dealer.

Source: Jdsupra.com, October 2017

Northrop Grumman's $16.8m Deal Leads to $5.6M in Attorneys' Fees

Abstract: Law firm Schlichter Bogard & Denton was awarded $5.58 million in attorneys' fees following the $16.8 million deal it reached earlier this year in a case involving Northrop Grumman's retirement plans.

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

Clock Is Ticking for Five Banks That Handle Retirement Money

Abstract: Deutsche Bank AG, Citigroup, UBS Assets Management, JPMorgan Chase, and Barclays Capital will all need the DOL's approval by early next year to keep operating as "qualified professional asset managers." The five banks are major players in the retirement industry, providing services to millions of retirement savers and managing billions of dollars in plan assets.

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

Supervising Your Plan's Investment Manager and an Atmosphere of Misinformation

Abstract: When a plan sponsor hires a Fiduciary Investment Manager, they have minimized their effort regarding plan investments and maximized their liability protection. However, they haven't eliminated their potential liability. The sponsor must continue to monitor the service provider. If the sponsor fails to monitor their FIM, and the FIM makes a mistake, the sponsor can be ultimately held liable. This is where misinformation may come into play.

Source: Alliant401k.com, October 2017

Structuring Your Retirement Portfolio

Abstract: The first aspect of a three-pronged approach to generating retirement income is creating a plan. After you've completed the planning stage, your next step should be to determine your portfolio allocation. Lastly, you'll make a plan for withdrawing from your portfolio in retirement.

Source: Schwab.com, October 2017

Investors Who Held Steady After the Great Recession Have Been Rewarded

Abstract: Those who did not flee to cash but remained invested have portfolios that are 50% higher than those who sought safety, Fidelity found. However, 25% of people have reassessed how much risk they can handle and have moved to more conservative portfolios, where they have remained in the past 10 years.

Source: Planadviser.com, October 2017

Plan Sponsors' Use of Best Practices Continues to Climb

Abstract: Plan sponsors continue to embrace best practices when it comes to running their retirement plan. Automatic enrollment, higher initial deferral rates, and financial counseling are just a few that more employers are adopting.

Source: Planadviser.com, October 2017

Study Says African-Americans Want More Financial Education

Abstract: Forty-five percent of African-Americans who bring home $75,000 or more say they feel less than financially secure compared with just 28% of other Americans in the same income category.

Source: Planadviser.com, October 2017

U.S. Receives "C" Grade in Global Retirement Study

Abstract: In a new global study of retirement systems around the world, the U.S. received an overall grade of "C," meaning the country's system has some good features, but also has major risks and/or shortcomings that should be addressed, according to the classification.

Source: Napa-net.org, October 2017

Retirement Assets on the Move

Abstract: Here is one more reason for financial services firms to target Millennials: 50% are likely to roll money out of plans with former employers into an IRA in the next year.

Source: Marketstrategies.com, October 2017

Do Advisory Boards Create Perceived Conflicts for DC Plan Advisers

Abstract: Many defined contribution plan advisers join the advisory boards of recordkeepers and asset-manager providers they use. But do these board memberships create perceived conflicts in the eyes of the Department of Labor and 401k or 403b plan sponsors?

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

401k Enrollment: How to Get More Employees Saving

Abstract: Despite efforts to bolster their employee's retirement savings, many plan sponsors realize something is missing. While enrollment rates have improved in recent years, there are still plenty of employees who fail to enroll in the company 401k. When asked about the reasons for not saving into the plan, 28% of plan sponsors reported that a "lack of awareness or understanding" was the primary reason employees did not participate in their plans.

Source: Forusall.com, October 2017

A Compliance Checklist for Plan Sponsors - Part 2

Abstract: Part one described the methods the IRS will be using to achieve compliance in qualified pension and 401k plans, as set out in its recently issued 2018 Work Plan. This part two describes the specific issues identified in the Work Plan that will draw the interest of the IRS.

Source: Fiduciaryplangovernance.com, October 2017

Eleventh Circuit Court of Appeals Holds ERISA Statute of Limitations Provision May Be Waived

Abstract: Upon reviewing the case, the Court agreed that Section 413(1) is a statute of repose, since the limit is based on the last time that the defendants acted, as opposed to when the claim accrued. However, the Court ruled that the statute of limitations provided by Section 413(1) may be waived, as a statute of repose is not nonwaivable.

Source: Erisalawyerblog.com, October 2017

Participant Site Retirement Educational Resources

Abstract: One of the most prominent trends in the digital retirement space has been the proliferation and evolution of retirement educational resources. Here are some tips for improving your participant site's suite of educational resources.

Source: Corporateinsight.com, October 2017

Failure to Log in: The Dirty Little Secret of Many Retirement Plans

Abstract: If employees of a retirement plan recordkeeper are not logging in to their own retirement plan website, then the chances are low that the average retirement plan participant has accessed their retirement plan homepage. And since most of the best material that recordkeepers utilize to engage participants is accessed via the website or mobile site, participants may not have the information they need to optimally save or invest.

Source: Cammackretirement.com, October 2017

401k Nudges and Course Corrections

Abstract: Behavioral economist Richard Thaler, winner of the 2017 Nobel Prize for economics, regards his field's greatest contribution as showing that people are more likely to save if the saving happens automatically. To make saving for retirement easier, employers have increasingly turned to automated 401ks.

Source: Bc.edu, October 2017

Nine Steps to an Effective Cybersecurity Program

Abstract: This article outlines some cybersecurity concerns including intentional hacking of files, unintentional release of files, and email phishing to steal information. It then reviews a nine-step approach to cybersecurity.

Source: Asppa.org, October 2017

401ks and 403bs Compared, Contrasted

Abstract: While 401ks are ubiquitous in the for-profit sector, 403bs plans rule the roost among non-profits. While 403bs and 401ks both serve as vehicles for retirement saving and employers can make contributions to both, there are key differences.

Source: Asppa.org, October 2017

The Trump-Era Fiduciary Rule

Abstract: Where does the DOL's fiduciary rule stand? What might we expect in the future? ERISA attorney Fred Reish provided an update on the former and shared his thoughts on the latter in an Oct. 24 workshop at the 2017 ASPPA Annual Conference.

Source: Asppa.org, October 2017

Best Practices Arising From the DOL Fiduciary Rule

Abstract: This article examines the manner in which the fiduciary rule, and in particular the BIC Exemption, affect business best practices regardless of whether any changes are made to the fiduciary rule and related exemptions.

Source: Wagnerlawgroup.com, October 2017

Ten Tips for Rolling Over a 401k When You Change Jobs

Abstract: Each time you change jobs you need to decide what to do with the money in your 401k plan. While you can typically leave the money in a former employer's 401k plan, there's also an opportunity to transfer your retirement savings to an IRA or a new 401k plan. Here's how to roll over your retirement savings when you leave a job.

Source: Usnews.com, October 2017

Which Expenses Can Be Reimbursed From Plan Assets

Abstract: Though the regulations do not provide for a listing of all the possible type of plan expenses and whether or not they can be reimbursed from plan assets, the DOL has published guidance on the subject that does provide specific, real-world examples.

Source: Plansponsor.com, October 2017

Americans Carry an Average Debt Load That Impedes Retirement Savings

Abstract: Americans carry an average debt load of $140,113, GoBankingRates.com found in a survey. Yet, 64% of Americans say they have more saved than they have as revolving debt on their credit card. GoBankingRates.com cautions that this should be taken in context, as an earlier survey the website conducted found that over half of Americans have less than $1,000 in their savings account.

Source: Planadviser.com, October 2017

Reach Out to 403b Participants Maintaining Outside Businesses

Abstract: Notifying 403b plan participants of annual additions limit rules under Internal Revenue Code Section 415(c) may not be just a best practice, it may be an affirmative obligation in the employer's 403b plan document.

Source: Ntsa-net.org, October 2017

Why Congress's Plan to Slash 401k Limits Was Never a Good Idea

Abstract: Personal finance and retirement-planning experts expressed concern that this would lead to a reduction in America's already anemic retirement savings rate. What's more, there's a bigger problem with the GOP's math, some experts say.

Source: Nbcnews.com, October 2017

Paying Employee Benefit Plan Expenses Chart

Abstract: This 6-page chart is a guide for employers to use in determining which types of expenses can be paid from the assets of an employee benefit plan governed by ERISA and the Internal Revenue Code.

Source: Groom.com, October 2017

What Does Consistent Participation in 401k Plans Generate

Abstract: This 24-page paper provides an annual update of a longitudinal analysis of 401k plan participants drawn from the EBRI/ICI 401k database. A few key insights emerge including the growth in account balances for consistent participants greatly exceeded the growth rate for all participants in the database.

Source: Ici.org, October 2017

401k Employee Contributions Above $2,400, a Possible Rothification Threshold

Abstract: There have been several press and other reports that some tax reform proposals might modify the tax treatment of 401k employee contributions. Considering this possibility, EBRI was asked to share its most recent information about the distribution of 401k employee contributions around the specified threshold, broken out by salary and by age. This release provides that information.

Source: Ebri.org, October 2017

Labor Department's Employee Benefits Agency Keeps Shrinking

Abstract: The Employee Benefits Security Administration continues to see its staffing levels decline, with the number of employees dropping nearly four percent in the past quarter.

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

Xerox Nixes Challenge to Robo-Adviser Fees in Ford 401k Plans

Abstract: Xerox HR Solutions escaped a lawsuit by participants in three Ford Motor Co. 401k plans challenging the allegedly excessive fees charged for investment advice provided by robo-adviser Financial Engines Advisors.

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

The 401k: A Benefit for Employers and Employees Alike

Abstract: Since 401k retirement savings plans first appeared in the early 1980s, they have grown rapidly. Today, they are one of the most popular and widespread employee benefits. This article looks at some of the key benefits 401ks provide to both employees and employers, as well as some important practical considerations.

Source: Blr.com, October 2017

The Impact of a Proposed Pre-Tax Contribution Cap

Abstract: The non-partisan Employee Benefit Research Institute using their Retirement Security Projection Model found that more than half of current 401k contributors would be impacted by a $2,400 contribution Roth, based on 2015 data. And, as you might expect, the impact reaches down to some very moderate income levels.

Source: Asppa.org, October 2017

DOL's Form 5500 Modernization Proposal Faces an Uncertain Future

Abstract: Work on the Labor Department's effort to expand, streamline and modernize the Form 5500 Series has been halted until a new head of the DOL's Employee Benefits Security Administration (EBSA) is in place.

Source: Asppa.org, October 2017

Legislative Fixes Would Make MEPs More Attractive Option

Abstract: Previous regulatory actions by the Department of Labor have made open multiple employer plans a less attractive option for employers, but legislative fixes proposed by Congress could significantly improve the overall appeal of MEPs.

Source: Asppa.org, October 2017

Advisors Must Up Their Game In New Fiduciary Rule Era

Abstract: The fiduciary rule effectively puts generalist advisors on notice to incorporate significant capabilities -- typically used by specialists -- into their practice to excel in this new, post-rule world.

Source: 401kspecialistmag.com, October 2017

Five Important Ages for Retirement Planning

Abstract: When your employees are in their 20's, retirement can seem extremely far away. As they approach their 40's, however, they should begin to view retirement and retirement planning in a different light. As a matter of fact, there are certain considerations they should make at age 50, 59 1/2, 65, 66, and 70 1/2; to ensure they enjoy the retirement life they envision and avoid costly penalties.

Source: Voya.com, October 2017

Seven Retirement Catch-Up Strategies for Lifelong Procrastinators

Abstract: It's easy to put off saving for the future as you focus on more immediate needs. But it's never too late to start saving for retirement. However, you'll need a change of mentality to prioritize your long-term retirement needs over short-term wants. Here are seven strategies you can use to play catch-up with your retirement savings.

Source: Usnews.com, October 2017

Financial Literacy Among U.S. Hispanics

Abstract: Financial literacy programs that separately address U.S.-born and foreign-born Hispanics are likely to experience better results for both groups. As growth in the U.S. Hispanic population is increasingly driven by births, the gap in Hispanic financial literacy relative to the general population will likely decrease. The increasing educational attainment of Hispanics will further decrease the financial literacy gap.

Source: Tiaainstitute.org, October 2017

ERISA Preempts State Law Revoking Beneficiary Designation Upon Divorce

Abstract: Plan administrators must be alert to the risk of conflicting benefit claims. These claims raise the possibility of double-payment liability for any plan that disburses benefits, such as life insurance proceeds, without prior court approval. The judicial procedure called "interpleader," which was used by the plan in this case, can protect a plan facing conflicting claims.

Source: Thomsonreuters.com, October 2017

District Court Halts Some Portions of MIT ERISA Challenge

Abstract: Interpreting and applying a series of detailed recommendations from a magistrate judge, the district court will allow some parts of the litigation against MIT's retirement plan fiduciaries to proceed.

Source: Planadviser.com, October 2017

Practical Fiduciary Practices

Abstract: Retirement plan committees have a host of responsibilities, most of them fiduciary. To help them fulfill their varied, and demanding, fiduciary role, advisers can turn to a number of practical strategies.

Source: Planadviser.com, October 2017

Find Those Missing Plan Participants

Abstract: Missing plan participants are usually only an issue when a retirement plan decides to terminate and wants to avoid dragging out the process and having to file another Form 5500. Now there maybe further reasons for plan sponsors to clear out their plans of missing participants.

Source: Jdsupra.com, October 2017

Shift to Roth 401ks 'Highly Likely' Part of Tax Reform

Abstract: Optimism from past weeks regarding the fate of 401k tax benefits under tax reform is beginning to wane, with some signaling that employees would have to pay taxes upfront on at least a portion of their retirement savings.

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

A Compliance Checklist for Plan Sponsors

Abstract: In late September, IRS issued its Work Plan for the 2018 fiscal year. The Work Plan tells us the issues the IRS will be focusing on in the coming year and how it will be using its compliance resources. The 2018 fiscal year runs from October 1, 2017 through September 30, 2018. With the knowledge the Work Plan provides, plan sponsors and their service providers can work to ward off potential problems likely to draw the attention of the IRS.

Source: Fiduciaryplangovernance.com, October 2017

Employee Benefits in the Supreme Court

Abstract: Eversheds Sutherland took a look back at the Court's work in employee benefit cases since the enactment of ERISA. They found 128 decisions, spanning a broad range of statutory and constitutional issues. This white paper takes a detailed look at the numbers and dynamics behind these cases.

Source: Eversheds-Sutherland.com, October 2017

Major Retirement Trouble on the Horizon: GAO

Abstract: Economic and societal trends -- such as increases in debt and health care costs -- can impede individuals' ability to save for retirement. Not a new statement, but always sounds more dire coming from a government entity, especially when it adds that the traditional "three-legged stool" of savings, including Social Security, employer-sponsored plans and individual savings, might not be enough to fund an affordable quality of life in retirement.

Source: 401kspecialistmag.com, October 2017

401k and Retirement Plan Limits for the Tax Year 2018

Abstract: On October 19, 2017, the Internal Revenue Service announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for the tax year of 2018. Chart, highlights, and detail.

Source: 401khelpcenter.com, October 2017

DC Plans Need a Framework for Managing Operational Risks

Abstract: An insight article offers a framework for identifying and managing operational risks, and Julian Regan, with Segal Marco Advisors, says even though the insight is given for public-sector DC plans, it could apply to corporate DC plans as well.

Source: Plansponsor.com, October 2017

The History and Future of MEPs and PEPs

Abstract: Are we headed for a second "gold rush" for multiple employer plans and pooled employer plans? Legislation favorable to multiple employer plans (MEPs) is broadly expected to pass one of these days, and the pooled employer plan (PEP) variant is one of the likely candidates. This article explores the status of PEP and MEP legislation and what it might mean.

Source: Pentegra.com, October 2017

Choosing the Right Retirement Plan for Small Business Owners

Abstract: Many choices are available to include a SIMPLE or Savings Incentive Match Plan for Employees IRA, a SEP IRA or Simplified Employee Pension IRA, a Solo (Individual) 401k and a Defined Benefit Plan. The most popular plans are the SIMPLE IRA and Solo (Individual) 401k. The pros and cons of each plan are discussed here.

Source: Nase.org, October 2017

401k Improvements Congress Should Consider

Abstract: The author says we have a retirement savings crisis in this country with the majority of American workers not saving nearly enough to retire. As Congress considers changing our private retirement system, lawmakers should evaluate the 401k improvements outlined here.

Source: Lawtonrpc.com, October 2017

GAO Report Says American Retirement System Not Providing Adequate Security

Abstract: The three pillars of the American retirement system -- Social Security, workplace retirement plans and individual savings -- will not provide adequate retirement security for a growing number of people, according to a report issued Wednesday by the U.S. Government Accountability Office.

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

Searching for Missing Participants

Abstract: Plan sponsors should always keep an up-to-date permanent listing of missing participants as part of their retirement plan records. It is important to perform a search for such participants, because, even though their employment with the plan sponsor has terminated, those participants should still be receiving important plan communications.

Source: Consultrms.com, October 2017

Advisor Q & A on TDF Monitoring

Abstract: Research shows that the majority of assets in DC plans today are invested in the QDIA, and most of those assets are invested in target-date funds. In speaking with top advisor teams in the industry, PIMCO learned that many would benefit from more guidance on how to establish and conduct an ongoing TDF monitoring process.

Source: Chaoco.com, October 2017

Not-So-Traditional Retirement

Abstract: In 2017, the work world is changing. Many young employees move from job to job or freelance gig to freelance gig, with some part-timing in between. Breaks in employment are not shameful; sometimes they are even desired. And in this new work world, retirement is changing too.

Source: Captrustadvisors.com, October 2017

Edison to Pay $5.8M in Attorneys' Fees in 401k Dispute

Abstract: Edison International agreed to pay $5.8 million in attorneys' fees and costs to Schlichter Bogard & Denton, which represented a class of current and former employees who sued the utility company over including high-fee mutual funds in its 401k plan.

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

Greenhouse Software Uses Robo 401k to Boost Retirement Plan Enrollment Rates

Abstract: Greenhouse, a 5-year-old maker of recruiting and onboarding software, had outsourced all of its benefits to third parties in its early days but, as the company grew to 200 employees, wanted to bring them back in-house.

Source: Benefitnews.com, October 2017

Consolidation Hitting Third Party Administrators

Abstract: The relatively quiet domain of third party administrators is seeing increased consolidation as owners hit retirement age and plan sponsors demand more robust services.

Source: Benefitnews.com, October 2017

What to Do About Missing 401k Participants

Abstract: The missing participant problem occurs because the American worker is highly-mobile, but their defined contribution balances are not. Consequently, too many will strand their retirement savings balances, leaving their former employers holding the bag.

Source: 401kspecialistmag.com, October 2017

Cybersecurity Threats: What Retirement Plan Sponsors and Fiduciaries Need to Know-and Do

Abstract: The loss of employee personal information due to a cyber breach is an ever-increasing concern to all employers. No organization or industry is immune from cyber threats, including benefit plan sponsors and plan service providers. This article analyzes cybersecurity issues for retirement plans.

Source: Poynerspruill.com, October 2017

Who Are the Top 403b Providers?

Abstract: Large nonprofits like hospitals and universities may have ample staff to thoroughly research potential 403b providers. They may even have the capability to administer the plan, and monitor the investments. Small nonprofits, however, may struggle to find time to even look for a provider, much less handle tasks associated with a retirement plan. Nonprofits unsure of just how to go about a search may simply contact one of the larger 403b providers. The biggest 403b players are presented below here.

Source: Forusall.com, October 2017

IRS Provides Guidance on Curing a Loan Default Caused by Missed Payment

Abstract: This guidance consists of a description of two situations, one in which a later single large loan payment is applied to cure loan payments that are missed, and one in which a replacement loan from the plan is applied to cure to missed loan payments, with the cures in each situation occurring during the regulation's period during which cures can be made.

Source: Erisalawyerblog.com, October 2017

Brokerage Windows: Do the Risks Outweigh the Rewards

Abstract: More 401k and 403b plan sponsors are offering an investment option called a brokerage window. However, more choice isn't always better when it comes to the investment menu. And some sponsors have the misconception that offering a brokerage window relieves some of their fiduciary responsibilities. That is not the case, while the Department of Labor does not prohibit the use of brokerage windows in retirement plans, it has shown increased interest in them in recent years.

Source: 401ktv.com, October 2017

Employee Benefit Plans: Mistakes and Available Correction Programs

Abstract: Employee benefit and retirement plans are required to comply with a number of complex laws and regulations, and failure to do so can result in significant penalties and/or disqualification of a plan. Despite best intentions different plan errors can occur. The good news is that there are correction program options available for plan sponsors without sacrificing the qualified status of a plan.

Source: Withum.com, October 2017

DOL Is Stepping Up "Missing Participant" Pension Plan Audits

Abstract: Sponsors of 401k plans may be interested to know that the DOL is ramping up its audits of DB plans with "missing" participants. This is putting pressure on plan administrators to locate former employees -- or their beneficiaries -- so that they can receive the benefits they're owed.

Source: Shrm.org, October 2017

Shift to Defined Contribution Plans Causes International Concern

Abstract: A collaborative survey between the U.S., Britain and Australia shows working-age employees struggle with retirement planning and saving. Workers in the three countries have similar reasons for lamenting the shift from defined benefit pensions to defined contribution plans.

Source: Plansponsor.com, October 2017

Bridging the Gap in Financial Wellness

Abstract: As popularity grows, providers must keep the goals of plan sponsors and participants in mind when deciding what components to build into these nascent financial wellness offerings. The most common components of current financial wellness programs according to plan sponsors are online access and guidance on health savings accounts or HSAs.

Source: Marketstrategies.com, October 2017

DC Plan Advisors Driving Financial Wellness Program Adoption

Abstract: Faced with increased pressure to demonstrate added value, DC advisors are offering financial wellness programs more frequently. Financial wellness programs, which are designed to educate employees about how to manage their personal finance challenges such as debt reduction, asset management, unexpected expenses as well as saving for retirement, are starting to soar in popularity.

Source: Marketstrategies.com, October 2017

The Truth and Myth Over the 401k Investment Policy Statement

Abstract: When you are a 401k plan sponsor, you hear a lot about an investment policy statement and how you need one. Yet many plan sponsors don't know what it is or what it does. This article breaks down what an IPS is, what it does, and what it doesn't do.

Source: Jdsupra.com, October 2017

Over a Quarter of Seniors Say Retirement Is Worse Than They Expected

Abstract: For some seniors, retirement isn't all it's cracked up to be. In fact, about 28% of them say their lives are actually worse during retirement than before they left the workforce, according to a Nationwide survey.

Source: Fool.com, October 2017

EPI Comment to the SEC Regarding the Fiduciary Rule

Abstract: The Economic Policy Institute's comment letter on standards of conduct for investment advisers and broker-dealers. They urge the SEC to build on the DOL rule addressing conflicts of interest that harm retirement savers to extend protections to other investors.

Source: Epi.org, October 2017

ERIC Challenges Oregon Reporting Requirements for Retirement Plans

Abstract: McDermott Will & Emery filed a lawsuit on behalf of the ERISA Industry Committee (ERIC) challenging new reporting requirements under Oregon law as applicable to retirement plans subject to ERISA.

Source: Employeebenefitsblog.com, October 2017

Oregon's Private-Sector Retirement Plan Faces First Legal Test

Abstract: Oregon's retirement savings plan for private-sector employees came under fire Oct. 12 when an employer industry group filed a lawsuit alleging federal law bars certain parts of it.

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

Five Dangerous Fiduciary Assumptions

Abstract: There's an old saying that when you assume...well, you know the rest. Here are five assumptions that can create real headaches for retirement plan fiduciaries.

Source: Asppa.org, October 2017

Enhanced Saver's Credit Would Improve Retirement Security

Abstract: A series of structural and administrative changes to the Saver's Credit would make the program less complex and more likely to achieve its intended goal of encouraging low- and moderate-income workers to save for retirement, according to a new report.

Source: Asppa.org, October 2017

Rutledge Nominated as EBSA Head

Abstract: President Trump has officially announced his intent to nominate Preston Rutledge to be an Assistant Secretary of Labor, Employee Benefits Security Administration. Rutledge currently serves as senior tax and benefits counsel on the Majority Tax Staff of the U.S. Senate Finance Committee where his responsibilities include employee benefits, retirement issues, tax-exempt organizations, health tax issues, and the tax provisions of the Affordable Care Act.

Source: Asppa.org, October 2017

Fiduciary Rule Kill Bill Clears Hurdle

Abstract: The House Financial Services Committee gave its stamp of approval to the latest attempt to block the Department of Labor's fiduciary rule. The committee passed the Protecting Advice for Small Savers (PASS) Act Of 2017, moving it a step closer to a full vote.

Source: 401kspecialistmag.com, October 2017

The Single Biggest Impediment to 401k Financial Success?

Abstract: You can have the best-laid retirement plan, but employees won't be able to fully utilize it and become engaged unless you address the biggest block to your employee's financial success: debt.

Source: 401kspecialistmag.com, October 2017

Leveraging Retirement Goals and Business Objectives in a 401k Plan

Abstract: The primary retirement goal is to maximize retirement savings. Business objectives are more complex in the sense that they encompass a dual purpose of maximizing benefits to the employer/owner(s) and providing a valuable benefit to the employees.

Source: Rpgconsultants.com, October 2017

How You Can Solve the Most Difficult DOL Rule Documentation Requirement

Abstract: Onboarding IRA assets requires advisors to create best interest documentation that must take into account plan fees. However, in the absence of transparent fee reporting by retirement plans, advisors must really understand how to obtain appropriate data, as well as limitations of different sources.

Source: Rixtrema.com, October 2017

Why the Average Retirement Age Is Rising

Abstract: This article provides a checkup on the working-longer lever by looking at recent numbers on the average retirement age, the age at which the labor force participation rate drops below 50%.

Source: Marketwatch.com, October 2017

A primer on Stable Value Funds for Retirement Plan Advisers

Abstract: Retirement plan advisers should not set and forget stable value funds. These funds can be an excellent supporting character in a diversified global portfolio for the right DC plan clients. But good advisers take nothing for granted. It's important to look under the hood of investments, even those considered to be the "safest" components of a portfolio.

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

How to Reduce Your ERISA Risks, and the Role of Fiduciary Liability Insurance

Abstract: If there had been any doubt, the last few years have made clear that lawsuits against all parties involved with retirement and welfare plans are here to stay. Indeed, plan sponsors and fiduciaries now face increased risks of litigation on many fronts, and the need for comprehensive fiduciary liability insurance is greater than ever. This white paper discusses the responsibilities of ERISA fiduciaries and the types of litigation that may be brought against them, as well as some practical suggestions on plan design and administration that may help reduce litigation risk.

Source: Groom.com, October 2017

Retirement Readiness Peer Comparisons: Best Practices and Recent Innovations

Abstract: Sufficiently preparing for retirement can be a daunting task for many participants, but properly gauging retirement readiness can be equally arduous. Peer comparison features provide an intuitive way to help participants understand their progress toward achieving their retirement income goals, offering valuable context to data that may otherwise be less meaningful to participants. Peer comparisons can also play off competitive instincts that may encourage participants to save more.

Source: Corporateinsight.com, October 2017

It Takes a Committee - The Best Ways to Govern DC Plans

Abstract: Effective governance of their DC plans helps employers meet fiduciary responsibilities, abide by regulatory requirements, and minimize the risk of litigation and negative press. This 13-page report identifies ways in which committee structure, composition -- and even the number of meetings and those responsible for meeting agendas -- have important implications for the priorities, challenges, and effectiveness of DC plan governance.

Source: Callan.com, October 2017

401k/IRA Holdings in 2016: An Update from the SCF

Abstract: The Federal Reserve's 2016 Survey of Consumer Finances offers an opportunity to examine households' holdings in 401ks and IRAs. For working households nearing retirement with a 401k, median combined 401k/IRA balances rose from $111,000 in 2013 to $135,000 in 2016. While growing balances are encouraging, $135,000 provides only $600 per month in retirement, so current saving levels are still falling short. Moreover, about half of households nearing retirement have no 401k assets at all, so lack of access to a plan remains an enormous problem.

Source: Bc.edu, October 2017

Consumer Group Says Shift to Fee-Based Accounts Could Violate Fiduciary Rule

Abstract: The Consumer Federation of America recently wrote to Secretary of Labor Alexander Acosta, both expressing skepticism regarding reports that that the fiduciary rule is "causing brokerage firms to shift investors into fee accounts where they face higher costs than they would have in a commission account," and cautioning that if that is happening, it "reflects a fundamental enforcement failure on the part of the Department."

Source: Asppa.org, October 2017

How to Raise the Grade on DC Plan Success

Abstract: In the quest to improve DC plans, plan sponsors are focusing on making participants more confident in their retirement readiness. With new tools and enhanced fiduciary training, sponsors will feel more confident that they can raise their plans' grades.

Source: Alliancebernstein.com, October 2017

Excessive Fee Litigation Sets Sights on Corporate Retirement Plans

Abstract: Of all the industries facing these risks, few have seen more litigation than the financial industry which has faced a barrage of lawsuits over the in-house mutual funds in their respective 401k plans. Currently, there are more than 20 different financial institutions facing lawsuits challenging these in-house 401k investments.

Source: Willistowerswatson.com, October 2017

IRS Reveals FY 2018 Compliance Priorities

Abstract: In the Internal Revenue Service Tax Exempt and Government Entities FY 2018 Work Plan, the agency revealed efforts it will be making next year to help sponsors achieve compliance for their employee retirement plans. Plan sponsors will have a number of new compliance checks to keep in mind.

Source: Plansponsor.com, October 2017

Internal Controls Policy -- Does Your Plan Need One?

Abstract: Do you wish that you could find a way to avoid plan compliance problems and shorten the length of IRS or Department of Labor plan audits? One compliance tool you can use is an Internal Controls Policy.

Source: 401ktv.com, October 2017

Step Up Your HR Communications Game

Abstract: With the dizzying pace of change in HR these days, the need to capture employees' attention and spur them to action has never been greater. Here's a quick summary of the biggest trends in new technologies and techniques for HR communications.

Source: Sibson.com, October 2017

Worker Reactions to State-Sponsored Auto-IRA Programs

Abstract: The Pew Charitable Trusts surveyed more than 900 workers without access to retirement plans at small and midsize businesses (those with five to 250 employees) to see how they perceive state-sponsored auto-IRA proposals. A series of focus groups provided additional context.

Source: Pewtrusts.org, October 2017

Hurricane Survival Guide for Employee Benefit Plans and Employers

Abstract: This article explores the efforts by the Internal Revenue Service, Department of Labor, and Pension Benefit Guaranty Corporation to grant multiple forms of relief to taxpayers impacted by Hurricane Harvey, Hurricane Irma, and other disasters enumerated by the Federal Emergency Management Agency. This new disaster relief affects health plans, retirement plans, and employers.

Source: Mwe.com, October 2017

Using Behavioral Economics to Participants' Advantage

Abstract: What stops us from making good financial decisions? This article shares ideas on what prevents us from making good financial decisions and what retirement plan sponsors can do to combat these natural human tendencies by tapping into behavioral economics.

Source: Ifebp.org, October 2017

Congress Adds Plan Distribution Tax Relief for Recent Disasters

Abstract: The Act includes relief from the 10% premature distribution penalty for withdrawals from retirement savings and provides expanded loan availability to qualified plan participants. It also offers withholding exceptions, delayed taxation, and extended repayment options to ease the financial bite of tapping retirement savings for hurricane recovery.

Source: Conduent.com, October 2017

The DOL Fiduciary Rule: Don't Misinterpret the Word "Delay"

Abstract: The word "delay" can be misconstrued. Context is everything. An advisor could interpret the delay to mean that the fiduciary rule is not applicable and that they don't have to follow it. But that isn't the case. It's more accurate for financial advisors to think of the DOL's proposal in terms of an extension of the transition period that's already in place.

Source: Columbiathreadneedleus.com, October 2017

SIMPLE vs 401k - Converting a SIMPLE to a 401k

Abstract: A SIMPLE IRA is a great starter plan for small businesses. But eventually the limitations of a SIMPLE will wear on an employer, so they may consider making the change to 401k.

Source: Benefit-Resources.com, October 2017

Should Your 401k Plan Go Safe Harbor?

Abstract: A plan sponsor must be advised by their third-party administration firm and/or ERISA attorney why a safe harbor plan design might be a good idea. Here are some clues as to when plans need to go this route.

Source: Jdsupra.com, October 2017

DOL Fiduciary Rule Ups Ante for Monitoring of 401k Recordkeepers

Abstract: The DOL fiduciary rule is changing how retirement plan advisers help their clients monitor recordkeeping firms such as Fidelity Investments and Empower Retirement. Several plan providers have expanded their participant-call-center services to include fiduciary advice, and advisers must help clients navigate the change.

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

ERISA Excess Fee Litigation: Waiting for the Deluge

Abstract: ERISA fee litigation is moving downstream to smaller plans and that this ought to be a source of worry for small plan sponsors.

Source: Fiduciaryplangovernance.com, October 2017

Are Your Older Employees Thinking Differently About Retirement?

Abstract: Employers invest a tremendous amount of time and cost in employee benefit offerings which are designed to help their employees save and financially prepare for retirement. Ironically, few employers are focused on the actual process of retirement and its workforce-related implications.

Source: Blr.com, October 2017

Hurricane Legislation Grants Retirement Plan Relief

Abstract: Under the provisions of the new law, "qualified hurricane distributions" from IRAs, qualified retirement plans, 403b plans, and governmental 457b plans are entitled to special tax treatment, as well as repayment options if the recipient so chooses. There are also provisions that apply specifically to loans from employer plans.

Source: Ascensus.com, October 2017

How Policymakers Can Restore the Role of Lifetime Income in Workplace Retirement Plans

Abstract: In this white paper, TIAA has identified six common-sense, bipartisan solutions for legislators and regulators to advance the role of lifetime income in retirement savings plans and help create a more financially secure future for all Americans.

Source: Tiaa.org, October 2017

Fiduciary Rule Creating Opportunities for Advisers to Small Plans

Abstract: Many sponsors in the mid- and small-plan market, facing pressure from participants and regulators, are seeking DC specialist advisers for the first time.

Source: Planadviser.com, October 2017

Required Minimum Distributions

Abstract: It is important to be reminded about one frequently overlooked retirement plan requirement. Upon attainment of age 70-1/2, certain participants of a tax-qualified retirement plan may be required by federal tax law to withdraw a minimum amount from such plan each year. These mandatory distributions are known as "required minimum distributions."

Source: Legacyrsllc.com, October 2017

Operational Compliance List

Abstract: Qualified retirement plans must satisfy Section 401(a) of the Internal Revenue Code (and related Code Sections) in both form and operation. In some situations, plans are required to begin operational compliance with changes in the law even before the plan document is required to be updated. This short article answers the question, what is the Operational Compliance List?

Source: Boutwellfay.com, October 2017

Blockchain Technology Hits the Retirement Plan Industry

Abstract: Some of the largest retirement service companies are trying to tap blockchain technology because of its potential to increase efficiency in recordkeeping, document sharing, transaction settlements, contract execution, and business collaboration.

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

Some Small Business 401ks Could Vanish Under Tax Plan "Glitch"

Abstract: Under the proposed tax plan, retirement plan contributions from pass-through small-business owners would be deductible against the 25 percent tax rate, but could be taxed at the individual rate of 35 percent when the 401k funds are withdrawn.

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

Fidelity Found Not Liable in Excessive Fee Suit

Abstract: Participants of the of the Delta Family-Care Savings Plan sued Fidelity entities regarding excessive fees charged for the plan's advice offering as well as its self-directed brokerage account option.

Source: Planadviser.com, October 2017

The Timely Use of Plan Forfeitures

Abstract: DC plans often provide employer contributions to participants, whether matching or nonelective, that are subject to a vesting schedule. When a participant terminates employment prior to becoming fully vested in those contributions, the unvested portion is forfeited on a date specified by the plan. While this process is generally straightforward, a plan may encounter challenges in determining how and when to use those forfeited assets appropriately.

Source: Fidelity.com, October 2017

Hurricane Summary Relief Charts

Abstract: These charts reflect the hurricane relief that is in effect as of September 29, 2017.

Source: Ferenczylaw.com, October 2017

Johns Hopkins Employees Advance Retirement Plan Fee Suit

Abstract: Johns Hopkins University is the latest prominent college to lose an early round in a lawsuit challenging the fees and investment options in its retirement plan.

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

Verizon Fee Disclosure Lawsuit Sees Most Claims Dismissed

Abstract: Verizon Communications is largely free of a proposed class action claiming it implemented an overly complex and risky investment structure for its defined contribution retirement plans and failed to explain how the plans charged fees.

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

Think Tax Reform Won't Impact Retirement Plans, Think Again

Abstract: If you had a choice between paying a 25% tax on your income or a 35% tax on your income, which would you choose? That's the choice small business owners could be asked to make under the new tax reform just unveiled by Congress and the White House that includes a 25% "pass-through" cap on tax rates for small business. But without a fix, the new rate could cause thousands of small businesses to terminate their retirement plans.

Source: Asppa.org, October 2017

Industry Leaders: Build on Existing Framework to Address "Challenges"

Abstract: Retirement industry leaders appearing at a recent Capitol Hill event generally agreed that building on the existing system would dramatically improve the retirement readiness of Americans throughout the country.

Source: Asppa.org, October 2017


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