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November 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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Morningstar Recommends Policies to Increase Small Employer Retirement Plans

Abstract: In its latest policy paper, Morningstar suggests workers at large U.S. companies are served relatively well by the U.S. retirement system. However, half of employees at small companies don't have access to a retirement plan at all. The paper notes that two policy proposals have attempted to rectify the issues plaguing the retirement system, but both proposals raise the risk of increasing fragmentation in the DC retirement plan system.

Source: Plansponsor.com, November 2017

401k Managed Account Push Rife With Conflicts of Interest

Abstract: Recordkeepers are looking to managed accounts to be their next 401k cash cow, but the way some firms are promoting the products to investors is rife with conflicts. Several providers offer incentive compensation to their advisers and representatives for getting plan participants to enroll in their paid managed account services.

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

Five Awkward 401k Questions Every Good Fiduciary Must Know the Answer To

Abstract: Retirement advisers can sometimes be taken aback by the nature of some of the questions plan sponsors and participants ask them. Here are three commonly asked questions that may initially merit a "pooh-pooh," but upon further review actually open the door for teachable lessons.

Source: Fiduciarynews.com, November 2017

Treasury Issues New Guidelines on Searching for Missing Retirement Plan Participants

Abstract: The US Department of the Treasury recently issued guidance that retirement plan sponsors should consider as part of their obligation to take reasonable steps to locate missing participants. Specifically, the Treasury issued a memorandum which sets forth guidelines that prohibit auditors from challenging qualified plans as failing to satisfy the required minimum distribution standards.

Source: Employeebenefitsblog.com, November 2017

Fiduciary Rule Extension: What This Means for Service Providers

Abstract: The DOL has extended the current Transition Period for the DOL Fiduciary Rule exemptions by 18 months. The Transition Period was scheduled to end on January 1, 2018, but now will end on July 1, 2019. Here's what the extension means.

Source: Drinkerbiddle.com, November 2017

American Airlines Can't Nix Retirement Plan Investment Lawsuit

Abstract: American Airlines must defend a lawsuit accusing it of violating federal benefits law by offering an allegedly poorly performing investment fund in the airline's 401k plan. The participants have sufficiently pleaded claims to survive American's motion to have the case dismissed Judge says.

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

House Bill Would Bump Up Cashout Limit

Abstract: Legislation has been introduced in the U.S. House of Representatives that would boost the cashout limit for retirement plans, which its sponsors say will help make it easier for small businesses to offer retirement plans.

Source: Asppa.org, November 2017

State-Based Retirement Initiatives and the AGES Principles

Abstract: This 5-page paper explores the public policy and regulatory framework that could apply to state-based private-sector retirement initiatives. It also considers how these programs potentially align with the American Academy of Actuaries' Pension Practice Council's Retirement for the AGES principles.

Source: Actuary.org, November 2017

Phased Retirement Largely Ignored Despite Flood of Retirees

Abstract: With 10,000 baby boomers retiring daily, it would seem that flexible retirement would be a staple benefit within the workforce. It's not.

Source: Workforce.com, November 2017

How do 401k Participants Really React to Fee Levelization?

Abstract: Many of you raise good questions and concerns about how your 401k participants might respond to fee levelization. Article looks at this so that you're in a better position to make fee-related decisions around the organization's retirement plan and, more importantly, help meet the related fiduciary responsibilities.

Source: Principal.com, November 2017

Retirees Still Have 80% of Savings After Nearly Two Decades

Abstract: Research conducted by the BlackRock Retirement Institute and the Employee Benefit Research Institute found that after nearly two decades of being retired, the average retiree still has 80% of their nest egg intact.

Source: Planadviser.com, November 2017

Do Specialized Retirement Plan Advisers Even Need a Broker-Dealer?

Abstract: The past several years have seen 401k specialists, similar to wealth managers in the retail market, migrate toward compensation structured on level fees rather than commissions, due largely to the evolution of record-keeping technology. That dilutes the necessity of a brokerage affiliation from the standpoint of compensation.

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

Protecting Retirement Plans From Identity Theft

Abstract: Identity theft and related crimes are on the rise, and they can have a devastating impact on employer-sponsored 401k plans. Plans can have very large balances compared to other cyber targets such as bank accounts, and therefore, have become quite attractive to cyber criminals. Cybercrime related to retirement plans can occur because of threats such as phishing, ransomware, "social engineering," and wire transfer fraud, among others.

Source: Icemiller.com, November 2017

DOL Finalizes Transition Period Extension to July 1, 2019

Abstract: The DOL will move forward to finalize its proposed 18-month extension of the transition periods under the Best Interest Contract Exemption and the Class Exemption for Principal Transactions until July 1, 2019. The publication of the 18-month extension furnishes the regulated community with a much greater degree of certainty, at least in the near term.

Source: Groom.com, November 2017

DOL Delays Parts of Fiduciary Rule About to Take Effect, Extends Enforcement Relief

Abstract: Finalizing its earlier proposal, DOL extended until July 1, 2019, the effective date for the written disclosures and fiduciary representations required under prohibited transaction exemptions to the expanded fiduciary rule. During this time, the department will consider possible changes and alternatives to the exemptions, as well as potential input from the SEC. The DOL similarly extended its "enforcement lite" policy for fiduciaries working diligently and in good faith to comply with the updated rule, which went into effect on June 9, 2017.

Source: Conduent.com, November 2017

Should Your 401k Plan Provide Hurricane Relief?

Abstract: You don't have to have employees in the disaster areas to be able to provide relief for victims of the 2017 hurricanes through your 401k plan. IRS announcements and a new law enable participants to take withdrawals to help relatives who were seriously impacted by hurricanes Harvey, Maria and Irma if their plan permits hurricane distributions. Special rules also allow plans to permit loans for relief even if the plan terms don't currently provide for loans. However, the agencies in charge aren't making it easy for plan sponsors who want to help.

Source: Cohenbuckmann.com, November 2017

DOL Extends Fiduciary Rule Delay

Abstract: The DOL released the final rule that further extends the Transition Period and delays the applicability date of several of the prohibited transaction exemptions associated with the DOL's revamped Fiduciary Rule that became applicable on June 9.

Source: Captrustadvisors.com, November 2017

Tax Reform and Retirement: What Plan Sponsors Need to Know

Abstract: Tax reform, and its impact on retirement plans, has weighed heavily on the minds of many plan sponsors since the new administration took office. Article looks at what has happened thus far, how the proposed changes could affect retirement plans, and what plan sponsors can expect moving forward.

Source: Cammackretirement.com, November 2017

Fiduciary Considerations When Adding and Reviewing Managed Accounts

Abstract: Beyond the standard investment menu of mutual funds, and even beyond target-date funds, the introduction of managed accounts offers retirement plan participants a more personalized investment strategy and the opportunity to further refine their retirement portfolios. However, as plan sponsors review the benefits of adding managed accounts to their retirement plans, there are ever-present fiduciary considerations which must be addressed.

Source: Cammackretirement.com, November 2017

Meet the Law Firms Fighting 401k, Health Plan Class Actions

Abstract: Morgan Lewis & Bockius gets a lot of business when big companies are sued for the way they manage their retirement and health plans. For the second year in a row, it's the law firm getting the most ERISA class action business.

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

Top 25 Large Business 401k Plans

Abstract: The top 25 401k plans for large-size businesses in the United States. Companies have 1,000 or more employees and are ranked by end-of-year net assets.

Source: Benefitnews.com, November 2017

Retirement Prospects for the Millennials: What is the Early Prognosis?

Abstract: This paper assesses retirement prospects for future generations, with a special focus on the late Generation-X and Millennial generations. Because retirement outcomes depend on how much people earned and saved when they were younger, the analysis compares trends in employment, earnings, pension coverage, and wealth during working ages across cohorts.

Source: Bc.edu, November 2017

What the New Form 5500 Means for 401k Advisors

Abstract: While the precise nature of any changes and the timing of implementation have yet to be finalized, proposals suggest that a 'modernized' Form 5500 will compel plan sponsors to deliver a trove of information -- some of it new -- in formats that facilitate data mining. The new Form 5500 has the potential to be a double-edged tool that both benefits plan sponsors and exposes plan vulnerabilities.

Source: 401kspecialistmag.com, November 2017

Changes Coming to Your 401k in 2018

Abstract: As the calendar flips to 2018, do you need to make any adjustments to the amount of money you're depositing monthly into your 401k? You might and there are other significant change to 401ks in 2018.

Source: Quickenloans.com, November 2017

CIT Interest Rising Among 401k Sponsors

Abstract: For over a decade now, pundits have been predicting a mass movement of 401k plans away from mutual funds and toward collective investment trusts. Migration numbers have not borne that out, yet. But now, some forecasts suggest the time of mass conversions has finally come.

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

These 401k Lawsuits Show the Value of Investment Policy Statements

Abstract: An investment policy statement is essentially the business plan for a portfolio. For 401k fiduciaries, the IPS serves as a critical governing document, one that should be carefully crafted, periodically reviewed and updated, and diligently followed. Two recent lawsuits against plan sponsors powerfully illustrate this valuable lesson.

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

There Are No Mulligans in Fiduciary Law

Abstract: Author writes, "Secretary Acosta's newly created loopholes, "good faith" and "willful" are inconsistent with long-standing fiduciary law, and the burden on Secretary Acosta and the department is to do their job and truly enforce the new fiduciary rule in order to carry out the department's mission."

Source: Iainsight.wordpress.com, November 2017

Are Retirement Plan Fee Disclosures Being Ignored?

Abstract: Several years ago, the Department of Labor engaged in a major regulatory effort to improve retirement plan fee disclosures, but new research suggests that many workers are not reading their plan disclosures and are unfamiliar with the fees being charged for managing their funds.

Source: Asppa.org, November 2017

2017 End of Year Plan Sponsor "To Do" List Qualified Retirement Plans

Abstract: This is a qualified plan "to do" list of items on which you may want to act on before the end of 2017 or in early 2018. The list is broken into five categories.

Source: Swlaw.com, November 2017

Spending, Relationship Quality, and Life Satisfaction in Retirement

Abstract: This research explores how spending and relationship quality contribute to life satisfaction in retirement, controlling for financial and human capital factors. The results provide evidence to suggest that leisure spending, health status, and spousal and friend relationships have the greatest impact on creating life satisfaction during retirement, while other type of spending and children relationships do not.

Source: Ssrn.com, November 2017

OregonSaves Serves as a Test for State-Sponsored Auto-IRAs

Abstract: As the first state-sponsored retirement savings program rolls out in Oregon, here's what employers in Oregon and other states that are planning such programs should know.

Source: Shrm.org, November 2017

Tax Reform and Employee Benefits

Abstract: Proposed employee benefits changes in the "Tax Cuts and Jobs Act" will make a significant imprint for many companies if they remain in the bills as they work through the legislative process. This article provides the highlights of the House Bill, as passed, compared to the current version of the Senate proposal.

Source: Seyfarth.com, November 2017

Stealing Plan Assets Is Easier Than You Think

Abstract: Stealing plans assets is simpler than you think. Why is it so easy for TPAs and financial advisors to steal plan assets? The problem is you have plan custodians assumes that orders to liquidate and transfer are on the up and up.

Source: Jdsupra.com, November 2017

Tax Reform Legislation Moves Through the House and Senate

Abstract: The House and Senate Bills would provide for the most sweeping changes to the U.S. Tax Code since 1986. Both bills also contain several provisions that would change the tax rules with respect to retirement plans, executive and nonqualified deferred compensation arrangements, employee fringe benefits, and health and welfare plans. This is a side-by-side summary comparing the retirement, executive compensation, fringe benefit and health and welfare provisions in the House and Senate bills.

Source: Groom.com, November 2017

DOL Guidance and Relief for Plans Impacted by Hurricane Maria and California Wildfires

Abstract: The U.S. Department of Labor announced employee benefit plan compliance guidance and relief for victims of Hurricane Maria and the October 2017 California Wildfires.

Source: Dol.gov, November 2017

GAO/CBO Weigh In: State of Retirement in America

Abstract: Two reports recently released by the Government Accounting Office and Congressional Budget Office reflect the current state of the nation's retirement system and explore how adequate retirement income is measured. In tandem, the reports offer insight for employers and policy makers looking to achieve a sustainable retirement system and adequate retirement income for the U.S. workforce.

Source: Conduent.com, November 2017

How Does Your 401k Compare?

Abstract: Article identifies some of the common performance characteristics and features offered by many 401k plans and compiled the statistics below from a variety of sources that will allow you to benchmark your plan.

Source: Bpp401k.com, November 2017

Don't Forget 401k Deadlines During the Holiday Bustle

Abstract: Even though the holidays loom large in most people's minds this time of year, retirement plan sponsors and participants also need to keep an eye on the fast approaching Dec. 31 deadline for certain moves they'll want to make with their 401ks or other retirement plans.

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

Wells Fargo Sued Over In-House 401k Funds, Again

Abstract: Wells Fargo is once again in the crosshairs of a proposed class action challenging the in-house investment funds in the company's 401k plan.

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

Majority of Canadians Worried About Level of Retirement Savings

Abstract: A survey, which polled more than 1,500 Canadian adults, found the vast majority (85 per cent) agreed they need to save more money, but 64 per cent aren't making it a priority. The top obstacles to saving are: not earning enough income (46 per cent); getting derailed by unexpected expenses (29 per cent); and struggling to pay everyday expenses (24 per cent).

Source: Benefitscanada.com, November 2017

Procrastination Pays! Why You Should Delay Retirement for as Long as Possible

Abstract: By working through your 60s, you give yourself a much better shot at a secure retirement. Boston College found that financial readiness for retirement would improve from around 30 percent at age 62 to nearly 80 percent at 70. Why?

Source: Bankrate.com, November 2017

DOL, IRS Release Information Copies of 2017 Forms 5500

Abstract: The IRS and the Department of Labor have announced what they describe as "advance informational copies" of 2017 plan year annual return Forms 5500 and 5500-SF. Also included are information copies of the accompanying schedules commonly filed with these forms.

Source: Ascensus.com, November 2017

Simplify Your Investment Menu - Help Improve Participant Outcomes

Abstract: Several key goals are critical to ensuring participants can adequately invest and grow their retirement savings. It's also important for sponsors to think about providing enough investment options for participants to diversify, yet keep the lineup simple enough so that participants don't get confused or overwhelmed.

Source: 401ktv.com, November 2017

Three Plays Women Can Make to Up Their Retirement Game

Abstract: Only 12% of women are very confident in their ability to retire comfortably versus 16% of men. Women need to up their retirement game and save more money. Luckily, there is no better time than now for women to dive in and learn about how to effectively plan for their futures. Here are three plays women can make to do just that.

Source: Quickenloans.com, November 2017

NYU Hit with Second Excessive Fee Suit

Abstract: If at first you don't succeed, try, try again seems to be the motto used in a new class action lawsuit filed against New York University alleging breach of fiduciary duties for excessive plan fees in the school's retirement plans.

Source: Ntsa-net.org, November 2017

Four Reasons to be Thankful for 401ks

Abstract: While 401ks may not be the perfect retirement plan vehicle, they do have a number of important attributes that most of us probably take for granted. Here are four of them.

Source: Benefitnews.com, November 2017

IRS Plan Examiner Memo Confirms Proper RMD Recipient Search Procedure

Abstract: The IRS recently posted an internal memorandum for retirement plan examination staff at its website, concerning procedures retirement plans are expected to use when seeking missing participants or beneficiaries who are required to take distributions.

Source: Ascensus.com, November 2017

Comparing Small Law Firm 401k Plans

Abstract: Law firm benefits are a difficult thing to track. Salary and bonuses are easy because firms race to match each other, but benefits have a more nebulous impact on recruiting applicants and they just aren't standardized like pay. Here's key information on small law firm 401k plans, broken down by state.

Source: Abovethelaw.com, November 2017

Pause Ordered in Fiduciary Litigation Case

Abstract: The National Association for Fixed Annuities hasn't had much success thus far in its litigation challenging the Department of Labor's fiduciary regulation, until now.

Source: Ntsa-net.org, November 2017

Puerto Rico Treasury Department Finally Grants Relief to Participants Affected by Hurricane Maria

Abstract: The Puerto Rico Treasury Department issued Administrative Determination No. 17-29 to grant relief on eligible distributions (including, hardship withdrawals) and plan loans by participants in Puerto Rico tax qualified retirement plans who were affected by Hurricane Maria.

Source: Groom.com, November 2017

Evaluating Auditor Proposals

Abstract: Evaluating responses to your plan auditor request for proposals can be done simply and efficiently if you lay out the criteria you consider most critical in advance and assign a weight in terms of importance to each. This approach creates a framework of objectivity before you begin reviewing the proposals.

Source: Fiduciaryplangovernance.com, November 2017

2018 Planning for ERISA Single-Employer DC Plan Operations

Abstract: This paper will help you set up a yearly schedule of activities, so you do not miss important deadlines for your qualified plans. As you evaluate the various tasks, you can confirm suitable deadlines with your vendors for their completion. Identifies and addresses other activities that are event-based and participant-specific.

Source: Conduent.com, November 2017


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