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November 2018 Digest

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

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Plan Administrators' 2018 Year-End Checklist

Abstract: Plan administrators should review the following actions to be taken before the end of 2018 and focus on what to expect for 2019. This 7-page checklist addresses plan amendments, notices and other considerations for qualified retirement plans, welfare plans, and stock-based and performance-based plans.

Source: Williamsmullen.com, November 2018

Finding Missing Defined Contribution Plan Participants

Abstract: Finding missing participants can be frustrating and time-consuming, but employers and plan sponsors have the fiduciary responsibility to provide communication, statements and disclosures to them just as often as active employees. The DOL and IRS has published guidance for locating missing participants.

Source: Watkinsross.com, November 2018

Survey Highlight the Power of Financial Advice

Abstract: Voya has released new research that examines Americans' retirement preparation efforts. The results also identify ways that working with a financial advisor can help Americans make wiser, more-informed decisions. The transition into retirement involves various financial, emotional and social choices, and a financial advisor can act as a sounding board, helping his or her clients make pivotal decisions and setting them on the right path toward success.

Source: Voya.com, November 2018

How Student Loan Debt Impacts Retirement Savings

Abstract: Student debt may play a large part in the finances of these young (and even not-so-young) employees. That's why a complete picture of employee financial wellness should consider it. In addition, carrying student debt may play a role in how much workers are saving for their eventual retirement. Both of these are good reasons for employers to take an interest in the impact of student debt on their workforce.

Source: Tra401k.com, November 2018

Americans Favor Workplace Benefits Over Extra Salary

Abstract: Eighty percent of Americans would favor a job that offered high-quality workplace benefits over one that paid 30% more salary but no benefits, the American Institute of CPAs learned in a survey of 2,026 adults. Only 20% would prefer the job with the higher salary but no benefits. A 401k match and health insurance are the benefits they value the most.

Source: Planadviser.com, November 2018

New Proposed Regulations Provide Helpful Guidance on Hardship Distribution Changes

Abstract: Though the regulations are only proposed, 401k plan sponsors should promptly consider these changes because decisions should be made on applying certain optional changes, which generally can be effective for plan years beginning after December 31, 2018.

Source: Mwe.com, November 2018

When a 401k Plan Sponsor May Have to Fire Their TPA

Abstract: There are many reasons why you may have to fire a TPA and there are reasons when you have no choice. This article is about when you may have to fire your TPA.

Source: Jdsupra.com, November 2018

Congress Tries to Jam Through Retirement Legislation by Year-End

Abstract: Congress is making one final push to get retirement legislation passed by the end of the year, with provisions promoting more 401k plan formation and greater use of annuities hanging in the balance.

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

OregonSaves Retirement Program Is Off to a Promising Start

Abstract: The public overwhelmingly supports OregonSaves. Employers say it is easy to sign up workers, and, based on a recent public survey, the level of support has increased in the first year.

Source: Georgetown.edu, November 2018

Seven Concerns on the Forefront of 401k Plan Sponsors' Minds Right Now

Abstract: Plan sponsors, as a collective, share some common concerns regarding their defined contribution plans. What are they and what's the buzz about them? Here's a list of seven issues 401k plan sponsors are either concerned about right now or ought to be concerned about right now.

Source: Fiduciarynews.com, November 2018

2018 Small Business 401k Fee Study - What's Too High?

Abstract: Employers have a fiduciary responsibility to ensure the fees paid by their 401k plan participants are "reasonable" and not subject to unnecessarily excessive fees. To do that job, employers must benchmark their 401k fees - basically, compare them to industry averages and/or fee charged by competing 401k providers. Sounds straightforward, but this information is hard to find and often harder to compare on an apples-to apples basis.

Source: Employeefiduciary.com, November 2018

Trends in Retirement Security by Race/Ethnicity

Abstract: This paper uses the National Retirement Risk Index to assess the retirement security of today's working-age households. The earnings and wealth gaps between whites and minorities are enormous. The question is how these disparities translate to retirement preparedness.

Source: Bc.edu, November 2018

House Introduces Major Tax, Retirement Savings Legislation

Abstract: Lame duck legislative action produced a 300-page package designed to positively impact Americans' retirement savings and business tax breaks, while revamping the IRS.

Source: 401kspecialistmag.com, November 2018

A Simple Recipe for Minimizing 401k Lawsuits

Abstract: Here is a simple recipe for minimizing the likelihood that a 401k plan will be the subject to a lawsuit. Advisors can use this recipe to help their 401k plan clients avoid trouble, or to open the door with 401k plan prospects that may appreciate a review of their current practices.

Source: 401kspecialistmag.com, November 2018

Five Retirement Plan Predictions for 2019

Abstract: It's that time of year. The annual look ahead (often anxiously) to what awaits in the New Year, and hot takes on how 401k and similar retirement plans will be affected, if at all.

Source: 401kspecialistmag.com, November 2018

2018 Plan Year: Year-End Compliance Reminders

Abstract: Every year, plan sponsors must make sure their plans meet certain compliance requirements. This 5-page publication identifies the materials you need to review and will help you prepare for year-end. This information applies to qualified defined contribution plans and 403b plans that are subject to Title I of ERISA.

Source: Prudential.com, November 2018

ERISA Industry Stakeholders Analyze Auto-Portability Potential

Abstract: While enjoying broad support, at this early stage, it is unclear what responsibility a plan sponsor would retain for data security and accurate processing; in addition, auto-portability solutions may be limited by recordkeepers' willingness to share participants' personally identifiable information with a third party.

Source: Planadviser.com, November 2018

Plaintiffs Drop Claims Against Matrix in TPA Suit

Abstract: The two plaintiffs, who are Texas A&M University retirees, voluntarily dismissed their complaint against Matrix on Nov. 16 in the U.S. District Court for the District of Colorado "without prejudice, with each party to bear its own costs, attorneys' fees, and expenses."

Source: Ntsa-net.org, November 2018

Waddell & Reed Settles 401k Lawsuit for $4.9 Million

Abstract: Waddell & Reed Financial Inc. is settling a lawsuit that alleges it loaded its company 401k plan with costly in-house investments by agreeing to pay nearly $5 million.

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

Retirement Plan Audits - How CPAs Can Differentiate Themselves in a Competitive Environment

Abstract: To avoid being seen as a commodity, you must deliver services beyond the list required in the audit. Of course, you should be timely, accurate, and professional, but how else should you set yourself apart from the rest of the pack or avoid being replaced by a lower cost alternative? The answer is to add value through a consultative approach. This article provides three steps.

Source: Fiallc.com, November 2018

2018 California Wildfires - Guidance and Relief for Employee Benefit Plans

Abstract: The DOL recognizes that these wildfires may impede efforts by plan fiduciaries, employers, labor organizations, service providers, and participants and beneficiaries to comply with ERISA over the next few months. The Department has published employee benefit plan compliance guidance and relief for victims of the California Camp, Hill, Woolsey and other 2018 California wildfires.

Source: Dol.gov, November 2018

DOL Addresses Retirement Plan Concerns for California Wildfire Victims

Abstract: The Department of Labor released an FAQ for participants and beneficiaries in benefit plans impacted by the recent California wildfires.

Source: Dol.gov, November 2018

Small Business Retirement Plan Options

Abstract: This chart compares four common types of plan designs often utilized by small employers.

Source: Consultrms.com, November 2018

Bill Would Resurrect myRAs, Replace Saver's Credit With Government Match

Abstract: Senate Finance Committee ranking member Ron Wyden and four other senators have introduced the Encouraging Americans to Save Act (EASA). A similar bill with the same title was introduced by Senator Wyden in 2016, but did not reach the floor for a vote. The 2018 version of EASA contains the same provisions as the 2016 version, with a few minor changes.

Source: Ascensus.com, November 2018

Recordkeeping Fee Charge Against Franklin Dropped; Other Parts of Suit to Continue

Abstract: A federal judge in San Francisco delivered a mixed ruling in preliminary judgments on a lawsuit filed against Franklin Resources Inc. by former participants in the company's $1.4 billion 401k plan. In an order issued Nov. 16, Judge Claudia Wilken in the District Court for the Northern District of California, granted Franklin's request for summary judgment on the claim that the firm failed to monitor the plan's administrative arrangements, which allegedly led to excessive recordkeeping fees.

Source: Pionline.com, November 2018

New Hardship Rules, Other Statutory Changes Reflected in Newly Proposed 401k Regulations

Abstract: The Treasury Department has issued proposed regulations that provide guidance on changes to the hardship distribution rules made by the Bipartisan Budget Act of 2018. The proposed regulations also include changes to reflect provisions of earlier legislation. Plan documents must be amended to delete any language that conflicts with required changes, and to adopt any optional rules, by the end of the second plan year that begins after final regulations are included in the Required Amendments List issued by the IRS.

Source: Newportgroup.com, November 2018

New Rule Takes Baby Steps on Auto Portability

Abstract: The Department of Labor (DOL) has issued a proposed rule addressing "auto portability," a mechanism intended to automatically reconnect defined contribution plan participants with accounts they may have inadvertently left behind or forgotten about after leaving an employer.

Source: Callan.com, November 2018

A Guide to Vesting in Your 401k Plan

Abstract: While you already own the amount you personally deposit in your 401k plan, you don't own your employer's contributions to the account until you vest in the 401k plan. This article deals with a number of vesting issues including, "How long does it take to fully vest in a 401k plan?" and " Should you stay at a job until you are vested in the 401k plan?"

Source: Usnews.com, November 2018

Setting Defaults and Auto-Escalations Too Low May Undermine Their Power

Abstract: BlackRock took a look at various cases where a plan sponsor made changes to plan design to see what the outcomes were and found some unintended consequences. They conclude that the three cases are an "argument for better data and deeper analysis." The company recommends that retirement plan advisers and sponsors "review plan objectives. Conduct plan and participant analysis, and test plan changes."

Source: Planadviser.com, November 2018

Minimum Distribution Problems -- Why Most Retirement Plans Have Them

Abstract: The minimum distribution requirement can be difficult to satisfy, but there are some simple solutions that plan sponsors can implement to protect themselves and their participants. Plan sponsors should carefully review a list of current and former employees to determine who has not taken their RMDs; the plan's recordkeeper can help produce this report. Plan sponsors should then work with their recordkeeper to contact those individuals and remind them of the associated penalty for satisfying the RMD.

Source: Cammackretirement.com, November 2018

Investment Selection and Monitoring Process: A Primer

Abstract: Ongoing due diligence and research are a necessity, even for funds that are performing well. In the end, retirement plans should aim to utilize investment strategies that are disciplined and focused on delivering results in the long run. These are the strategies most compatible with the investment goals of retirement savers.

Source: Cammackretirement.com, November 2018

New Regulations on Hardship Distributions: What Plan Sponsors and Administrators May Do Now and Must Do Later

Abstract: Many plan administrators of 401k and 403b plans permitting hardship distributions will want to implement some of the changes soon to take advantage of the liberalized hardship distribution standards, and virtually all sponsors of such plans will be required to amend their plans in the not-so-distant future as a result of these changes.

Source: Bradley.com, November 2018

Avoid Retirement Account Rollover Pitfalls

Abstract: After retiring or leaving a job, your first big tax question might be: What should I do with the money in qualified retirement plan accounts with my former employer?

Source: Lindquistcpa.com, November 2018

Bad Reasons for Hiring 401k Plan Providers

Abstract: Due to how providers may market themselves to you, you may pick a plan provider for the wrong reason and you're breaching your fiduciary duty by hiring plan providers that aren't up to the job. This article is about things that plan providers may tout that shouldn't really impress you because it doesn't mean they'll be good at their job.

Source: Jdsupra.com, November 2018

With Year-End Deadline Looming IRS Issues Much Anticipated Hardship Guidance

Abstract: Plan sponsors and recordkeepers have been eagerly anticipating IRS guidance on changes to the hardship distribution rules made by the Bipartisan Budget Act of 2018, which are effective for plan years beginning on or after January 1, 2019. These changes impact 401k plans that offer hardship withdrawals, which provide active participants the ability to receive their elective deferrals prior to reaching age 59-1/2. They also impact 403b plans.

Source: Groom.com, November 2018

How to Contribute to Multiple 401ks Legally

Abstract: Adding contributions to your 401k or other salary deferral type retirement account can be an effective way of ramping up your retirement nest egg. Consider that for 2018, you can defer up to 100% of your compensation, as long as the amount does not exceed $18,500 for 2018/$19,000 for 2019, plus an additional $6,000 catch-up contribution if you are at least age 50 by the end of the year.

Source: Forbes.com, November 2018

State-Sponsored Retirement Plan Now Open to Individuals

Abstract: While a number of states have established (or are planning to establish) government-sponsored retirement plans for small businesses that do not currently cover workers, the Beaver State announced its OregonSaves retirement program will allow "individual Oregonians, such as self-employed or gig economy workers, to join and start saving for a better retirement."

Source: 401kspecialistmag.com, November 2018

Legislation Introduced With Changes to Retirement Savings Tax Credit

Abstract: Legislation to change the current non-refundable saver's credit into a refundable, government matching contribution for more workers to contribute to 401k plans or IRAs was introduced Thursday by Senate Finance Committee ranking member Ron Wyden and four other senators.

Source: Pionline.com, November 2018

IRS Issues Proposed Regulations on Hardship Distribution Rules

Abstract: The Treasury Department and Internal Revenue Service issued proposed regulations that would amend the rules governing hardship distributions from 401k plans. The proposed regulations reflect statutory changes, including changes made by the Bipartisan Budget Act of 2018 and Pension Protection Act of 2006.

Source: Westlaw.com, November 2018

DOL Guidance Addresses Fiduciary Status and Fees Under Program Facilitating Portability of Automatic Rollovers

Abstract: The program provider asked the DOL for two forms of guidance: first, an advisory opinion clarifying the fiduciary status of the parties involved; and second, a prohibited transaction exemption that would allow the provider to receive a fee for transferring a default IRA's assets into the plan of the IRA owner's current employer without the owner's affirmative consent.

Source: Thomsonreuters.com, November 2018

401k Hardship Withdrawals, Account Transfers Might Get Easier

Abstract: Taking hardship withdrawals from 401k plans may soon be easier for plan participants, while plan sponsors could face fewer risks when transferring small "left behind" 401k accounts to departing employees' individual retirement accounts and new 401k plans.

Source: Shrm.org, November 2018

ERISA Advisory Council Recommends Rules for the Encouragement of Lifetime Income Options in QDIAs

Abstract: Brief article that reviews the ERISA Advisory Council recommendations for rule changes to encourage the inclusion of lifetime income options in QDIAs, the effect of the new Society of Actuaries MP-2018 mortality improvement scale on liability valuations, and a recent IRS “Program Letter” identifying qualified plan distributions as a compliance target.

Source: Octoberthree.com, November 2018

Fiduciary Liability Claim Trends

Abstract: While insurers have not reacted in a unified way, the claim environment has become much more active and severe during the past 24- 36 months, highlighted by well-publicized excessive fee litigation under ERISA. This 10-page fiduciary liability claim trends report discusses, among other items, the many excessive fee cases brought against universities, why proprietary funds are more challenging risks, and recent results from a Boston College study examining the causes and consequences of 401k lawsuits.

Source: Lockton.com, November 2018

The 401k Adoption Agreement Explained

Abstract: Maybe you're looking into establishing a 401k for your company. Or perhaps you've realized it is time to make a change to how your plan is run. Both are often excellent, if tough, decisions. In this easy-to-read 401k plan document reference guide is just about everything you need to know about 401k adoption agreements.

Source: Forusall.com, November 2018

401k Plan Administration Checklist for the 2019 Plan Year

Abstract: Annual 401k administration tasks generally fall into one of four categories: nondiscrimination testing, Form 5500 reporting, participant disclosure, and plan document maintenance. If you're an employer, it is recommended that you manage the completion of these tasks using a checklist. A checklist can serve another important purpose, monitoring your 401k provider's job performance.

Source: Employeefiduciary.com, November 2018

DOL RCH Advisory Opinion Illustrates the Difficulties Inherent to Bulk IRA/Auto Portability Programs

Abstract: The DOL Advisory Opinion 2018-01 on the Retirement Clearinghouse shows the challenges presented by auto-portability in general, and specifically in the use of these types of IRA programs to accomplish it. Its ruling on negative consent related to "plan" assets (which includes IRA monies) is a big deal, of which we should all take note when dealing with auto-portability.

Source: Businessofbenefits.com, November 2018

Best Intentions: The Unintended Consequences of Plan Design

Abstract: DC plans are complex and changes often bring unintended consequences. The most well-intentioned and carefully considered plan design decisions may have unexpected results and even successful implementations occasionally reveal the limits of some baseline assumptions.

Source: Blackrock.com, November 2018

IRS Issues Proposed Amendments to Retirement Plan Hardship Rules

Abstract: The IRS released proposed amendments in REG-107813-18 to defined contribution retirement plan hardship distribution regulations. These amendments have been drafted to reflect statutory changes contained in the Bipartisan Budget Act of 2018 and the application of hardship rules related to modifications made by the Tax Cuts and Jobs Act.

Source: Ascensus.com, November 2018

Will the DOL's MEP Proposal Make MEPs Available to You?

Abstract: The key legal issue here is that plans, including MEPs, must be adopted by an employer of employees covered under the plan. Up to now, the Department of Labor defined "employer" narrowly to preclude unrelated employers from adopting single plan MEPs. Unfortunately, these eagerly awaited regulations did not authorize the kind of MEP many wanted.

Source: 401ktv.com, November 2018

Here's How to Fix 401k Elective Deferral Failures

Abstract: In order to encourage employers to use plan designs that include automatic contribution features (such as auto enrollment and auto escalation of elective deferrals), the IRS allows special "safe harbor" correction methods for plans that experience elective deferral failures related to these types of features.

Source: 401kspecialistmag.com, November 2018

Cuomo Forced to Court in 401k Financial Farce

Abstract: New York Gov. Andrew Cuomo had, through the Department of Financial Services, ordered state regulators to suggest to 401k and similar financial firms they "review any relationships they may have with the National Rifle Association and other similar organizations. Upon this review, the companies are encouraged to consider whether such ties harm their corporate reputations and jeopardize public safety."

Source: 401kspecialistmag.com, November 2018

Significant Disconnect Exists Between Employers and Employees on Saving for Retirement

Abstract: The survey results show a significant disconnect between employers and employees when it comes to saving for retirement. While 88 percent of employees think it's important to have retirement plans when choosing a new employer, just 67 percent of small business employers think it's important to have a retirement program for employees.

Source: 401khelpcenter.com, November 2018

DOL Guidance on Auto Portability

Abstract: Under an auto portability program, employees would be told that their 401k savings will be moved to tax-favored IRAs when they leave a job or if the plan is terminated, and that the employee's savings in the IRA would then be automatically transferred to the 401k plan or other individual account plan of the new employer when the employee finds a new job. However, because the prohibited transaction provisions of ERISA and the Internal Revenue Code prohibit a plan fiduciary from using its discretion to cause the plan or IRA to pay the fiduciary a fee, implementation of this type of program would require a prohibited transaction exemption.

Source: Wagnerlawgroup.com, November 2018

Would You Move Your 401k to a State Plan if Given the Opportunity?

Abstract: A surprising number of plan sponsors answered 'yes' to this question, but not necessarily for the reasons you might think. The LIMRA Secure Retirement Institute recently followed up on a 2016 survey that found that more than half (55%) of plan sponsors said they would be "very" or "somewhat" likely to consider transitioning from their current DC plan to a state-managed solution. The latest survey seemingly validates the degree of interest LIMRA found among plan sponsors in 2016.

Source: Napa-net.org, November 2018

Improving Retirement Savings for America's Public Educators

Abstract: The research examines the impact of participant choice of investment providers in 403b plans. The research further looks at the extent to which school district employees want choices in their 403b plans and the positive impact choice has on participation and savings rates. The data shows a decrease in the participation rates for 403b plans when the number of choices is reduced. While investment provider options may create more administrative complexity for the district, this paper suggests other alternatives to alleviating this burden, such as using an independent TPA to administer the plan and providing transparent disclosure of investment fees and other expenses to workers.

Source: Ntsa-net.org, November 2018

IRS Proposes New Hardship Distribution Regulations

Abstract: The Internal Revenue Service has issued proposed regulations that would change the rules for hardship distributions from 401k and 403b plans. The proposed regulations are scheduled to be published in the Federal Register on November 14, 2018. The provisions of the unpublished draft are summarized here.

Source: Ktserisacorner.com, November 2018

IRS Issue Eagerly-Awaited Guidance on Hardship Distributions With a Few Surprises

Abstract: As a general rule, there are two key components for a permissible hardship distribution: (1) the withdrawal must be made due to an immediate and heavy financial need; and (2) the amount of the withdrawal must be limited to the amount necessary to satisfy that financial need. Existing regulations provide detailed rules for how plan participants can prove each requirement is met when requesting a withdrawal. The Proposed Regulations would modify and relax many of these rules to conform to new law changes.

Source: Erisapracticecenter.com, November 2018

Under the DOL Proposed MEP Reg: Is Controlling and Maintaining a Retirement Plan a "Substantial Employment Function?"

Abstract: The key to the DOL's proposed MEP regulation is not so much the helpful and appropriate hemming in of the "commonality and control" requirements; nor is it that certain PEOs can generally be "employers" when acting indirectly on behalf of their clients in sponsoring a MEP; nor is it in the likewise helpful notion that participating employers are not co-sponsors; nor is it in the DOL's new-found willingness to recognize important policy differences between MEWAs and a retirement plan MEP.

Source: Businessofbenefits.com, November 2018

Retirement Plans for the Millennial Workforce

Abstract: The marked differences in communication style and expectations about the availability of cutting-edge technology and multiple career paths provide a roadmap for design. As a group, Millennials are more interested in saving and investing than previous generations of entry-level workers and may be more risk averse. Given the importance of DC plans to Millennials, what characteristics will improve participation and utilization, and set the plan apart?

Source: Buck.com, November 2018

DOL Releases Advance Copy of 2018 Form 5500

Abstract: The U.S. Department of Labor, the Internal Revenue Service, and the Pension Benefit Guaranty Corporation released advance informational copies of the 2018 Form 5500 Annual Return/Report and related instructions.

Source: 401khelpcenter.com, November 2018

Less Choice Leads to Lower 403b Participation, Study

Abstract: New research published by the National Tax-Deferred Savings Association confirms that a decrease in investment choice and reduced access to advisors leads to lower retirement plan participation by employees in public education 403b plans. The research is based on data from nearly 4,500 school districts across the United States.

Source: 401khelpcenter.com, November 2018

Survey: Advisors and 3(16) Fiduciary Outsourcing

Abstract: Pentegra released this report -- based on the results of a survey of retirement plan advisors -- to determine what their attitudes are toward ERISA 3(16) fiduciary outsourcing.

Source: Issuu.com, November 2018

DOL Plan Would Help Workers Consolidate 401k Accounts

Abstract: The Labor Department is seeking public comment on an "auto-portability" program intended to help workers consolidate small 401k and IRA balances when they change jobs.

Source: Thinkadvisor.com, November 2018

Ways to Help 401k Participants Understand Portfolio Risk

Abstract: One of the most obvious ways to look at the risk of portfolio is by checking its standard deviation. Another way to help people understand risk is to make sure they understand the risk and reward aspect of investing, and how that relates to their future goals. Investigating loss and gain factors in major scenarios can also help.

Source: Rixtrema.com, November 2018

SEC Investor Advisory Committee Calls for Stronger Best Interest Regulations

Abstract: The committee says the SEC should explicitly explain that Regulation Best Interest is a fiduciary duty shared equally by advisers and broker/dealer to act in their customers' best interest.

Source: Planadviser.com, November 2018

DOL Proposes New Multiple Employer Plan Rules: Everything You Need to Know

Abstract: The MEP proposal would allow certain small businesses to band together to offer more robust 401k plans to their employees and achieve significant savings. While the new regulation is certainly a step in the direction, it doesn't go as far as many had hoped. Thus, the future of open MEPs lies in the hands of a Congress that seems to be at a clear impasse going into the midterms.

Source: Lockton.com, November 2018

Regulation Moves to Expand Multi-Employer Plans

Abstract: President Trump issued an executive order in August directing the DOL to examine policies that expand the circumstances where employers, especially small- and mid-sized businesses, may sponsor or adopt a multi-employer plan as a workplace retirement savings option, subject to appropriate safeguards. In response, the DOL issued a proposed regulation on October 23 that clarifies who can sponsor or adopt a MEP. The regulation is meant to expand the use of open multiple employer plans, allowing different businesses to join a MEP.

Source: Callan.com, November 2018

401k Sponsors in Serious Need of Fiduciary Training

Abstract: There is not a legal requirement that committee members receive fiduciary training. Instead, it's a best practice and good risk management. But, what should the fiduciary education cover? Based on an analysis of court decisions on fiduciary responsibility, Fred Reish worries that fiduciaries may not be adequately educated about their basic responsibilities and particularly their administrative oversight duties.

Source: 401kspecialistmag.com, November 2018

Average 401k Account Balances Reach New Record

Abstract: 401k participants and retirement savers alike have plenty to be thankful for this year. Account balances have reached another all-time high, nearly doubling since 2008's economic downturn.

Source: 401kspecialistmag.com, November 2018

Employees Can Now Save in a 401k by Using a Credit Card

Abstract: Spending and saving are kind of like oil and water, they don't mix well together. But one company is trying to link credit-card spending to increased retirement savings, and financial advisers are taking notice.

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

DOL Proposes Rule to Reduce Leakage in 401k Plans

Abstract: The DOL has proposed a rule that's meant to stanch the flow of money out of 401k plans, an issue that has long troubled retirement policymakers. The proposal promotes the idea of "auto-portability," a mechanism that automatically reconnects plan participants with 401k savings they may have inadvertently left behind or forgotten about after leaving a prior employer.

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

Top Five Post-Election Retirement Policy Observations

Abstract: The historic 2018 mid-term elections are in the rearview mirror, and Democrats are poised to take control of the House in January while Republicans will expand their majority in the Senate. The new political landscape fundamentally changes the retirement policy dynamic in Washington and there is a very real possibility of significant reforms over the next two years. There are five key issues to keep in mind.

Source: Groom.com, November 2018

Deadline for Retirement Plan Annual Notice Is Rapidly Approaching

Abstract: The time of the year has come for Plan Sponsors to send their annual notices to participants (if your retirement plan has a December 31 plan year-end). Make sure that you send the appropriate notices to your participants on time if your plan contains certain features.

Source: Graydon.law, November 2018

Making Sure 401k & 403b Fees are "Necessary and Reasonable" - Part One

Abstract: As a plan sponsor, you are required to understand all of 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 downright misleading. The most effective way to meet your fiduciary requirement is a Request for Proposals process, typically run every three-to-five years. Why? The 401k and 403b markets are extremely competitive. They are constantly evolving and changing.

Source: Fiduciaryplangovernance.com, November 2018

Five Key Moves That Can Help Boost Your 401k Savings

Abstract: These days, more and more 401k investors are keeping their accounts on cruise control and employers are encouraging that trend. Most companies automatically enroll you, choose your contribution rate, and nudge you into the preferred investing option. But this convenience carries a major risk: Leaving your 401k on autopilot is likely to jeopardize your retirement goals.

Source: Consumerreports.org, November 2018

The Target-Date Funds State of the Union

Abstract: LifePath, the industry's first target-date fund, prepares to mark its 25th anniversary in 2018, creating the perfect opportunity to step back and consider the growth and future of target-date funds.

Source: Blackrock.com, November 2018

Qualified Retirement Plan Considerations and 2018 Year-End Action Items

Abstract: This 4-page advisory reminds plan sponsors of deadlines for amending qualified retirement plans and highlights other action items for plan sponsors to consider in the near future.

Source: Alston.com, November 2018

What is a 3(16), 3(21), or 3(38) Fiduciary?

Abstract: 401k Plan Sponsors may consider retaining outside help to assist the organization in meeting various fiduciary responsibilities. To prepare for any meaningful conversation of fiduciary responsibilities, there are a few terms one should be familiar with and have a basic working knowledge of - §3(16), §3(21) and §3(38).

Source: 5500audit.com, November 2018

Debt Disaster is Real, Especially for Generation X

Abstract: The generation of flannel and grunge are heading into their highest earning years yet, compared to other generations, Gen Xers have also accumulated the most debt. In fact, a recent LightStream survey found that one in four Gen Xers who are currently in debt say they are not confident in the way they manage it, and 22 percent don't see a way out.

Source: 401kspecialistmag.com, November 2018

DOL Wants Your Opinion on 401k Auto Portability

Abstract: The DOL's Employee Benefits Security Administration is asking the public to comment on a proposed exemption related to the consolidation of small 401ks that are commonly left behind when employees change jobs.

Source: 401kspecialistmag.com, November 2018

How Many Plans Make You a DC Specialist?

Abstract: Cogent Reports' latest analysis of the DC plan adviser industry shows most advisers touching this space still manage only a handful of plans, while those with more plans are growing much faster than the average firm.

Source: Planadviser.com, November 2018

Taxpayers Generally Comply With Annual Contribution Limits for 401k Plans; Additional Efforts Could Further Improve Compliance

Abstract: Analysis of IRS records showed that the vast majority of taxpayers are complying with tax laws designed to limit the annual amount of compensation that can be contributed to 401k retirement plans. Nonetheless, two areas in which compliance could be improved were identified: 1) some 401k plans did not prevent taxpayers from exceeding the annual limit, and 2) some taxpayers exceed annual limits when contributing to multiple 401k plans.

Source: Oversight.gov, November 2018

Biennial Study on the American Retirement Experience

Abstract: The goal of this 23-page study is to examine the retirement experience of individuals who have been living in retirement for a meaningful amount of time, and develop a deeper understanding of the underpinnings of their retirement security: the risks they have encountered, are worried about, and may face; how well they have prepared, and where their preparations are weak; and finally, how their experience can help guide the preparations of future generations of retirees.

Source: Myirionline.org, November 2018

Revisiting Target-Date Retirement Income Funds

Abstract: This article explains why advisors to retirement plans may wish to consider offering a series of target-date retirement income funds and provides an update about a development.

Source: Morningstar.com, November 2018

Jackson National to Settle 401k Self-Dealing Lawsuit for $4.5 Million

Abstract: Jackson National Life Insurance Co. has reached a $4.5 million settlement in a self-dealing lawsuit that alleged the company profited at the expense of its employees by adding high-cost proprietary investment funds to its 401k plan.

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

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. Because the annual cross sections cover participants with a wide range of participation experience in 401k plans, meaningful analysis of the potential for 401k participants to accumulate retirement assets must examine the 401k plan accounts of participants who maintained accounts over all of the years being studied (consistent participants). Key findings are detailed.

Source: Ici.org, November 2018

Open MEP Opportunities: A Look at the Compliance Challenges, as Well

Abstract: The success of these plans will largely depend on the nature of the guidance issued by the DOL at the president's direction or that of any legislation enacted by Congress. Advisers likely will have the opportunity to sponsor open MEPs and make them available to their small business clients; they also likely will be subject to ERISA, to at least some extent.

Source: Groom.com, November 2018

Consistent 401k Participation Leads to Higher Account Balances

Abstract: The average 401k plan account balance of "consistent 401k participants" -- those who remained active in the same 401k plans from year-end 2010 through year-end 2016 --- more than doubled in that period, according to new data published by the Employee Benefit Research Institute.

Source: Ici.org, November 2018

Proposed Multiple Employer DC Plan Rules Could Affect Co-Employers of Leased Employees

Abstract: Employers of all sizes that provide retirement plan coverage for all or a portion of their workforce through an association or leasing organization may benefit from new options presented by proposed DOL regulations. The proposal would simplify Form 5500 filing requirements and clarify fiduciary responsibilities.

Source: Buckglobal.com, November 2018

Corrections of Elective Deferral Failures in Automatic Contribution Arrangements

Abstract: This 1-page article examines the correction methods for the most common downside of automatic contribution arrangements: elective deferral failures.

Source: Boutwellfay.com, November 2018

Five Reasons You Should Never Take Out a 401k Loan

Abstract: Borrowing from a 401k only delays, or wipes out, retirement plans. Sometimes, taking out a loan from retirement savings is the only option to cover unexpected costs. But using a retirement account as emergency savings comes with serious risks.

Source: Bankrate.com, November 2018

Student Loan Programs Top List of Plan Design Warnings

Abstract: With Student Loan Repayment programs so popular and with the blessing of the IRS in the case of at least one 401k SLR program, why is caution advisable? Steve Riordan notes that SLR contributions are subject to all qualification requirements; however, he said that he is more concerned about coverage, non-discrimination and contribution limits. Each component, he noted, is separately tested regarding coverage and non-discrimination. If one population receives a match and the other receives a non-elective contribution, that increases the potential for coverage and non-discrimination failures, he warned.

Source: Asppa.org, November 2018

Multiplication Fables

Abstract: When you see headlines putting a really big number on what you already suspect is a problem -- in this case 401k plan "leakage" -- well, you could hardly be blamed for simply accepting at face value the most recent attempt to quantify the impact of the problem. A closer look at the assumptions behind that analysis, however, puts things in a different light.

Source: Asppa.org, November 2018

Have You Noticed? A Guide to Year-End (and other) 401k Disclosures

Abstract: There's often confusion about the many required 401k plan notices including the purpose of each notice, when each must be distributed, and to whom each must be sent. This short article explains some of the most common notices and clarify the distribution requirements.

Source: Alliant401k.com, November 2018

401k Plan Design Drives Best Outcomes and Big Impact

Abstract: Employers should be thinking about ways to improve their 401k plan design. Participants in plans that offer features like a generous employer match typically have higher projected income replacement rates, and these plans tend to have better participation rates overall. These are both desirable outcomes for employers considering ways to use 401k plan design to improve plan performance. In short, 401k plan design matters when it comes to offering a competitive workplace retirement plan benefit for employees and helping them to get on a path to a financially comfortable future.

Source: 401ktv.com, November 2018

Revenue Procedure 2018-52 Released by IRS: VCP Modifications

Abstract: The most impactful change comes to the submission of corrections process to the IRS's Voluntary Correction Program. The VCP is one of three correction programs plan sponsors can use to correct errors under the Employee Plans Compliance Resolution System, and is in place for plan sponsors to correct mistakes with either the plan document's language or how the plan has been run.

Source: Schneiderdowns.com, November 2018

IRS Updates Model Tax Notices for Eligible Rollover Distributions From Retirement Plans

Abstract: In its recent Notice 2018-74, the IRS provides updated model tax notices for the required written explanations given to recipients of eligible rollover distributions from qualified retirement plans. These updated notices reflect recent changes to the laws in this area as well as IRS guidance. Plan administrators should review the notices they are currently using to see if they need updating.

Source: Findley.com, November 2018

Why We Still Need Open MEP Legislation

Abstract: We know that there are many factors that can deter 401k plan adoption. The "open MEP," a plan in which unrelated employers can be pooled in a plan run by professionals, seems to be a solution to these problems. However, we need changes in the law to make these plans a workable reality, and the recent proposal by the Labor Department falls short of what we need.

Source: Cohenbuckmann.com, November 2018

ERISA: Thou Shall Not Pay Excessive Fees

Abstract: With increased government scrutiny, ERISA lawsuits at an all-time high, and the plaintiff's bar not only increasing in number but in sophistication, 403b plan fiduciaries will continue to face high exposure if they fail to prudently select and then continue to monitor the investments options of their plans and plan fees. Litigation is not limited to large plans, as plaintiffs and the DOL have found that smaller plans are "low hanging fruit" in terms of finding ERISA violations.

Source: Ckrlaw.com, November 2018

Casualties of the Retirement Plan Recordkeeping Fees Race to the Bottom

Abstract: Recordkeeping fees can't go down to zero, so cost savings are going to become less robust over time as plan sponsors continue to go back to the well to renegotiate pricing. More importantly, there is concern about the casualties of the "race to zero" which can be generally placed into two categories: impact on recordkeeper services and impact on competition.

Source: Cammackretirement.com, November 2018

DOL Opens Door to Wider MEP Availability, but How Much?

Abstract: Advocates of expanding access to retirement plans through a multiple employer plan approach have been hoping for a relaxation of existing rules that govern these cooperative arrangements. Now, the DOL has obliged, at least to a degree. But if MEP proponents were looking for a magic bullet to significantly expand worker coverage and saving within employer plans, that outcome -- at least as it can be influenced by MEPs -- will only be determined with time and employers' response to the following guidance.

Source: Ascensus.com, November 2018

IRS Rules on Student Loan Program Under 401k Plan Leaves Important Compliance Issues Unanswered

Abstract: The IRS released the private letter ruling in response to an employer's request to amend its 401k plan to include a voluntary student loan program, under which it would make contributions to the accounts of participants making student loan repayments. The PLR and the contingent benefit rule are described in detail here including some issues the IRS leaves open.

Source: Truckerhuss.com, November 2018

Stock Drop Claims Based on Public Information Fail to Overcome Deference to Market Prices

Abstract: Two more courts have disallowed claims of imprudence against 401k plan fiduciaries that permitted investments in employer stock as those companies headed toward bankruptcy.

Source: Thomsonreuters.com, November 2018

Mitigating the Risk of Cyber Attacks to Your Employee Benefit Plan

Abstract: Cybersecurity risks, such as phishing techniques, malware and ransomware attacks, facing employee benefit plans are no different than those facing corporations, and in fact, may be even more significant. As a plan sponsor and those charged with governance, you have a responsibility with respect to management and oversight of the plan, including understanding risks to the plan, even risks of cyberattacks.

Source: Schneiderdowns.com, November 2018

DOL ERISA Regulatory Enforcement Emphasis

Abstract: The demise of the confusing Investment Fiduciary Advice Rule has allowed the DOL to focus on other enforcement priorities. The Plan Investment Conflicts project, which began in 2016, continues the efforts of prior enforcement projects by investigating the payment of improper or undisclosed compensation to ERISA plan vendors. This article offers five tips to help HR managers and committees be prepared and not get caught off guard.

Source: Rolandcriss.com, November 2018

Many Retirees Fail to Consider Effect of Taxes

Abstract: Thirty-seven percent of retirees admit they did not consider how taxes would impact their retirement income, a Nationwide Retirement Institute survey found. As a result, the institute says, they may have lost the opportunity to save six years' worth of income in retirement.

Source: Planadviser.com, November 2018

ERISA Tips: Sufficient Information for Purposes of Section 404(c)

Abstract: In order to be in compliance with ERISA Section 404(c), a plan needs to meet some general requirements; one is that plan participants must be allowed to receive information sufficient for them to make informed decisions. But what constitutes "sufficient information"?

Source: Ntsa-net.org, November 2018

The Labor Department's Proposal for Multiple-Employer Plans Is Limited

Abstract: The proposal isn't comprehensive enough to create sweeping changes. But, it may induce a few more entities to offer MEPs, possibly increasing retirement coverage and perhaps improving the quality of the retirement plans for some small businesses. The most significant impact of this proposal might be that it gives professional employer organizations a leg up in offering MEPs and might encourage more employers to join such organizations.

Source: Morningstar.com, November 2018

401k Plan Notice Issues of Which to Be Aware (or Beware)

Abstract: There are detailed laws and regulations regarding the content and when/how the plan participant notices are delivered. For most plans, the next plan year will begin on January 1, 2019, which means that December 1 is generally the last date by which those notices may be provided. This article touches on some bigger picture issues for an employer's attention as we enter notice season.

Source: Hawleytroxell.com, November 2018

Averting a 401k Disaster

Abstract: As the bull market approaches its 10th year, retirement plan specialists are essentially offering plan sponsors and plan participants some of the same tips the National Park Service suggests for tourists who encounter a bear: Stay calm, don't run, and remember that a sudden movement may trigger an attack. Dumping equities from a 401k plan when a bear market is pending -- or when it's in progress -- is a sure way for plan participants to sabotage their retirement savings efforts, caution the retirement experts. But continuing to invest too aggressively can also be a problem.

Source: Fa-mag.com, November 2018

2019 401k Plan Limits

Abstract: The Internal Revenue Service announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2019. The contribution limit for employees who participate in 401k, 403b, most 457 plans, and the federal government's Thrift Savings Plan is increased from $18,500 to $19,000. Full details provided.

Source: 401khelpcenter.com, November 2018


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