November 2021 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.

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

House-Passed Build Back Better Act's Retirement Provisions

The BBBA (H.R. 5376) passed the House on November 19, 2021. The bill has several revenue raisers that would have an impact on high-income individuals' DC and IRA accounts as well as all taxpayers' ability to make Roth conversions of after-tax contributions. This article discusses the ones that are most significant to the BBBA's retirement provisions.

Source: Segalco.com, November 2021

A Strong 401k Can Set Your Company Apart

The better your retirement plan, the better your chances of attracting and retaining top talent. These tips can help make your benefits package more appealing to current and future employees.

Source: Jpmorgan.com, November 2021

DOL Proposes New ESG and Proxy Voting Rule

The DOL's new ESG and proxy voting rule proposal are significant. It goes beyond merely resuscitating the Obama-era guidance. Should this proposal be adopted largely as-is by the DOL, ERISA fiduciaries will likely feel a new sense of urgency in considering ESG factors in their investment decision-making and their exercise of shareholder rights on behalf of ERISA plans. This article reviews some of the salient points of the proposal.

Source: Fiduciarygovernanceblog.com, November 2021

Hardship Distribution Amendment Deadline Is Fast Approaching

Over the past few years, several laws and regulations were passed to loosen rules on hardship distributions for 401k and 403b retirement plans. While there was an extension to give plan sponsors more time to revise plans to reflect the changes, the final day to amend pre-approved qualified retirement plans that adopted hardship distribution regulations is Dec. 31, 2021.

Source: Bdo.com, November 2021

Voluntary Fiduciary Correction Program

This article describes the Voluntary Fiduciary Correction Program administered by the DOL's Employee Benefits Security Administration. The VFCP offers employers and fiduciaries of employee benefit plans subject to ERISA the opportunity to self-correct certain delineated fiduciary violations. Applicants can voluntarily apply for EBSA approval of the corrections to avoid certain penalties, excise taxes, and governmental enforcement actions. This article sets forth the specific violations covered by the VFCP, methods for correcting violations, including calculation of plan restitution amounts, and describes the VFCP application process.

Source: Gjassets.com, November 2021*

How to Handle Your 401k if you Leave a Job

Workers often leave their 401ks behind when they leave a job, resulting in roughly 1.35 trillion dollars that's just floating around in the ether. You're going to need that money in the future. Here are some tips to keep in mind if you're planning on leaving a job.

Source: Yahoo.com, November 2021

Why You Should Encourage "Mini" Retirement Plan Audits

From the annual hassle of engaging an accountant to review retirement plan financials to the ever-present threat of a DOL investigation, "audit" is practically a four-letter word for plan sponsors, financial professionals, and administrators. But they don't have to be a bad thing. Regularly conducting "mini" plan audits allows compliance to be broken down into more manageable, bite-sized pieces. These voluntary reviews require minimal time and resources and can pay big dividends.

Source: Voya.com, November 2021

Worker Participation in Employer-Sponsored Pensions: Data in Brief

This 7-page report provides data on the percentage of U.S. workers who have access to and who participate in employer-sponsored pension plans. The data are from the National Compensation Survey, conducted by the Bureau of Labor Statistics.

Source: Congress.gov, November 2021

The 2022 Retirement Landscape Takes Shape

The widening retirement savings gap, improving financial wellness, and adjusting to lower return expectations are three themes shaping the U.S. retirement landscape going into 2022. A new study shows the events of the past two years have either accelerated these themes or shined a spotlight on them, and the response of individual savers, employers, and those that advise them are evolving as well.

Source: Planadviser.com, November 2021

Plaintiffs File ERISA Excessive Fee Lawsuit Against VCA

Plaintiffs have filed a new ERISA lawsuit in the U.S. District Court for the Central District of California, naming as defendants veterinary hospital network VCA Inc. and several retirement plan administration and compensation committees appointed by the company's leadership. The lawsuit claims the veterinary hospital network's retirement plan, which has more than $500 million in assets, should have paid lower fees for recordkeeping and administrative services.

Source: Planadviser.com, November 2021

Which Plan Documents Must You Surrender if You Are Sued?

When participants believe they have been mistreated by your company's retirement plan and take their complaints to court, be prepared for requests for plan documents. Although under ERISA you are obligated to produce relevant materials, you are not required to indulge in a document fishing expedition. A recent court case, Theriot v. Building Trades United Pension Trust Fund, offers insights on just how far you need to go and where to draw the line.

Source: Orba.com, November 2021

MarylandSaves Targets Summer 2022 Launch

According to a Nov. 22 announcement by the program's board, MarylandSaves will begin offering its new automatic workplace retirement and emergency savings program starting next summer.

Source: Napa-net.org, November 2021

DOL's EBSA Investigations, Recoveries Down From Record in FY 2020

The Labor Department's Employee Benefits Security Administration recovered about $2.4 billion in fiscal 2021, down from $3.1 billion a year prior.

Source: Investmentnews.com (registration may be required), November 2021

House Passes Build Back Better Act

On November 19, 2021, the U.S. House of Representatives voted to approve the Build Back Better Act (H.R. 5376), the budget reconciliation bill that includes much of President Biden's economic and social policy agenda, by a vote of 220 to 212, with all but one House Democrat voting for the bill and all House Republicans voting against it. The BBB Act also includes several health and welfare, retirement, and executive compensation provisions.

Source: Groom.com, November 2021

Retirement Plan Amendment Deadlines

As we approach the end of 2021, it is a good time to review upcoming year-end plan amendment deadlines applicable to retirement plans. Employers should review their plans with their providers and advisers to determine if any plan amendments need to be adopted by the end of 2021.

Source: Bsk.com, November 2021

State-Sponsored Retirement Programs Striking a Chord

Americans give state-facilitated retirement programs an enthusiastic nod, a recent study has found. The National Institute on Retirement Security study on state-facilitated retirement programs found strong support for state-sponsored retirement saving programs, and it cuts across party identification and generational lines.

Source: Asppa.org, November 2021

Year-End Reminders for Retirement Plans 2021 Edition

As the end of 2021 approaches, employers and plan sponsors of retirement plans need to be aware of their year-end responsibilities and some of the issues they will need to consider going into 2022. Here is a brief overview.

Source: Wagnerlawgroup.com, November 2021

Expect More Difficulty Obtaining Fiduciary Insurance

The insurance carriers that provide fiduciary liability insurance to retirement plan sponsors and their fiduciary service providers are growing cautious -- even a bit cagey -- when it comes to issuing their coverage policies. The basic reason for their reticence is the glut of retirement plan-focused litigation that has emerged in recent years, and especially the intensity of suits filed over the past year or two.

Source: Plansponsor.com, November 2021

CITs Continue Taking Over in 401ks, but the Change Isn't Always Easy

Investment providers launched just one target-date mutual fund series in the U.S. in 2020, while six pulled the plug on them, marking the second year in a row that the number of products on the market went down. Behind that trend, according to data from Cerulli Associates, is the rise of collective investment trusts, or CITs. The products, which are sponsored by banks or trust companies, function similarly to their mutual fund corollaries but don't have the same reporting requirements.

Source: Investmentnews.com (registration may be required), November 2021

Federal Court Enforces DOL Subpoena

Shortly after the DOL's Employee Benefits Security Administration issued its cybersecurity guidance for employee retirement plans and updated its audit inquiries to include compliance with these guidelines, a federal court in Chicago ruled an employee benefit services provider must comply with a subpoena requesting, among other things, documents and communications relating to the provider's information security and cybersecurity plans and controls.

Source: Erisalitigationadvisor.com, November 2021

Proposed Revisions to Form 5500

On September 14, 2021, the DOL, the IRS, and the PBGC jointly announced a tri-agency notice of proposed forms revisions to the Form 5500 Annual Return/Report forms filed for employee pension and welfare benefit plans. The DOL simultaneously published a proposed rulemaking to implement the proposed forms changes under ERISA. The proposals are intended to implement changes to the Form 5500 annual reporting under the SECURE Act, in addition to other changes.

Source: Belfint.com, November 2021

Protecting Confidential Participant Data and Cross-Selling

In light of the DOL's increased focus on cybersecurity and participant data, plan sponsors should review their service agreements to ensure they do not give implicit approval to use participant data to cross-sell.

Source: Asppa.org, November 2021

Most Understood Acronym in the Retirement Plan Industry

What's the most used and least understood/appreciated acronym in the retirement plan industry? Well, for Nevin Adams, it's "TPA," short for "third-party administrator." It's a term that is widely bandied about but misunderstood by many.

Source: Asppa.org, November 2021

Lessons Learned From Recent Fiduciary Victories

There is nothing a plan sponsor or ERISA fiduciary can do to prevent allegations of a fiduciary breach. However, there are many things they can do to be prepared to rebut such claims. Two recent fiduciary victories provide valuable insights into how a court would evaluate the decisions and processes of plan committees.

Source: Spotlightonbenefits.com, November 2021*

Latest ERISA Suit Targets Olin Corp.

The allegations in the new lawsuit are familiar, suggesting the plan fiduciaries permitted the payment of excessive recordkeeping and investment fees over a lengthy proposed class period.

Source: Planadviser.com, November 2021

House Committee Advances Bill With Various Retirement Plan Provisions

The RISE Act would increase automatic cashout limits, enable employers to offer small financial incentives for retirement plan participation and simplify plan sponsor disclosure requirements, among other things.

Source: Planadviser.com, November 2021

Retirement Policy Provisions of the Build Back Better Act

The BBBA includes certain changes to the Internal Revenue Code's corporate tax structure, notably a new corporate alternative minimum tax which raises a question about the treatment of pension income. It also includes tighter rules concerning Roth conversions and individuals with large IRA and defined contribution plan accounts. this brief note reviews (1) certain key tax and benefits-related provisions that were dropped from the original (September 2021) proposal; (2) benefits-related provisions of that proposal that have been retained; and (3) the new corporate AMT proposal.

Source: Octoberthree.com, November 2021

Continuous Improvement Through Investment Menu Review

This advisor suggests investment menus be reviewed periodically, typically bi-annually. Regular reviews of the investment menu design ensure that committees are continuously working to improve and challenge their process and incorporate current research. This case study examines the investment menu design review.

Source: Multnomahgroup.com, November 2021

Required Plan Amendment Compliance Tracking Procedure for Individually Designed Retirement Plans

In Revenue Procedure 2016-37 the IRS eliminated the determination letter process for individually designed plans for all situations except initial plan qualification, qualification upon plan termination, and a few other special circumstances such as a plan merger in the event of a merger or acquisition involving unrelated entities. Once the IRS ended this process, they substituted a new "self-help" procedure that left employers on their own for demonstrating compliance with these requirements.

Source: Foley.com, November 2021

Retirement Fiduciary Calendar for 2022

This Retirement Fiduciary Calendar for 2022 makes it fast, simple, and easy for plan sponsors to keep their retirement plans in compliance with Internal Revenue Service, Department of Labor, and ERISA regulations. When used, it will help them stay in front of administrative deadlines and submission complexities.

Source: Tri-ad.com, November 2021

Some Claims Dismissed in LinkedIn Excessive Fee Suit

Motions to dismiss a lawsuit alleging fiduciaries of the LinkedIn Corp. 401k Profit Sharing Plan and Trust violated ERISA by allowing the plan to pay excessive fees have been granted in part and denied in part, with the court giving the plaintiffs leave to amend their lawsuit.

Source: Planadviser.com, November 2021

Three Themes Shaping the 2022 Retirement Landscape

In its inaugural U.S. Retirement Market Outlook, T. Rowe Price offers insights on the major themes professionals at the firm expect to shape the retirement landscape in 2022. According to the paper, given the impact of the significant global events over the past two years, the three themes that the firm sees for next year are reviewed here.

Source: Napa-net.org, November 2021

Form 5500 DOL Investigations

When you receive a letter from the DOL letting you know that the plan that you administer is under investigation, it is natural to ask "how did my plan get picked?" While some investigations are opened based on participant complaints or concerning news reports, many investigations are opened because your plan meets the criteria that a current initiative has flagged. This is a lot of words to say that Form 5500 has become an enforcement tool.

Source: Groom.com, November 2021

Navigating the Spectrum of Retirement Income Solutions for DC Plans

With the continued shift from Defined Benefit to Defined Contribution, longer life expectancies, and unpredictable market returns, people have never been so challenged with determining how to spend down their accumulated retirement savings. A range of new solutions is emerging to help answer those needs.

Source: Blackrock.com, November 2021

Employer-Sponsored Retirement and Health Plans: What You Need to Know for Year-End

While year-end is ordinarily a busy time for companies, the number of COVID-19-related pieces of legislation and developments present additional items employers and plan sponsors must address in wrapping up 2021.

Source: Troutman.com, November 2021

Why Don't More 401k Plans Have Lifetime Income Options?

Recent surveys show that interest in providing lifetime income through 401k plans is strong. An Allianz Life survey indicates that 85% of employers that do not offer a lifetime income option would consider adding one in the next two years. Seventy-three percent of participants said they would consider a lifetime income option. Yet, many 401k plans still have only lump-sum options, and Nationwide found that 60% of advisers don't think plan sponsors are interested in annuities. Why is there a disconnect?

Source: Rpaconvergence.com, November 2021

The DOL's Proposed ESG Rule: A Retirement Committee Perspective

A recently proposed DOL regulation entitled "Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights" addresses the duties of retirement plan fiduciaries when considering economically targeted investments, i.e., investments that take into account environmental, social, and governance factors. Issued in response to a May 20, 2021, Executive Order, the Proposal would significantly modify prior, Trump-era rules on the subject. This article examines the proposal from the retirement committee perspective.

Source: Mintz.com, November 2021

Excessive Fee Lawsuits Without Excessive Fees: The Case of the $30 Recordkeeping Fee

If the recent case of Sigetich v. The Kroger Co., filed in the Western District of Ohio on November 5, 2021, is any indication, we have reached a turning point in which plaintiffs have started suing plans with really low fees. The complaint alleges that the Kroger 401k Plan had a $30 recordkeeping fee, which they claim is 50% too high, but in reality, is lower than nearly every plan in America today. The case shows how the Supreme Court needs to step in and halt the ability of the plaintiffs' bar to impose improper liability on the fiduciaries of America's retirement plans, absent legitimate proof of real fiduciary imprudence and harm to participants.

Source: Euclidspecialty.com, November 2021

When Is a 401k Not a Retirement Plan?

A 401k plan is not a "retirement plan" for California creditor protection purposes when it was expressly set up to protect IRA rollover assets from creditors. This was the holding in a 2019 California Court of Appeal decision that is still valid law and that is worth revisiting.

Source: Eforerisa.com, November 2021

401k Safe Harbor Rules - 2021

A description and chart of the 401k safe harbor rules, as well as the advantages and disadvantages of this plan design option.

Source: Consultrms.com, November 2021

Small Business Retirement Plan Options - 2021

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

Source: Consultrms.com, November 2021

IRS Adds Two FAQs to Its Covid-19 Q&A Guidance for Retirement Plans

On October 28, 2021, the IRS added two FAQs to its official guidance in the form of questions and answers regarding COVID-19 pandemic relief for retirement plans, including 401k plans.

Source: Compliancedashboard.net, November 2021

Self-Directed 401k Investors Stay the Course in Q3, See Balances Increase 12.8% Year-over-Year

According to Charles Schwab's SDBA Indicators Report, a benchmark on retirement plan participant investment activity within self-directed brokerage accounts, the average account balance across all participant accounts finished Q3 2021 at $341,068, a 12.8% increase year-over-year and a 2.0% decrease from Q2 2021. The third quarter SDBA report overall showed steady investing behavior among participants.

Source: Businesswire.com, November 2021

The Value of Working With a Retirement Plan Consultant

Retirement plan consultants are financial professionals who help businesses with their employer-sponsored retirement plans. They are equipped to handle the wide and complicated span of retirement plan tasks and responsibilities, from start to finish. Working with a retirement plan consultant is a benefit to both you and your employees. Here are several reasons why.

Source: Voya.com, November 2021*

Establishing a Solo 401k Under the New Rules

For self-employed individuals and their tax advisors, there are several special considerations concerning setting up and contributing to solo 401k plans, including, but not limited to, the deadline for establishing a 401k plan, the deadline for making a salary deferral election, and the owner's compensation for contribution purposes.

Source: Tra401k.com, November 2021

2021 Best Practices Conference: Outsourcing and What to Expect From Providers

A panel discussion at the virtual 2021 PLANSPONSOR Best Practices Conference focused on the critical topic of fiduciary outsourcing and what plan sponsors can expect from service providers. Experts discussed the types of outsourcing available to plan sponsors, from basic 3(16) administration services to full discretionary 3(38) investment management.

Source: Plansponsor.com, November 2021

2021 Best Practices Conference: Understanding ERISA and Fiduciary Fundamentals

During the first session of the virtual 2021 PLANSPONSOR Best Practices Conference, experts discussed the requirements for maintaining retirement plan documents and operating a plan according to ERISA. They also discussed what should be reported to participants and regulators, and how sponsors can adhere to fiduciary duties.

Source: Plansponsor.com, November 2021

2021 Best Practices Conference: Benchmarking Investments and Fees

During the final session of PLANSPONSOR's virtual 2021 Best Practices Conference, experts talked about the mechanics of benchmarking plan investments and fees, what to look for when benchmarking, and where to get help. Plan sponsors should consider two necessary elements when benchmarking investments. Meanwhile, whether fees need to be benchmarked depends on how they are paid.

Source: Plansponsor.com, November 2021

Colorado, New Mexico Partner on State IRA Programs

Colorado and neighboring New Mexico plan to form a partnership regarding the state-run retirement saving programs each operates. The Colorado Department of the Treasury announced on Nov. 9 that the Colorado Secure Savings Program and the New Mexico Work and Save programs signed a Memorandum of Cooperation to pursue a formalized partnership agreement for their auto-enroll IRA programs.

Source: Ntsa-net.org, November 2021

DOL Sets New Tone on ESG Investing and Proxy Voting With Recently Proposed Rule

On October 13, 2021, the DOL proposed amendments to its investment duties regulation under ERISA, to clarify that prudent ERISA fiduciaries may consider (and may often be required to consider) climate change and other environmental, social, or governance factors when assessing investment risks and returns. This is a detailed review.

Source: Klgates.com, November 2021

Bundled or Unbundled 401k Provider: How to Choose

401k providers can deliver either "bundled" or "unbundled" plan administration services. A bundled provider delivers all three of the major plan administration services -- asset custody, participant recordkeeping, and Third-Party Administration -- while an unbundled provider ally with at least one other company to deliver all three services. If you're a business owner, understanding the differences between the two service models can help you choose the best 401k provider for you and your employees.

Source: Employeefiduciary.com, November 2021

RISE Act OKed by House Panel, Will Be Merged With SECURE 2.0

Bipartisan retirement security legislation that shares some overlap with the SECURE Act 2.0 has been approved by a key House committee. The House Education and Labor Committee on Nov. 10 approved the Retirement Improvement and Savings Enhancement (RISE) Act of 2021 (H.R. 5891) by a unanimous voice vote.

Source: Asppa.org, November 2021

What Should We Do When Our 401k Plan Must Make a Distribution to Someone We Cannot Locate?

Each year, when our 401k plan makes required minimum distributions, we discover that the addresses on file for some distributees are no longer valid. We sometimes have similar problems locating beneficiaries when a participant dies. What procedures should we follow when our plan must make distributions to individuals we cannot locate? And what can we do to minimize this problem?

Source: Thomsonreuters.com, November 2021

New York Expands Secure Choice Savings Program

This law amends the general business law to make enrollment into the New York State Secure Choice Savings Program automatic for employees at covered employers. However, employees can opt-out of the program. Employees will also be provided with informational materials that include an explanation of how employees can opt-out of the program after being enrolled as well as a form for an employee to note his or her decision to opt-out of program participation and to allow new employees to opt-out of the program. Employers are not liable for an employee's decision to opt-out of the program.

Source: Goldbergsegalla.com, November 2021

DOL Temporarily Extends Non-Enforcement Relief for Investment Advice Fiduciaries

On October 25, 2021, the DOL issued Field Assistance Bulletin 2021-02, temporarily extending its non-enforcement policy regarding certain rules applicable to fiduciaries who provide investment advice for 401k plans, per Prohibited Transaction Exemption 2020-02, released in December 2020. The temporary non-enforcement policy now extends generally through January 31, 2022; it was originally set to expire on December 20, 2021.

Source: Compliancedashboard.net, November 2021

Retirement Plan Error Corrections Options Available Through EPCRS

Earlier this year, the IRS issued Revenue Procedure 2021-30, which provides retirement plan sponsors additional opportunities to use voluntary and self-correction features of the Employee Plan Compliance Resolution System. This guidance continues a trend of the IRS seeking ways to make it easier for plan sponsors to correct errors that may occur in running a tax-qualified retirement plan.

Source: Bdo.com, November 2021

IRS Adds FAQs on In-Service Distributions, Rehiring Retirees

The IRS has shed light on whether rehiring a retiree causes that retirement to not be considered a bona fide retirement and on in-service distributions to people who are still working. The IRS provided this information by adding frequently asked questions to those it provides concerning Coronavirus-related relief for retirement plans and IRAs.

Source: Asppa.org, November 2021

Committee Leaders Introduce Retirement Legislation in House

Leadership from the House Committee on Education and Labor and its Subcommittee on Health, Employment, Labor and Pensions have introduced the Retirement Improvement and Savings Enhancement (RISE) Act to expand worker access to a secure retirement.

Source: Ascensus.com, November 2021

Pandemic Weakens Women's Retirement Security

Women have taken a disproportionate hit on retirement savings and financial well-being, says Transamerica report, which could have lingering repercussions.

Source: 401kspecialistmag.com, November 2021

Provider Reviews, Contracts Emphasized in DOL Cybersecurity Guidance

Retirement plan fiduciaries often rely on their service providers to create the electronic systems used to maintain participant data and conduct electronic transactions involving plan assets, so the Department of Labor is paying special attention to these relationships.

Source: Planadviser.com, November 2021

Kroger Faces ERISA Recordkeeping Fee Lawsuit

Plaintiffs have filed an ERISA complaint in a division of the U.S. District Court for the Southern District of Ohio, naming as defendants The Kroger Co. and its board of directors. Fiduciaries of the grocery chain's 401k plan are accused of allowing unreasonably high fees for recordkeeping services and failing to disclose to plan participants fees associated with the plan.

Source: Planadviser.com, November 2021

RISE Up: Retirement Reform Bill Introduced in House

The chairman and ranking member of the House Education and Labor Committee have introduced -- and plan to act on -- bipartisan legislation that shares some overlap with SECURE Act 2.0. The Education and Labor Committee also announced that it plans to mark up the RISE Act on Wed., Nov. 10 at 1:00 p.m. EST.

Source: Napa-net.org, November 2021

Participation of Long-Term, Part-Time Employees in 401k Plans

One of the goals of the SECURE Act was to increase participation in 401k plans. In this regard, Section 112 of the SECURE Act requires certain long-term, part-time employees to be allowed to make salary deferrals to a 401k plan. The clock started on January 1, 2021, for tracking hours to determine eligibility under a 401k plan as a long-term, part-time employee. As we are nearing the close of the first 12-month period since the effective date, employers that exclude part-time employees from 401k plan participation should ensure that they are on track for compliance with the new rules.

Source: Kilpatricktownsend.com, November 2021

Year-End Deadlines and Considerations for Employee Retirement, Health and Welfare Plans

With the end of the year fast approaching, employers should be aware of several important deadlines and considerations related to retirement and health and welfare plans. With the onslaught of recent COVID-19-related legislation, 2021's year-end employee benefit plan checklist is more complicated than usual. This checklist will assist employers with specific year-end requirements and remind employers of important items on the horizon.

Source: Huschblackwell.com, November 2021

2021 Retirement Plan Year-End Amendments and Operational Compliance

As we approach the end of 2021, it's again time for sponsors of 401(a) and 403b plans to review their plan documents and plan operations to ensure compliance with increasingly complex qualification requirements. While there is no one-size-fits-all checklist, the following provides an overview of these requirements to help plan sponsors (1) determine the need to adopt plan amendments before year-end, (2) ensure operational compliance with changes in law, (3) evaluate the implications of potential plan changes, and (4) take appropriate action/next steps.

Source: Groom.com, November 2021

Survey Finds Nearly 50% of Respondents Incorporate ESG, Highest Level Ever

Callan's annual survey on environmental, social, and governance principles is designed to better understand the views of institutional investors and the trends driving ESG adoption. In our recently published 2021 ESG Survey, we found that 49% of respondents incorporated ESG into their investment decision-making process, up 7 percentage points from the previous year's level and more than double the share in 2013.

Source: Callan.com, November 2021

401k and Retirement Plan Limits for the Tax Year 2022

On November 4, 2021, the Internal Revenue Service announced that employees in 401k plans will be able to contribute up to $20,500 next year. The IRS announced this and other changes in Notice 2021-61. This guidance provides cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2022. Chart and details here.

Source: 401khelpcenter.com, November 2021*

Switching Retirement Plan Providers in a Changing Market

Considering the consolidating market for recordkeepers, one might wonder whether looking to move a retirement plan to a new service provider is worth the effort. Yet, shopping around by soliciting requests for proposals, for instance, can yield important intelligence regarding the state of pricing and the level of services being offered. For example, employers with DC retirement plans, DB pension plans, and stock-compensation plans could find opportunities to save time and money by consolidating the administration of all of those plans with one provider.

Source: Shrm.org, November 2021

Fiduciaries: Assuming Additional Responsibilities for Retirees Is Rife With Questions

Should a 401k plan sponsor take on the additional fiduciary liability associated with retirees? Deciding whether to encourage participants to leave account balances in the plan through retirement should not be based solely on considerations like accumulation of assets in the plan, the offsetting of administrative fees, and the ability to offer very low-cost funds. Using only these factors may lead to unexpectedly difficult questions with no clear answers. Thus, when contemplating whether to encourage participants to leave account balances in the plan, consider the questions outlined here.

Source: Keightleyashner.com, November 2021

2021 Year-End Preparation for Benefit Plans

As 2021 barrels toward its end and the focus is on infrastructure and tax legislation, don't lose sight of important 2021 legislative and regulatory deadlines. With that in mind, here is a list of benefits and compensation items to be sure to check off your list before 2021 concludes.

Source: Ipbtax.com, November 2021

SIMPLE IRAs vs 401k Safe Harbor Plans - 2021

This outline compares a SIMPLE IRA with a safe-harbor 401k plan and is especially important for employers who must cover participants other than just the owners.

Source: Consultrms.com, November 2021

What are Prohibited Transactions in Retirement Plans?

What exactly is a prohibited transaction? A transaction between the qualified plan and anyone listed here is considered a prohibited transaction unless there is a statutory exemption allowing for the transaction to occur.

Source: Consultrms.com, November 2021

New York Mandates Employer Participation in State-Run Retirement Savings Program

Under a recently enacted law, many New York employers may soon be required to participate in a state-run retirement savings program. The effective date of that requirement depends on when the "Secure Choice Savings Program" is established by an administrative board of political appointees. Nine months after the administrative board establishes the program, private sector employers will be required to participate if they had ten employees in New York during the previous calendar year, have been in business for two or more years, and do not sponsor or otherwise offer access to a qualified retirement plan. Payroll deductions under the program will be routed to Roth (after-tax) IRAs and invested in one of the investment options selected by the administrative board.

Source: Cohenbuckmann.com, November 2021

Misuse of Participant Confidential Data

The DOL has become highly focused on the cybersecurity practices of plan sponsors and their service providers and has begun asking comprehensive cybersecurity questions in plan audits. It seems clear the DOL is concerned not just with theft of plan data or assets, but also with the misuse of confidential participant data.

Source: Wagnerlawgroup.com, November 2021

The Unbelievable Value of 401k Participant Data

It's incredibly powerful (and profitable) but when it comes to who "owns" participant data, there's a palpable tension between recordkeepers and advisors.

Source: Royle.com, November 2021

Benchmarking Your Retirement Plan Committee

While there is no perfect number of committees or committee members, their construction, monitoring, and maintenance are critical to their effective operation, as is the design of the plan functions they oversee. Little wonder that over the years, Plan Sponsor Council of America members have been curious as to the experience of other organizations, how and how often these bodies are benchmarked, how many and who participate, as well as how often they convene to comply with those needs. In response to these inquiries, PSCA conducted a snapshot survey in April 2021 to answer these questions. PSCA received responses from 255 plan sponsors representing a range of industries and plan sizes.

Source: Napa-net.org, November 2021

"Absurd" 401k Plan Sponsor Facts That Are 100% True

When it comes to retirement plans, there are absurd things that make no sense but are true. The problem is that plan sponsors don't know about these things before it's too late. So this article is about absurd things regarding 401k plans that are true.

Source: Jdsupra.com, November 2021

SCOTUS May Soon Decide Fate of Many 401k Fee Suits

A forthcoming decision by the Supreme Court could either stem the number of retirement-plan fee lawsuits being filed or it could encourage plaintiffs' law firms to continue filing them at the fast pace seen in recent years. Numerous trade groups and other organizations have been flooding the court with briefs in support of Northwestern University, while at least one group of organizations is against it.

Source: Investmentnews.com (registration may be required), November 2021

EPCRS Update Brings Good News for Plan Sponsors

Rev. Proc. 2021-30 is the latest iteration of the IRS correction program -- Employee Plans Compliance Resolution System -- that enables plan sponsors and the retirement industry to sleep at night knowing that plan errors can be corrected and may retain their all-important tax-favored status. In this article, Groom’s Elizabeth Dold and David Levine outline the few, key changes that were made to the Self-Correction Program, Voluntary Correction Program, and the Audit Closing Agreement Program, and Voluntary Audit Cap via EPCRS.

Source: Groom.com, November 2021

Time Running Out to Issue Plan Notices

It is again time for plan sponsors to distribute their annual notices to participants. Outside of the normal changes to plan COLAs and investment expense ratios, plan sponsors will want to consider and incorporate any changes made to their plan in the past year into this year's annual notice. As a reminder, the 401k safe harbor, qualified default investment alternative, and automatic enrollment notices must all be sent to plan participants between 30-90 days before the beginning of the plan year (i.e., no later than December 2nd for calendar year-end plans), and may be combined into a single document.

Source: Graydon.law, November 2021

Use Fiduciary Underwriting Factors to Stop Meritless Excessive Fee Cases Being Filed Against Prudent Plan Sponsors

Fiduciary underwriting company Euclid Fiduciary filed an amicus brief in Hughes v. Northwestern case before the Supreme Court, urging the Court to provide guidance to district courts to use the same factors that inform fiduciary underwriting to weed out meritless cases alleging inaccurate and misleading claims against the fees and investments in retirement plans.

Source: Euclidspecialty.com, November 2021

ERISA Bonding Requirements and Compliance Testing

ERISA bonding requirements and compliance testing, although not necessarily related, are two of the compliance matters auditors commonly look at during an audit. It is important for plan fiduciaries to be aware of the overall purpose of the bonding requirements and the compliance tests and be familiar with the correction methods and deadlines.

Source: Berrydunn.com, November 2021

The Who, What, Where, Why, and How of Retirement Plan Audits

You (or your client) may have just found out that an audit is required for its retirement plan. Many questions may be running through your head such as Why must an audit be performed? What must be audited? Who performs audits? Who is required to have an audit? How is an audit performed? Well, it's your lucky day, because this blog will address these burning questions. If your plan already requires an audit, this article may still provide benefits by uncovering facts that you didn't know.

Source: Belfint.com, November 2021

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