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December 2019 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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Legislation Includes the SECURE Act, Which Changes Retirement Plan Requirements

Congress has passed, and President Trump has signed into law, the Further Consolidated Appropriations Act, 2020, which includes the Setting Every Community Up for Retirement Enhancement Act, known as the SECURE Act. The Act includes provisions relating to retirement plans such as multiple employer plans, required minimum distributions, frozen defined benefit plans, and lifetime annuity options.

Source: Westlaw.com, December 2019*

Past Practices Cited in ERISA Lawsuit Against Plan Sponsors

A participant in the Rollins 401k Savings Plan has sued that plan and the Western Industries Retirement Savings Plan, as well as the plans' administrative and investment committees and various John Does, for breaches of ERISA fiduciary duties. Although the complaint notes that the defendants acted to replace higher-cost share classes with lower-cost ones in 2019, it says that action did nothing to repair participants' accounts for past practices.

Source: Plansponsor.com, December 2019

Ways to Find Missing Participants

Since 2015, the Department of Labor has focused on plan sponsors' duty under ERISA to find missing participants. The signs of a missing participant include returned mail, returned emails, no recent activity on the Internet or phone, or an outstanding distribution check that has not been cashed. Neither the DOL or the IRS have offered much guidance on how to find missing participants, but this article looks at a few.

Source: Planadviser.com, December 2019

Compliance, Fiduciary Duty Top 403b Plan Sponsor Priorities

Fulfilling responsibilities and increasing participation and deferral rates are the top priorities of 403b plan sponsors for 2020, the Plan Sponsor Council of America finds in a new survey. Survey respondents' top five priorities are noted.

Source: Napa-net.org, December 2019

What Plan Sponsors Need to Know About the SECURE Act

The SECURE Act, which changes many retirement plan provisions, was just signed into law with many changes effective in 2020. This article is about what you need to know about the SECURE Act and its affect on your retirement plan.

Source: Jdsupra.com, December 2019

What if OregonSaves Went National: A Look at the Impact on Retirement Income Adequacy

With more than a year of experience with the OregonSaves plan, the Employee Benefit Research Institute asked the question: What if OregonSaves were a national program? How would that impact the retirement security of American workers? They further asked how a national version of OregonSaves would compare with nationwide implementation of 401k safe harbor plans among employers who do not currently offer a DB or DC plan. They examined both using EBRI's Retirement Security Projection Model.

Source: Ssrn.com, December 2019

The Year in ERISA Litigation

As have previous years, 2019 brought major settlements and decisions in retirement-plan focused litigation, including some precedent-setting appellate and Supreme Court decisions.

Source: Planadviser.com, December 2019

Plan Sponsors Sued for Investment Menu Practices

With regard to "improper selection and monitoring of plan service providers," the lawsuit specifically names a broker/dealer representative whom it says was terminated in 2014 for "failure to follow firm policies and industry regulations."

Source: Planadviser.com, December 2019

How Will the SECURE Act Affect a 401k Plan Sponsor

The SECURE Act and spending bill provisions recently signed into law by President Trump contain a cornucopia of significant changes, but some of the most important affect 401k plans. While plan amendments will not be required until 2022 at the earliest, plan sponsors may take advantage of some of the changes in 2020. Here is a summary of new rules that current and potential 401k plan sponsors need to know.

Source: Cohenbuckmann.com, December 2019

Retirement Plan Cyber Crimes and How to Mitigate Them

Cybersecurity has been a growing concern across all parts of life in the digital age. Plan sponsors need to understand how vulnerable retirement plan and participant data is to cyberattacks, and know what they, providers and participants can do to mitigate the risk.

Source: Plansponsor.com, December 2019

SECURE Retirement Legislation Becomes Law: Overview of Provisions Affecting Retirement Plans

The SECURE Act -- the most impactful retirement plan legislation since the Pension Protection Act of 2006 -- was included in the bipartisan spending bill signed by US President Donald Trump on December 20, 2019. The SECURE Act will advance the goals of increasing access to defined contribution plans, promoting lifetime income options, and facilitating retirement plan design and administration. This article focuses on the Act's impact on retirement plans.

Source: Morganlewis.com, December 2019

403b Plan Restatement Deadline Fast Approaching

403b retirement plans are used by a wide variety of non-profits, including large university systems. These plans are required to be restated on IRS-approved documents in order to ensure they meet IRS requirements. The deadline to accomplish this, March 31, 2020, is fast approaching.

Source: Hallbenefitslaw.com, December 2019

72 Is the New 70 1/2 for RMDs, but What If You Turned 70 1/2 This Year?

What if a participant attained age 70 1/2 during 2019? Does the passage of the SECURE Act mean these participants can delay distributions? Unfortunately, the answer is no. The SECURE Act only changes the age for participants who attain age 70 1/2 after December 31, 2019. Therefore, IRA owners, 5% or more owner-participants, and retired participants who attained 70 1/2 at any point during 2019 will still need to take their required minimum distributions by April 1, 2020.

Source: Graydon.law, December 2019

Enhanced Retirement Provisions: The SECURE Act Signed Into Law

Just in time for the holidays, Congress gave plan sponsors and employee benefits attorneys a reason to celebrate this holiday season. On December 19, 2019, the U.S. Congress passed a spending bill, which was signed by President Trump, which contains several new provisions affecting pensions and benefits. One of the new laws that was adopted in the flurry of new rules in the year-end federal spending bill was the SECURE Act, a measure designed to ease compliance burdens on retirement plans and increase opportunities for employees to save for retirement. In fact, the SECURE Act is the most comprehensive pension reform since 2006.

Source: Cohenbuckmann.com, December 2019

The Setting Every Community Up for Retirement Enhancement (SECURE) Act

The SECURE Act -- just signed into law late last week-- includes probably the most comprehensive revisions to the law governing employer-sponsored retirement plans since the Pension Protection Act of 2006. Many of the provisions will not be effective until after 2020, but some provisions go into effect immediately. Here's a highlight of the more significant new rules, based on the date the provisions go live

Source: Beneficiallyyours.com, December 2019

A Retroactive Deduction for Adopting a 401k Plan

Let us say you are a plan advisor with experience advising on cash balance, age-weighted profit-sharing, or similarly designed retirement plans, and your client's accountant calls in April with a problem. Your shared client (with just a 401k plan) had a banner year and they are getting clobbered with a giant tax bill. She asks you: "Is there anything you can do to help?" Here is the Post-SECURE Act Solution.

Source: Asppa.org, December 2019

Video: Benefits of Remaining in DC Plans During Retirement

As we talk about these lifetime income solutions and DC plans, do you think that more plan sponsors, as they think about adopting these solutions, may begin to want to keep the participants in their plans longer? Seems to be the way that they're designed.

Source: Alliancebernstein.com, December 2019

Innovative Retirement Solutions Are Required for Gig Workers

Most efforts to improve retirement security focus on improving access to workplace plans. It makes sense since Americans are 15 times more likely to save for retirement in payroll deduction savings plans through work. However, these improvements don't move the needs of independent workers. The retirement industry needs innovative solutions that can help meet the needs of a rapidly growing segment of our economy. It's unclear what these solutions will be, but they might include those covered here.

Source: 401kspecialistmag.com, December 2019

SECURE Act Makes Significant and Immediate Pension Law Changes

The most far-reaching pension reform legislation in 13 years was passed by Congress as part of the budget bill funding the federal government for the remainder of the fiscal year. The Setting Every Community Up for Retirement Enhancement Act of 2019 was added as Division O to the Further Consolidated Appropriations Act, 2020. Of critical importance to plan sponsors: The effective dates in the original bill were left unchanged. As a result, many of the new law's provisions will become effective on January 1, 2020.

Source: Truckerhuss.com, December 2019*

UPenn Petitions Supreme Court to Review 403b Plan Case

The University of Pennsylvania has filed a petition for a writ of certiorari in the U.S. Supreme Court asking whether the pleading standard the court established in its decision in Bell Atlantic Corp. v. Twombly governs breach of fiduciary duty claims under ERISA.

Source: Planadviser.com, December 2019

SECURE Act Summary

The SECURE Act represents the most significant retirement plan legislation in more than a decade. This legislation benefits both employers and employees by providing administrative relief along with expanded retirement plan coverage and increased savings opportunities to improve retirement security. This is a two-page summary.

Source: Pentegra.com, December 2019

Could Multiple-Employer Plans Be a Game Changer for Retirement Security?

Open MEPs are an exciting policy change, but it is far from clear how they will work in practice. Their effectiveness in improving retirement-plan quality and their overall appeal depends on how this niche industry reacts. There is also the matter of how regulators nudge MEPs along, as they will have to balance concerns regarding the soundness and proper regulation of these plans with maintaining their appeal to the industry for use and promotion. This article discusses a few questions employers and plan sponsors may have around open MEPs.

Source: Morningstar.com, December 2019

Highlights of the Newly Enacted SECURE Act

The Setting Every Community Up for Retirement Enhancement Act is designed to expand and preserve retirement saving options for more Americans. While the Act introduces nearly 30 new amendments to the Internal Revenue Code, this article highlights 12 changes that could be the most impactful.

Source: Manning-Napier.com, December 2019

Third-Party Sued for Alleged Fiduciary Breach Involving Retirement Plans

A recent lawsuit, Chavez, et al. v. Plan Benefits Services, Inc., et al., focuses on a dispute regarding two benefit plans, a retirement plan, and a health and welfare plan sponsored by Training, Rehabilitation & Development Institute. The plan participants did not sue TRDI, the plan sponsor, but rather third-party entities responsible for marketing and supporting these plans.

Source: Hallbenefitslaw.com, December 2019

End-of-Year 401k HR Checklist

For HR teams, the end of the year often means wrangling end-of-year payroll, planning out headcounts, making sure employees use up vacation days and remaining funds, and tying up all the other loose ends to set things up right for the new year. And then there's end-of-year retirement plan compliance to deal with, which is no small task, regardless of your plan size. This checklist lays out three steps to help you maintain full compliance and keep your year-end stress free.

Source: Forusall.com, December 2019

2019 Required Amendments List for Individually Designed Plans

With its 2019 required amendments list, the IRS reminds plan sponsors to monitor operational compliance for changes required to be made this year and to identify any corresponding plan amendments that may be needed before 2022 to memorialize those changes. Discretionary changes implemented in 2019 remain subject to the requirement to adopt plan amendments by the end of the plan year.

Source: Buck.com, December 2019

SECURE Act: The Wait Is Finally Over

The SECURE Act provides the most comprehensive retirement reform package in over a decade. The primary goals of the SECURE Act are to expand retirement savings, improve plan administration, simplify existing rules, and preserve retirement income. The provisions summarized here will certainly give rise to questions in the coming days.

Source: Ascensus.com, December 2019

Transamerica Retirement Survey: A Compendium of Findings About U.S. Workers

The Compendium provides in-depth perspectives on retirement. This 222-page report offers 30+ key indicators of retirement readiness, preparations and attitudes among workers by employment status (full-time, part-time), generation, gender, household income, level of education, and race/ethnicity.

Source: Transamericacenter.org, December 2019

Cintas Corporation Accused of ERISA Fiduciary Breaches

A new ERISA lawsuit filed in the U.S. District Court for the Southern District of Ohio names as defendants the Cintas Corporation, its board of directors, its retirement plan investment committee, and some 30 John Does. Among other allegations, the national work uniform provider is accused of permitting high-cost mutual funds to persist on the retirement plan menu while cheaper but otherwise identical funds were available.

Source: Planadviser.com, December 2019

Congress Has Passed the SECURE Act

The retirement plan industry is hailing Congress for passage of the Setting Every Community Up for Retirement Security Act, better known as the SECURE Act, which is expected to be signed by the President as soon as Friday. Through a laundry list of popular bipartisan provisions, the SECURE Act seeks to expand and modernize the DC retirement plan system. Through the establishment of "open multiple employer plans," or "open MEPs," the SECURE Act is expected to expand access to workplace retirement plans for millions more full- and part-time workers, particularly small business employees.

Source: Planadviser.com, December 2019

Planning for 2020: Changes to Hardship Distribution Rules and Amendment Deadlines

Under the recently issued final regulations implementing the changes to the hardship distribution rules under the BBA of 2018, for retirement plans that permit hardship distributions, there are two mandatory changes that must be made beginning January 1, 2020 and several other voluntary changes that may (but are not required to be) made by plan sponsors.

Source: Pbwt.com, December 2019

Defined Contribution Plan Participants' Activities, First Half 2019

Defined contribution plan assets are a significant component of Americans' retirement assets, representing 28 percent of the total retirement market and almost one-tenth of US households' aggregate financial assets at the end of the second quarter of 2019. To measure participant-directed changes in DC plans, ICI has been tracking participant activity through recordkeeper surveys since 2008. This 16-page report updates results from ICI's survey of a cross section of recordkeeping firms representing a broad range of DC plans and covering more than 30 million employer-based DC retirement plan participant accounts as of June 2019.

Source: Ici.org, December 2019

Cybersecurity: What Plan Participants Can Do to Protect Their Accounts and How Plan Sponsors Can Help

Retirement plan providers invest significant resources to protect participant accounts from cyber theft. Yet, security vulnerabilities can still be exploited if participants are not proactively engaged in protecting their own accounts. Covered here are some things plan sponsors can do to help plan participants understand the importance of and, more importantly, take action to bolster their account security.

Source: Fiallc.com, December 2019

Listing of Effective Dates for SECURE Act Provisions

The SECURE Act will make substantial and highly technical changes to some very specific elements of retirement plan laws. This is a list -- in chronological order -- of the effective dates for these changes to help in prioritizing what to pay attention to first.

Source: Businessofbenefits.com, December 2019

Rev. Proc. 2020-9 Addresses Interim Amendments for Pre-Approved Plans That Allow Hardship Distributions

The IRS has issued Revenue Procedure 2020-9 (Rev. Proc. 2020-9), which clarifies which amendments are integral to pre-approved retirement plan provisions that must be amended to comply with the final regulations on hardship distributions. Rev. Proc. 2020-9 also extends the deadline for making these interim amendments to December 31, 2021.

Source: Westlaw.com, December 2019

2020 403b Plan Priorities

The Plan Sponsor Council of America conducted a survey of 403b plan sponsors in October 2019 to determine their priories for their retirement plan in 2020. The survey also assessed what changes are planned in 2020 to address those priorities. Nearly three hundred 403b plan sponsors responded to the survey, representing a diverse group of organizations. This is the 15-page report on the survey results.

Source: Psca.org, December 2019

A New Way to Think About Building a Retirement Plan Practice

There are roughly eight million small businesses with employees in the United States. The Investment Company Institute reports that there are 555,000 401k plans in the U.S. as of June 2019. That leaves a lot of opportunity for both advisers and the retirement industry, overall. That opportunity may be realized by proactively offering 401k alternatives to these small businesses. Establishing business relationships with companies that may be interested in a SIMPLE, SEP or payroll deducted IRA may create openings down the road for 401k plans, financial planning, risk management, business planning, and other services.

Source: Planadviser.com, December 2019

You Better Watch Out, You Better Not Cry, You Better Not Pout, I'm Telling You Why...

Your excessive fees suit is coming to you. The 401k and 403b lawsuit world is hotter than the U.S. economy and equity markets. With such growth in suits, plan sponsors need to heed these suits and take a look at their retirement plan offerings and assess their potential fiduciary liability. So, plan sponsors be aware that: Lawyers are making a list, Checking it twice, Gonna find out who is prudent or not.

Source: Orba.com, December 2019

Cybersecurity: Don't Assume Outsourced Administration Is Duty-Free

For years, there has been a persistent trend toward outsourcing retirement plan recordkeeping and other administrative responsibilities. But service providers will be quick to remind plan fiduciaries that lightening the administrative load does not include transferring fiduciary duties. When selecting and monitoring a service provider, one key issue facing retirement plan fiduciaries is their duty with respect to the privacy and security of plan participant data.

Source: Ntsa-net.org, December 2019

SECURE Act Clears House, Heads to Senate

The House of Representatives on Dec. 17 approved the "minibus" government funding bill that contains the bipartisan Setting Every Community Up for Retirement Enhancement (SECURE) Act, moving the bill one step closer to enactment. The bill passed by a 297-120 margin.

Source: Ntsa-net.org, December 2019

In Surprise Reversal, Ninth Circuit Rules Fiduciary Breach Claim is Subject to Arbitration

A recent decision by the U.S. Court of Appeals for the Ninth Circuit found that arbitration is allowable to handle fiduciary breach claims when they are brought by an individual. In the case at hand, Charles Schwab was sued by a plan participant who claimed that Schwab breached their fiduciary duties and that certain transactions, specifically the holding of proprietary funds in a 401k plan, were prohibited by ERISA. In a published opinion, prior precedent was reversed regarding whether individual ERISA claims are subject to arbitration.

Source: Hallbenefitslaw.com, December 2019

IRS Relieves Uncertainty About Timing of Plan Amendments

After the Internal Revenue Service finalized significant changes on hardship distribution regulations in September, the deadline for adopting certain retirement plan amendments has been extended to December 31, 2021. Groom Law Principals Louis Mazawey and Elizabeth Dold discuss their thoughts on the extension in this article.

Source: Groom.com, December 2019

Cyberfraud: Must a Plan's Security Policies Meet the Duty of Prudence?

Criminals attempting to steal employees' benefits is not a new issue. However, the means by which they commit such crimes have changed with the advancement of technology and how benefits are paid. Two recent cases alleging breach of fiduciary duty under ERISA in connection with the distribution of participant account balances in DC plans highlight the compliance and litigation risks associated with plan losses. This article provides an in-depth analysis of these cases.

Source: Groom.com, December 2019

Due Diligence Process for Managed Accounts (Podcast)

What elements should you consider when evaluating a managed account service provider? This podcast dives into the due diligence process for evaluating managed account service providers. It covers: Why customization does not "turn off" the need for due diligence, what specific topics to address with a managed accounts service provider, what to do if a service provider cannot fulfill the requirements of the due diligence process, and tips and examples of the process from client interactions.

Source: Francisinvco.com, December 2019

The Basics of Managed Accounts (Podcast)

As interest in offering investment advice to plan participants grows, it is important to understand the benefits and drawbacks of offerings such as managed accounts. This podcast talks through the basics of managed accounts, including: Why there is growing interest in offering investment advice to plan participants, how managed accounts compare and contrast to target retirement date funds, and the advantages and drawbacks of managed accounts that plan sponsors need to understand.

Source: Francisinvco.com, December 2019

IRS Reiterates Requirement to Sign Plan Documents and Amendments

At the heart of tax qualified retirement plan compliance is a requirement to timely adopt plans and plan amendments. Failure to adopt plan amendments when required can result in plan disqualification. Accordingly, it is very important for plan sponsors to prove that amendments were properly executed in a timely manner. In a General Legal Advice Memorandum from the IRS’s Office of Chief Counsel dated December 13, 2019, the IRS provided a reminder of this important qualification requirement and the ramifications of noncompliance.

Source: Erisapracticecenter.com, December 2019

IRS 2019 Required Amendments List Requires Plan Amendment for Hardship Distribution Changes

The IRS has now included amendments for the final hardship distribution regulations in its 2019 RAL, thus requiring affected 401k and 403b plans to be amended by no later than Dec. 31, 2021.

Source: Clarkhill.com, December 2019

Retirement Plan Providers Can Either Get Big or Get Smart

As retirement plan providers grapple with ever-increasing fee pressure, they also contend with evolving expectations from plan sponsors and participants for better, faster, and more comprehensive service offerings. According to findings from The Cerulli Report-U.S. Retirement Markets 2019, maintaining profitability while meeting these expectations will require firms to achieve economies of scale and prioritize technology initiatives.

Source: Cerulli.com, December 2019

Hope for SECURE in Year-End Funding Package

The most significant piece of retirement legislation in a decade could become a reality, after all. Hill staff worked throughout the weekend to put the finishing touches on the nearly $1.4 trillion spending bill for FY 2020, which will likely be the last "legislative vehicle" for 2019 and things look promising for the Setting Every Community Up for Retirement Enhancement (SECURE) Act to be attached to that spending bill.

Source: Asppa.org, December 2019

The Unexpected Dangers of Paying Off Student Loans With Your 401k Savings

Using your 401k savings to pay down debt incurred for past education may be a cure that's worse than the disease. This doesn't solve the problem. Rather, it just trades one problem -- student loan debt -- for another, a shortfall in retirement savings. The data suggests more problems with this concept.

Source: Forbes.com, December 2019*

November Was Light Month for 401k Trading Activity

The month saw the lightest amount of trading among 401k investors for the year, according to the Alight Solutions 401k Index. Average net daily trading activity was 0.013% of balances and there were zero days of above-normal activity.

Source: 401kspecialistmag.com, December 2019

Are 401k Fiduciaries Correctly Benchmarking Their Funds?

One limitation with which we all struggle is that we are creatures of habit. We get used to something and stick with it. For named fiduciaries of ERISA-covered retirement plans, Modern Portfolio Theory may be one. This concept has been around so long, we just take for granted that all one must do is satisfy MPT and all is well. However, the two court cases are now requiring fiduciaries of participant investment-directed 401k and ERISA 403b plans to change how they traditionally benchmarked their funds.

Source: 401kspecialistmag.com, December 2019

How to Set up a 401k Plan for Small Business Employees

As top candidates weigh the pros and cons of different employment opportunities in a competitive job market, offering a 401k plan is among the best ways to help your business attract and retain quality talent. Additionally, other advantages such as tax benefits and owner retirement savings options make setting up a 401k plan a smart benefit option. However, business owners may believe that a 401k plan isn't right for them, are unclear of the benefits, or believe the administrative responsibilities are too cumbersome.

Source: Paychex.com, December 2019

Amid Shifting Landscape, Notion of 'Normal Retirement' Is Changing

With longer life expectancies and workforce participation rates pushing past age 65, Americans' notion of "normal retirement" is changing, according to a biennial survey. The 2019 edition of Deloitte's Defined Contribution Benchmarking Survey confirms this trend, showing that many employees continue to work even though they are eligible to retire. In fact, the workforce participation rate among those age 65 or older has surpassed 20% for the first time in more than 50 years, the study notes.

Source: Napa-net.org, December 2019

Putnam Says Feds Biased in ERISA Burden of Proof Case

The feds said the Supreme Court didn't need to bother with a case involving the burden of proof in an ERISA case, but the petitioners in the case say they have a bias. The petitioners in this case are Putnam Investments and they had asked for a Supreme Court review of the case to resolve two issues: which party bears the burden of proof on the issue of causation once a plaintiff has established a breach of fiduciary duty under ERISA and related plan losses, and to address whether passively managed index funds can be appropriate benchmarks for establishing losses from the improper monitoring of actively managed funds.

Source: Napa-net.org, December 2019

New E-Delivery Rules for ERISA Pension Plans on the Horizon

Adopting a so-called "notice and access" e-delivery structure, the DOL allows plans to save paper by emailing disclosures. The rule potentially would cover all ERISA required disclosures (i.e., Summary Plan Description, benefit statements, investment information) as long as the plan uses the proper email address of a participant. Disclosures can be made this way to beneficiaries and ex-employees as well. The new rule would act as a safe harbor to protect the plan and employer sponsor from liability. Keep in mind it is not required. This new proposed rule will be an addition to the DOL's existing safe harbor rules of electronic disclosures.

Source: Mcbrayerfirm.com, December 2019

Great 401k Features That Aren't a Fit for Every Plan Sponsor

Retirement plan sponsors are sold services that many really don't need. There isn't a retirement plan solution that is appropriate for every plan sponsor. What a retirement plan sponsor should get is something that actually fits their needs. This article is about the many services offered to retirement plans that a plan sponsors might want to say "no thanks" to.

Source: Jdsupra.com, December 2019

Revenue Procedure Clarifies Which Hardship Amendments are Deemed Integral to a Qualification Provision

This revenue procedure clarifies which amendments are treated as integral to a plan provision that fails to satisfy the qualification requirements of the Internal Revenue Code by reason of a change to those requirements made by the recently published regulations under sections 401(k) and 401(m) relating to hardship distributions of elective deferrals. This revenue procedure also extends the deadline, applicable to pre-approved plans, for adopting an interim amendment relating to those regulations. The deadline is extended to December 31, 2021.

Source: Irs.gov, December 2019

Supreme Court Ruling in Intel ERISA Statute of Limitations Suit Could Have Far-Reaching Implications

The "actual knowledge" question is an important one because it concerns a critical threshold issue in ERISA fiduciary duty claims. Of the near 80,000 ERISA cases filed in the past decade, a major share of the litigation has included suits against plan fiduciaries for allegedly breaching their fiduciary duties, and the statute of limitations is potentially implicated in many such cases. Given the importance of this issue, Groom attorneys attended oral argument, which are summarized here.

Source: Groom.com, December 2019

How to Choose a Small Business 401k Plan

In a time of record-low unemployment, small business leaders can't hope to compete for talent without the right retirement benefits. Most small businesses simply can't afford to set workers up with pensions, but they can provide defined contribution 401k plans. With so many providers on the market, though, how can they be sure they're picking the right one? The best ones have these key features.

Source: Forbes.com, December 2019

Deloitte Defined Contribution Benchmarking Survey

In the era of 100-year lives and with the workforce participation rate among those age 65 or older surpassing 20 percent for the first time in more than 50 years, Americans' notion of "normal retirement" is changing. Deloitte's biennial Defined Contribution Benchmarking Survey shows how plan sponsors are working to address increasingly diverse retirement needs.

Source: Deloitte.com, December 2019

Five Features That Retirement Plans Can Do Without

There are many retirement plan features that add tremendous value to both plan sponsors and participants. However, there are also numerous plan features that are relatively useless, mostly because they are impossible for participants to understand, cause administrative nightmares, and/or add little in the way of benefit to plan sponsors or participants. Here are the top five.

Source: Cammackretirement.com, December 2019

Canadian Millennials Facing Challenges Around Saving for Retirement: Survey

Among all survey respondents, 77 per cent said they expect there will be a significant shortfall in retirement savings. A majority also said more Canada Pension Plan/government benefits will be required to support income needs (82 per cent), that the federal government must do more to protect pension plans (89 per cent) and that Canada will need to overhaul public and private pension and retirement savings (83 per cent).

Source: Benefitscanada.com, December 2019

IRS Extends Final Hardship Regulations Amending Deadline for Pre-Approved Plans

The IRS has issued Revenue Procedure 2020-09, guidance that extends the deadline for pre-approved retirement plans to amend for final IRS hardship regulations published in September 2019. The amending deadline for these plans is extended to December 31, 2021.

Source: Ascensus.com, December 2019

Opportunities for Advisors Adopting New Communication Technologies

Redtail Technology's AdvisorComms 2019 survey finds that advisors are largely relying on -- or limiting their methods of communication with their clients, such as practices to using -- the "traditional" in-person meetings and phone calls. While it may be comfortable to rely on tried and true methods of communication, a new study suggests that advisors could do more to effectively reach their target audience.

Source: Napa-net.org, December 2019

Answering a Key Question in a Request for Proposal

One question that a plan sponsor always asks respondents to an RFP for investment management services is to describe their investment philosophy. Plan sponsor going to the trouble and expense of issuing an RFP deserves an answer to this question from a respondent that is forthright, commonsensical, and well thought-out. A fiduciary should be the leader of the pack in its relationship with a plan sponsor, especially in cases where an RFP calls for the services of a discretionary fiduciary, such as an ERISA section 3(38) investment manager.

Source: Morningstar.com, December 2019

Where Does the SECURE Act Stand?

At first sight, it appeared that the Setting Every Community Up For Retirement Enhancement Act, known as the SECURE Act, was primed for immediate passage after flying through the House with a 417-3 vote. But progress slowed when the measure reached the Senate. The SECURE Act suffered some backlash from the negative media coverage and appears entangled in D.C. politics.

Source: Investmentnews.com (registration may be required), December 2019

Top Five ERISA Litigation Developments of 2019

As 2019 draws to a close, it is a good time to reflect on the biggest developments in ERISA litigation this past year. If this year is any indication, we expect 2020 to include landmark Supreme Court opinions and more.

Source: Icemiller.com, December 2019

The State Retirement Savings: How the Shift to 401ks Has Increased Gaps in Retirement Preparedness

The evidence presented in this chartbook -- that the retirement system does not work for most workers -- underscores the importance of preserving and expanding Social Security, defending defined benefit pensions for workers who have them, and seeking new solutions for those who do not.

Source: Epi.org, December 2019

401k Administration Checklist for the 2020 Plan Year

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's recommend 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. As a 401k fiduciary, you can't simply assume your 401k provider is doing a good job. You must monitor them to ensure they're completing assigned tasks timely. A checklist can help you meet this important fiduciary responsibility.

Source: Employeefiduciary.com, December 2019

Is Your Defined Contribution Plan Ready for 2020?

Defined contribution plan assets have soared in recent years, rising about 90% between 2007 and mid-2019. And they are only set to climb further as defined benefit plans continue to decline and employers turn to DC plans as the sole source of retirement income for their employees. This trend is driving more innovation, more focus on compliance and competitive fee structures. This article suggests action steps in three broad areas -- financial wellbeing, investments and plan compliance -- to help DC plan sponsors address the challenges of 2020 and beyond.

Source: Willistowerswatson.com, December 2019

E-Delivery of Retirement Plan Communications Could Improve Retirement Readiness

Electronic delivery for retirement plan communications could save participants up to $450 million a year, according to the SPARK Institute. Over the course of their savings lives, this could boost participants' returns by 9%, the Institute adds. "This latest research significantly endorses the Department of Labor's electronic delivery proposal and the undeniable benefits for the nation's retirement savers," says Tim Rouse, executive director of the SPARK Institute. "It clearly demonstrates improved retirement outcomes with electronic delivery and online access that can reduce costs and increase savings for the average retiree by 9% over the accumulation period."

Source: Planadviser.com, December 2019

Supreme Court Hears Polarized Arguments in Intel ERISA Case

While not divided across political lines, the parties in Sulyma v. Intel Corporation Investment Policy Committee view the question of what establishes "actual knowledge" of an alleged fiduciary breach under ERISA very differently.

Source: Planadviser.com, December 2019

Aligning a Plan Sponsor's Business Objectives and Plan Design

Today's 401k plan and recordkeeping solutions are flexible enough that every employer can have a plan that is tailored to their needs while staying within the standardized plan offerings. As a financial advisor, you can add value by educating your plan sponsor clients about their plan design options and illustrating how plan features can drive savings outcomes. As you design the agenda for your next plan meeting, consider incorporating some of the following plan design discussion items on your agenda.

Source: Newportgroup.com, December 2019

MFS Excessive Fee Settlement Gets Judicial OK

A federal judge says the terms are a "fair, reasonable, and adequate settlement and compromise of the claims asserted in the Class Action." The terms of the settlement (approved on Dec. 5th) were announced in mid-June, and news of the settlement itself just before the parties were slated to go to trial. The parties had announced having come to terms last month, just days before the case was set to go to trial.

Source: Napa-net.org, December 2019

Do 401k Loans Impact a Participant's Credit Score?

Beyond the tax and possible penalty ramifications, there generally are not any additional punitive actions (such as a negative mark on a credit report) taken against the participant in the case of a loan default.

Source: Dwc401k.com, December 2019

IRS Releases Updated VCP Compliance Statement

The IRS released an updated version of Form 14568 (Model VCP Compliance Statement), intended for use in connection with filing voluntary correction program submissions with the IRS under the latest version of its Employee Plans Compliance Resolution System program. Generally stated, VCP is one of three programs under EPCRS, and, unlike self-correction, it requires advance submission to the IRS for its approval as to the proposed method of correction of a potential plan qualification defect.

Source: Compliancedashboard.net, December 2019

Mandatory Individual Arbitration Clauses in 401k Plans, a Good Idea?

The dispute resolution landscape for ERISA fiduciary breach claims may be shifting. The Ninth Circuit's decision in Dorman v. Charles Schwab Corp. upheld a provision in Charles Schwab's 401k plan mandating individual arbitration, and waiving class actions, for certain types of fiduciary breach claims. Should employers add a similar mandatory individual arbitration clause to their own plans? The answer requires a careful balancing of potential pros and cons of mandatory individual arbitration clauses.

Source: Troutman.com, December 2019*

Default Electronic Delivery Works, White Paper

Building on research conducted in 2015, this 50-page white paper updates the previous estimate of participant cost savings and further explores the other benefits of electronic communication for plan participants based on current empirical evidence of internet access and technology adoption. In addition, the current research is enhanced by providers experience with electronic delivery to demonstrate the many benefits realized by plan participants from electronic communication.

Source: Sparkinstitute.org, December 2019

Can Your Plan Records Be Hacked? Plan Fiduciaries Need to Focus on Cybersecurity

Imagine you have a plan participant who suddenly finds that $99,000 has been stolen from her account by a hacker. Her only notice was confirmations she received after the money had been stolen. Now imagine that you are that participant. These are the facts of an actual lawsuit recently filed by a plan participant who was a victim of cyber theft. The plan fiduciaries and recordkeeper refused to reimburse her losses, and her retirement account literally disappeared. Is anyone legally responsible to make up this kind of loss? If you are a plan sponsor or other plan service provider whose systems permitted this breach, you may well be, and you need to pay attention to maintaining and improving your system's security.

Source: Penchecks.com, December 2019

Court Provides Guidance on Monitoring ERISA Investment Fiduciaries

The U.S. District Court for the Western District of Pennsylvania in Scalia v. WPN Corporation wrote regarding the duty to monitor investment fiduciaries. Given the potential risk related to a breach this fiduciary duty, the WPN opinion is likely to be an important one for Appointing Fiduciaries. In its opinion, the WPN court provided the guidance for assessing the extent to which an Appointing Fiduciary has a duty to monitor and, if so, for determining whether the Appointing Fiduciary has fulfilled that duty.

Source: Financialservicesemploymentlaw.com, December 2019

Underfunding 401ks Is Among the Biggest Money Mistakes

The end of the year should be a time for clients to review their monthly statements and get rid of subscriptions and items that they don't need, but many clients fail to do this, a financial consultant writes at CNBC. Many working clients also fail to use up the balance in their flexible spending account, make the most of the credit card rewards and make enough 401k contributions to qualify for their employer's match, the expert says.

Source: Financial-Planning.com, December 2019

Justices Wary of Intel Committee Position in 401k Dispute

A majority of justices on the Supreme Court seem to think posting 401k plan documents online isn't enough for companies to shorten the amount of time participants have to sue plan managers for mishandling investments. The case, which stems from a dispute over hedge fund and private equity investments in Intel Corp.'s 401k plan, has the potential to set a standard for determining how long employees have to file a lawsuit under ERISA.

Source: Bloomberglaw.com, December 2019

Who Owns a 401k Participant's Personal Information?

Service providers for 401k and other retirement plans require access to personal data on participants including name, age, address, date of hire, compensation and possibly social security number to provide recordkeeping services. Are these plan service providers simply taking advantage of a business opportunity or are they improperly exploiting information that is a plan asset that plan fiduciaries must protect?

Source: Retirementplanblog.com, December 2019

Most 401ks Embrace New Hardship Rules, But Participant Response Muted

Employers that sponsor 401k plans have moved quickly to incorporate new, more liberal, hardship withdrawal provisions, but most have not yet seen an uptick in participants taking advantage of the new rules, according to a new snapshot survey by the Plan Sponsor Council of America.

Source: Psca.org, December 2019

Self-Directed 401k Millennial Investors Favor ETFs, Cash

Compared to their older counterparts, Millennials who invest through self-directed brokerage accounts may be investing more conservatively than they should be at that age, based on the results of an industry-leading benchmarking report.

Source: Napa-net.org, December 2019

Plan Sponsors Embrace New Hardship Withdrawal Rules, PSCA Finds

Plan sponsors have moved quickly to incorporate new, more liberal hardship withdrawal provisions, but that have not seen an increase in the number of participants taking advantage of them, says a new survey by the Plan Sponsor Council of America.

Source: Napa-net.org, December 2019

Is Auto-Enrollment Helping or Hurting Long-Term Retirement Saving?

There is little doubt that the use of auto-enrollment has helped increase participation rates. But could it also lead to lower savings rates? A new white paper from T. Rowe Price, explores that possibility, examining whether automatic enrollment in a 401k plan increases lifetime wealth accumulation and benefits all participants equally.

Source: Napa-net.org, December 2019

Why Retirement Plan Advisers Should Act as 3(38) Investment Fiduciaries

A year ago, we reviewed 3(21) versus 3(38) ERISA investment fiduciaries and asked which was better. Now it seems clear that 3(38) is better, at least for advisers, and that rather than charge more or the same for acting as a 3(21) fiduciary, advisers should charge less. Here's why.

Source: Investmentnews.com (registration may be required), December 2019

Arbitrator to Decide Whether ERISA Fiduciary Claims Should Be Arbitrated

A federal district court in Texas referred to arbitration a 401k plan participant's ERISA breach of fiduciary duty action based on allegations that certain plan investment options charged excessive fees.

Source: Erisapracticecenter.com, December 2019

IRS Releases 2019 List of Required Amendments for Qualified Retirement Plans, Including 401k Plans

The IRS released Notice 2019-64, its annual list of required amendments for individually designed qualified retirement plans, including 401k plans. Demonstrating how little has been happening in the 401k world recently, this year the RA List includes only one qualification change applicable to 401k plans. Amendments required to be made in response to the final regulations that were issued on September 23, 2019 regarding hardship distributions.

Source: Compliancedashboard.net, December 2019

IRS Releases 2019 Required Amendments List for Individually-Designed Qualified and 403b Plans

The IRS has issued Notice 2019-64, the 2019 Required Amendments List for drafting individually designed retirement plan documents for plans intended to be qualified under Internal Revenue Code Sections 401(a) and 403b. In general, a Required Amendments List includes statutory and administrative changes in requirements that are first effective during the plan year in which the list is published, but does not include guidance that is issued or legislation that is enacted after the list has been prepared.

Source: Ascensus.com, December 2019

Bill Would Allow Tax- and Penalty-Free Retirement Savings Withdrawals for Student Loan Payments

Sen. Rand Paul has introduced legislation that would permit tax-free, penalty-free withdrawals from IRAs and employer-sponsored retirement plans for qualified education expenses or student loan repayment.

Source: Ascensus.com, December 2019

What Morningstar's New Investment Study Means for Employers

A new Morningstar study reverses the previously held "keep it simple" philosophy, which suggested employers choose only a few investment options for a 401k fund line-up to avoid overwhelming employees and discouraging plan participation. Morningstar's "Bigger is Better" study found that a larger investment line-up -- when plan defaults are included -- results in greater participation and more efficient portfolios for all.

Source: Alliant401k.com, December 2019

2019 Plan Year: Year-End Compliance Reminders

Every year, plan sponsors must make sure their plans meet certain compliance requirements, including those listed here. This 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: Retirepru.com, December 2019

Plan Participants Have Their Own Responsibilities for Cybersecurity

Plan sponsors are taking measures to battle cyberattacks on retirement plan participant data and accounts, but is there anything participants can do to protect them? An approach plan participants are always urged to employ is creating a strong, complex password, along with updating anti-virus malware on personal computers to reflect current models and avoiding links from unknown users.

Source: Plansponsor.com, December 2019

Cybersecurity Update: Act Now on Multiple Fronts

Cybercrime, and cybersecurity, obviously are a concern for plans. But that means more than making sure plan records and accounts are not targets and victims, it also includes other functions, structures, and systems. Experts at the recent SPARK Forum offered insights and tips on heading off cybercrime and protecting the integrity of processes and systems.

Source: Ntsa-net.org, December 2019

Missing Voices: What 401k Borrowers Can Add to the Loan Conversation

How do participants feel about loans, how are they using them, and how are participants affected by plan sponsor decisions related to the loan feature? Addressing the "voice of the participant" -- and what we can learn from these voices -- is the purpose of this 16-page report.

Source: Loaneraser.com, December 2019

Important 401k Improvements for 2020

What 401k improvements are you considering for your plan in 2020? Most leading edge employers will have the following items on their list of 401k improvements for the coming year.

Source: Lawtonrpc.com, December 2019

How You Should Deal With Missing Plan Participants

Being a 401k plan sponsor isn't easy. Half the battle is identifying your responsibilities as a plan fiduciary. The other half is identifying compliance and fiduciary errors that can lead you into a lot of trouble. One problem is that has been neglected for a long time is missing participants.

Source: Jdsupra.com, December 2019

How to Evolve Default Options for Retirees in DC Plans

Current target-date structures tend to manage competing objectives through trade-offs. Sponsors are generally responsible for determining which target-date design makes sense for their participants, given demographics, behaviors, and fund objectives. This is a challenging task, and while the industry has developed most of the elements of a more-complete retirement solution, they have yet to broadly create more versatile and complete forms of QDIAs. On its own, change occurs slowly, so as an industry, we need to encourage progress by combining these existing components into more useful solutions.

Source: Georgetown.edu, December 2019

Should a Plan Sponsor Adopt a 401k Investment Policy Statement?

While it is by no means a universal truth, it is now commonly believed most 401k plan sponsors are better served by adopting an IPS. The law does not require it, but it is a best practice not only for the plan but for the investment adviser as well because it lays out in writing a guideline for investment objectives and limitations for both.

Source: Fiduciarynews.com, December 2019

What is a Suspense Account and Can We Use Our Forfeiture Account Instead

Can we just move the overfunded amounts to the forfeiture account, or is there a requirement that we create a separate suspense account? The short answer is that you can use the forfeiture account, but this is one of those "just because you can doesn't mean you should" situations.

Source: Dwc401k.com, December 2019

Beware of the "Overshare": Construe Requests for ERISA Plan Documents Narrowly

Administrators of ERISA plans frequently receive requests from participants, beneficiaries, and their representatives for plan-related documents. A recent decision from the Court of Appeals for the Fifth Circuit supports providing only those documents that fall under a narrow reading of ERISA Section 104(b)(4). Over-production could serve to facilitate litigation.

Source: Beneficiallyyours.com, December 2019

Understanding the Mindset of Participants Who Take Loans

Most participants tend to be under financial stress when taking a loan from their 401k, so the thought of repaying it becomes an afterthought that later adds to their stress, according to a new study. Greenwald & Associates conducted a survey of 500 plan participants who have taken at least one plan loan and performed in-depth interviews with a subset of the participants to better understand the context around loan-taking, participant education and loan defaults.

Source: Asppa.org, December 2019

Short Plan Years: What They Are and What They Mean

What is a short plan year? Defining a short plan year is very easy: any plan year with fewer than 12 months. Company-sponsored retirement plans are generally required to operate on a 12-month plan year. From time-to-time, however, there are circumstances that cause a given year to be truncated. And those circumstances are really the key issue.

Source: Asppa.org, December 2019

ERISA Fiduciary Breach Back on Supreme Court Docket

How long is too long to take issue with 401k plan investments offered and/or made by the plan sponsor? It was one question central to Tibble v. Edison International, which was argued before the Supreme Court by tort lawyer Jerry Schlichter, and now the high court will once again debate the point at which the proverbial clock starts ticking.

Source: 401kspecialistmag.com, December 2019

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