On April 23, 2024, the DOL released its new fiduciary investment advice definition in a package titled the "Retirement Security Rule." The package is made up of four different components and represents a continuation of DOL's efforts to expand the types of interactions between retirement savers and financial professionals that are subject to ERISA. This article highlights a few key provisions of the package.
The SECURE 2.0 Act of 2022 includes helpful changes to retirement plans -- some mandatory and some optional -- that should increase coverage and allow participants to save more and longer for retirement. The law allows sponsors to tailor their plans more specifically to the needs of their plan population and also makes important improvements to plan administration. This 8-page article is designed to help plan sponsors understand the key provisions and suggests how plan sponsors might approach implementation.
After a long wait, on April 3, 2024, the DOL published in the Federal Register its finalized amendments to the qualified professional asset manager class prohibited transaction exemption 84-14. Many early discussions have focused on favorable changes that lessen the immediate compliance burden, but a deeper review shows that the Final Amendments raise some key issues for asset managers, regardless of whether they currently serve as QPAMs or not.
The IRS has issued Notice 2024-35, which extends relief for certain beneficiaries of required minimum distribution rules that were changed under the SECURE Act of 2019, proposed RMD regulations issued in February 2022, and the SECURE 2.0 Act of 2022. Here is a background on and a review of the relief.
Dynata, an independent third-party research provider, conducted a study among 1,000 DC plan participants in the US on behalf of MFS. In this article, MFS shares the responses from the participants in three sections: market event impacts, retirement confidence, and the power of quality advice.
While target-date funds have become commercially successful and are often the default investment vehicle in retirement plans, they have also received flack for not being sufficiently well diversified and that a glidepath with declining equity allocations over time is not optimal for all participants. However, according to a recent paper by T. Rowe Price in The Journal of Portfolio Management, as recordkeeping technology continues to evolve, there is increasingly more opportunity for target-date funds to become more personalized, down to the participant level.
Retirement for the American worker is a popular topic today, not only in the financial media but also in the halls of Congress, where new legislation is continually considered to offer more retirement options, especially in employer-sponsored plans. The Pension Protection Act of 2006 and the SECURE 2.0 Act of 2022 are examples of bills that made significant changes and allowed for new features to be offered in retirement plans. But customization usually also requires advanced expertise as to the pros and cons of implementing these features into an employer-sponsored retirement plan.
The DOL issued the final Retirement Security Rule that will bring change to the fiduciary obligations of financial advisers when dealing with retirement-related investments for plan sponsors and individuals. The final rule requires "trusted investment advice providers," and financial institutions working with them, ensure there are no conflicts of interest or overcharges for clients using their services.
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Collected Wisdom™
Our researchers look for what they think are some of the better resources available to assist you in administering your plan or helping your clients. We group these resources in our COLLECTED WISDOM™ topics to make it easy for you to locate the information you need. Each item in a category contains a summary and date of when it was placed in the group.
We also maintain some older material in these collections for perspective and context.
