DC Trends Survey: Funds, Fees and Financial Wellness
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In This Issue
Insight: Studies, Research, Analysis, and Papers DC Trends Survey: Funds, Fees and Financial Wellness Reviewing plan fees and investment options are top fiduciary priorities for plan sponsors in 2024, but financial wellness and managed accounts are gaining ground in importance as benchmarked against prior years, according to investment consulting firm Callan's 2024 DC Trends Survey. In a survey of 132 DC plan sponsors conducted in late 2023, Callan found that reviewing plan fees is the top fiduciary initiative in 2024 for 74% of respondents, followed by considering the investment policy statement and investment menu structure. Source: Planadviser.com Nine Key Findings from EBRI's 2024 Retirement Confidence Survey Workers' and retirees' confidence has not yet fully recovered from the significant drop seen in 2023, but majorities remain optimistic about their retirement prospects and the lifestyle they envisioned, according to the 34th annual Retirement Confidence Survey, published by the Employee Benefit Research Institute and Greenwald Research. Here are some of the key findings from the survey of 2,521 Americans. Source: 401kspecialistmag.com »» Click here for More Studies, Research, and White Papers Fiduciary and Plan Governance DC Plan Forfeitures: Proposed Regulations and Recent Litigation There have been recent developments from both the IRS and the DOL and pending court cases about how plan forfeitures under defined contribution retirement plans must be handled. The purpose of this article is to summarize what the potential conflicts are and to make sure that employers are aware of them, and that until these potential conflicts are resolved, employers are administering their plans so as not to violate any of the rules. Source: Kelleydrye.com SECURE 2.0: What Plan Sponsors Need to Know 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. Source: Troweprice.com »» Click here for more Fiduciary and Plan Governance Material Items of Special Interest to Advisers and Other Service Providers Why Do Some Small Businesses Offer Retirement Plans? Numerous studies have shown that offering a retirement plan is closely related to firm size; firms with fewer than 100 employees are much less likely to offer a plan than larger firms. As a result, observers tend to dismiss small firms as a source of future growth in coverage. However, a meaningful share of small businesses do offer retirement plans. The purpose of this study is to identify the characteristics of sponsoring firms and their employees to determine which small businesses may be more likely to offer a retirement plan in the future. Source: Bofa.com DOL Final Fiduciary Rule Released On April 23, 2024, the DOL released its new fiduciary invest. 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. Source: Groom.com Proposed Changes to PTE 2020-02 That Impact Broker-Dealers The DOL has proposed amendments to its regulation defining fiduciary advice so that, in most cases, a single recommendation to a retirement investor will be a fiduciary act. In addition, the DOL has proposed amendments to Prohibited Transaction Exemption 2020-02, which provides relief for prohibited conflicts of interest. This article focuses on the proposed amendments that will impact broker-dealers and their registered representatives. Source: Brokerdealerlawblog.com Eight Important Changes in DOL's Final Fiduciary Rule The DOL released the Retirement Security Rule, informally known as the fiduciary rule, to great fanfare on Tuesday, including a press conference and White House ceremony. Now that it has been released, what changes does the final rule make to the proposed rule? Here are eight important items. Source: Napa-net.org The Amended QPAM Exemption: Nine Key Practical Impacts for Asset Managers 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. Source: Ropesgray.com 403b Plans Customization Is Coming to the 403b Space 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. Source: Planpilot.com Report Reveals 403b Plan Sponsors Support Retirement Saving and Investing Employers' commitment to their 403b plan participants is evident in a new report just released by the ICI. Analyzing the plan year 2020 data for large 403b plans filing Form 5500 under the ERISA, the report finds that nearly one-third of large ERISA 403b plan participants were in plans that put their employees on the path to retirement saving with automatic enrollment. Source: Ici.org »» Click here for More 403b Material Court and Legal New Fiduciary Suits, TDF Demographics and a Prudent Process Primer The new year has brought with it two new genres of ERISA litigation, including the first-ever case of an employee alleging a fiduciary breach by the employer's health care plan practices. That said, cases involving prudent selection and monitoring of investments persist and continue to dominate the ERISA litigation arena. Most importantly for plan sponsors, several victories for plan fiduciaries remind us that a prudent process generally prevails and may be effective in fending off litigation. Source: Napa-net.org »» Click here for more Court and Other Legal Issues Compliance and Regulatory The DOL Wage and Hour Division issued final regulations, effective March 11, 2024, which are intended to serve as a practical guide to employers on how the DOL determines whether a worker is an employee or independent contractor under the Fair Labor Standards Act [29 CFR part 795]. This new guidance may impact employee classification under ERISA. Source: Hallbenefitslaw.com DOL Issues Proposal for SECURE 2.0 Lost and Found Database In the proposed procedure, the DOL places the burden of data collection and reporting on plan administrators. Administrators would be required to provide necessary data to the DOL via Form 5500s each year, perhaps starting with the 2023 5500s that are due in 2024. Because, for most plans, the collection of 5500 data is almost always outsourced to a third-party administrator or bundled recordkeeper, these will be the entities that would presumably provide required data to the DOL via the 5500s of the individual plan sponsors. Source: Captrust.com IRS Extends Required Minimum Distribution Relief Pending Issuance of Final Regulations On April 16, 2024, the IRS issued Notice 2024-35 which further extends the required minimum distributions relief for the fourth year in a row while plan sponsors, IRA providers, participants/IRA owners, and their beneficiaries await final Code section 401(a)(9) regulations. This Article provides a summary of the notice. Source: Groom.com Too Little, Too Late? Plan Contribution Timing Requirements and How to Correct Delays One of the most basic duties of a defined contribution plan sponsor is to ensure that that there is no delay and participants' salary deferral elections are correctly and timely deposited into the retirement plan. Not only is this duty necessary for proper administration of the plan, but it is also part of a plan sponsor's fiduciary duties under ERISA. This is a review of the plan contribution timing requirements and how to correct delays. Source: Brickergraydon.com »» Click here for more Compliance and Regulatory Material Marketplace News BlackRock's LifePath Paycheck Now Available in DC Plans Nationwide Pushes Forward With Default In-Plan Retirement Solution
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