How to Streamline Your 401k Plan Audit
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Compliance and Regulatory How to Streamline Your 401k Plan Audit As a plan sponsor of a 401k plan that requires an annual audit, you've probably wondered in frustration, "Why does it take so long?" Yes, audits can be time-consuming, but they don't have to be. Here are the top industry reasons why your audit takes so long and how you and your auditing team can speed up the process. Source: Cassellplanaudits.com New DOL Guidance Extends Abandoned Plan Program to Bankruptcy Trustees The DOL has released interim final rules and an amendment to a prohibited transaction class exemption to make it easier for Chapter 7 bankruptcy trustees to distribute assets from bankrupt companies' retirement plans. The guidance issued May 16 by the DOL's Employee Benefits Security Administration amends the agency's Abandoned Plan Program to allow these trustees to use the program to terminate, wind up, and distribute benefits. Source: Asppa-net.org IRS Explains New Disaster Relief Distribution and Loan Rules The IRS has issued FAQs addressing the disaster relief provisions of the SECURE 2.0 Act of 2022, which gives retirement plan sponsors the option to provide distribution and loan relief in response to a "qualified disaster," which is a major disaster declared by the president and indicated on the Federal Emergency Management Agency website. Source: Segalco.com »» Click here for more Compliance and Regulatory Material Fiduciary and Plan Governance Unpacking the DOL's Final Retirement Security Rule: A Guide for Plan Sponsors The DOL's recent final Retirement Security Rule has significant implications for plan sponsors and fiduciaries. At the heart of this rule is the amended Prohibited Transaction Exemption 2020-02, which provides relief from prohibited transaction treatment for conflicted fiduciary advice, subject to stringent conditions. As a plan sponsor, it's crucial to understand how this PTE impacts your fiduciary duties and responsibilities. This comprehensive analysis delves into the details of PTE 2020-02. Source: Octoberthree.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, Analysis, and Papers Do Managed Accounts Need a Rebrand? Managed accounts appear to work well for participants who use them, but may still be "lost in translation" when it comes to uptake and use, according to a new white paper by Cerulli Associates. What the researchers found was a stark contrast between 401k savers not in managed accounts versus those who leverage them. Source: Planadviser.com »» Click here for More Studies, Research, and White Papers Items of Special Interest to Advisers and Other Service Providers Fred Reish Unpacks the DOL's New Fiduciary Rule: Podcast The DOL released its final Retirement Security Rule recently, which aims to raise the legal bar for financial advisors, brokers, insurance agents, and others who give retirement investment advice. Noted ERISA attorney Fred Reish shares his thoughts on some of the rule's key focuses and changes, along with implementation questions and potential hurdles to the rule becoming effective in September. Source: 401kspecialistmag.com Fidelity, Voya and BoA Smooth Blackrock's Launch of Guaranteed-Paycheck ETFs With a friendly Fidelity boost, BlackRock is off to a flying 401k start with its launch of a best-of-both-worlds pension product that combines a target-date ETF with an annuity, but its opacity and complexity could give investors pause. The $10.5 trillion New York City asset manager's LifePath Paycheck is a "new generation" ETF target-date product that includes an option to purchase a lifetime income stream (i.e. annuities) from BlackRock-selected insurers. Source: Riabiz.com QDIAs To Receive ERISA Advisory Council Review The ERISA Advisory Council voted during a recent meeting to focus its attention on issues related to welfare plan claims and appeals and qualified default investment alternatives. The council will study these issues and make recommendations to the Employee Benefit Security Administration later this year as per its mandate from the Department of Labor. Source: Planadviser.com New DOL Fiduciary Rule: Top Five Facts Advisers Should Know The new fiduciary rule, or officially the Retirement Security Rule, is effective September 23, 2024, and casts a wide net that could cause one-time recommendations about a retirement account to be considered a fiduciary act. In this article, ERISA experts from Faegre Drinker Biddle & Reath provide five facts registered investment advisers need to know about the DOL's new Retirement Security Rule. Source: Planadviser.com Court and Legal Who Owns Plan Forfeitures? New Cases Challenge IRS Guidance Several lawsuits have been filed recently challenging 401k plan sponsors' use of forfeitures to reduce employer contributions. Is this a new phase in ERISA litigation or a wrong turn by plaintiffs' counsel? While it is always risky to predict how courts will rule on issues, motions to dismiss filed by defendants Clorox and Fisher Scientific target the holes in plaintiffs' cases. Further, it is not clear that participants would benefit even if plaintiffs were to prevail. Here are some of the reasons why using forfeitures to reduce employer contributions should not be restricted. Source: Cohenbuckmann.com Defense Contractor L3Harris to Pay $650k to Settle 401k Class Action Aerospace and defense technology company L3Harris has agreed to settle an ERISA class action lawsuit for $650,000. Plan participants in the company's $5.2 million 401k plan claimed that the defense contractor violated ERISA by charging excessive fees and retaining expensive investment options. The settlement resolves the lawsuit before the court could rule on a pending motion for summary judgment. Source: Hallbenefitslaw.com AT&T Fee Lawsuit Could Reach Supreme Court Next Year AT&T was initially sued in 2017 for a breach of fiduciary duty when it amended contracts to add brokerage and investment advisory services offered by Fidelity Investments for their participants in 2012 and 2014, respectively. The plaintiffs alleged that AT&T did not evaluate or disclose the compensation paid to Fidelity when it added these services. The complaint added that the fees were a prohibited transaction, did not comply with the terms of any exemption, and that the plan sponsor had not followed a prudent process. Source: Planadviser.com 401k Rule Suit Echoes Past Legal Attack on Obama-Era Version The DOL's newest fiduciary rule finalized in late April prompted a swift legal response from insurance industry stakeholders, who sued on May 2 in the US District Court for the Eastern District of Texas to block and vacate it and an accompanying amended prohibited transaction exemption. The plaintiffs are following a similar playbook to litigants who successfully convinced an appeals court to vacate a previous iteration of the standard six years ago. Source: Wagnerlawgroup.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC Bills to Nullify the Retirement Security Rule Proposed in Congress Members of the House and Senate introduced companion bills under the Congressional Review Act that would nullify the Department of Labor's Retirement Security Rule. The rule was finalized in April and would subject one-time transactions such as annuity sales and rollovers to fiduciary obligations under ERISA. Source: Plansponsor.com »» Click here for more on Legislative and Washington Actions State-Based Private-Sector Retirement Programs A Conversation About State-Based Retirement Programs A look back at the policy landscape that led to state-facilitated retirement plans and a look ahead to the opportunities as these programs continue to gain steam. Source: Georgetown.edu Three-Quarters of Americans Favor State-Run Retirement Plans Working Americans want state-facilitated retirement programs to help them prepare for their future, finds new research today from the National Institute on Retirement Security. According to the findings from the organization, 77% agree that a state-run program is a good idea. This view is particularly backed by Millennials, who showed the highest support among all generations (79%). Source: 401kspecialistmag.com Marketplace News Slavic401k Announces New Partnership With TriSpan LLP to Bolster Growth and Innovation Pontera Unveils 401k Mega-Partnership With Stifel AllianceBernstein Expands Retirement Income Suite
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