Could SCOTUS Chevron Decision Undermine Fiduciary Rule?
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Items of Special Interest to Advisers and Other Service Providers
Could SCOTUS Chevron Decision Undermine Fiduciary Rule? With far-reaching implications -- likely including the DOL's fiduciary rule -- the nation's highest court has set aside a long-standing judicial deference to federal regulators in interpreting the law. While the full implications will take time to emerge, it's almost certainly going to produce more litigation, and in the process, less certainty for advisors, plan sponsors, and recordkeepers trying to operate within those boundaries. Source: Asppa.org
The New Fiduciary Rule: Confusion About Incentive Compensation The DOL's fiduciary regulation will be effective on September 23 of this year. While some of the requirements of PTEs 2020-02 and 84-24 also become effective on September 23, others will not be effective until a full year later on September 23, 2025. Both PTEs have provisions limiting incentive compensation and some have taken that to mean that incentive compensation is prohibited. That is not the case. Source: Fredreish.com
Technology Integration "Linchpin" for In-Plan Retirement Income Getting in-plan retirement income options to take hold will in large part rely on the technology making it possible, according to a recent recordkeeping survey by the Defined Contribution Institutional Investment Association's Retirement Research Center. Middleware providers that offer annuity incorporation and portability across retirement plan recordkeeping platforms will play a key role in uptake, says the DCIIA research group. Source: Planadviser.com
The Retirement Security Rule: Designed for Permanency? This article outlines the DOL's objectives and enhancements to the definition of fiduciary investment advice in the final rule, and how it differs from the proposed rule and the vacated 2016 fiduciary rule. It also discusses the final rule's potential impact on investors and investment professionals who are currently subject to the existing regulatory landscape. The article also addresses related prohibited transaction exemptions that form the regulatory package, and how the package aims to level the playing field and provide clear and equal application of fiduciary protections in rendering investment advice. Source: Truckerhuss.com Fiduciary and Plan Governance
Design Options: Building Strong Retirement Plans Retirement plan design is increasingly focused on getting employees enrolled sooner, keeping them in longer, and providing more options for creating income people can rely on in retirement. The design elements plan sponsors are considering include immediate plan enrollment, lowering the eligibility age to contribute, larger arrays of product sets to accommodate decumulation, and providing participants with nonguaranteed and guaranteed investments and options to support, converting their accumulated retirement savings into a paycheck in retirement. Source: Plansponsor.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, Analysis, and Papers
The Five Forces Shaping U.S. Retirement Major events of the past few years -- including the pandemic, ongoing market volatility, and rising inflation -- have left many Americans feeling stressed about their financial futures. This challenging period magnifies the cracks in our retirement system. This report identifies five major trends that are shaping retirement today and points to areas where advisors can convert challenges into opportunities. Source: Blackrock.com
2024 Living in Retirement Report Findings on the financial challenges and concerns of retired Americans from the Schroders 2024 US Retirement Survey. Study finds inflation taking a toll on retirees. The worst bout of inflation in decades is weighing heavily on the minds of retirees. Source: Schroders.com
2024 US Retirement Readiness Report Schroders recently surveyed 2,000 US investors nationwide to learn more about the state of retirement readiness and planning, key concerns regarding retirement, and current sentiment among those who are already living in retirement. Source: Schroders.com
SECURE 2.0's Saver's Match: The Promise and the Challenges When provisions of SECURE 2.0 were signed into law in December 2022, the clock started ticking on one of its most consequential retirement savings public policy initiatives: the Saver's Match. Tom Hawkins explores four key themes associated with the impactful SECURE 2.0 provision set to replace the Saver's Credit for tax years following 2027. Source: 401kspecialistmag.com »» Click here for More Studies, Research, and White Papers Court and Legal
Chevron Doctrine Overruled: US Supreme Court Upends Longstanding Foundation of Administrative Law The US Supreme Court on June 28 overturned the Chevron doctrine that for four decades has required federal courts to defer to administrative agencies' interpretations of ambiguous or broad statutes. The doctrine was a foundation of administrative law and afforded successive US presidential administrations flexibility to interpret statutes via agency adjudications and rulemaking. The Court's decision will have a substantial impact on both regulated industries and agencies. Source: Morganlewis.com
Supreme Court Overturns the Chevron Doctrine, Sending Statutory Interpretation Back to the Courts This article considers the Supreme Court's recent decision in Loper Bright Enterprises et al. v. Raimondo, Secretary of Commerce, et al., June 28, 2024, overturning the Chevron Doctrine, what it is, what it does, and how it might affect current and future disputes over agency decisions concerning ERISA, primarily decisions by the Department of Labor. Source: Octoberthree.com
The longstanding Chevron doctrine required courts to defer to agencies' construction of ambiguous statutes, even as to the scope of those agencies' authorities, so long as the agency's construction of the ambiguous statute was reasonable and thus a "permissible" one. Supreme Court's decision strips agencies of this presumptive deference and invites new litigation over interpretations of statutory language that govern many areas of law and business. The decision also signals that more changes to administrative law may be on the horizon. Source: Ropesgray.com
Conflicting Decisions Foreshadow Upcoming Disputes in ERISA 401k Forfeiture Class Actions Conflicting orders on motions to dismiss from two California courts foreshadow issues for a new theory of ERISA liability. Employers have faced a recent wave of novel ERISA class actions that challenge the reallocation of defined contribution plan forfeitures. The recent lawsuits challenge an employer's decision to use plan forfeitures to make later employer contributions rather than defray administrative fees otherwise payable by the participants. Source: Erisalitigationadvisor.com »» Click here for more Court and Other Legal Issues Compliance and Regulatory
IRS Guidance on New Exceptions to the Penalty Tax for Early Qualified Plan or IRA Withdrawals The IRS recently issued guidance in Notice 2024-55 on the application of two new exceptions to the 10% additional tax under Code section 72(t) for early withdrawals from a qualified plan or IRA. These exceptions are for (1) emergency personal expense distributions and (2) domestic abuse victim distributions. This guidance will assist plan sponsors and plan administrators in implementing these provisions. Formal plan amendments are not required until December 31, 2026, at the earliest. Source: Groom.com
IRS Issues Guidance on Personal Expense and Domestic Abuse Victim Distributions On June 20, 2024, the Department of the Treasury and the IRS released guidance in the form of Notice 2024-55 regarding two of the exceptions to the 10% additional tax on early distributions under Internal Revenue Code section 72(t)(1): emergency personal expense distributions and domestic abuse victim distributions. The Notice is in the form of Q&As, as we've seen recently in guidance related to other provisions of the SECURE 2.0 Act of 2022. Source: Ferenczylaw.com
Automatic Enrollment Is Mandatory in 2025: Now Is the Time to Prepare SECURE 2.0 implemented almost 100 different changes to the retirement plan landscape. This article is focused on one of the most impactful of such changes which is scheduled to first become effective in 2025. This change is the requirement that most plan sponsors adopt automatic enrollment provisions for their 401k and 403b plans. Source: Legacyrsllc.com »» Click here for more Compliance and Regulatory Material Marketplace News SageView Collaborates With Transamerica to Launch Integrity Pooled Solutions Application Period Opens for PenChecks/ASPPA Scholarship Program
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