Lies and Statistics -- What the 401k Data Actually Says: Podcast
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Insight: Studies, Research, Analysis, and Papers
Lies and Statistics -- What the 401k Data Actually Says: Podcast Former high-ranking Social Security Administration official and retirement policy gadfly Andrew Biggs joins American Retirement Association CEO Brian Graff for a frank discussion about the data fueling the 401k debate. Biggs, a frequent financial media critic of "retirement crisis" sensationalism, explains the retirement readiness disconnect and why we get it so wrong. Source: Asppa.org
The Economics of Providing 401k Plans: Services, Fees, and Expenses, 2023 401k plan participants investing in mutual funds tend to hold lower-cost funds. At year-end 2023, 401k plan assets totaled $7.4 trillion, with 38 percent invested in equity mutual funds. In 2023, 401k plan participants who invested in equity mutual funds paid an average expense ratio of 0.31 percent. The mutual fund expense ratios that 401k plan participants incur have declined substantially since 2000. In 2000, 401k plan participants incurred an average expense ratio of 0.77 percent for investing in equity mutual funds. By 2023, that figure had fallen to 0.31 percent, a 60 percent decline. Source: Ici.org
401k Investors Benefit as Mutual Fund Fees Cut in Half The latest research from the Investment Company Institute shows that 401k plan participants have incurred substantially lower fees for holding mutual funds over the past two decades, offering them higher returns and higher balances in retirement. From 2000 to 2023, the average equity mutual fund expense ratio paid by 401k investors dropped by more than half. Source: Ici.org
The Notion of DC Lifetime Income as a Participant Investment Choice Having this valuable new and unfamiliar element available as part of a DC plan means developing support mechanisms of all sorts to deliver their value. Grasping this requires understanding a new "language" (and concepts) with which we all must now become accustomed if these programs are to work. The ideas are not complicated, but very unfamiliar to most of us. Source: Businessofbenefits.com »» Click here for More Studies, Research, and White Papers Fiduciary and Plan Governance
Evonik Corporation Beats 401k Plan Challenge With Evidence of Rigorous Fiduciary Process A New Jersey federal district court recently granted summary judgment in the defendant's favor in an ERISA excessive fee case accusing Evonik's 401k plan fiduciaries of keeping imprudent investments in the plan and of allowing participants to pay excessive recordkeeping fees. At the core of the decision was the court's finding that Evonik's fiduciaries followed a rigorous, prudent process for reviewing plan investments and fees. Source: Erisalitigationadvisor.com »» Click here for more Fiduciary and Plan Governance Material Items of Special Interest to Advisers and Other Service Providers
Insights From Schwab's 2024 RIA Benchmarking Study Schwab's RIA Benchmarking Study is the leading study in the industry. 1,304 advisory firms, representing $2 trillion in AUM, participated in the 2024 study. 2024 study highlights include: Firms continued focus on growth strategies led to strong performance in 2023, talent remains a top priority for RIAs, and firms are optimizing digitization and client segmentation strategies to deliver high-touch service at scale. Source: Schwab.com
The New Fiduciary Rule: The Fiduciary Acknowledgment The Impartial Conduct Standards and the Fiduciary Acknowledgment disclosure are effective September 23, 2024. The remaining conditions in the PTEs are effective on September 23, 2025. This article discusses the fiduciary acknowledgment. Source: Fredreish.com
The New Fiduciary Rule: Qualified Annuity Exchanges A fiduciary recommendation to exchange "qualified annuities" is subject to the new fiduciary rules. In this article, Fred Reish discusses the requirements in NAIC Model Regulation #275 and the similarities and differences between the Model Rule and the PTE requirements. Source: Fredreish.com
Insurers Respond to DOL to Forward Fiduciary Rule Lawsuit A group of insurers seeking to halt the DOL's Retirement Security Rule from taking effect has responded to a counter-filing by the regulator alleging that "changes" the department made from a 2016 fiduciary proposal are not enough to make the 2024 proposal viable. Source: Planadviser.com Court and Legal
First Reasoned ERISA Forfeitures Decision Dismisses Complaint Since September 2023, ten lawsuits have been filed alleging a novel theory of liability against ERISA plan sponsors for their use of forfeited employer-matching retirement plan contributions. Motions to dismiss have been filed or will be filed in all the lawsuits. After thoughtful deliberation, a federal trial judge in Silicon Valley dismisses the ERISA 401k plan forfeitures suit against HP Inc., albeit with leave to amend. Source: Nixonpeabody.com
Chevron Deference Overturned: Video This video delves into the U.S. Supreme Court's recent overturning of the Chevron doctrine and how this landmark decision is opening the floodgates for challenges against federal agencies including the DOL. Source: Workforcebulletin.com
401k Forfeitures Under Fire: Unpacking Recent Legal Battles -- Podcast In this podcast, Richard and Sarah are joined by Ian Morrison, a Partner in Seyfarth's ERISA Litigation group to delve into a new line of cases alleging that forfeitures are plan assets, and must be used to benefit plan participants. Source: Seyfarth.com
District Court Grants Motion to Dismiss Forfeiture Complaint That article discusses the May 24, 2024, decision by the United States District Court for the Southern District of California denying Qualcomm's motion to dismiss. It outlines how the district court in Qualcomm addressed and overruled arguments seeking to dismiss six substantive causes of action based on allegations asserting the misuse of plan forfeitures and the court's conclusion that the plaintiff in that case had plausibly alleged violations of ERISA. Source: Wagnerlawgroup.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC
Republican Congressmen Rail Against Biden Administration's Fiduciary Rule Saying the Biden Administration's "overly restrictive" fiduciary rule put forth by the DOL "will only complicate financial planning with burdensome overregulation," authors of the Congressional Review Act Joint Resolution of Disapproval recently introduced in the House and Senate seeking overturn the rule, this week contributed an op-ed in the Washington Examiner explaining their rationale. Source: 401kspecialistmag.com »» Click here for more on Legislative and Washington Actions Compliance and Regulatory
DOL Launches New Online Filing System for Abandoned Plans The DOL launched a new online system for qualified plan termination administrators to "more efficiently" submit information for individual account retirement plans, such as 401k plans, that have been abandoned. The system comes shortly after the DOL amended a rule to include Chapter 7 bankruptcies. Source: Plansponsor.com
More than two years after releasing proposed regulations that revised the required minimum distribution regulations and other related guidance, the IRS has released final regulations that revise existing regulations applicable to RMDs, eligible rollover distributions, and excess accumulation tax. Source: Ascensus.com »» Click here for more Compliance and Regulatory Material Marketplace News JULY Acquires Sunwest Pensions American Trust Retirement Launches WorkSaveRetire Program Retirement Law Group Rebrands as Fiduciary Law Center PensionBee Announces US Launch DOL Calls for Nominations to ERISA Advisory Council Bain Capital and Partners to Acquire Envestnet for $4.5B Osaic Unveils Enhancements to Retirement Income Planning Platform
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