Plan Governance: Plan Sponsor vs. Fiduciary and Committee Roles and Responsibilities
|
In This Issue
Fiduciary and Plan Governance
Plan Governance: Plan Sponsor vs. Fiduciary and Committee Roles and Responsibilities Depending on the size of your company, who is responsible for retirement plan oversight may be only the owner of a small business or there may be specific teams or committees assigned to tasks in larger entities. Certain parties will inevitably wear multiple hats, acting on behalf of the employer and of the plan as a fiduciary. The roles of the plan sponsor and the plan fiduciaries can be hard to distinguish and, in certain functions, can overlap. This article will help you decipher just who is responsible for what so that an effective governance structure can be developed and maintained. Source: Newfront.com
Experts Outline Strategies for Investment Menu Design Developing and maintaining a plan's investment menu is a key fiduciary responsibility. Industry experts offer their insights into factors and steps to consider in performing that function. In a Plan Sponsor Council of America webcast "The Art and Science of Investment Menu Design," experts offered their insights on strategies for designing an investment menu that will best serve participants and address their needs and concerns. Source: Asppa.org
What Should Plan Sponsors Consider When Selecting a Dynamic QDIA? As dynamic qualified default investment alternatives are gaining interest with plan sponsors, panelists on a Morningstar webinar discussed the benefits of more personalized investment advice, as well as how a plan sponsor can go about selecting the right QDIA for their population. Understanding the average age of participants and how employees are allocated in their investments are some factors plan sponsors should consider when evaluating a QDIA that moves participants from a TDF to a managed account. Source: Plansponsor.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, Analysis, and Papers
The American Benefits Council advocates for sponsors of employee benefit plans. In this role, they have assembled this collection of data to demonstrate the strength and vitality of 401k plans and the employer-sponsored retirement system. Source: Americanbenefitscouncil.org
Workers are feeling more confident about their ability to reach their financial goals for retirement as anxiety around inflation and market volatility has come down since last year, according to a new survey from Charles Schwab. The annual nationwide survey of 401k plan participants finds that 43% of workers think they are very likely to achieve their retirement savings goals compared to 37% in 2023. Inflation and stock market volatility continue to be the biggest obstacles to saving for a comfortable retirement, though workers are slightly less concerned about both factors in 2024. Source: Schwab.com
DC Lens 3rd Quater 2024: DC Market Insights and DC News Update This 57-page report offers market insights and news updates written exclusively for defined contribution practitioners. Topics include ESG updates, Litigation summaries, Administrative/Legislative updates, Enhancing retirement readiness, Cyber attacks require a sound defense, and High profile cyber breaches have put a renewed focus. Source: Schroders.com
Americans Worry Extreme Weather Will Rain on Their Retirement The majority of Americans are anxious about the effect extreme weather could have on their financial future yet few are talking about it with a financial professional, according to the 2024 Annual Retirement Study from Allianz Life. More than half (56%) of Americans say they have anxiety about rising costs, financial losses, or even health effects from extreme weather events or natural disasters. Source: Allianzlife.com »» Click here for More Studies, Research, and White Papers Items of Special Interest to Advisers and Other Service Providers
Advisers: Diligence About 401k Plan Litigation as Crucial as Ever As the risk of 401k plan litigation remains at a heightened level, plan advisers face increasing pressure to protect plan sponsors. The steady drumbeat of plaintiffs' bar lawsuits, driven by both legitimate claims and opportunistic legal actions, highlights the growing challenges advisers face as fiduciaries, according to practitioners. Source: Planadviser.com
The New Fiduciary Rule: The Regulation and Exemptions are Stayed Shortly after the DOL's new regulation defining fiduciary advice and Amended Prohibited Transaction Exemptions 2020-02 and 84-24 were finalized, two lawsuits were filed in Federal District Courts in Texas. The lawsuits sought to "vacate", or overturn, the regulation and exemptions as being beyond the authority of the DOL. In addition, the plaintiffs requested that the courts "stay" the effective dates of the regulation and exemptions pending the outcome of the lawsuits. In the past two weeks, both courts have agreed to stay the effective dates, pending resolution of the cases. This article discusses the consequences of the stays for broker-dealers, investment advisers, and insurance companies. Source: Fredreish.com
Two Texas District Courts Issue Orders Delaying the Effective Date of DOL Fiduciary Rule Orders issued by the Eastern District of Texas on July 25th and the Northern District of Texas on July 26th indefinitely delayed the September 23, 2024, effective date of the DOL's revised regulation defining when a party becomes an "investment advice" fiduciary and amendments to seven related prohibited transaction exemptions. Source: Beneficiallyyours.com
The Demise of Deference: Podcast With far-reaching implications -- likely including the Labor Department's fiduciary rule -- the nation's highest court has set aside a long-standing judicial deference to federal regulators in interpreting the law. In this podcast, Nevin Adams and Fred Reish consider the impact. Source: Nevinandfred.com
The Journey of Retirement Third-Party Administration In the ever-evolving realm of regulations, procedures, and technology advancements, the essence of a TPA's work remains remarkably constant, rooted in a historical narrative that traces back to the emergence of Third-Party Administrators as service providers to retirement plans. This article focuses on the need for TPAs to embrace change, foster collaboration, mentor new consultants, and provide strong leadership. Source: Benefitslink.com Court and Legal
A Closer Look at Arbitration Provisions in ERISA Breach of Fiduciary Duty Claims As plan sponsors increasingly look to arbitration provisions to avoid costly class action litigation, courts across the nation have weighed in on whether plan-wide claims for breach of fiduciary duty under ERISA 502(a)(2) can be subject to mandatory arbitration. Here is a review. Source: Truckerhuss.com
Major 401k Litigators Are Back in Action With More Entering the Fray Just more than halfway through 2024, 401k plan lawsuits based on ERISA show no sign of slowing down. After a dip in the number of lawsuits in 2023, they have picked up pace in 2024, with complaints ranging from excessive fees for recordkeeper services to the use of managed accounts in plans. The most prolific law firms like Walcheske & Luzi and Capozzi Adler are filing a consistent number of cases. Source: Planadviser.com
Class Action Claims Wells Fargo Misused Forfeited 401k Funds in Violation of ERISA A former Wells Fargo employee filed a proposed class action lawsuit against the company, alleging that it violated ERISA in using forfeited 401k funds to reduce its contributions to the plan rather than benefit plan participants. According to the suit, the net result was that the company's actions reduced plan assets and caused plan participants to incur expenses that the forfeited funds could have covered. Source: Hallbenefitslaw.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC
Senators Introduce Bipartisan Bill to Allow CITs in 403bs A bipartisan group of Senators introduced a bill on Aug. 1 to allow 403b plans to include collective investment trusts as part of their investment menu options. The bill, S.4917 mirrors a version passed in the House on March 8. Source: Asppa.org »» Click here for more on Legislative and Washington Actions Marketplace News Streamlined Digital Experience Launched for Financial Benefits Participants
This eNewsletter is a digest of information published by a variety of web-based sources on 401k and related issues and is published as a service to our users. 401khelpcenter.com, LLC is not the author of the material unless specifically noted. Articles are copyrighted to their publishers. If you believe that your work has been copied in a way that constitutes copyright infringement, please contact the source site immediately. Hyperlinks in this document are provided as a convenience and we disclaim any responsibility for information, services, or products found on websites linked hereto. All links were tested before this eNewsletter was e-mailed to you to ensure that they are still functional, but publishers do move or delete articles. Therefore, we can't guarantee that the links provided will remain operational. 401khelpcenter.com does not endorse, approve, certify, or control this material and does not guarantee or assume responsibility for the accuracy, completeness, efficacy, or timeliness of the material. Use of any information obtained from this material is voluntary, and reliance on it should only be undertaken after an independent review of its accuracy, completeness, efficacy, and timeliness. Reference to any specific commercial product, process, or service by trade name, trademark, service mark, manufacturer, or otherwise does not constitute or imply endorsement, recommendation, or favoring by 401khelpcenter.com. Opinions expressed are those of the author of the article and do not necessarily reflect the positions of 401khelpcenter.com. THIS NEWSLETTER IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE INVESTMENT, TAX, ACCOUNTING, OR LEGAL ADVICE. Copyright © 2024 by 401khelpcenter.com, LLC. All rights reserved. No reproductions without prior authorization, but you are free to email this copy (in its entirety) along to colleagues or clients. This newsletter may not be posted on any website. 401khelpcenter.com, LLC
|
