Navigating Retirement Plan Transitions
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Fiduciary and Plan Governance
Navigating Retirement Plan Transitions Transitioning your retirement plan from one recordkeeper to another can be a complex and significant undertaking. This guide will help you navigate the challenges of such transitions while offering best practices to ensure a seamless experience for both plan sponsors and participants. The resource includes information defining a retirement plan transition, lays out the critical framework of the process, discusses the finer details within each stage, and more. Source: Multnomahgroup.com
How to Reduce Your ERISA Risks, and the Role of Fiduciary Liability Insurance Groom Law Group's Lars Golumbic, co-chair of the firm's Litigation group, discusses the escalating litigation risks that retirement and health and welfare plan sponsors and fiduciaries have faced in recent years in this report. The report, prepared for Chubb, details the responsibilities of fiduciaries under ERISA, the types of litigation that could be brought against them, and how fiduciaries might mitigate the risk of litigation. Source: Groom.com
Benchmarking Outcomes, Not Fees There are substantial efforts underway in many parts of the industry to develop similar sorts of benchmarking tools for assessing, comparing, and monitoring the growing variety of lifetime income programs for DC plans. A very real challenge these developers face arises from the fundamental difference in the nature of the investments involved. Even the language used to produce these new tools is demanding a new mindset. Source: Businessofbenefits.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, Analysis, and Papers
Participant Pulse: Tracking the Financial Wellness of Plan Participants The Participant Pulse is a quarterly report that tracks the confidence of plan participants. The report monitors plan participants' behavior in Bank of America's 401k recordkeeping and HSA clients' employee benefits programs, which comprise more than 4 million total participants. A two-page report. Source: Bofa.com
Financial Strain Puts Retirement Out of Reach for Many American Workers A recent survey reveals a growing financial strain among U.S. workers, with 88% struggling to meet basic living costs. Nearly half of employees (46%) are extremely worried about essentials such as food, healthcare, housing, and transportation. As a result, 44% of employees report living paycheck to paycheck, and 59% say money concerns are negatively impacting their overall well-being. For older workers, the situation is particularly concerning, and this financial pressure is leading to a sharp decline in retirement confidence. Source: Blr.com »» Click here for More Studies, Research, and White Papers Items of Special Interest to Advisers and Other Service Providers
ERISA Attorneys Outline Next Steps, Actions Item After DOL Fiduciary Rule Stays Industry reaction is pouring in as the DOL faces a grave setback in implementing its Retirement Security Rule this fall. Two legal challenges filed in Texas have stalled the fiduciary rule from its September 23 effect, with the second stay having been issued late last Friday night. Despite initial shock from the industry, the challenges aren't unexpected, nor staggering for advisors already in compliance with the current fiduciary regulation, according to Bonnie Treichel, ERISA attorney and founder of Endeavor Retirement. Source: 401kspecialistmag.com
SIMPLE 401k Versus a Safe Harbor 401k: The Pros and Cons for Your Small Business A small employer may find that converting its 401k plan into a "SIMPLE" 401k plan is preferable to adopting a traditional safe harbor 401k plan. What is a SIMPLE 401k plan? It is a 401k plan under which the employer makes either (i) a nonelective contribution to the plan equal to 2% of compensation for each employee who was eligible to defer under the plan or (ii) a matching contribution equal to 100% of each employee's deferrals up to 3% of compensation. Source: Employeebenefitslawgroup.com 403b Plans
2024 PLANSPONSOR 403b Market Survey The 2024 PLANSPONSOR 403b Market Survey includes data from 27 recordkeepers reporting on their U.S.-defined contribution recordkeeping business and focuses on recordkeeping of more than $1.3 trillion in single-employer 403b plan assets, including 70% in non-ERISA plans and 30% in ERISA plans. The survey found that regulatory changes are narrowing down the differences between the two largest kinds of defined contribution plans in the U.S. retirement market. Source: Plansponsor.com
The SECURE 2.0 Act's LTPT rule took effect on January 1, 2023, which means that as of January 1, 2025, any employee who has worked at least 500 hours (but no more than 999 hours) annually for two consecutive years (and has reached age 21 by the end of those two years) must be permitted to contribute elective deferrals to a 403b plan, unless otherwise excluded. Source: Belfint.com »» Click here for More 403b Material Court and Legal
Appellate Court Backs Home Depot in 401k Excessive Fee Suit A federal appellate court has backed the decision of the district court -- rejecting claims made in an excessive fee suit, not only finding a prudent process -- but ruling that those bringing suit had to prove that any losses to the plan were the result of imprudent actions. Source: Napa-net.org
Fifth Circuit Remands ESG Rule in First ERISA Test Case Post-Chevron The Fifth Circuit did not decide whether the DOL properly promulgated the ESG rule. Instead, the court noted that Loper Bright "upended the legal landscape" by eliminating the Chevron deference and it could not consider the merits of the case because the district court relied on Chevron in deferring to the DOL's rulemaking process. With the removal of the Chevron duty to defer, the Fifth Circuit held that it was required to remand the case to the district court to make an independent determination of whether the rule was within the DOL's authority to pass. Source: Erisalitigationadvisor.com
Lawsuit Alleges TIAA, Morningstar, Pushed Participants Into Proprietary Annuities Retirement plan participants have filed a class action lawsuit against TIAA and Morningstar for allegedly breaching their fiduciary duty by using a jointly created retirement planning tool to steer participants into TIAA investment products. The plaintiffs alleged that a retirement tool -- known as the Retirement Advisor Field View -- was designed to push participants in college and university retirement plans into TIAA annuity investment offerings. Source: Planadviser.com
"Bad" Comparators Bounce Tyson 401k Excessive Fee Suit A federal judge has dismissed an excessive fee suit against Tyson Foods' 401k plan, finding that the plaintiffs hadn't provided comparison plans against which to conclude the fees paid were unreasonable. The plaintiffs allege that the defendants, as fiduciaries of the Plan, breached their duty of prudence they owed to the Plan by requiring the Plan to pay excessive recordkeeping and administrative fees, and "by failing to remove their high-cost recordkeeper, Northwest Plan Services, Inc." Source: Napa-net.org »» Click here for more Court and Other Legal Issues Legislative and Washington DC
Bipartisan Bill to Widen Savings Access for Young Employees Helping Young Americans Save for Retirement Act, presented last week by Rep. Brittany Pettersen and co-sponsored by Rep. Tim Walberg, would revise ERISA to expand savings access for workers between 18 to 20 years old. Source: 401kspecialistmag.com »» Click here for more on Legislative and Washington Actions Compliance and Regulatory
Employing the Proper Definition of Compensation The DOL and IRS routinely report common operational failures that such agencies detect in the context of retirement plan audits and investigations. One of the operational failures that is always at or near the top of that list concerns plan sponsors failing to employ the correct definition of compensation. This article is intended to briefly highlight some of the issues that can occur when the incorrect definition of compensation is employed as well as explain some of the differences between the most commonly employed definitions of compensation. Source: Legacyrsllc.com
This is the third in a series of articles designed to inform you of the significance of the so-called "coverage rules" and the "minimum participation rules" applicable to qualified retirement plans. This article finishes the discussion of the coverage rules by exploring: (a) the average benefit test; (b) the rules for aggregating and disaggregating plans for coverage testing purposes; and (c) the transition rule for certain business acquisitions and dispositions. Source: Employeebenefitslawgroup.com »» Click here for more Compliance and Regulatory Material Marketplace News Lincoln Adds to In-Plan Retirement Income Offerings Prime Pensions Acquires Pennsylvania-Based TPA, Adds 350 Plans Voya Unveils Enhancements to Stable Value Suite Pacific Life and Franklin Templeton Partner on Guaranteed Income
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