What Every Fiduciary Should Know About a Self-Directed Brokerage Account
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Fiduciary and Plan Governance What Every Fiduciary Should Know About a Self-Directed Brokerage Account While SDBAs have been around for a long time, plan fiduciaries often have questions about their fiduciary responsibilities under ERISA concerning SDBAs. Unfortunately, there is limited clear guidance addressing the broad array of issues facing plan fiduciaries. To help clear up some confusion regarding the fiduciary considerations of including an SDBA within a retirement plan, this 8-page paper provides answers to some common and pressing issues in this evolving area of the retirement services industry. Source: Schwab.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, Analysis, and Papers Is the Retirement Picture for Millennials Looking Better? Since 2019, the nation has experienced a global pandemic and economic disruption. At the same time, the government provided unprecedented fiscal support, employment remained strong, home values rose substantially, and the stock ended up significantly higher than in 2019. Using the Federal Reserve's 2022 Survey of Consumer Finances, the question addressed in this article is how all these factors affect the retirement preparedness of Millennials. Source: Bc.edu Survey Finds U.S. Employees' Average Retirement Savings Decreases in 2024 The average amount that U.S. adults have saved for retirement dropped slightly from US$89,300 in 2023 to $88,400 in 2024 and more than $10,000 from its five-year peak of $98,800 in 2021, according to a new survey by Northwestern Mutual Life Insurance Co. The survey, which polled more than 4,500 U.S. adults aged 18 or older, found a third (33%) said they don't feel financially secure, up from 27% in 2023. Source: Benefitscanada.com 401k Plan Participants Continue to Benefit From Employer Contributions and Falling Fees: Report The undeniable strength of the 401k system is seen in this report. Analyzing automatic enrollment, employer contributions, and participant loans, the report reveals the care with which employers set up their 401k plans, and how employer contributions and cost-effective investing bolster the success of the system in helping Americans save for retirement. Source: Ici.org Passive Products Widen Lead on Active in DC Managed Assets Passively managed investment products in defined contribution retirement plans have steadily increased their market share at the expense of actively managed products, according to recent research by ISS Market Intelligence. The trend toward passive in-plan investments is similar to the steady market share the strategy has made in overall investment management. The growth is particularly of note in DC plans, which usually lag the broader market. Source: Planadviser.com »» Click here for More Studies, Research, and White Papers Court and Legal Sixth Circuit Finds Individual Arbitration Provision in 401k Plan Unenforceable The Sixth Circuit now joins the Second, Third, Seventh, and Tenth Circuits in concluding that an arbitration agreement may not prospectively waive participant rights under ERISA to seek plan-wide relief. Because the individual arbitration provision prohibited participants from recuperating all losses to the plans and restoring profits resulting from the fiduciary breaches, the court concluded that it functioned as a prospective waiver of the participants' substantive statutory remedies and, under the effective vindication doctrine was unenforceable. Source: Benefitslink.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC Legislative Proposals Affecting Retirement Plans: A Washington, DC Recap The retirement landscape in the United States is a pressing concern, with policymakers and industry leaders urgently seeking solutions to ensure financial security for Americans in their later years. Two pieces of proposed legislation, the Automatic IRA Act of 2024 (H.R. 7293) and the Retirement Savings for Americans Act (H.R. 6065/S. 3102) have sparked intense debate and raised crucial questions about the future of retirement savings in the country. Source: Cuiwealth.com »» Click here for more on Legislative and Washington Actions State-Based Private-Sector Retirement Programs How Are Employees Responding to State-Run Retirement Plans? There is research indicating that State-run auto-IRA plans, in which employers are required to register if they do not already offer retirement coverage to their employees, have a variety of positive effects. This article reviews some data on how employees are responding to these plans. Source: Asppa.org What is the Delaware EARNS Program? The Delaware EARNS program is a state-sponsored program that aims to help Delaware workers save for retirement, especially those who don't have access to employer-sponsored plans. Delaware employers (for-profit and nonprofit) with five or more employees (full or part-time) must register for the program if they don't offer a qualified retirement plan. The program is also available for self-employed individuals. Source: Belfint.com »» Click here for more on Legislative and Washington Actions Compliance and Regulatory Starting in 2024, the SECURE 2.0 Act allows employers to make matching contributions to 401k, 403b, and governmental 457b plans, and SIMPLE IRAs on account of employees' qualified student loan payments. Many plan sponsors have deferred implementation of QSLP matches pending IRS guidance, and on August 19, 2024, the IRS issued Notice 2024-63, which provides that interim guidance in a question-and-answer format. It addresses discrete issues of eligibility, annual certification, ADP testing, and reasonable procedures to administer a plan with a QSLP matching feature. Source: Wagnerlawgroup.com Student Loan Match: Repay Student Loans and Save For Retirement On August 19, 2024, the IRS issued Notice 2024-63 for retirement plan sponsors that provide or may wish to provide, matching contributions based on qualified student loan payments made by their participating employees. The Notice goes far in addressing many administrative issues summarized below to get plan sponsors and recordkeepers started, but more guidance is coming with pending proposed regulations. This is an overview and review of the notice. Source: Groom.com IRS Issues Proposed Required Minimum Distribution Regulations On July 19, 2024, the IRS bestowed upon us two pieces of "light" reading on required minimum distributions. One was the final regulations to Internal Revenue Code 401(a)(9), a mere 290 pages. The other guidance was the proposed RMD Regulation, which expounds on several of the components of the SECURE 2.0 Act of 2022 impacting RMDs. That is the subject of this article. Source: Ferenczylaw.com IRS Releases Guidance on Retirement Plan Student Loan Matching On August 19, 2024, the IRS released Notice 2024-63, providing much-anticipated guidance on employer retirement plan contributions as they relate to qualified student loan payments (QSLPs). This notice provides important clarification for plan sponsors who are considering adding matching student loan payments to their retirement plans. Source: Captrust.com Catch-Up Contributions Must Exceed Some Limit What's the Catch? Catch-up contributions are not subject to discrimination testing. Misclassification of regular deferrals as catch-up contributions affects the results of the discrimination testing. If the ADP test passes with ample margin, or the plan is a safe harbor plan, this contribution classification error may not have much impact. However, if the test passes by a hair or if the test fails, then having included the misclassified catch-up contributions would yield a different result. Source: Belfint.com The Definitive Guide to the Saver's Match This article provides a definitive guide to the Saver's Match program, which will replace the Saver's Credit effective for tax years following December 31, 2026. For qualified retirement savers, the Saver's Match will provide a federal matching contribution of up to 50% of the first $2,000 of an annual workplace retirement plan or IRA contributions per individual, for a maximum matching contribution of $1,000 per tax year. Source: Rch1.com »» Click here for more Compliance and Regulatory Material Marketplace News Participate in the 2024 PLANSPONSOR DC Survey PSCA Collecting Data on 403b, 401k Plans TIAA, Accenture Partner to "Transform Recordkeeping" Callan Broadens Education Programs to Include Alternative Investments
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