Reinventing Retirement Recordkeeping
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Newsletter Sponsor The newly released 401k Averages Book 24th Edition introduces fresh charts and a revamped format. Notable additions include Advisor Compensation along with the introduction of a comprehensive recordkeeping administration fee, encompassing hard dollar and asset-based recordkeeping costs along with any allocations from revenue sharing. These new data points will prove to be highly beneficial, offering a more comprehensive and insightful perspective on 401k average costs. Click here to order your copy. In This Issue
Items of Special Interest to Advisers and Other Service Providers Reinventing Retirement Recordkeeping The retirement recordkeeping industry is presented with both significant challenges and opportunities for transformation. This dynamic environment calls for strategies that could include scaling up or targeting specific market segments, delivering comprehensive financial advice services, and introducing personalized products. By leveraging emerging technologies such as generative AI, and building a strong digital core, recordkeepers could achieve a lean cost structure and adapt to the changing and consolidating landscape. This is a 20-page report. Source: Accenture.com After Chevron: SEC Climate and ESG Rules Likely Doomed Much has been said about Chair Gary Gensler's aggressive rulemaking since his arrival at the SEC in April 2021. But the more concerning to Gensler's critics is the scope of the SEC's most controversial proposals. In particular, two rules would require climate-related disclosures by public companies and disclosures regarding environmental, social, or governance, or ESG, factors by investment companies and registered investment advisers. Now, under the Supreme Court's June decision in Loper Bright Enterprises v. Raimondo, federal courts will not defer to agency interpretations, likely spelling doom for the SEC's climate disclosure and ESG rules. Source: Carltonfields.com Court Appears Skeptical of Invalidating the DOL's ESG Rule Despite the Fall of Chevron A U.S. Court of Appeals for the Fifth Circuit panel appeared skeptical during oral arguments in which conservative states and Texas-based energy interests sought to reverse a district judge's order upholding an environmental, governance, and social rule in an Administrative Procedure Act case. The states also have asked the Fifth Circuit to remand the case and vacate the DOL rule as in conflict with ERISA. Source: Hallbenefitslaw.com Still Work to Do on Retirement Plan Digital Experiences, Study Suggests As more retirement plan participants come to rely on digital channels for their primary means of interaction, digital experiences will be critical in supporting them in reaching their retirement savings goals. However, according to J.D. Power's 2024 "U.S. Retirement Plan Digital Experience Study," most retirement plan digital experiences still have a lot of room for improvement. Just 21% of retirement websites and mobile apps are living up to customer expectations for a valuable digital experience, significantly lagging those of other industries and putting assets under management at risk, the study warns. Source: Napa-net.org Two Years After Infamous Reversal, Vanguard's Vote on ESG Proposals Tell an Interesting Story The Vanguard Group claims its taste for ESG shareholder proposals is unchanged, but just one year after push-back from oil-drilling states, its votes tell a different story. In an unprecedented sweep, the Malvern, PA manager rejected all 400 environmental, governance, and sustainability shareholder resolutions up for a vote this summer, according to its Aug. 29 US Investment Stewardship Report. But anti-ESG activists also had reason to be aggrieved. Vanguard voted against 40 anti-ESG shareholder proposals that sought to block environmental and diversity initiatives. Source: Riabiz.com Fiduciary and Plan Governance What Is a Retirement Plan Consultant and How Does Your Business Benefit? The services of a retirement advisor are invaluable for establishing an attractive, cost-effective, and trustworthy corporate retirement plan. This article will guide you on what a retirement plan consultant is and how to choose one that meets your needs. Source: Hubinternational.com The Essential Plan Providers Needed for a 401k Plan People who are ill try to find the best medical coverage possible. They won't hire a doctor because they're the lowest price. So when it comes to the health of their retirement plan, it's surprising that plan sponsors skimp when hiring their plan providers. Plan sponsors need to make solid choices of retirement plan providers because "it's their neck on the line if they don't." This article covers the key plan providers that need to be hired and what to avoid when hiring them. Source: Jdsupra.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, Analysis, and Papers U.S. Needs "Hybrid" Retirement Plan System: Report The report by TIAA Institute says the best way to create a sustainable and secure retirement that addresses the challenges of longer lifespans and divergent working patterns is to develop a "hybrid" system consisting of the best elements from DB and DC plans, including diversified sources of income and a form of guaranteed income. Source: 401kspecialistmag.com How Financial Factors Outside of a DC Plan Can Impact Retirement Readiness This research found that, like private-sector DC plan participants, public-sector DC plan participants who lack income and cash reserves to support a spending spike are likely to end up with more credit card debt. This higher debt can have a long-lasting impact on retirement security since higher credit card utilization is correlated with lower DC plan contributions and account balances, even when controlling for income. Thus, the availability of emergency savings to cover spending spikes can be a critical factor in preventing or stalling a cycle of increasing debt that can significantly impact retirement readiness. Source: Ebri.org Despite Economic Challenges, Nearly Two-Thirds of Employees Feel on Track for Retirement Amid today's economic challenges, American workers are showing remarkable confidence in their long-term financial and retirement plans, according to the fourth annual Protected Retirement survey from the Nationwide Retirement Institute®. More than six in ten (65%) of workers say they are on the right track when it comes to financial preparedness for retirement; this figure rises to 71% for 22-34-year-olds, a 15-point increase from 2023. Source: Nationwide.com What are the Most Significant ERISA Developments Affecting Retirement Plans? What are some of the most significant developments affecting retirement plans, and what role has ERISA played in allowing for the continued evolution and innovation of providing benefits? Barbara Marder, President and CEO of the Employee Benefit Research Institute asked this question of panelists during a presentation of the ERISA 50th Research Project at a symposium in Washington, D.C. Here are their responses. Source: Napa-net.org »» Click here for More Studies, Research, and White Papers Court and Legal Forfeiture Cases Update: BAE Prevails on a Motion to Dismiss On September 5, 2024, United States District Court Senior Judge Trenga, Eastern District of Virginia, issued the fourth substantive ruling on a motion to dismiss in a forfeiture case, granting BAE Systems' motion. The BAE decision breaks somewhat from other court's line of reasoning. In particular, the BAE Court concluded that the facts before it were distinguishable from the factual predicates underlying the other cases in which other courts have issued rulings on motions to dismiss. In the eyes of the BAE court, the particular language in the BAE plan did not provide plan fiduciaries with the discretion to apply forfeitures to pay plan expenses ahead of employer contributions. Source: Wagnerlawgroup.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC House GOP Continues Attacks on ESG Investing The House of Representatives hosted another hearing on September 10 in which House Republicans characterized ESG as "woke" and an attempt to steer investor dollars toward social causes, at the financial expense of those investors and their retirement security. The hearing was hosted by the House Committee on Financial Services Subcommittee on Oversight and Investigations. Source: Napa-net.org »» Click here for more on Legislative and Washington Actions Cyber and Plan Security DOL Updates Cybersecurity Guidance for Plan Sponsors and Fiduciaries Following a 2022 recommendation from its ERISA Advisory Council, the DOL on Sept. 6 issued a new Compliance Assistance Release that provides best practices in cybersecurity for plan sponsors, plan fiduciaries, recordkeepers, and plan participants. The release updates the DOL's 2021 guidance. Source: 401kspecialistmag.com DOL Updates Cybersecurity Guidance for All Employee Benefit Plans On September 6, 2024, the DOL issued new guidance to help plan sponsors and fiduciaries safeguard plan-related data. The new guidance also clarifies that the DOL's cybersecurity guidance applies to all employee benefit plans, not just retirement plans. The Compliance Assistance Release focuses on three areas: tips for hiring service providers, cybersecurity program best practices, and online security tips for plan participants. Source: Kutakrock.com »» Click here for more on Cybersecurity Issues Compliance and Regulatory What You Need to Know About the New RMD Regulations In July, the IRS issued final regulations related to required minimum distributions from retirement accounts, clearing up some of the controversy and uncertainty surrounding changes made under the SECURE Act and the SECURE 2.0 Act. These regulations will bring significant changes to the landscape of retirement account distributions and tax planning. Here are some key developments to be aware of as you begin planning for next year. Source: Buckinghamstrategicpartners.com »» Click here for more Compliance and Regulatory Material Marketplace News Betterment for Advisors Changes Name to Betterment Advisor Solutions Nationwide Shifts Advertising to Highlight Financial, Plan Services Voya Buys OneAmerica's Retirement Business T. Rowe Price Launches Personalized Retirement Manager Capital Group Launches 1st Active/Passive TDF Blend Series
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