2025 DC Survey: Plan Provider Service Ratings
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In This Issue - Headlines Insight: Studies, Research, Analysis, or Papers
General Items Items of Special Interest to Advisers or Other Service Providers
Court and Legal
Legislative or Washington DC
State-Based Private-Sector Retirement Programs Compliance and Regulatory
Marketplace News Article Summaries Insight: Studies, Research, Analysis, or Papers 2025 DC Survey: Plan Provider Service Ratings Recordkeeper satisfaction among defined contribution plan sponsors is generally high, with an average Net Recommendation/Promoter Score exceeding 8 on a scale of 1 to 10, according to PLANSPONSOR's DC Survey. Jeff Cullen, CEO of Strategic Retirement Partners, notes that most of his clients are satisfied with their current providers and few are seeking alternatives. He emphasizes that "quality of service" and a "true partnership philosophy" are critical factors when choosing a recordkeeper. Cullen points out that variations in client experiences often stem from the quality of personnel assigned to their accounts, highlighting an area for potential improvement. Source: Plansponsor.com DESTINATION 2030: A Roadmap for the Future of Employer-Provided Benefits Katy Johnson, President of the American Benefits Council, emphasized the importance of employer-provided health, retirement, and paid leave benefits for the well-being of many Americans. The Council introduced "DESTINATION 2030," a strategic plan aimed at protecting and enhancing these workplace benefits over the next five years, particularly in the context of upcoming tax and budget discussions. The plan is built on core values, including the preservation of ERISA and tax incentives for employer-sponsored plans. DESTINATION 2030 outlines the Council's approach to shaping future policy debates regarding employee benefits. This is a large file. Source: Americanbenefitscouncil.org »» Click here for More Studies, Research, and White Papers General Items 401k Loans: Debunking the Myths The retirement industry has had ongoing discussions regarding the necessity and implications of 401k loans, with many believing that borrowing from retirement accounts jeopardizes long-term financial security for immediate needs. However, recent research suggests that retirement loans may be misunderstood. Insights from the Principal Retirement Security Survey—Loans and Withdrawals 2023, along with Principal Proprietary 2022 data, have uncovered misconceptions surrounding retirement plan loans, indicating a potential shift in perspective and approach to their use. Source: Principal.com Why Are Employees Not Participating in Their 401k's? Workplace retirement plans aim to ensure employees' financial security in retirement, but their effectiveness hinges on enrollment rates. Principal conducted a survey of eligible individuals who aren't currently contributing to their retirement plans to identify the barriers to participation. The survey revealed three key obstacles that hinder employees from enrolling in retirement plans. Source: Principal.com Items of Special Interest to Advisers or Other Service Providers President Issues Regulatory Freeze: Will the DOL Fiduciary Rule Saga Continue? Since Donald Trump's inauguration on January 20, 2025, there has been a movement toward deregulation. On his first day, he issued a presidential memorandum called "Regulatory Freeze Pending Review," which functions similarly to an executive order. This freeze memo is particularly important as it could jeopardize the 2024 Retirement Security Rule, known as the fiduciary rule, which outlines the definition of investment advice fiduciary under ERISA. Since the fiduciary rule had not yet been implemented, the article reviews how the freeze memo will affect its progress. Source: Carltonfields.com Judge Grants DOL Motion to Pause Fiduciary Rule Litigation A federal circuit court judge has granted the DOL a 60-day pause on two cases challenging the fiduciary rule. This decision allows new DOL officials time to familiarize themselves with the issues before determining their course of action. The DOL requested this pause after the recent change in administration on January 20, 2025, as the new leadership is still onboarding and assessing the pending litigation. Source: Napa-net.org SECURE 2.0 Provisions Should Boost Adviser Revenue in 2025 Most retirement plan advisers anticipate revenue growth this year due to the SECURE 2.0 Act of 2022, according to a survey by Fuse Research Network. About two-thirds expect revenue increases of at least 1%, with 59% anticipating a growth of 1% to 10% and 9% expecting over 10%. However, one-third of advisers do not foresee any revenue increase from the new provisions. The survey covered advisers with at least 10 DC plan clients, 79% of whom manage at least 25 plans. Source: Planadviser.com Court and Legal Lawsuit Alleges Empower Misused Participant Data for Cross-Selling Former employees of Swiss Re American Holding Corp. have filed a lawsuit against the company, its board of directors, the employee pension plan committee, and the recordkeeper Empower for alleged breaches of fiduciary duties under ERISA. Specifically, Empower is accused of providing improper rollover recommendations and using participant data for cross-selling. The lawsuit seeks class-action status and covers the period since January 2019. Source: Planadviser.com 401k Excessive Fee Class Action Lawsuits Proliferate in 2024 In 2024, excessive fee class action litigation under ERISA has increased by 35%, continuing a trend seen in other ERISA class action cases. The rise has been notable in the past six months, influenced by record-high settlements for plaintiffs over the previous three years. While some major cases have settled, plaintiff law firms are employing innovative legal strategies to initiate new lawsuits, including an uptick in forfeiture claims against defined contribution plans, excessive fee cases, and fraud claims under the Affordable Care Act. Additionally, the year has seen more claims against defined benefit plans, particularly around pension risk transfers, and an increase in fiduciary breach claims against health plans, including those related to tobacco and vaccine wellness programs. Source: Hallbenefitslaw.com Supreme Court Declines to Address Circuit Split Over Arbitration Provisions in ERISA-Covered Plans The U.S. Supreme Court has denied Tenneco's request to enforce an arbitration clause in its ERISA-governed retirement plan, leaving an ongoing circuit court split unresolved regarding the enforceability of such provisions. Tenneco and its subsidiary, Driv Automotive, faced a lawsuit from current and former employees who accused the company of mismanaging the retirement plan and violating fiduciary duties under ERISA. The employees alleged that the company's selection of poorly performing investment options resulted in significant financial losses in their retirement savings. Source: Hallbenefitslaw.com Some New Twists on Forfeiture Reallocation Litigation: Podcast Yet another 401k forfeiture fiduciary breach suit has been filed, but there are some key differences. And then there is a case that has been through several rounds of adjudication and though winning, has had to keep going back to court. In this podcast, Nevin Adams and Fred Reish examine the issues and potential implications, as well as a quick review of some recent updates. Source: Napa-net.org »» Click here for more Court and Other Legal Issues Legislative or Washington DC How SECURE 3.0 Could Reshape the 401k Fiduciary Regulatory Landscape and Why That's a Good Thing 401k plan sponsors and fiduciaries are facing a potential significant regulatory change with the forthcoming SECURE 3.0 legislation, designed to modernize retirement plans, boost participation, and improve financial security. This law is expected to build on prior SECURE Acts, which expanded access to employer-sponsored plans and introduced lifetime income options. Experts believe SECURE 3.0 could fill gaps in the current retirement system, ensuring greater long-term financial stability for retirees. Future changes might also involve alterations to the tax treatment of ERISA plans to incentivize saving while easing regulatory burdens on businesses, influenced by shifting political dynamics. Source: Fiduciarynews.com ERISA Advisory Council Currently "On Ice" The ERISA Advisory Council is currently inactive amid efforts by President Trump to reduce federal bureaucracy, including staff cuts in the Department of Labor's Employee Benefits Security Administration. Ali Khawar, the deputy assistant secretary of labor for EBSA under President Biden, notes that the council is a statutory body established by ERISA, meaning the administration cannot abolish it without legislative action. Khawar expresses concern over the potential for future recommendations to repeal the council, indicating it would be a lengthy and unfortunate process. Source: Plansponsor.com »» Click here for more on Legislative and Washington Actions State-Based Private-Sector Retirement Programs State Legislatures Continue Auto-IRA Push State-level activity to expand retirement plan coverage marches on, as four state legislatures are considering bills to create state programs for private-sector employees whose employers do not offer a plan. Source: Napa-net.org »» Click here for more on Legislative and Washington Actions Compliance and Regulatory How to Avoid Submitting Any Information to the DOL Lost and Found Database The DOL's Lost and Found Database was established last year as part of SECURE 2.0, but its implementation faced several challenges, including decisions about the required information, the submission process, and whether participation would be voluntary. Despite these difficulties, plan sponsors can minimize their need to submit participant information to the database by using force-out distributions and automatic rollover IRAs, effectively reducing potential risks associated with the database. Source: Penchecks.com 401k plans are complex systems involving various stakeholders, which can lead to frequent errors. As an ERISA attorney, Ary Rosenbaum frequently encounters specific recurring mistakes in these plans which he reviews here. Source: Jdsupra.com »» Click here for more Compliance and Regulatory Material Marketplace News Betterment Advisor Solutions Launches Solo 401k 401GO Partners With isolved on Retirement Plan Offering Callan Adds DC Fiduciary Coursework to Its Online Education Portal, CODE Morningstar IDs Best Robo-Advisers of 2025 Great Gray Expands Retirement Business With RPAG Acquisition Human Interest Introduces First-Ever "401k Customer Experience Guarantee"
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