Deepfaked Fiduciary
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Headlines Fiduciary and Plan Governance
Insight: Studies, Research, Analysis, or Papers Items of Special Interest to Advisers or Other Service Providers 403b Plans Court and Legal
Legislative or Washington DC Compliance and Regulatory
Marketplace News Summaries Fiduciary and Plan Governance The rise of AI-driven deepfake technology poses a new risk for 401k fiduciaries, who are responsible for authorizing fund releases and are personally liable for participant losses under ERISA. Many fiduciaries may not fully understand their potential vulnerability to such advanced attacks. While this risk has not yet materialized in the 401k sector, it's anticipated to arise in the future. The article aims to prepare fiduciaries with insights to help them avoid being among the first to encounter this issue. Source: Wealthadvisors.com M&A and 401k: Where Fiduciary Oversight Often Goes to Die In corporate mergers and acquisitions, extensive focus is placed on financial statements, contracts, and other critical aspects, while the company's 401k plan, which affects all employees, is often overlooked. It tends to be treated as a minor detail amid the urgency of deals. However, neglecting proper due diligence on the retirement plan can lead to significant issues when regulators like the IRS or DOL intervene. The author shares experiences of companies eager for growth who ended up facing compliance problems related to their retirement plans as an unexpected consequence of their acquisitions. Source: Jdsupra.com Evaluating Private Market Investments in Retirement Plans: Podcast Jennifer Doss and Matt Patrick from CAPTRUST are joined by Lucian Marinescu and Josh Charlson from Morningstar to discuss the increasing integration of private market investments in defined contribution plans. They delve into potential allocation strategies, operational hurdles, and the practical considerations for plan sponsors, including issues related to fees, liquidity, and valuation transparency. Lucian and Josh also provide valuable insights on the need for fiduciary due diligence, the significance of transparency, and the key factors that sponsors should assess before adding private market strategies to their retirement plan offerings. Source: Captrust.com The SEC's Pro-Crypto Shift and Its Implications for 401k Integration The SEC's 2025 regulatory reforms in crypto are transforming perceptions among institutional and individual investors by clarifying rules on staking, stablecoins, and custody. This shift aims to balance innovation with investor protection. For retirement investors, the inclusion of cryptocurrencies in 401k plans presents potential for reshaping wealth-building strategies, alongside the need to carefully consider associated risks. However, ERISA fiduciaries must navigate risks associated with the high volatility of crypto markets and evolving regulations. Source: Ainvest.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, Analysis, or Papers Mobile, AI, and Beyond: Trends and the Future of Retirement Plan Participant Experiences The retirement industry is at a crucial point in its digital evolution, with recordkeepers under significant pressure to deliver seamless, personalized digital experiences that meet the rising expectations of plan sponsors and participants. These expectations are shaped by the user-friendly websites and apps individuals encounter in their everyday lives. Digital experiences are becoming a key factor in Requests for Proposals, dramatically impacting firms' financial performance. While top recordkeepers have made substantial investments to enhance their digital offerings and have seen improvements, many still struggle to keep pace with evolving user experience standards and digital trends. The author shares his insights on where the retirement plan industry's digital experiences are heading and what trends and insights recordkeepers need to know to stay competitive. Source: Corporateinsight.com »» Click here for More Studies, Research, and White Papers Items of Special Interest to Advisers or Other Service Providers Schwab Advisor Services' 2025 RIA Benchmarking Study, now in its nineteenth year, analyzes data from over 1,300 independent advisor firms managing more than $2.4 trillion in assets under management. The study highlights the strength of the independent advisory model, with firms prioritizing growth, largely driven by organic means. It covers various topics, including asset and revenue growth, client acquisition sources, pricing strategies, staffing, compensation, marketing, technology, and financial performance, emphasizing the importance of trusted client relationships in driving momentum. Source: Schwab.com 403b Plans It's Time to Restate Your Pre-approved 403b Plan Every employer sponsoring a 403b plan with a pre-approved plan document must restate that document to reflect legal changes by December 31, 2026. Given the resource and staffing limitations often encountered by nonprofit and public sector organizations, it's essential to begin the restatement process as soon as possible. Source: Boutwellfay.com »» Click here for More 403b Material Court and Legal DOL's Plan Forfeiture Amicus Brief "Significant," Legal Experts Say Legal experts view the DOL's recent amicus brief supporting HP Inc. in a 401k-forfeiture complaint as a significant development that could lead to more favorable court rulings for plan sponsors. The DOL stated that the alleged use of forfeited employer contributions in this case would not violate ERISA. Experts note that this marks a shift in the DOL's historical stance towards a more employer-friendly approach, which could influence future legal outcomes. Source: Plansponsor.com DOL Supports Employers in Forfeiture Allocation Litigation In a notable turn of events regarding ERISA forfeiture allocation cases, the DOL has submitted an amicus brief supporting the employer in Hutchins v. Hewlett Packard, a Ninth Circuit case, the first forfeiture case to reach an appellate court. This marks the DOL's first formal stance on the issue, which is usually disfavored by courts, as they prefer legal positions to be established through regulations rather than litigation. Source: Wagnerlawgroup.com Has the Forfeiture Tide Turned? Podcast Recent federal court dismissals of two significant lawsuits concerning forfeiture reallocation could indicate a shift in judicial perspective. The DOL has also expressed support for plan fiduciaries in a related case, raising the question of whether this might signal a turning point. The lawsuits against JP Morgan and Wells Fargo were dismissed in separate courts for different reasons, but the timing and manner of these dismissals suggest that some federal courts may now view established practices, previously accepted by the IRS, as lacking merit. Nevin Adams and Fred Reish weigh in. Source: Napa-net.org Plan Forfeiture Complaint Filed Against Aldi Tries New Allegation In the recent case Castillon v. Aldi Inc., the plaintiffs accuse the grocery chain of breaching its fiduciary duties under ERISA by utilizing participant-forfeited funds to lower company contributions, rather than to cover administrative fees as has been argued in previous complaints. This case, filed in the U.S. District Court for the Northern District of Illinois, introduces the new aspect of timeliness in the forfeiture complaint, following the Department of Labor's supportive amicus brief for plan sponsors. Source: Planadviser.com Court Rules 401k Plan Fiduciaries Must Repay Over $100,000 Within 60 Days In the case Micone v. iProcess Online, the U.S. District Court for Maryland ruled in favor of the DOL regarding the mishandling of 401k participant contributions by the employer, who also acted as the plan sponsor and ERISA plan administrator. The DOL alleged that the company failed to deposit participant contributions into the 401k plan, commingled those funds with company assets, and did not fulfill matching contributions or process distribution requests promptly. The company did not respond to the lawsuit, and the court highlighted that one of its officers had been convicted of embezzlement. As a result, the court ordered the fiduciaries to pay over $100,000 in outstanding damages to the affected plan participants within 60 days. Source: Hallbenefitslaw.com »» Click here for more Court and Other Legal Issues Legislative or Washington DC 401k Coverage for 18-20 Year Olds? Bipartisan legislation known as the Helping Young Americans Save for Retirement Act (H.R. 4718) has been reintroduced in the House of Representatives to allow employees under the age of 21 to participate in their company's 401k plans. Introduced by Rep. Brittany Pettersen and cosponsored by Rep. Michael Rulli, the bill aims to amend ERISA to enhance access to employer-sponsored retirement plans for individuals aged 18 to 20. The bill has been referred to both the House Education and Workforce Committee and the Ways and Means Committee. A companion bill (S. 1707) was also introduced in the Senate by Sens. Bill Cassidy and Tim Kaine. Source: Asppa-net.org »» Click here for more on Legislative and Washington Actions Compliance and Regulatory IRS Issues Further Guidance on Withholding and Reporting of Uncashed Checks Revenue Ruling 2025-15, issued by the IRS on July 16, provides guidance for retirement plan administrators regarding withholding and reporting obligations related to uncashed distribution checks. This ruling builds on earlier guidance from Revenue Ruling 2019-19 and addresses issues surrounding uncashed checks that are canceled and later reissued. While the ruling offers helpful insights, the complexities of uncashed check situations mean it may not fully resolve the difficulties faced by plans. Source: Groom.com IRS Clarifies That Failure to Cash Checks Does Not Affect Withholding or Reporting Revenue Ruling 2025-15 offers guidance on the withholding and reporting responsibilities related to plan participants or beneficiaries who do not cash their distribution checks and subsequently receive replacement checks. The ruling aligns with general constructive receipt principles, indicating that individuals cannot alter their tax obligations by ignoring or failing to cash compensation. Although the ruling does not explicitly discuss constructive receipt, its implications are consistent with these established principles. Source: Erisapracticecenter.com The Essential Role of Plan Sponsors in Participant Beneficiary Designations As a plan sponsor, your responsibilities go beyond managing retirement plans; you also play a crucial role in securing the financial future of participants and their beneficiaries. A key part of this role involves assisting participants with the designation and regular updating of their beneficiaries. This article emphasizes the significance of accurate beneficiary designations, the risks associated with neglecting this aspect, and the proactive measures sponsors can take to educate and support participants. Source: Psca.org »» Click here for more Compliance and Regulatory Material Marketplace News Goldman Sachs Launching Private Credit CIT for 401k Market
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