Summaries

Fiduciary and Plan Governance

Expanding 401k Investment Choices With Alternative Asset Allocation Funds

In August 2025, President Trump issued an executive order aimed at enhancing 401k participants' access to investment strategies that include alternative assets such as private equity, real estate, and digital assets. The order highlights the potential for these assets to provide competitive returns and diversification benefits, helping participants grow their retirement savings. Deputy Secretary of Labor Keith Sonderling expressed optimism about the future of innovative retirement products that can offer increased returns, diversification, and security for American workers. This article explores the implications of this policy change for plan sponsors.

Source: Ifebp.org

The Rise of Managed Accounts: Are They Right for Your Plan?

Managed accounts are investment portfolios overseen by professional managers who tailor asset allocation based on various financial factors and retirement age, going beyond the approach used by target-date funds. Incorporating managed accounts into retirement plans can offer personalized investment advice similar to that of traditional financial advisors, but in a more scalable and cost-effective way. They are particularly beneficial for participant demographics with higher balance accounts and older employees facing complex financial situations. However, there are some drawbacks to managed accounts that should be considered.

Source: Planpilot.com

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Insight: Studies, Research, Analysis, or Papers

Five Innovative Ways Organizations Can Use AI to Improve Their Retirement Plans

As employee benefits continue to change, artificial intelligence is becoming a transformative force in the realm of 401k and other retirement plans. By harnessing AI, companies can significantly improve retirement planning and boost employee engagement through innovative methods. Here are five compelling strategies for retirement plan sponsors to embrace AI and enhance their employee benefits programs.

Source: Alight.com

Federal Saver's Match, Coming in 2027, Could Boost Automated Retirement Savings Programs

Nearly 57 million American workers -- almost half of the private sector -- lack retirement benefits at their jobs. In response, 17 states have implemented automated individual retirement accounts to help close this savings gap. However, unlike 401k plans, auto-IRAs do not allow for employer contributions, which may reduce employee participation. A new federal initiative, the Saver's Match, set to launch in 2027, could change this by providing incentives for eligible workers, potentially increasing participation in state auto-IRA programs and encouraging higher voluntary contributions, thereby boosting overall savings.

Source: Pew.org

What Happens When Default Rates Are High?

Researchers, including David Laibson from Harvard University, studied the impact of default savings rates on retirement outcomes by examining employees at a U.K. firm with a 12% default rate. They found that while 75% of employees opted out, 25% remained at the 12% savings rate, notably including many lower-income employees. Laibson suggests that these findings indicate the effectiveness of high default savings rates but also highlight the need for a more individualized approach to retirement plans.

Source: Plansponsor.com

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Items of Special Interest to Advisers or Other Service Providers

Want to be Highly Valued by Plan Sponsors? Improve Participant Outcomes

Fidelity Investments' 16th annual Plan Sponsor Attitudes Study reveals a strong correlation between plan sponsors' satisfaction with retirement plan advisors and their perception of employees' retirement readiness. The study, which surveyed over 1,100 employers, found that 74% of sponsors who believe participants are saving adequately for retirement express high satisfaction with their advisors, compared to only 58% for those who think otherwise. Christopher Alpaugh from Fidelity highlights that advisors play a crucial role in helping sponsors navigate complexities and enhance participant outcomes.

Source: 401kspecialistmag.com

What to Consider Regarding Cryptocurrency Investments in Retirement Plans

As financial advisors adapt to the evolving investment landscape, the challenge of incorporating emerging assets like cryptocurrency into retirement plans becomes significant. While cryptocurrencies present growth opportunities, they also carry unique risks that can affect the financial security of participants. To navigate this complexity, fiduciary analysts can align cryptocurrency investment considerations with best practices in fiduciary investment management.

Source: Napa-net.org

Target-Date Funds

A Breakdown of Target-Date Fund Strategies in 2025

A deeper understanding of target-date strategies empowers asset managers to conduct better competitive analysis and deliver more differentiated offerings. Morningstar's 2025 Target-Date Fund Landscape report analyzes flows, fees, asset composition, top picks based on the Morningstar Medalist Rating, and more.

Source: Morningstar.com

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Court and Legal

Supreme Court Decision Impacts Retirement Plan Sponsors

On April 17, 2025, the U.S. Supreme Court delivered a unanimous and significant ruling in the case of Cunningham v. Cornell University, fundamentally altering the legal framework for retirement plan fiduciaries. If you play a role in managing your company's retirement plan, this decision goes beyond mere legal updates; it serves as a critical prompt to evaluate your plan's oversight methods and the quality of the advisory services you utilize.

Source: Francisway.com

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Legislative or Washington DC

House Bill Would Permit Transfer of Unclaimed Retirement Distributions

Reps. Seth Magaziner and Ron Estes have introduced the Unclaimed Retirement Rescue Plan, a bill that would authorize the DOL to regulate the transfer of unclaimed retirement distributions to state unclaimed property programs. If passed, the bill would allow, but not require, ERISA fiduciaries to transfer unclaimed balances after making efforts to contact the participant. Additionally, fiduciaries would be required to report the transfers to the DOL for inclusion in a Lost and Found database.

Source: Napa-net.org

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Compliance and Regulatory

Industry Best Practices and Procedures for Roth Catch-Up Contributions

Final regulations regarding Roth catch-up contribution rules were released on September 15, 2025, and will take effect in 2027. In the interim, plans are expected to follow a reasonable, good faith interpretation of Section 603 for the year 2026. This document provides best practices, along with designated roles and responsibilities, to ensure compliance with the Roth catch-up contribution requirements, with the goal of streamlining complex processes and fostering consistency across the industry.

Source: Sparkinstitute.org

401k Plans and Audits

Generally, retirement plans sponsored by companies with 100 or more participants are required to submit an independent audit report along with their annual Form 5500 filing. Furthermore, both the DOL and the IRS have the authority to audit retirement plans. Therefore, it is advisable for plan sponsors to always be prepared for an audit. This article provides tips on how to get ready, including what to anticipate when notified of an audit.

Source: Colonialsurety.com

Is Your Retirement Plan Correction Playbook Ready?

Retirement plans offer significant advantages to employees, but their administration can be quite complex. Even the most attentive plan sponsors can encounter errors. Since it's likely that mistakes will happen at some point during your retirement plan's duration, it's essential to have a strategy in place to effectively and promptly address any issues that arise.

Source: Brickergraydon.com

Final Catch-Up Contribution Regulations Under SECURE 2.0 Act

On September 15, 2025, the IRS released final regulations regarding catch-up contributions for 401k, 403b, and governmental 457b plans, in line with the SECURE 2.0 Act of 2022. These regulations outline provisions for "Super" Catch-Up Contributions and Mandatory Roth Catch-Up Contributions specifically for high-wage employees, aimed at participants aged 50 or older by the end of the year.

Source: Ktslaw.com

Final Catch-Up Rules: What Now? (Spoiler Alert: There is No Extension)

The IRS has released final regulations regarding changes to catch-up contribution provisions under SECURE 2.0, following earlier proposed regulations. These final regulations address various administrative questions and clarify ambiguities that arose after the enactment of SECURE 2.0. This overview highlights key issues that have been resolved by these regulations.

Source: Beneficiallyyours.com

Mandatory Roth Catch-Ups for Higher-FICA Wage Participants: Final Regulations

The IRS released Final Regulations on September 15, 2025, concerning mandatory Roth catch-up contributions for participants with higher FICA wages. These regulations maintain the "Deemed Roth Catch-up Election" rule from earlier proposed regulations. Under this rule, plans can automatically designate catch-up contributions as Roth for affected participants, provided they are offered a chance to opt out. To implement this option, plans must be amended accordingly.

Source: Sgrlaw.com

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Marketplace News

Betterment at Work and First Citizens Wealth Launch 401k Solution for Business Clients

Daybright Financial Buys The Platinum 401k

This eNewsletter is a digest of information published by a variety of web-based sources on 401k and related issues and is published as a service to our users. 401khelpcenter.com, LLC is not the author of the material unless specifically noted.