Seven Critical Tips for Employers to Minimize ERISA Fiduciary Risk

Summary: Article sets forth seven critical tips that employers can act upon to reduce their potential ERISA fiduciary exposure.

Source: Benefitslawadvisor.com

When a Committee of One Runs a 401k

Summary: According to professionals in the retirement field, most new sponsors of small or micro plans are unaware of the critical duties of prudence, loyalty and diversification of investments that a fiduciary to a plan assumes under ERISA. Many are also unclear that the individual making plan-level decisions for a micro plan in essence becomes that plan's management committee -- meaning they must perform many of the same responsibilities as the more robust and experienced committee of a mega plan.

Source: Planadviser.com

Money Market Fund Reform Likely Warrants 401k Plan Changes

Summary: The recent money market fund reforms adopted by the SEC, which take effect in October 2016, will require retirement plan advisers to review the money market funds in their plan sponsor clients' lineups and possibly recommend changes, experts say. Some believe more 401k plans will switch to government money market funds.

Source: Planadviser.com

Insight: Studies, Research and White Papers

Strategies to Help DC Plan Participants Improve Financial Wellness and Achieve a Secure Retirement

Summary: The time has come to adopt and implement proven features and solutions to help defined contribution plan participants achieve improved financial wellness and enjoy greater financial security in their retirement years. Paper outlines three strategies employers can adopt to accomplish this.

Source: Xerox.com

Infographic: Improving Retirement Readiness

Summary: Given the expanding number of workers that will rely on their defined contribution plans in retirement, employers can benefit from improving the retirement readiness of their employees. To improve their DC retirement plans and engage employees in building and protecting their retirement savings, employers can look to four primary areas.

Source: Towerswatson.com

16th Annual Transamerica Retirement Survey

Summary: The 16th Annual Transamerica Retirement Survey finds American workers are continuing to recover from the Great Recession and its aftereffects. While the economy is recovering, the U.S. retirement landscape is also continuing to evolve, with increases in life expectancies, the need for Social Security reform, and an even greater need for individuals and families to plan and save for their future financial security. Most workers are rising to the challenge by savings, but are they saving enough? Are they properly planning?

Source: Transamericacenter.org

Company Stock in Defined Contribution Plans

Summary: The findings of this survey of 160 employers with company stock in their DC plans show that companies are paying close attention to the Fifth Third decision. A majority of responding companies have reviewed or are planning to review their procedures for monitoring company stock, investment policy statements and plan documents. In addition, more than one-third already have or are considering retaining a third party as an independent fiduciary, and slightly more than one-fourth have initiated or are considering the elimination of company stock.

Source: Towerswatson.com

Economists Say 401k Plan Loan Policy Shapes Borrowing

Summary: Decades into reviewing the pluses and minuses of 401k plans, most employer plan sponsors have chosen to offer plan loans, which on the one hand give participants early partial access to their retirement funds but also threaten to erode those savings. A new paper suggests that plans' loan policy can shape participant borrowing, which may give sponsors a greater sense of control as a 401k lender.

Source: Thompson.com

Items of Special Interest to Service Providers

What Does Retirement Plan "Best Interests" Really Mean

Summary: The DOL asserts the new fiduciary rule will require brokers to act in the "best interest" of the clients they serve, whether they be institutional or individual. But the DOL never really defines exactly what "best interest" means. Author canvassed retirement plan service providers from coast to coast to see if he could discover the phrase means.

Source: Fiduciarynews.com

Cybersecurity: SEC Outlines Steps You Can Take

Summary: SEC guidance points out that the use of technology makes it necessary to protect confidential and sensitive information from third parties. Its suggestions include the following steps, which track a time-tested solution process: (1) assess; (2) develop an appropriate strategy; and (3) implement that strategy.

Source: Asppa.org

The New Fiduciary Advice Regulation and Its Likely Impact on Advisors

Summary: The proposed fiduciary definition changes are so great that advisors should be aware of them now and perhaps begin adapting their practices to the anticipated changes. This article discusses the DOL proposal and the exemption for commissions (and, possibly, rollovers) and their likely impact on advisors.

Source: Hartfordfunds.com

The Essence of the Fiduciary Proposal . . . for Advisors

Summary: By now, you've probably read about some of the details of the Department of Labor's fiduciary proposal. This article isn't about the details; it's about the essence. Fred Reish looks at the big picture.

Source: Fredreish.com

Target-Date Funds

Latest Trends in Target-Date Funds

Summary: BrightScope announced recent findings in target-date funds as a result of their examination of the lowest cost institutional share class for all target-date funds through February 2015. This includes 59 target-date series, composed of 561 distinct target-date funds from 40 different asset managers.

Source: Brightscope.com

Compliance and Regulatory Related

ASPPA Makes Recommendations on IRS Priority Guidance Plan

Summary: ASPPA took the IRS up on its invitation to comment on the 2015-2016 Priority Guidance Plan and in a comment letter filed on April 30 has made suggestions to the IRS regarding projects and guidance it should pursue during the period covered by the plan.

Source: Asppa.org

Relief for Some Small Retirement Plans That File Late Returns

Summary: All is not lost for some small retirement plans that were late in filing certain required retirement plan returns. The IRS on May 1 issued a reminder in news release IR-2015-74 that eligible small businesses can file the returns by June 2 and not suffer the penalties they would otherwise face.

Source: Asppa.org

New Compliance Questions on Form 5500 Filing

Summary: The IRS recently announced that it will be collecting additional compliance information on qualified plans. The additional information gathered will be used by the IRS to monitor tax compliance, encourage plan sponsor development and use of internal controls, compile data to use for future Employee Plans Compliance Unit (EPCU) projects, and check plans for potential disqualification errors.

Source: Consultrms.com

Five Fast Facts Regarding the New DOL Proposed Fiduciary Rule

Summary: The proposed rule is controversial, replacing a 2010 proposed rule that was withdrawn due to feedback from concerned industry groups. At 120 pages, much of which can be interpreted in various ways, the proposed rule is anything but light reading. However, some simple observations can be of benefit in determining the impact of the proposed rule on plan sponsors and the entities with whom they work.

Source: Cammackretirement.com

Marketplace News

FSR Announces New "Save 10" Initiative to Help Workers Save

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.