The 2016 Retirement Landscape: Five Predictions
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General Items The 2016 Retirement Landscape: Five Predictions Summary: Mark Miller expects changing rules for retirement advice and rising inflation to be among the most important retirement stories this year. Source: Morningstar.com Millennials in the Dark About Their Benefits Summary: Younger workers are more likely to overlook the value of employer-provided benefits. Showing how these offerings can help build a successful future can foster engagement. Source: Shrm.org Retirement Plan Mobile Technology Summary: Retirement plan providers are continuing to expand access to plan data on mobile devices, and some are allowing participants to complete transactions through a mobile device. Source: Plansponsor.com
403(b) Plans IRS Updates Materials for 403(b) Plans, IRAs Summary: The IRS has made available updated materials relevant to annual filings that 403(b) plans and certain IRA holders must make, including Publication 571 on "Tax-Sheltered Annuity Plans (403(b) Plans)." Source: Ntsa-net.org After-Tax 403(b) Contributions: Too Good to Be True? Summary: You may have read reports that the use of after-tax contributions can allow participants to contribute substantially more than the 402(g) limit of $18,000. And that such contributions can be immediately rolled over to a Roth IRA or possibly to a Roth 403(b). Is this true? The answer, as is often the case, is maybe. Here are the basics. Source: Ntsa-net.org
Fiduciary and Plan Governance Material 2016 401k ERISA Retirement Plan Compliance Summary: This 2016 401k ERISA Retirement Plan Compliance Calendar highlights critical compliance deadlines for 401k retirement plans. Some of the deadlines apply only to particular plan types and are noted accordingly. Source: Cammackretirement.com A New Fee Challenge for Retirement Plan Sponsors: Levelization Summary: Plan sponsors, as a whole, are unaware that participants pay disparate fees, and service providers, particularly recordkeepers that receive revenue-sharing payments, are not going to address it, experts say. It is incumbent on sponsors, then, to ask their plan advisers and recordkeepers about fee levelization. Source: Plansponsor.com
Insight: Studies, Research and White Papers The Impact of Merger and Acquisition Activity on DC Retirement Plans Summary: Given the complexity and the potential liability associated with either assuming or terminating the retirement plan of the acquired organization, it is worth assessing the retirement plan much earlier in the process, in order to evaluate any potential impact on the costs and risk associated with the transaction. Source: Cammackretirement.com A Look at Access to Employer-based Retirement Plans and Participation in the States Summary: Policymakers have emphasized the need to expand access to what are known as employer-sponsored defined contribution plans, such as 401ks. The ability of employees to contribute directly from their paychecks and the use of features such as automatic enrollment makes the workplace an effective place to encourage saving. Today, only about half of workers participate in a workplace retirement plan, according to this 44-page analysis of data compiled by The Pew Charitable Trusts. Source: Pewtrusts.org
Items of Special Interest to Service Providers SEC Releases Guidance Following Distribution-in-Guise Sweep Summary: The SEC has released guidance describing the steps that fund complexes and their boards can take to ensure that their funds are not paying for distribution from fund assets outside of a rule 12b-1 plan through the mischaracterization of distribution-related payments as sub-transfer agent, sub-accounting or other shareholder service fees. Source: Drinkerbiddle.com SEC Draws a Bead on 401k Specialists Summary: Continuing to deliver on its promise to focus on 401k plans and IRAs under its ReTIRE (Retirement Targeted Reviews and Examinations Initiatives) program, the SEC is focusing examinations on retirement advisors. Source: Napa-net.org
Court and Legal How Has Supreme Court Decision Affected Litigation Over Company Stock in Retirement Plans? Summary: Many observers believed Fifth Third Bancorp v. Dudenhoeffer would significantly increase litigation concerning company stock in retirement plans. That clearly has not happened yet. In tracking this type of litigation since 1990, there have been far fewer lawsuits initiated over stock-drop issues after the Dudenhoeffer ruling than in the years before the decision. Source: Natlawreview.com JPMorgan Dodges ERISA Liability in Lawsuit Summary: JPMorgan Chase once again defeated a lawsuit challenging losses in its 401k and employee stock ownership plans, despite an intervening U.S. Supreme Court decision changing the standard for these types of claims. Source: Bna.com Excessive Fee Claims Against Principal Dismissed Summary: An appellate court has dismissed a plan sponsor's lawsuit claiming its plan provider charged excessive fees to retirement plan participants. Among other things, the 8th Circuit found Principal's adherence to its agreement with a plan sponsor does not imply any fiduciary duty. Source: Plansponsor.com
Compliance and Regulatory Audit Plan Distribution Process to Avoid Headaches Summary: At a recent DC plan conference, a panel of ERISA attorneys was asked, "What are some of the most common issues tripping up your clients in IRS or DOL audits?" The first issue they discussed was a growing trend of clients unable to produce the proper and necessary documentation to support the early distribution of plan assets due to hardship withdrawals and loan requests. Source: Francisinvco.com IRS Previews Qualified Plan Determination Letter Changes in New Guidance Summary: The Internal Revenue Service has issued guidance that clarifies certain implications of its previously announced changes to the employee plans determination letter program. Source: Employeebenefitslawreport.com
Marketplace News Russell Names Vernon Barback President TRA Acquires Virginia Based Capital Pension Services PSCA Releases 58th Annual DC Plan Survey
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