Legal Implications of 2016 Trends in the Advisor Community
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Items of Special Interest to Service Providers Legal Implications of 2016 Trends in the Advisor Community Abstract: From a legal perspective, what is likely to be coming down the pike for plan advisors? David N. Levine, a principal with the Groom Law Group, sees four business trends with potential legal compliance impacts on advisors. Source: Napa-net.org SEC Proposes Rules on Adviser Business Continuity and Transition Plans Abstract: A proposed new rule, Rule 206(4)-4, would require SEC-registered investment advisers to adopt and implement written business continuity and transition plans (BCP) reasonably designed to address operational and other risks related to a significant disruption in the investment adviser's operations. Source: Drinkerbiddle.com
General Items Fewer Recordkeepers in the 401k Field Abstract: Several 401k recordkeepers have exited the game, merged or been acquired by larger providers because they haven't been able to keep pace with fees or expanded services that plan sponsors have been demanding. As consolidation takes over the recordkeeper marketplace, employers gain more opportunities to get the same service at a discount price. Source: Workforce.com The Hidden Downsides of a 401k Loan Abstract: At first, the 401k loan looked like a great option. There's no credit check, the fees and interest rate are minimal, and best of all, the interest would go back into her own account. However, there are also several hidden downsides of 401k loans to be aware of that are outlined here. Source: Financialfinesse.com
Fiduciary and Plan Governance Material Plan Fiduciaries Take More Interest in Recordkeepers' Cybersecurity Practices Abstract: In an era when costly cyberattacks and data breaches are becoming more common, 401k plan advisers are beginning to scrutinize data-security practices at recordkeeping firms. RK clients also have heightened concerns about securing the personal data of their employees. Source: Investmentnews.com (registration may be required) Abstract: Just one among the many difficult aspects of learning to run a retirement plan is coming to appreciate the sometimes subtle, but clearly critical, differences between a recordkeeper and a third-party administrator (TPA), a task made all the harder by the near-constant evolution in business models, technology and client service preferences. Article reviews the differences and why plan fiduciaries turn to TPAs for help with plan design and administration. Source: Plansponsor.com Key Fiduciary Decisions Loom for Retirement Plans Using MM Funds Abstract: In July 2014, the SEC adopted a beefed-up rule designed to make money funds less susceptible to heavy redemptions and loss of principal during a financial panic. Oct. 14 is the compliance deadline for the rule. If plan fiduciaries haven't done so yet, they should start preparing now to assess how the new regulation will impact the investment options available to participants. Source: Investmentnews.com (registration may be required)
»» Click here for more Fiduciary and Plan Governance Material
Insight: Studies, Research and White Papers 2016 Defined Contribution Plan Participant Survey Abstract: This 28-page report discusses research findings, draw implications for the continued evolution of DC plans, and explores what plan sponsors and their industry partners can do to help as many participants as possible achieve a financially secure retirement. Source: Jpmorgan.com 2016 PLANSPONSOR Third-Party Administrator Survey Abstract: The survey includes TPA firms from the very small to the very large: $600,000 in total retirement plan assets to $54 billion in plan assets, respectively; more than one in six have in excess of 500 plans. Survey participants have offices in all but seven U.S. states, and about one in six is a national firm. Article provides details from the survey data. Source: Plansponsor.com
»» Click here for more Studies, Research and White Papers
Legislative and Washington DC Lawmaker Introduces Bill to Create Universal Retirement Plan Abstract: U.S. Representative Joe Crowley of New York introduced the Secure, Accessible, Valuable, Efficient Universal Pension Accounts (SAVE UPs) Act. The new legislation would universalize retirement savings accounts so every American worker would have an opportunity to generate tax-advantaged assets. Source: Planadviser.com
»» Click here for more Legislative and Washington Material
Court and Other Legal Issues Excessive-Fee Suit Targets Checksmart's $25M 401k Plan Abstract: A participant in Checksmart Financial LLC's 401k plan sued the loan servicing company for allegedly breaching its ERISA fiduciary duties by allowing excessive administrative fees and imprudent investment options in the company's plan. Source: Bna.com New York Life Accused of Profiting Off Workers' 401ks Abstract: New York Life Insurance Co. has been sued by employees who claim that one of the company's in-house mutual funds carried needlessly high fees that eroded their retirement savings. Source: Bna.com Cetera, Plan Sponsor Sued for Excessive Fees Abstract: For the second time in two months, a small 401k plan is at the center of a lawsuit alleging excessive plan fees. The plan adviser, Cetera Advisor Networks, has been named as a co-defendant in a move experts call a twist of sorts from other 401k litigation. Source: Investmentnews.com (registration may be required) First Circuit Holds "Float" Is Not a Plan Asset Abstract: In the case In re: Fidelity ERISA Float Litigation, No. 15-1445 (1st Cir., July 13, 2016), the plaintiffs alleged that Fidelity breached its fiduciary duties because it used float to earn interest for itself, and not to benefit the plan. The district court dismissed the complaint on the defendants' motion to dismiss. The First Circuit, in a decision former Supreme Court Justice Souter wrote as he sat by designation, upheld the dismissal. Source: Dbr.com
»» Click here for more Court and Other Legal Issues
Compliance and Regulatory Agencies Propose Significant Changes to Form 5500 Annual Reporting Abstract: These proposed revisions, if implemented, would be the most significant overhaul of the Form 5500 since the Agencies' update that was effective with the 2009 plan year. The revisions would affect employee pension and welfare benefit plans, plan sponsors, administrators, and service providers to plans (including recordkeepers and trustees) subject to annual reporting requirements under ERISA and the Internal Revenue Code. Source: Groom.com DOL Commences Retirement Plan Audits for Compliance With Code Section 401(a)(9) Abstract: This client article provides an overview of the Code's qualification requirements as they relate to required minimum distributions, the DOL's interest in required minimum distributions, and the DOL's guidance on missing plan participants. Source: Dickinson-Wright.com
»» Click here for more Compliance and Regulatory Material
Marketplace News Pensionmark Welcomes Ridge Retirement Consultants Retirement Plan Marketing and KnowHow 401k Announce Partnership Prudential Taps Jamie Kalamarides to Lead New Retirement Plan Unit
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