Mutual Fund Trading Costs: The Most Important Fee You've Never Heard Of?
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Public Service Announcement Western Benefits Conference, July 9-12 The Western Benefits Conference is designed specifically for retirement and health and welfare benefits professionals, with an emphasis on practical issues that are important to plan sponsors and their advisors. Learn more here. In This Issue
Fiduciary and Plan Governance Material Mutual Fund Trading Costs: The Most Important Fee You've Never Heard Of? Abstract: What if I told you that there is a fee present in mutual funds that is not included in the fund's published expense ratios and is often not publicly disclosed by the fund companies, since the SEC does not require its disclosure? You might laugh, but it is true. Source: Cammackretirement.com Should Looming Tax Reform Drive 401k Prefunding? Abstract: If the corporate tax rate is lowered, funding more future liabilities before the change takes effect could net significant savings for plan sponsors. Source: Cfo.com Making Sure 401k and 403(b) Fees Are "Necessary" and "Reasonable" - Part One Abstract: A plan sponsor is required to understand all the fees that are associated your organization's retirement plan benefit program. This is a challenge because plan fee structures are often opaque, complicated, and sometimes, downright misleading. You are also required to ensure the services for which the plan is paying are necessary and reasonable. The most effective way to meet this fiduciary requirement is a Request for Proposals (RFP) process. Source: Fiduciaryplangovernance.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers Survey: Potential Impact of Tax Reform on Employees' Retirement Savings Abstract: The Plan Sponsor Council of America released the results of a new snapshot survey to gather insights on the impact of possible changes to tax preferences for retirement savings plans. Source: 401khelpcenter.com Abstract: Recordkeeping is often described as a commodity, and that might be true for the pure administration of participant accounts, but the 55 providers responding to this survey showcase a wide range of investment, technology and service options. Source: Plansponsor.com Abstract: The survey profiles 55 leading providers of DC recordkeeping services. These firms account for more than $6 trillion in assets and are estimated to represent approximately 85% of the total DC market. Collectively, results from the survey demonstrate the market's evolution and point up some factors to consider when selecting a recordkeeping partner. Source: Plansponsor.com Small Businesses Are Boosting Benefits of Their 401k Plans Abstract: Vanguard issued its fourth annual 'How America Saves: Small Business Edition,' an extension of its defined contribution publication. The report analyzes small business 401k plans and finds that small business plans, like their large corporation counterparts, are increasingly implementing best-in-class design features to improve the retirement readiness of their employees. Source: 401khelpcenter.com How America Saves: Small Business Edition Abstract: In this 36-page report, Vanguard analyzes small business 401k plans and participant behavior based on 2016 recordkeeping data. Source: Vanguard.com »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers Market Forces Could Cause Fundamental Changes to Small and Midsize 401k Markets Abstract: For years, experts have predicted the small-plan 401k market would have to change. Although prices have come down, they are still high when compared with larger plans, and the market is rife with inefficiencies. However, a series of dramatic industry changes this year could finally cause fundamental shifts and improvements in the small and perhaps even midsize 401k markets. Source: Investmentnews.com (registration may be required) Court and Other Legal Issues Nationwide's 401k Recordkeeping Fees Are Excessive, Lawsuit Claims Abstract: Nationwide has been sued for allegedly charging 401k plans excessive recordkeeping and administration fees in a lawsuit that also challenges the practice of assessing fees based on the amount of plan assets. Source: Investmentnews.com (registration may be required) Waddell & Reed Sued Over In-House Funds in Its 401k Plan Abstract: Waddell & Reed Financial Inc. is the latest financial services company accused of filling its workers' 401k plan with high-fee, poorly performing in-house funds, when less expensive, better performing outside options were available. Source: Bna.com (registration may be required) Washington University Sued Again Over Its $3.8B Retirement Plan Abstract: Washington University in St. Louis was hit with a second lawsuit accusing it of filling its $3.8 billion retirement plan with duplicative, expensive, and underperforming investment options. Source: Bna.com (registration may be required) Pioneer Natural Resources Sued Over 401k Fees Abstract: Pioneer Natural Resources USA is accused of choosing inappropriate, high-cost mutual funds in its 401k plan and paying Vanguard unreasonable, excessive recordkeeping fees. Source: Bna.com (registration may be required) »» Click here for more Court and Other Legal Issues Cybersecurity Issues Cybersecurity: Are Public Defined Contribution Plans at Risk? Abstract: Given the continuing need for plans to adopt ever-greater levels of technology for administrative efficiency, the risk of inadvertent disclosure of personal information is escalating. Regardless of the investment made in protecting systems and data transmissions, plans remain vulnerable to human error and malicious or criminal actions. Source: Nagdca.org »» Click here for more on Cybersecurity Issues DOL's Fiduciary Rule DOL Again Seeks Comments on New Fiduciary Rules and Exemptions Abstract: The DOL requested another round of public comment on its fiduciary rule, this time in the form of a Request for Information. The RFI seeks input on (a) whether to extend the January 1, 2018, applicability date for parts of the rule that are not yet in effect, and (b) changes to make the rule more workable. The RFI expresses an openness to modifying existing exemptions and adopting new ones. Source: Erisapracticecenter.com »» Click here for more on the DOL's Fiduciary Rule Compliance and Regulatory ERISA Retirement Plans May Not Protect Fraudulent Transfers Abstract: The federal protections of ERISA protect retirement assets from most creditors under the anti-alienation provision. However, not all retirement plan contributions are protected from all creditors of fraudulent transfers. For example, transfers to a retirement plan specifically to avoid creditors are generally not protected. Source: Bsllp.com IRS Moves to Nudge Employers to Pre-Approved Plans Abstract: The IRS has made some changes to how it deals with pre-approved plans, hoping to encourage employers to switch from individually designed plans to the pre-approved format. Source: Asppa.org Fewer DC Plans Offering Hardship Withdrawals and Plan Loans Abstract: Fewer organizations are offering DC plan hardship withdrawals, plan loans and online retirement invest. advice compared with five years ago. However, one-on-one and group/classroom-style investment retirement advice remains unchanged over the same period, according to new survey results from the Society for Human Resource Management. Source: Napa-net.org »» Click here for more Compliance and Regulatory Material Marketplace News Plante Moran Adopt IRAFiduciaryOptimizer Tool Manning & Napier Adds to Collective Investment Trust Lineup Cafaro Greenleaf Launches Fiduciary Fit Roland|Criss Expands Digital Fiduciary Risk Management Solution to Education Sector »» Click here for More Marketplace News
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