Do 401k Managed Accounts Live Up to All the Hype?
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Newsletter Sponsor Are All $5,000,000 401(k) Plans Created Equal? Just Published! The 401k Averages Book has released a new Special Report taking a closer look at two 401(k) Fee Benchmarks. The report compares two plans with the same assets with different average account balances. Click here for your copy of the report. In This Issue
General Items Do 401k Managed Accounts Live Up to All the Hype? Abstract: Offering employees professionally managed accounts in a 401k plan might seem to be an excellent option, as this service seeks to provide an investment mix customized to individual needs and goals while increasing the odds of saving enough money for retirement. But managed accounts present challenges and concerns that both plan sponsors and participants should fully understand. Source: Shrm.org Robo-Advisers: More Complex Than They May Appear Abstract: The article analyzes the growing trend of investment firms including robo-advisers as part of their service offerings. The SEC's Information Guidance and Investor Alert from February 2017 indicated that "robo-advisers, like all registered investment advisers, are subject to the substantive and fiduciary obligations of the Advisers Act." The article provides insight into the challenges robo-advisers face in terms of compliance with disclosure requirements, fiduciary obligations, and other regulatory responsibilities. Source: Kattenlaw.com 403(b) Plans Why Some 403bs May Delay Form 5500 Filing Abstract: Many retirement plan sponsors, including 403b plan sponsors, file an extension of time to file their Form 5500s. This article discusses the two primary reasons. Source: Plansponsor.com New Jersey Considers 403(b) Disclosure Bill Abstract: A bill that would require new disclosures in New Jersey, A5151, has been filed by Assemblywoman Amy Handlin, the Deputy Republican Leader of the Democrat-controlled Assembly. Source: Napa-net.org »» Click here for More 403(b) Material Fiduciary and Plan Governance Material Seven Ways a Fiduciary Can Follow "Procedural Prudence" Abstract: "Procedural Prudence" is not a new concept. It underlies one of ERISA's bedrock requirements. A fiduciary must discharge their duties prudently with care, skill, and diligence. It's the process by which a fiduciary can accomplish this. Here are seven practical considerations for fiduciaries to shore up their defenses and improve their governance practices. Source: Retirementplanblog.com Checklist for Strengthening Your Defenses to 401k Plan Class Actions Abstract: It is in the interest of plan sponsors and plan fiduciaries to take all reasonable steps to head off claims quickly if they are asserted. The following checklist is offered as a non-exclusive guide for those purposes. Source: Jdsupra.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers Improving Participant Communications Abstract: It's always been important to communicate effectively with plan participants. Not to mention that law and regulation set certain bottom lines for performing that function. A recent paper offers some insights on how those communications can be improved based on current circumstances. Source: Asppa.org »» Click here for More Studies, Research, and White Papers Plan Automation The Positive Impact of Automatic Features Abstract: Automatic plan features offer numerous benefits. These positive impacts occur amidst a backdrop that surprises many employers: employees favor automatic features and appreciate an employer that utilizes them. This 7-page white paper will help employers to strengthen their commitment through a thoughtful and informed automatic enrollment and escalation structure. Source: Qualifiedplanadvisors.com »» Click here for more on Automatic 401k Plan Features Court and Other Legal Issues Sears Hit With Second Lawsuit Over Company Stock in 401k Plans Abstract: Sears Holdings was sued for the second time in a month over its decision to retain and continue purchasing its own declining stock as an investment option in the retailer's 401k plans Source: Bna.com (registration may be required) Arch Coal Beats ERISA Lawsuit Over Company Stock in 401k Plan Abstract: Arch Coal defeated a lawsuit by employees accusing it of failing to divest their 401k plan of the company's stock during a three-year period when its value declined from $680 to $1.42 per share. Source: Bna.com (registration may be required) What Hitchcock v. Cumberland Means for Plan Fiduciaries Abstract: Earlier this year, the 6th U.S. Circuit Court of Appeals ruled that the participants in a university's pension plan do not have to exhaust administrative remedies before they pursue claims of ERISA violations. A recent blog entry discusses what this ruling means for plan fiduciaries. Source: Asppa.org Participant Fails to Establish Class Status in Prudential Lawsuit Abstract: A federal district court judge has denied class action status to an ERISA challenge filed by a retirement plan participant invested in a stable value product offered by Prudential. The denial of the class certification motion goes into some detail regarding what it takes to establish class standing under ERISA. Source: Plansponsor.com »» Click here for more Court and Other Legal Issues DOL's Fiduciary Rule DOL Seeks to Delay Fiduciary Rule Until July 2019 Abstract: The Labor Department is seeking to delay implementation of the remaining parts of its fiduciary rule for 18 months. In a brief filed in a Minnesota lawsuit Wednesday, the DOL indicated it had submitted to the Office of Management and Budget a proposal to delay the rule from Jan. 1, 2018, until July 1, 2019. The OMB must review and approve the proposal before it can go into effect. Source: Investmentnews.com (registration may be required) Fifth Circuit Oral Arguments -- A New Hope for Fiduciary Rule Opponents? Abstract: During oral argument in Chamber of Commerce v. Acosta, Judge Jones not only peppered both parties with questions that appeared to be largely based on the Chamber of Commerce's briefs, but also raised a new argument about why the Fifth Circuit need not defer to the DOL's analysis. Should Judge Jones and at least one of the other members of the panel side with the Chamber of Commerce, the Fiduciary Rule could be vacated. Source: Groom.com »» Click here for more on the DOL's Fiduciary Rule Compliance and Regulatory Five Common Mistakes of Plan Sponsors Abstract: There are a number of ways plan sponsors can reduce their liability and avoid costly penalties for operational errors. These include conducting a complete review of plan documents and company policies to ensure they are in accord. Here are five common mistakes plan sponsors make. Source: Bsllp.com Hardship Distributions: Source Documents vs. Documentation of Self-Certification by Participants Abstract: The IRS released a Memorandum to its agents setting forth the substantiation they should expect to see for 401k plan hardship distributions issued. The IRS agents were instructed to examine source documents if they are obtained by the employer or third-party administrator, or to examine the summary of documentation that the hardship distribution recipient will maintain. Source: Belfint.com »» Click here for more Compliance and Regulatory Material Marketplace News CUNA Mutual Retirement Solutions Enhances Technology Trust Builders Announces Company Name Change TRA Announces Acquisition of Retirement Planning, Inc. Cammack Adds to Consulting Staff »» Click here for More Marketplace News
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