SEC Accuses 403b Plan Advisory Firm of Conflicts-of-Interest
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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
Compliance and Regulatory SEC Accuses 403b Plan Advisory Firm of Conflicts-of-Interest Abstract: The SEC has instituted a cease-and-desist order against Envoy Advisory. Envoy is accused of breaches of fiduciary duty, inadequate disclosures and compliance deficiencies. Most of its clients are small to medium-sized non-profit, faith-based organizations that sponsor ERISA Section 403(b) retirement plans for employees. Source: Planadviser.com Like Harvey, Retirement Plans Can Make Loans, Hardship Distributions to Victims of Hurricane Irma Abstract: The Internal Revenue Service announced that 401ks and similar employer-sponsored retirement plans can make loans and hardship distributions to victims of Hurricane Irma and members of their families. This is similar to relief provided last month to victims of Hurricane Harvey. Source: Irs.gov A Fresh Look at Mid-Year (aka "Projected") 401k Testing Abstract: It's that time of year again, when many clients and their advisors map out a strategy for the remainder of the year to try to maximize 401k deferral rates for their Highly Compensated Employees. Often, mid-year, or projected, compliance testing is the tool that they use to devise that strategy. This article focuses on how mid-year nondiscrimination testing can be a disservice to advisors, clients, and participants alike. It then reviews how to use 401k test results in a more constructive manner. Source: Pentegra.com Staying Out of Trouble: How to Avoid IRS and DOL Audits Abstract: This presentation discusses IRS and DOL audit triggers, the process for each, and what to do if your plan is audited. It also discuss the top audit issues and actionable steps companies can take to avoid audits and compliance issues. Source: Employeebenefitsblog.com »» Click here for more Compliance and Regulatory Material General Items Three Ways Participants are Driving a New Era of Menu Design Abstract: The industry has put immense effort into introducing new participants to retirement education and help preparing resources to assist in participants' long-term needs. While the effort on behalf of those participants can and should continue to be a large focus, there needs to be an additional layer of planning, preparation, and servicing to those participants who are near or at retirement with a shorter time horizon, and full of diverse needs. Source: Manning-Napier.com Employers Looking to "DBification" of DC Plans as Industry Matures Abstract: As the defined contribution pension industry continues to mature, Canadian employers are considering ways to improve their DC plans by introducing elements of defined benefit plans, according to an industry expert. Source: Benefitscanada.com 403b Plans How to Do a 403b Collective Trust Abstract: The University of California made news when it announced that it has found a way to apply the collective trust rules in such a way to make just such an offering to its 403b plan. For sophisticated state universities with large plans, or even those large consolidated K-12 plans, this could be a very real option. Source: Businessofbenefits.com 403b Plans Must Be Universally Available -- Is Yours? Abstract: Plan sponsors sometimes run into confusion regarding which employees may be excluded from making salary deferral contributions under their plan. This article discusses the rules to help clarify which employees may be excluded. Source: Eisneramper.com »» Click here for More 403b Material Fiduciary and Plan Governance Material Fiduciary Duties in an Age of Impact Investing Abstract: This article describes "impact investing" and reviews how fiduciary duties applicable to managers of pension plan assets and charitable institution assets permit and restrict the use of nonfinancial factors in managing those assets. Source: Steptoe.com White Label Fund Options for DC Plans Abstract: The core lineup of most plans has remained largely unchanged over the past 20 years. The author suggests that it's time for DC plan sponsors to rethink these legacy investment lineups. This paper focuses reframing the design of actively managed options with an emphasis on fewer, broader investment options to ease participant decision making. Source: Willistowerswatson.com ERISA's Reasonable Fee Requirement Abstract: Plan fiduciaries must review service provider fees annually against reliable indicators as part of proper plan governance. The efficacy of any such review depends upon the ability to break out fees for each service and to utilize acceptable benchmarks, rather than self-serving benchmarks supporting excessive fee arrangements. Source: Cpajournal.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers Webinar Replay: NEPC 12th Annual DC Plan and Fee Survey Abstract: NEPC's Ross Bremen, CFA, Partner, and Kevin McCullough, CFA, Analyst, hosted this review of NEPC's 12th Annual DC Plan and Fee Survey. NEPC conducted the Survey to capture data and trends around plan design, and to help plan fiduciaries better understand and measure the investment and administrative costs of their plans. Source: Nepc.com Assessing Americans' Financial & Retirement Security Abstract: The ACLI study analyzes data from 4,500 U.S. households to provide a comprehensive picture of Americans' current state of financial and retirement security. It finds that 65 percent of U.S. households are on track or nearly on track to be financially secure. Among households considered to be the most financially secure, 25 percent earn $50,000 or less. Among households that need significant financial improvement, 25 percent earn $72,000 or more. Source: Acli.com »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers Retirement Plan Advisers Need to Start Marketing to Providers Abstract: Resources are shrinking as margins get thinner, with more assets moving into target-date funds and passive investments, forcing providers to make tough decisions on who they can support. As a result, advisers need to start "selling" providers on why they deserve support and treat them like true business partners rather than vendors. Source: Investmentnews.com (registration may be required) Fiduciary Liability Defenses for Advisers Under ERISA Abstract: If an investment adviser makes a recommendation to a retirement plan sponsor or investment manager, who then follows that recommendation and later challenges it as a breach of fiduciary duty, there are several types of defenses available to the adviser. Source: Investmentnews.com (registration may be required) Cybersecurity Must Be C-Suite Concern at RIAs, Brokers and Managers Abstract: Cybersecurity attorney and former SEC staffer Marlon Paz suggests it is absolutely essential for advisory firms to have a senior executive "not just appointed but also empowered" as the chief information security risk officer. Source: Planadviser.com Marketplace News DWC - The 401k Experts Announces Merger With Hawkins Retirement »» Click here for More Marketplace News
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