Seven Investment Trends in 401k Plans
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In This Issue
General Items Seven Investment Trends in 401k Plans Abstract: A number of forces continue to drive change in 401k investing, among them the broad adoption of index funds and litigation targeting 401k plans for allegedly excessive fees. Here's a breakdown of the prevalent trends by the numbers. Source: Investmentnews.com (registration may be required) Participant Communications: Targeting the Goal Line Abstract: Benefits administrators from two employers in a May 1 session of the Plan Sponsor Council of America's annual conference in Scottsdale, AZ shared their experiences and approaches in communicating with plan participants in their respective retirement plans. Source: Asppa.org Fiduciary and Plan Governance The Inconvenient Truth of Fiduciary Loan Regulation Abstract: Many plan sponsors falsely believe that loan defaults do not merit fiduciary attention. Yet the Employee Retirement Income Security Act characterizes plan loans as investments, requiring care and prudence to meet the fiduciary standard. With all the litigation targeting defined contribution plans, now is a good occasion for plan sponsors to re-evaluate their loan practices. Source: Loaneraser.com Fiduciary Compliance and Best Practices Abstract: Fred Reish, partner at Drinker, Biddle and Reath, told attendees of the Plan Sponsor Council of America 71st Annual National Conference, from his perspective, plan sponsors have a "best practices hat," meaning "plan sponsors have an option of going beyond looking at what benefits the participants or employer. Meeting minimal objectives of the law is not the goal." Source: Plansponsor.com Plan Fiduciaries -- The Best Offense is Not a Defacto Defense Abstract: When it comes to being a workplace retirement plan fiduciary, the best defense is a good offense. That said, if your fiduciary plays are more about keeping yourself out of hot legal water than they are about doing what's in your participants' best interests, even your best defense may not be good enough. Source: 401ktv.com Does Your Company Need Fiduciary Liability Insurance? Abstract: When insurance is not mandatory, deciding whether to purchase a policy may depend on weighing the costs and benefits. When fiduciary liability associated with your company's maintenance of a qualified retirement plan (eg. 401k Plan, Profit Sharing Plan, Defined Benefit Plans and ESOPs) puts your personal assets at risk, you may decide that fiduciary liability coverage is worth the cost. Source: Bsllp.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers Design Matters: Plan Distribution Options Abstract: This paper highlights recent research that demonstrates the impact of plan design on participant behavior with respect to distributions. It also examines the various distribution options available to DC plan sponsors. Except for distributions that are mandated by regulatory policy or law, plan sponsors have significant discretion in designing a distribution policy for their plans. Source: Ymcdn.com Trends in the Expenses and Fees of Funds Abstract: Fund expenses cover portfolio management, fund administration and compliance, shareholder services, recordkeeping, certain kinds of distribution charges, and other operating costs. This ICI study found that, on average, fund expenses for long-term mutual funds have declined substantially for more than 20 years. Source: Ici.org, April 2018 Three Technology Trends Impacting Retirement Plans Abstract: The retirement plan market may have finally reached its point of reckoning with major technological developments. Innovation in the sector is constantly happening, and if plan sponsors are unaware of and adapting to it, they -- and their employees -- could easily find themselves behind the curve. Here are three of the most important tech-driven trends in retirement plan services today. Source: Planpilot.com Human Interaction Increases Benefits Engagement Abstract: A new survey conducted among HR and benefits managers on employee benefits engagement and utilization has found that despite the ongoing growth of technology, employees desire personalized, human interaction. This was among the findings of the Driving Benefits Engagement survey by Health Advocate. Source: Blr.com »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers Why the Financial Engines/Edelman Financial Deal Could End the 401k Rollover Bonanza Abstract: The biggest trend being portended by the Financial Engines and Edelman Financial deal is one that the industry has missed so far. And that trend is the rise of human financial advice solutions directly in the 401k channel (as Financial Engines is ostensibly going to soon offer through Edelman Financial), which could be the beginning of the end of the 401k rollover bonanza. Source: Kitces.com Dealing With a TPA's Business Challenges Abstract: Thanks to a competitive marketplace, it's hard for a TPA to manage the day-to-day issues of being in business and standing out in the crowd. This article is about the challenges that a TPA faces and how to deal with them in a super competitive business. Source: Jdsupra.com 403b Plans Third Parties Weigh in on 403b Litigation Abstract: Three briefs were filed with the US Court of Appeals for the Third Circuit in support of the University of Pennsylvania and its Investment Committee. The briefs support the assumption that 403b plans have traditionally been managed differently than 401k plans, and as a result, they cannot be viewed in the same light with respect to litigation. Source: Sentinelgroup.com »» Click here for More 403b Material Court and Legal 401k Lawsuits: What Are the Causes and Consequences? Abstract: This 24-page paper looks at the broad complaints that motivate the litigation and how the threat of litigation may affect the retirement industry. The first section introduces the three main reasons why litigation is brought in the first place. The second section turns to the potential effects of this litigation on 401k plans. Source: Bc.edu Aon Hewitt, Lowe's 401k Plan Latest Target of ERISA Lawsuit Abstract: Aon Hewitt Investment Consulting and Lowe's are being sued by the participants of the Lowe's 401k retirement plan; the proposed class of plaintiffs puts forward a variety of familiar ERISA fiduciary breach claims. Source: Planadviser.com »» Click here for more Court and Other Legal Issues Compliance and Regulatory Helping Plan Sponsors Establish Internal Controls Abstract: A plan auditor speaking at the Plan Sponsor Council of America 71st Annual National Conference suggested internal controls plan sponsors should have in place for eligibility, compensation, and contributions and loans. Source: Planadviser.com »» Click here for more Compliance and Regulatory Material Marketplace News Beacon Wealth Consultants Unveils 401k Plan With Faith-Based Investment Models Financial Engines Announces Agreement to Be Acquired by Hellman & Friedman Advantus Capital Management Rebrands as Securian Asset Management »» Click here for More Marketplace News
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