The Top 25 401k Plans
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2019 NAPA 401(k) Summit Save the dates, April 7-9, 2019. Sign up to be among the first notified when more information becomes available. In This Issue
General Items Abstract: The country's largest retirement plans have a lot of things in common. A high percentage of employees participating. A robust match. A well-integrated financial wellness program. A large number of assets under management. The latter factor, in particular, gives businesses a leg up in negotiating fees and setting the terms of the relationship with their plan provider. Source: Benefitnews.com Roth vs. Traditional IRAs, 401ks: Which Is Better for You? Abstract: What's the difference between a Roth IRA and traditional IRA? Ditto for Roth 401k accounts and traditional 401k accounts. And, more importantly, which one is best for you? Answer: the one that leaves you more money after you've paid taxes. And that depends on your individual circumstances, everything from your age to your prospects for future pay raises and your tax bracket. Source: Investors.com Insight: Studies, Research, and White Papers MEPs and PEPs, Mind the Coverage Gap Abstract: Would "open multiple employer plans" or "pooled employer plans" encourage thousands of small employers to offer their workers a retirement plan for the first time? This article talks to several people with strong opinions regarding these types of questions. The answers suggest that there probably will be some cannibalization and some growth in coverage. Source: Retirementincomejournal.com Americans Have Been Saving Much More Than Thought, New Data Show Abstract: U.S. households have been socking away a lot more money in recent years than had been earlier thought, revised government statistics released on Friday showed. The saving rate over 2016 and 2017 is now pegged at an average 6.7 percent, up from a previously reported 4.2 percent. Source: Bloomberg.com »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers Cogent: Small, Mid-sized Plans Are the Sweet Spot in the 401k Market Abstract: Big plans may have more assets (and larger fees), but new data suggests that there's more promise in focusing sales efforts on small and mid-sized plans. A recent Cogent Reports study said that plan sponsors in the Small-Mid segment (plans with $5 million to $100 million in assets) report the greatest intent to act. Source: Asppa.org Plan Advisors Face Litigation Landmines Abstract: Advisors are increasingly being pulled into 401k plan litigation under novel theories of liability and need to pay extra attention in documenting their actions, according to a prominent litigation attorney. Source: Napa-net.org Plan Automation Potential vs. Realized Savings Under Automatic Enrollment Abstract: While automatic enrollment in employer retirement plans has been shown to vastly increase plan participation, many employees tend to withdraw some or all their account balances before retirement, offsetting automatic enrollment's positive effect. This study gauges how automatic enrollment influenced savings plan loans and withdrawals at a Fortune 500 financial services firm and how pre-retirement withdrawals affected employees' retirement plan balances over time. Source: Tiaainstitute.org »» Click here for more on Automatic 401k Plan Features Court and Legal Internal Statutes of Limitation Under ERISA Abstract: Considering the heightened frequency of 401k plan litigation, it is appropriate for plan fiduciaries to include favorable procedural rules as part of their claims procedures. One such rule is an internal statute of limitations, which the Supreme Court has held is permissible in an ERISA plan so long as it is reasonable and there is no controlling statute to the contrary. As a best practice, notice of any internal statute of limitations should be provided. Source: Wagnerlawgroup.com Ninth Circuit Rejects Bid to Arbitrate ERISA Plans' Claims Abstract: The Ninth Circuit held that employees' agreements to arbitrate all claims the employees may have did not extend to claims brought on behalf of two ERISA plans under ERISA Section 502(a)(2). In so ruling, the Court explained that the employees could not agree to arbitrate claims on behalf of the plans in individual employment contracts because those employees cannot waive the plans' rights. Source: Erisapracticecenter.com Judge Dismisses Amended Complaint in Wells Fargo Stock-Drop Case Abstract: A U.S. District Court judge in Minneapolis dismissed for the second time a lawsuit by participants in the 401k plan of Wells Fargo & Co., saying plaintiffs failed to prove their complaints of fiduciary breaches regarding the management of a company stock fund within the plan. Source: Investmentnews.com (registration may be required) General Cable Defeats 401k Suit Over Foreign Bribery Scandal Abstract: General Cable Corp. defeated a lawsuit challenging losses in its workers' retirement savings allegedly caused by keeping artificially inflated company stock as an investment option amid a foreign bribery scandal. Source: Bna.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC 401k: Winds of Change are Blowin' Around Washington Abstract: Word out of Washington is that Congress may be posed to pass legislation that would make the most sweeping changes to retirement plans, including 401k plans, in over a decade. Source: Compliancedashboard.net "Tax Reform 2.0" to Include Universal Savings Accounts Abstract: Building on the tax cuts enacted last year as part of the Tax Cuts and Jobs Act, the Chairman of the powerful House Ways and Means Committee released a Tax Reform 2.0 framework July 24 that he plans to tackle this fall. The two-page outline includes three main components: make the middle-class and small business tax cuts permanent, promote family savings, and spur new business innovation by allowing new businesses to write off more of their initial start-up costs. Source: Asppa.org »» Click here for more on Legislative Actions Compliance and Regulatory What CFOs Should Know About Retirement Plan Audits Abstract: A common reason for an audit is to minimize the financial risk associated with annual tax-filing obligations. However, as certain issues, like financial wellness and cybersecurity, have grown more prominent, the scope of an audit has widened to provide a more complete view of a plan's overall health and value. Source: Cfo.com 401k Participant Disclosures - What Employers Need to Know Abstract: 401k plan sponsors have a fiduciary responsibility to distribute certain information to plan participants from time to time. These important participant disclosures can also be many and spread throughout the year, which can make their distribution seem like an overwhelming fiduciary responsibility. This is a description of the various participant disclosures that can apply to a participant-directed 401k plan with guidelines for their distribution. Source: Employeefiduciary.com IRS Finalizes Amended Regulations Allowing Forfeitures to Be Used for QNECs and QMACs Abstract: Now that these regulations have been finalized, plan sponsors and advisors of 401k plans with forfeitures have clear authority to use plan forfeitures for QMACs or QNECs to the extent permitted by their plan documents. The regulations also effectively clarify the ability to use forfeitures for corrections, as the IRS's Employee Plans Compliance Resolution System defines QNEC for correction purposes by reference to the regulations. Source: Thomsonreuters.com »» Click here for more Compliance and Regulatory Material
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