Five Examples of Self-Dealing Transactions That are Prohibited
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In This Issue
Items of Special Interest to Service Providers Five Examples of Self-Dealing Transactions That are Prohibited as a Result of Fiduciary Duty Abstract: They can take away the DOL's Fiduciary Rule, but they can't remove the after effects. Remember, the official name wasn't "The Fiduciary Rule." When the DOL unveiled the final version, it was rechristened "The Conflict-of-Interest Rule." The focus wasn't on some legal definition of fiduciary. Instead, the emphasis was on the dangers inherent in advice containing conflicts-of-interest. Here are some examples of self-dealing transactions that, if executed, will likely result in a fiduciary breach. Source: Fiduciarynews.com Two Strategies to Stay Top of Mind With Plan Sponsors Abstract: With today's constant stream of information, doesn't it feel more challenging than ever to gain shelf space within the minds of 401k prospects? This article shares ideas on how you can create awareness that evolves into inbound leads. You'll learn to leverage two of the most time-efficient and affordable ways to deliver your message to plan sponsors and retirement plan decision makers. Source: 401k-Marketing.com Fidelity's Zero-Cost Funds Raise Issues for 401k Advisers Abstract: Fidelity Investments is making 401k advisers' lives a little more complicated. The zero-cost funds won't be offered to participants in defined-contribution plans, at least initially. But it's only a matter of time before Fidelity or another index-fund giant brings a no-cost fund to 401k investors. Source: Investmentnews.com (registration may be required) How Small Business Owners Overvalue 401k Plan Tax Deferral Abstract: The allure of starting a small business employer retirement plan is easy to understand. As compelling as that might seem however, the caveat is that the upfront tax savings of making 401k salary deferral and profit-sharing contributions for owners isn't a tax savings for them. Instead, it's merely tax deferral, as those pre-tax contributions will eventually be taxable when distributed. Which is important, because the cash outlays made on behalf of the employees are a permanent expense that the owners will never be able to recapture. Source: Kitces.com General Items Six Pillars to Successful 401k Financial Outcomes Abstract: In recognizing that many workers do not have a complete understanding of their financial picture; Voya has identified six pillars that it believes are essential to successful financial outcomes and serve as the core of the experience. Source: 401kspecialistmag.com Fiduciary and Plan Governance Protecting Employee Benefit Plans With Cyber Insurance Abstract: This article outlines reasons employers should consider obtaining cyber insurance, protections that a plan should include, possible drawbacks, and best practices for finding the plan with the appropriate coverage. Source: Spencerfane.com What Every Advisor and Plan Sponsor Should Consider When It Comes to 404(c) Compliance Abstract: One of the keys to good fiduciary practices is understanding that nothing can ever be put on autopilot. In order to receive the benefits of ERISA Section 404(c), plan fiduciaries must comply with certain requirements. This article's recommendations will help advisors and plan sponsors evaluate their efforts. Source: Vestwell.com »» Click here for more Fiduciary and Plan Governance Material 403b Plans Lessons for 403b Plan Fiduciaries From Current Litigation Abstract: In the last two years, over 100 lawsuits were filed against fiduciaries of 401k plans, primarily involving selection of investment options and other plan service providers. Similar lawsuits are targeting plans sponsored by private sector universities and tax-exempt organizations. Defined contribution plan fiduciaries should review the types of claims described here and schedule a review of your processes for selection of investment options and other service providers, to limit liability exposure. Source: Hansonbridgett.com »» Click here for More 403b Material Plan Automation Retirement Plan Leakage Thwarts Automatic Enrollment Abstract: With benefits from kick starting retirement savings to fostering participant engagement, automatic enrollment has proven itself to be an important plan feature. Yet, this does not acquit it from including its own set of drawbacks. A TIAA study finds the feature's benefit are continuously offset by pre-retirement withdrawals and plan loans. Source: Planadviser.com Making Sense of Auto-Enrollment Rules Abstract: While the IRS means well, when reviewing some of the regulations, one cannot help but wonder if someone was thinking, "How can I make this as difficult to understand as possible?" Such is the case with automatic enrollment. Source: Cammackretirement.comg »» Click here for more on Automatic 401k Plan Features Court and Legal Benefit Plan Sponsors Must Be Given Deference in Plan Interpretation Abstract: A recent federal appeals court decision has vacated the lower court's decision and remanded the case back to the court. The decision found the district court had used the wrong standard of review and the ambiguous terms of the plan should have been reviewed using the deferential arbitrary and capricious standard. Source: Bsllp.com Statute of Limitations Bars Claim That High Fees Made Plan's Investments Imprudent Abstract: This case highlights the importance of "actual knowledge" under ERISA's statute of limitations for fiduciary violations. Not only does actual knowledge shorten the limitation period from six to three years, but it may also effectively prevent the use of a continuing violation theory of liability. Source: Thomsonreuters.com »» Click here for more Court and Other Legal Issues State-Based Retirement Programs Bill to Create Auto-IRA Savings Program Before NJ Legislature Abstract: The New Jersey Secure Choice Savings Program Act, a measure that would create an automatic enrollment payroll deduction IRA in the Garden State, is before the state Assembly and the state Senate. It is intended to promote "greater retirement savings for private sector employees in a convenient, low-cost, and portable manner." Source: Ntsa-net.org Compliance and Regulatory On the Form 5500, Sometimes the Answer Lands You in Trouble Abstract: When you're filing that Form 5500, certain answers may likely lead you to an Internal Revenue Service or Department of Labor audit. Source: Jdsupra.com Partial Termination of Your Qualified Retirement Plan: Don't Let It Sneak Up on You Abstract: What some plan sponsors may not be aware of is that it is possible for a plan to experience a "partial termination" even if the plan sponsor did not intentionally initiate a termination. Because this can occur over time, partial terminations frequently sneak up on plan sponsors. The fact that a partial termination may be discovered long after it occurs can complicate taking necessary measures and require correction to maintain the plan's tax qualified status. Source: Boutwellfay.com Abstract: This podcast discusses ten basic steps for how to manage qualified domestic relations orders (QDROs). A QDRO is a judgment, decree, or order for a retirement plan to pay child support, alimony or marital property rights to a spouse, former spouse, child or other dependent of a participant. Source: Erisapracticecenter.com »» Click here for more Compliance and Regulatory Material Marketplace News Ascensus to Acquire Continental Benefits Group Ascensus Announces Agreement to Acquire 401k Plus »» Click here for More Marketplace News
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