Borrowing Early From a 401k: Pros and Cons
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General Items Borrowing Early From a 401k: Pros and Cons Abstract: Employers are not their employees' financial advisors. Nonetheless, if you offer a 401k plan at your business, consider the following information that may help you and your employees better understand the rules and regulations around borrowing early from a retirement plan. Source: Paychex.com Fiduciary and Plan Governance Duty of Loyalty in Stock Drop Cases Abstract: The United States District Court for the District of Minnesota has, for a second time, dismissed claims by participants in the Wells Fargo 401k plan. This second decision focused on the issue of the fiduciary duty of loyalty, the court's discussion of which is thorough and interesting both in its specific application to stock drop cases and to fiduciary litigation more generally. This article discusses the court's opinion in detail. Source: Octoberthree.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers Top Plan Sponsor Concerns Are Shifting Abstract: Employers are more worried about whether their retirement plan is effectively preparing employees for retirement. It's a distinct change from 2017, when the focus was on reducing business costs related to the plan, according to Fidelity Investments' annual plan sponsor attitudes study. Source: 401kspecialistmag.com Retirement Education Preferences, Survey Abstract: The 2018 survey was designed to give insight into what retirement topics plan participants are interested in, what educational resources they want to help guide them to financial security in their retirement years, and how well they understand their retirement plans. The survey delves into demographic trends to offer further insight into how age and gender differences may impact retirement education preferences. Source: Widencdn.net Participants Report Diverse Communication Preferences Abstract: Results of a participant survey conducted by CUNA Mutual show a close tie between in-person training, short topical online videos, and self-guided learning modules as the preferred way to receive education about retirement plans. Source: Plansponsor.com »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers The Problem With Consolidation in the TPA Business Abstract: While consolidation may allow these large TPAs get savings when dealing with other providers and becoming more efficient, it does have costs within the industry. Consolidation also decreases choices and less competition could lead to increased pricing even if fees have been going down for years. Source: Jdsupra.com Why You Should Still Take the Fiduciary High Ground on 401k Rollovers Abstract: The Fifth Circuit Court of Appeals issued its mandate to vacate the Department of Labor fiduciary rule in June, but guidance issued by the DOL the month prior allows at least part of the rule to continue to apply. This anomaly has some profound ramifications for retirement advisers dispensing rollover advice. Source: Investmentnews.com (registration may be required) 403b Plans Best Practices for 403b Plan Fiduciaries Abstract: Plan fiduciaries of 403b plans face some unique challenges and making mistakes can expose these fiduciaries to liability. Following 403b fiduciary best practices can help reduce the risk of lawsuits and avoid ERISA compliance violations. Source: Bsllp.com The Recent NYU ERISA Decision and Best Practices for ERISA Fiduciaries Abstract: The decision in favor of NYU, and the recent dismissal of two other similar lawsuits against Northwestern University and the University of Pennsylvania, should give some comfort to fiduciaries of ERISA retirement plans, especially those sponsored by higher education institutions. The NYU decision suggests that 403b plans do not necessarily violate ERISA simply because they have a very large number of investment funds, including actively managed funds, or because they do not promptly remove underperforming funds from the plan. Source: Bsk.com 403b Loose Ends for 2019 Hardships Abstract: While the Bipartisan Budget Act of 2018 modified the safe harbor rules for hardship withdrawals starting in the 2019 plan year, the extent to which these modifications will impact 403b plans is still subject to open to interpretation. Source: Ntsa-net.org »» Click here for More 403b Material Plan Automation Automatic Features in Retirement Plans Boost Retirement Confidence Abstract: Although 25% of sponsors are not using automatic enrollment due to their fear of participant pushback, 82% of participants are either in favor of or neutral towards automatic enrollment. Among the participants who have been automatically enrolled, 95% are satisfied. Only 1% opted out, and 33% said that if they had not been automatically enrolled, they probably would not have enrolled in the plan. Among those who have been automatically escalated, 97% are satisfied. Source: Plansponsor.com »» Click here for more on Automatic 401k Plan Features Court and Legal 8th Circuit Sets High Bar for Labeling Retirement Plan Investments "Imprudent" Abstract: In Meiners v. Wells Fargo & Company, the U.S. Court of Appeals for the Eighth Circuit clarified the burden plaintiffs must meet to state a claim for breach of fiduciary duty under ERISA based on the inclusion of allegedly underperforming and expensive investment funds. Because plaintiffs often lack detailed information about the process plan fiduciaries followed to make investment choices, pleading a plausible claim that those fiduciaries have acted imprudently can pose a significant challenge. Source: Kslaw.com »» Click here for more Court and Other Legal Issues State-Based Retirement Programs Illinois Governor Proposes Making Secure Choice Retirement Program Optional for Employers Abstract: Illinois Gov. Bruce Rauner issued an amendatory veto making it optional for employers to participate in the state's Secure Choice program. There now are three possible actions. Legislators could: approve the change; let die the technical changes bill to which Mr. Rauner's action applies; or override the amendatory veto. Source: Pionline.com Compliance and Regulatory The DOL's Plan Investment Conflicts Project Is Showing up in Its Plan Audits Abstract: One of the key EBSA National Enforcement Projects is the "Plan Investment Conflicts Project." You'll hear DOL staff refer to it as the PIC project, and many of you have already run into it, maybe even without knowing it. It is the “next generation” of fiduciary compliance programs that the DOL has developed over the years, with this one building on those past programs which had looked at compensation conflicts, 408(b)(2) compliance and 404(a)-5 disclosures. Source: Businessofbenefits.com The Right Way to Manage Taxed Uncashed Retirement Checks Abstract: If you think uncashed pension checks are a hassle to manage, it gets more difficult if the taxes have been taken out at distribution. There is a practical solution discussed in this article authored by PenChecks Trust President and CEO Peter Preovolos. Source: Penchecks.com Abstract: On July 31, 2018, the PR Treasury issued Administrative Determination Number 18-13 extending the eligible period until November 30, 2018 to make eligible distributions pursuant to AD 17-29 and 18-02. All other provisions under AD 17-29 and AD 18-02 remain in effect. Source: Littler.com »» Click here for more Compliance and Regulatory Material Marketplace News Blue Prairie Group Adds Veteran Retirement Plan Consultant CalSavers Board Selects Ascensus to Administer New Private Sector Retirement Program »» Click here for More Marketplace News
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