Newsletter for September 10, 2018
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In This Issue
Cybersecurity
Cybersecurity: The Industry's Next Frontier
Abstract: Cybersecurity fraud was once a problem reserved for the largest government agencies, credit card companies and banks. However, as these organizations have hardened their security capabilities, fraudsters have shifted their focus to the next tier of banks, as well as financial firms that play in the brokerage, retirement and insurance spaces. Many of these firms are now scrambling to learn from the big banks and quickly implement similar or next generation cybersecurity methods and capabilities.
Source: Newportgroup.com
»» Click here for more on Cybersecurity Issues
General Items
A New Method to Incentivize Young Workers?
Abstract: Companies have considered various ways to retain and incentivize their younger, and increasingly mobile, workforce. A recent PLR offers another option: using a 401k plan to provide additional benefits (in the form of a nonelective contribution) to employees who pay down their student debt during the plan year.
Source: Benefitsbclp.com
Fiduciary and Plan Governance
Understanding Fiduciary Roles: 3(21) vs 3(38)
Abstract: Due to ERISA's increased standard of care, the now defunct DOL rule and other potential regulatory replacements, plan sponsors are faced with the heightened importance to understand the fiduciary roles and responsibilities for their retirement plan. This article outlines the ways of becoming a fiduciary, the differences between ERISA 3(21) and 3(38), and which is best depending on your plan and plan committee.
Source: Planpilot.com
»» Click here for more Fiduciary and Plan Governance Material
Insight: Studies, Research, and White Papers
Workers Feel Stressed About Preparing for Retirement
Abstract: A significant percentage of workers across the board reported feeling stressed about preparing for retirement, in particular, workers with lower incomes (64 percent), those who have not calculated how much they will need to save for retirement (65 percent), and those in fair or poor health (75 percent). However, a majority of workers thought that workplace financial well-being programs would be either very or somewhat helpful in better preparing or saving for retirement.
Source: Ebri.org
Employees Not Realizing the Importance of Debt Control in Retirement Planning
Abstract: Although a majority of workers thought workplace financial well-being programs would be either very or somewhat helpful in better preparing or saving for retirement, fewer than half of workers thought debt counseling or budgeting help would be helpful, EBRI found.
Source: Plansponsor.com
»» Click here for More Studies, Research, and White Papers
Plan Education
Helping Employees Get the Best Bang for Their DC Plan Bucks
Abstract: Even small changes in asset allocation can have a significant impact on employees' ability to retire comfortably when they want. Yet few organizations pay attention to how their employees allocate their DC plan contributions and current assets. This paper focuses on how employers can use targeted internal communications and other tactics to help their employees understand asset allocation and empower them to make better choices.
Source: Segalco.com
Buy Better 401k Education
Abstract: Much 401k education remains heavily investment-weighted and jargon-infested. It was never designed for young, non-numbers-loving people who are yet-to-be-motivated to learn about something they believe they can put off 20 or 30 years. And still today, virtually no learning experts or cognitive scientists have been involved in improving 401k education. This has contributed to making 401k education the largest failure ever of adult education.
Source: Dennisackley.com
»» Click here for more on Employee Education, Participation, and Communications
Court and Legal
Court Defers to Plan Language in Denying 401k Eligibility to Distributors
Abstract: The court ruled in favor of the company, finding that the plan language explicitly excluded the distributors from coverage. The plan document provided that individuals not treated as common-law employees for purposes of the company’s payroll records were excluded from plan participation -- even if a court determined they were common-law employees and not independent contractors -- and further specified that individuals who were distributors under an agreement with the company for the distribution or sale of goods or products were not eligible to participate in the plan.
Source: Thomsonreuters.com
5th Circuit Sides With Whole Foods in Stock Drop Litigation
Abstract: The case ascended on appeal from the U.S. District Court for the Western District of Texas, where it also flatly failed to meet the high hurdles for proving standing established in Fifth-Third Bank vs. Dudenhoeffer.
Source: Planadviser.com
»» Click here for more Court and Other Legal Issues
Legislative and Washington DC
Will the Administration's Executive Order Work?
Abstract: Over the coming weeks, a question that you're likely to see posed (again and again) about the President's Executive Order is, "will it work?" "Work" in this case means to expand access to workplace retirement plans, for that is the stated policy of the Trump administration in issuing the order.
Source: Napa-net.org
Executive Order Seeks to Reduce Retirement Plan Burdens and Costs
Abstract: On August 31, 2018, President Trump issued an Executive Order on "Strengthening Retirement Security in America." The Executive Order is intended to set the policy for the DOL and the IRS in three areas outlined here.
Source: Ktserisacorner.com
»» Click here for more on Legislative Actions
State-Based Retirement Programs
State's Proposal Would Expand OregonSaves to Individuals
Abstract: The Oregon Retirement Savings Board reports that the Oregon State Treasury has filed a notice of proposed rulemaking that would create an option by which individuals could participate in OregonSaves. Currently, individuals can only participate in OregonSaves through their employers.
Source: Asppa.org
Piloting the State-Run DC Retirement Plan: Where Are They Headed?
Abstract: Author writes, "Leaving Americans to their own devices and signing up for an IRA has put eight states in the position to implement a state-run savings program. Employers in these eight states may end up split on two sides of the coin-- those who find that a state-run plan is a great addition to the benefits package for their company versus those facing payroll challenges. Eight states are taking on the challenge and piloting state-run programs, and we will be eagerly awaiting the results of these endeavors."
Source: Milliman.com
Compliance and Regulatory
Employing the Proper Definition of Compensation
Abstract: One of the operational failures that is always at or near the top of the DOL's list concerns plan sponsors failing to employ the correct definition of compensation for purposes of performing necessary compliance testing and/or determining benefit allocations. The following article is intended to briefly highlight some of the issues that can occur when the incorrect definition of compensation is employed as well as to provide an explanation of some of the differences between the most commonly employed definitions of compensation.
Source: Legacyrsllc.com
New Changes in 2018 for Form 1099-R Reporting
Abstract: The Internal Revenue Service has issued the updated 2018 Form 1099-R and the updated 2018 Instructions for Forms 1099-R and 5498, containing some important changes compared to the 2017 instructions. Significantly, many of the updates to Form 1099-R reflect the changes made by The Tax Cuts and Jobs Act.
Source: Icemiller.com
Retention Practices: Fiduciary Records Are (Almost) Forever
Abstract: The question now is how long should fiduciary records be kept? It is not difficult to make the argument that reviewing and monitoring plan investment portfolios is an annual affair and a best practice. If you accept this premise and do the math, plan fiduciaries are exposed for a significantly long period. This extended period of risk means that for records relating to that original investment should be preserve for a significantly period.
Source: Fiduciaryplangovernance.com
»» Click here for more Compliance and Regulatory Material
Marketplace News
Fidelity Launches Target-Date Blend Funds; Lowers Pricing on Target-Date Commingled Pools
ICI Launches FactsOnRetirement.org
Securian Expands Its Retirement Plan Investment Solution Options
»» Click here for More Marketplace News
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