Newsletter for October 15, 2018
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In This Issue
Compliance and Regulatory
Projected 2019 401k Plan Limits
Abstract: Based upon the actual and projected CPI, there is little doubt that we will see increases in the pension limits for 2019. Here are our projected changes. Remember, these are unofficial projections. The IRS hasn't officially announced the 2019 limits and will not do so until later in October.
Source: 401khelpcenter.com
»» Click here for more Compliance and Regulatory Material
General Items
The Marshmallow Test for Retirement
Abstract: For those who aren't familiar with the famous "Marshmallow Test," a young girl or boy sits at a table with a single marshmallow on a plate. The tester tells the child that he or she can eat the marshmallow right away, but waiting to eat it until the tester comes back into the room will bring a big payoff: a second sweet, puffy morsel. Watching the children in this video squirm as they wrestle with their decisions brings to mind the adult equivalent. A desire for immediate self-gratification can come at the detriment of any number of personal financial decisions.
Source: Bc.edu
Student Loan Repayments or Retirement Savings? Maybe Both
Abstract: Recent statistics show that approximately 70 percent of college graduates will leave college with an average of at least $30,000 in student loan debt. Cumulatively, the national student loan debt is approximately $1.5 trillion. This burden is causing millennials to wait longer than previous generations to buy houses, start families, and save for retirement. Although student loan indebtedness is not an issue employers can solve alone, a few are finding ways to recruit and retain talent by offering a helping hand to employees dealing with massive debt burdens.
Source: Ogletree.com
Fiduciary and Plan Governance
The Ins and Outs of ERISA Fiduciary Insurance
Abstract: Fiduciary liability insurance is an important, but often overlooked, aspect of a company's risk management plan. This article discusses the use of fiduciary insurance in protecting fiduciaries from liability when governing or providing services for employee benefit plans subject to the Employee Retirement Income Security Act.
Source: Ckrlaw.com
»» Click here for more Fiduciary and Plan Governance Material
Insight: Studies, Research, and White Papers
Employees Struggle With Allocating Money to HSAs and Retirement Plans
Abstract: Eighty-two percent of employees see medical costs as their biggest challenge now and in the future, according to the Willis Towers Watson 2018 Health Accounts Employee Attitudes Survey. Yet only 25% rank contributing to a health savings account (HSA) as a top current financial priority, falling below saving for retirement in a 401k, paying for essential day-to-day expenses and paying off debt. The survey found the majority of employees (69%) who didn't enroll in an HSA said they chose not to because they didn't see the benefit, understand HSAs or take the time to understand them.
Source: Plansponsor.com
Only One in Three Workers are on Track to Retire Comfortably by Age 67
Abstract: If current employee savings trends continue, half of workers will need to wait for retirement until at least age 70 to be considered financially prepared, according to findings from The Real Deal: 2018 Retirement Income Adequacy study released by Aon.
Source: Aon.com
This Scares Americans More Than Dying
Abstract: What's scarier than death? Money issues, apparently. More than 40 percent of people worry about paying for health care and right around a third fear finances in general more than dying, according to a new study. It's a morbid by-product of something most people are otherwise excited about: on average, we're living longer than ever before.
Source: 401kspecialistmag.com
»» Click here for More Studies, Research, and White Papers
Items of Special Interest to Service Providers
Benchmarking the Features of a 401k Plan
Abstract: Reviewing an existing plan represents a tremendous opportunity for practitioners to offer value-added services to their clients and for finance employees to serve their employers. These questions can be used to benchmark a plan against others and to learn more about the important features of a retirement plan.
Source: Journalofaccountancy.com
Are Advisors Actively Making a Passive Shift?
Abstract: Amidst what seems the perennial debate of active versus passive options, are retirement plan advisors "voting" with their recommendations? Well, according to a survey of more than 500 advisors, the clear majority (78%) opted for the equivalent of "it depends," more precisely "sometimes - depending on the situation" in terms of their active/passive recommendations.
Source: Napa-net.org
Open MEPs Could Create Many Opportunities for Advisers
Abstract: Should Congress or federal regulators eliminate the common nexus and bad apple rules that have held back open multiple employer plans, experts anticipate many more small businesses will jump in.
Source: Planadviser.com
Why the SEC Will Never Enact a Meaningful Fiduciary Standard
Abstract: The author writes in this opinion piece, "I continue to enjoy reading analyses on the SEC's BI proposal. These are analyses from industry leaders, people who I greatly admire and respect. When people ask my opinion, I just tell them it is all just a cruel game, that the SEC has never intended to protect the public with a meaningful universal fiduciary standard, that the SEC will never do so, as it would jeopardize their own careers and risk incurring the wrath of Wall Street."
Source: Iainsight.wordpress.com
Plan Automation
Why Auto-Enrollment Matters for Plan Sponsors
Abstract: Aside from employee benefit, companies have myriad incentives to give their employees automatic enrollment. Even companies that hold out may soon be legislated to provide it, so companies that implement it now will be ahead of the curve.
Source: Planpilot.com
»» Click here for more on Automatic 401k Plan Features
Court and Legal
ERISA University Excessive Fee Cases Take Another Hit
Abstract: Excessive fee complaint dismissed because the diverse selection of funds available to plan participants negates any claim that Defendants breached their duties of prudence simply because cheaper funds were available.
Source: Erisa-employeebenefitslitigationblog.com
Fidelity Sued Again for 401k Plan Mismanagement
Abstract: Fidelity Investments Inc. has been sued by participants in its company 401k plan for alleged self-dealing that caused the firm to profit at the expense of its employees saving for retirement. The lawsuit filed against Fidelity is similar to a separate case filed against the firm about five years ago, which was settled for $12 million in 2014.
Source: Investmentnews.com (registration may be required)
»» Click here for more Court and Other Legal Issues
Legislative and Washington DC
Possible Retirement Savings Legislation in Lame Duck Session
Abstract: This article begins by briefly discussing the changes made to the FSA when it passed the House and the political outlook for retirement policy legislation before the end of the year. It provides an inventory of some of the key retirement policy proposals that may be included in any year-end 2018 retirement policy legislation.
Source: Octoberthree.com
House Flip Could Fuel Focus on Retirement Policy
Abstract: Rep. Richie Neal, the ranking Democrat on the House Ways & Means Committee, and the man in line to become chairman of that powerful committee, has cited three priorities on which he even thinks he might align with President Trump, and two of them -- shoring up retirement savings and protecting multi-employer pension plans -- deal with retirement, according to a report in The Hill.
Source: Asppa.org
»» Click here for more on Legislative Actions
Marketplace News
Spectrum Pension Consultants Expands Hawaii Office
»» Click here for More Marketplace News
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