Newsletter for November 19, 2018
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In This Issue
Fiduciary and Plan Governance
Bad Reasons for Hiring 401k Plan Providers
Abstract: Due to how providers may market themselves to you, you may pick a plan provider for the wrong reason and you're breaching your fiduciary duty by hiring plan providers that aren't up to the job. This article is about things that plan providers may tout that shouldn't really impress you because it doesn't mean they'll be good at their job.
Source: Jdsupra.com
Fiduciary Liability Claim Trends
Abstract: While insurers have not reacted in a unified way, the claim environment has become much more active and severe during the past 24- 36 months, highlighted by well-publicized excessive fee litigation under ERISA. This 10-page fiduciary liability claim trends report discusses, among other items, the many excessive fee cases brought against universities, why proprietary funds are more challenging risks, and recent results from a Boston College study examining the causes and consequences of 401k lawsuits.
Source: Lockton.com
Best Intentions: The Unintended Consequences of Plan Design
Abstract: DC plans are complex, and changes often bring unintended consequences. The most well-intentioned and carefully considered plan design decisions may have unexpected results and even successful implementations occasionally reveal the limits of some baseline assumptions.
Source: Blackrock.com
The 401k Adoption Agreement Explained
Abstract: Maybe you're looking into establishing a 401k for your company. Or perhaps you've realized it is time to make a change to how your plan is run. Both are often excellent, if tough, decisions. In this easy-to-read 401k plan document reference guide is just about everything you need to know about 401k adoption agreements.
Source: Forusall.com
»» Click here for more Fiduciary and Plan Governance Material
General Items
Avoid Retirement Account Rollover Pitfalls
Abstract: After retiring or leaving a job, your first big tax question might be: What should I do with the money in qualified retirement plan accounts with my former employer?
Source: Lindquistcpa.com
How to Contribute to Multiple 401ks Legally
Abstract: Adding contributions to your 401k or other salary deferral type retirement account can be an effective way of ramping up your retirement nest egg. Consider that for 2018, you can defer up to 100% of your compensation, as long as the amount does not exceed $18,500 for 2018/$19,000 for 2019, plus an additional $6,000 catch-up contribution if you are at least age 50 by the end of the year.
Source: Forbes.com
Insight: Studies, Research, and White Papers
Significant Disconnect Exists Between Employers and Employees on Saving for Retirement
Abstract: The survey results show a significant disconnect between employers and employees when it comes to saving for retirement. While 88 percent of employees think it's important to have retirement plans when choosing a new employer, just 67 percent of small business employers think it's important to have a retirement program for employees.
Source: 401khelpcenter.com
»» Click here for More Studies, Research, and White Papers
403b Plans
Less Choice Leads to Lower 403b Participation, Study
Abstract: New research published by the National Tax-Deferred Savings Association confirms that a decrease in investment choice and reduced access to advisors leads to lower retirement plan participation by employees in public education 403b plans. The research is based on data from nearly 4,500 school districts across the United States.
Source: 401khelpcenter.com
Improving Retirement Savings for America's Public Educators
Abstract: The research examines the impact of participant choice of investment providers in 403b plans. The research further looks at the extent to which school district employees want choices in their 403b plans and the positive impact choice has on participation and savings rates. The data shows a decrease in the participation rates for 403b plans when the number of choices is reduced. While investment provider options may create more administrative complexity for the district, this paper suggests other alternatives to alleviating this burden, such as using an independent TPA to administer the plan and providing transparent disclosure of investment fees and other expenses to workers.
Source: Ntsa-net.org
»» Click here for More 403b Material
Court and Legal
Cuomo Forced to Court in 401k Financial Farce
Abstract: New York Gov. Andrew Cuomo had, through the Department of Financial Services, ordered state regulators to suggest to 401k and similar financial firms they "review any relationships they may have with the National Rifle Association and other similar organizations. Upon this review, the companies are encouraged to consider whether such ties harm their corporate reputations and jeopardize public safety."
Source: 401kspecialistmag.com
»» Click here for more Court and Other Legal Issues
State-Based Retirement Programs
Would You Move Your 401k to a State Plan if Given the Opportunity?
Abstract: A surprising number of plan sponsors answered 'yes' to this question, but not necessarily for the reasons you might think. The LIMRA Secure Retirement Institute recently followed up on a 2016 survey that found that more than half (55%) of plan sponsors said they would be "very" or "somewhat" likely to consider transitioning from their current DC plan to a state-managed solution. The latest survey seemingly validates the degree of interest LIMRA found among plan sponsors in 2016.
Source: Napa-net.org
State-Sponsored Retirement Plan Now Open to Individuals
Abstract: While a number of states have established (or are planning to establish) government-sponsored retirement plans for small businesses that do not currently cover workers, the Beaver State announced its OregonSaves retirement program will allow "individual Oregonians, such as self-employed or gig economy workers, to join and start saving for a better retirement."
Source: 401kspecialistmag.com
Compliance and Regulatory
DOL Releases Advance Copy of 2018 Form 5500
Abstract: The U.S. Department of Labor, the Internal Revenue Service, and the Pension Benefit Guaranty Corporation released advance informational copies of the 2018 Form 5500 Annual Return/Report and related instructions.
Source: 401khelpcenter.com
DOL Guidance on Auto Portability
Abstract: Under an auto portability program, employees would be told that their 401k savings will be moved to tax-favored IRAs when they leave a job or if the plan is terminated, and that the employee's savings in the IRA would then be automatically transferred to the 401k plan or other individual account plan of the new employer when the employee finds a new job. However, because the prohibited transaction provisions of ERISA and the Internal Revenue Code prohibit a plan fiduciary from using its discretion to cause the plan or IRA to pay the fiduciary a fee, implementation of this type of program would require a prohibited transaction exemption.
Source: Wagnerlawgroup.com
IRS Issues Proposed Regulations on Hardship Distribution Rules
Abstract: The Treasury Department and Internal Revenue Service issued proposed regulations that would amend the rules governing hardship distributions from 401k plans. The proposed regulations reflect statutory changes, including changes made by the Bipartisan Budget Act of 2018 and Pension Protection Act of 2006.
Source: Westlaw.com
401k Plan Administration Checklist for the 2019 Plan Year
Abstract: Annual 401k administration tasks generally fall into one of four categories: nondiscrimination testing, Form 5500 reporting, participant disclosure, and plan document maintenance. If you're an employer, it is recommended that you manage the completion of these tasks using a checklist. A checklist can serve another important purpose, monitoring your 401k provider's job performance.
Source: Employeefiduciary.com
»» Click here for more Compliance and Regulatory Material
Marketplace News
Newport Group Acquires Kidder Benefits Consultants
»» Click here for More Marketplace News
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