Ten Litigation Lessons for 401k and 403b Fiduciaries
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Fiduciary and Plan Governance Ten Litigation Lessons for 401k and 403b Fiduciaries Abstract: 401k and 403b plan litigation is not going away. If you are a plan fiduciary looking to avoid (or win) future lawsuits over fees and investments, there are lessons to be learned from recent decisions and settlements about the best ways to protect yourself in 2019. Here are some important takeaways from recent litigation activity. Source: Cohenbuckmann.com ESG Inclusion Is a Major 401k Fiduciary Fail Abstract: The context is an op-ed in The Wall Street Journal decrying calls for mandated ESG investing, proponents of which argue it's right for the world and -- more recently -- risk-adjusted returns. The catalyst is the U.N.-sponsored Principles of Responsible Investing, which, like it or not, runs afoul of both finance and ERISA law, as the authors note. Anyone considered a fiduciary must "act for the exclusive benefit of the beneficiaries, considering solely their interests, without regard for collateral benefits." Source: 401kspecialistmag.com »» Click here for more Fiduciary and Plan Governance Material General Items How to Manage Your 401k Plan in a Time of Market Volatility Abstract: For most people with 401k plans, stock market volatility is taking its toll. Given that a majority of 401k plan holders have exposure to equities, recent dips may feel like serious threats to one's retirement plans. But investment professionals suggest that rebalancing one's account is as radical a change as one should make. Sticking to the long haul was the plan all along and that plan remains as solid as it ever was. Source: Born2invest.com A Plan Sponsor Can Increase 401k Participation Without Costing Much Abstract: Getting participants involved can be difficult, but it doesn't have to be costly. There are quite a few tools out there to increase plan participation that doesn't have to cost plan sponsors much money in terms of contributions and plan expenses. Source: Jdsupra.com SIMPLE IRAs vs 401k Safe Harbor Plans - 2019 Abstract: The purpose of this outline is to compare a SIMPLE IRA with a safe harbor 401k plan, especially for employers who must cover participants other than just the owners. Source: Consultrms.com Insight: Studies, Research, and White Papers PSCA Publishes 61st Annual Survey of Profit Sharing and 401k Plans Abstract: As the 401k commemorates its 40th anniversary, new research from the Plan Sponsor of America finds that employers are contributing an average of 5.1 percent of pay to their employees' 401k accounts, the highest ever recorded in the history of the survey, the longest running of its kind. This rate of contribution, combined with an average savings rate by participants of 7.1 percent, gives a total savings rate of more than 12 percent. Source: 401khelpcenter.com The Winding Road to Retirement - Financial Stress Survey Abstract: John Hancock announced the results of its annual Financial Stress Survey of 1,352 retirement plan participants, revealing a majority of workers (69 percent) are stressed over their finances, costing companies approximately $2,000 per employee. Most respondents (72 percent) admitted to worrying about personal finances while at work, with one-third doing so more than once per week. Source: Jhrps.com Abstract: There is a sea change underway in the retirement industry. As many as five different generations are now participating in retirement plans. New technologies are emerging to engage participants and streamline back-office operations. All the while, the regulatory environment continues to shift with new and proposed rules. Amidst dramatic change lies unprecedented opportunity. Source: Broadridge.com How Do Retirement Plan Participants Feel About HSA Benefits? Abstract: HSAs are often used as spending accounts to fund short-term needs rather than saving accounts for long-term healthcare expenses. Many DC plan participants miss the opportunity to accumulate savings for healthcare needs in retirement, not because they do not want to invest, but because they do not know that they can use an HSA to invest. Source: 401kspecialistmag.com »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers Advice Standards Packages From the SEC and DOL Expected by September 2019 Abstract: The Securities and Exchange Commission's advice standards package and the Labor Department's revised fiduciary rule are both expected to be finalized by September 2019, ThinkAdvisor writes. As part of the SEC package, there will be changes to Regulation Best Interest and the Customer Relationship Summary, according to SEC Chairman Jay Clayton, the publication writes. Source: Thewealthadvisor.com 403b Plans Abstract: Plan sponsors are changing key governance practices to improve 403b plan performance and outcomes for employees, according to new findings from the latest Plan Sponsor Council of America survey report. The 13-page report highlights that changes are largely in response to litigation surrounding plans, the need to mitigate risk, recommendations from their advisor, and the normal course of plan governance. Source: Psca.org »» Click here for More 403b Material Legislative and Washington DC Retirement Savings Plan Provisions on Capitol Hill Abstract: Among the many year-end bills that are circulating in the U.S. Senate and House of Representatives are a number that include fixes for Individual Retirement Accounts and 401k-type retirement savings plans. Some of the fixes are found in several bills; others are in just one of the bills. Source: Pensionrights.org »» Click here for more on Legislative and Washington Actions State-Based Retirement Programs How Have Workers Responded to Oregon's Auto-IRA? Abstract: To assess the overall impact of an auto-IRA, one would need comprehensive financial data for a household, including debt, income, and saving over a long period of time. But an early look can still be useful, so this 10-page paper examines the experience of Oregon to date, which recently became the first state to implement an auto-IRA program (called OregonSaves). The goal is to answer a limited question: how do workers who gain access to an auto-IRA initially interact with the program? Source: Bc.edu Compliance and Regulatory End of Year IRS Checklist for Plan Sponsors Abstract: Most retirement plans provided by employers have a tax-favored status to provide tax savings to both employers and beneficiaries. However, when a retirement plan does not continue to meet the necessary requirements, the plan can lose tax-favored status and end up costing plan sponsors. The IRS provides a list of the "Top Ten Failures Found in Voluntary Correction Program" to alert businesses to common benefit plan tax problems, including those reviewed here. Source: Bsllp.com Employee Benefits Due Diligence in Mergers and Acquisitions Abstract: When conducting due diligence in connection with a potential merger or acquisition, companies too frequently treat employee benefits as an afterthought. In reality, employee benefit plans are a common source of substantial hidden liabilities. Employee benefit specialists should be engaged early in the due diligence process to flag potential liabilities and craft appropriate workarounds. Source: Schneiderdowns.com »» Click here for more Compliance and Regulatory Material Marketplace News BlackRock and Microsoft to Reimagine Retirement CBIZ Acquires Retirement Plan Business Unit From Sequoia Financial Transamerica Selects Craig Haase as Director of Client Engagement for Retirement Plans Transamerica Enhances Retirement Website Experience for Spanish-Speaking Participants The Retirement Advantage Acquires The Condon Company »» Click here for More Marketplace News
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