Six New Year's Resolutions to Avoid Fiduciary Frustration
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In This Issue
Fiduciary and Plan Governance Six New Year's Resolutions to Avoid Fiduciary Frustration Abstract: The problem with most resolutions is that people quickly give up on them. For plan sponsors, they should have New Year's resolutions to improve their plan because they are fiduciaries by being responsible for the retirement plan assets over their employees. This article is about New Year's resolutions that plan sponsors should make and keep alleviating some of the potential liability they face as plan fiduciaries. Source: Jdsupra.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers The Impact of Employee Financial Health at Work Abstract: Survey shows a clear relationship between employees' financial worries and their work performance, engagement and absence. Specifically, the survey finds that employees who are financially struggling: Lose 41% more work time to absence than peers without financial worries; Have lower engagement levels than peers without financial worries (51% vs 29%); and, Are less productive compared with peers without financial worries (32% vs. 5%). Source: Willistowerswatson.com What Do Participants Want in Their Investments? Abstract: When it comes to investing for retirement, a frequently asked question is, "How do defined contribution plan participants make decisions regarding their investment elections?" Very often, participants do not possess the technical skills to assess the appropriateness of an investment for their DC portfolio. Therefore, it is important to understand what characteristics of an investment they value most and least. Source: Napa-net.org »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers The Retirement Plan Industry Enters a Consolidation Phase Abstract: The retirement plan advisory business seems to have entered a consolidation phase. The wealth management space is more mature and has been consolidating for a while. Now we are at the beginning of it in the retirement space. If it's a baseball game, a lot of advisory firms feel like they are in the sixth or seventh inning of their evolution. Source: Napa-net.org Court and Legal 401k Suits Point to Need for Litigation Risk Prevention Abstract: A series of recent settlements in ERISA lawsuits illustrates to defined contribution sponsors why an ounce of prevention is worth a pound of cure. These settlements cover financial institutions that have filled their 401k plans with proprietary investments, provoking allegations of self-dealing that violate their fiduciary responsibilities under ERISA. Source: Pionline.com Under ERISA, Ignorance Is Bliss in the Ninth Circuit Abstract: In Sulyma v. Intel Corporation Investment Policy Committee, the Ninth Circuit Court of Appeals recently held that having access to documents disclosing an alleged breach of fiduciary duty is not sufficient to trigger the three-year statute of limitations under ERISA if the plaintiff does not have actual knowledge of the alleged breach. Source: Ogletree.com Nineth Circuit Sets New "Actual Knowledge" Standard in 401k Suit Abstract: A plan sponsor who had been sued for allegedly breaching its ERISA fiduciary duties in shifting allocations in a plan's custom target-date portfolios to "risky and high-cost" investments will have to go back to court. Source: Napa-net.org Second Circuit Revives Dismissed ERISA Stock-Drop Suit Abstract: The Second Circuit reinstated a claim for breach of fiduciary duty under ERISA brought by participants in IBM's 401k plan who suffered losses from their investment in IBM stock. This article briefly reviews the Supreme Court and Circuit Court precedent leading up to the Second Circuit's IBM decision, the IBM decision itself, and its potential implications going forward. Source: Erisapracticecenter.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC The Implications of the 2018 Midterm Elections on the Retirement Policy Abstract: Change is coming to the nation's capital and the ramifications for retirement policy could be significant. For starters, momentum has been building for quite some time on both sides of the political aisle that an update is needed to the Pension Protection Act of 2006 to build on the successes of the legislation as well as to address some of the perceived shortcomings. Another area primed for action is addressing retirement adequacy for those who are saving, but may not be saving enough to live a secure retirement. Source: Napa-net.org »» Click here for more on Legislative and Washington Actions Multiple Employer Plans (MEP) The DOL's Own Reasoning Supports MEPs Being "Open" Abstract: TAG Resources' comment to the proposed MEP regulation which was filed with the DOL last week. The comment letter addresses the DOL's main concern in initially prohibiting non-PEO commercial enterprises from becoming MEP sponsors. Source: Businessofbenefits.com Closing the Retirement Savings Coverage Gap - Multiple Employer Plans Abstract: The retirement coverage gap can and should be narrowed. While a variety of solutions are possible, there is a growing consensus in Washington that one of the broadest and most expedient ways would be to expand access to multiple employer plans, or MEPs, for small employers and their employees. This 12-page paper outlines the legislative and regulatory actions that would be needed to broaden access to MEPs. It also describes the features that a model MEP might incorporate. Source: Prudential.com »» Click here for more on Multiple Employer Plans Compliance and Regulatory 2019 Reporting and Disclosure Requirements Under Ongoing Calendar-Year Qualified Plans Abstract: This chart provides reporting and disclosure requirements under ongoing calendar-year qualified retirement plans in the United States. Source: Willistowerswatson.com IRS Releases 2019 Form 1099-R and 5498 Reporting Instruction Abstract: The IRS has released the 2019 Instructions for Forms 1099-R and 5498. These detailed instructions describe the reporting requirements for IRA and employer-sponsored retirement plan distributions, IRA contributions, rollovers, conversions, recharacterizations, and fair market values. Source: Ascensus.com »» Click here for more Compliance and Regulatory Material
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