Fidelity Facing 401k Fee Fire on Multiple Fronts
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Items of Special Interest to Service Providers Fidelity Facing 401k Fee Fire on Multiple Fronts Abstract: Massachusetts Secretary of the Commonwealth William Galvin sent a letter to Boston-based Fidelity Investments on Feb. 27 requesting information about its 401k access fees. The Department of Labor is also investigating these fees, according to a report in The Wall Street Journal. Fidelity stated that its traditional business model is "broken" and characterized the infrastructure fee as a solution to that problem. Source: 401kspecialistmag.com Lessons for Advisers From 401k Lawsuits Abstract: Perhaps nothing causes as much anxiety for retirement plan advisers as the potential for a client to be hauled into court to face accusations of fiduciary breaches. Even in the best-case scenario where the plan successfully defends itself, dealing with litigation is a disruption and drain on resources that otherwise could be spent on helping participants achieve their investing goals. A survey of recent 401k litigation reveals two truths. Source: Investmentnews.com (registration may be required) Four Reasons 401k Advisers Should Partner With a Benefits Broker Abstract: The employee benefits marketplace continues to evolve, with medical and retirement products continuing to merge. This trend is fantastic for the end consumer. But what is the best way for retirement plan advisers to partner with a benefits broker to serve a mutual client? Source: Investmentnews.com (registration may be required) State Fiduciary and Best Interest Developments Abstract: A number of states are seeking to impose fiduciary or best interest requirements on broker-dealers, investment advisers, financial planners and/or insurance brokers and producers in their dealings with customers. While the rules vary from state to state, they are in addition to -- and sometimes inconsistent with -- federal requirements being considered by the SEC or by the Department of Labor for retirement invest. advice. This chart summarizes the activities in each state. Source: Brokerdealerlawblog.com Twenty-four Different Designations for 401k Advisors - How to Choose Abstract: Interested in earning a professional designation or certification to help you become a more competent 401k advisor? Help comes in the form of a newly updated guide to retirement plan professional designations and certifications, which shows the average annual cost to maintain one is $330 Source: 401kspecialistmag.com The 10 Biggest Threats for Retirement Plan Advisers Abstract: The entire defined-contribution industry is in flux as retirement planning becomes more important. Plan sponsors are paying more attention to their DC plans, putting pressure on advisers to deliver real value while demanding lower costs. Here are the 10 biggest threats facing retirement plan advisers over the next three years. Source: Investmentnews.com (registration may be required) Fiduciary and Plan Governance Lost Participants: It Is Sponsors' Duty to Locate Their Terminated "Missing Persons" Abstract: A challenge that all plan fiduciaries and their advisers face is how to deal with "lost" participants. When investigating a plan, the DOL will focus on how the plan addresses that. Indeed, the DOL recently challenged practices thought by plan fiduciaries and their advisers to be appropriate under ERISA. Given this scrutiny, plan sponsors and their advisers should examine how their plans and service providers resolve the issues involved. This article provides further details about these challenges and offers some ideas on how to address the issues. Source: Groom.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers Americans Cite Healthcare Expenses as No. 1 Barrier to Early Retirement Abstract: When asked to name barriers to financial independence and early retirement, Americans are less concerned about uncertain market conditions (37 percent) or inflation (35 percent), than they are about healthcare costs (57 percent), according to a new survey conducted for TD Ameritrade, of 1,500 Americans aged 45 and older with $250,000 or more in investable assets. Source: Amtd.com EBRI Projects Decrease in America's Retirement Deficit Abstract: A new study from the Employee Benefit Research Institute (EBRI) projects that the retirement deficit for U.S. households with heads ages 35-64 decreased 13.7 percent from $4.44 trillion (in current dollars) in 2014 to $3.83 trillion in 2019. The largest improvement was experienced by younger workers, with those ages 35-39 projected to have a 22 percent decrease in their average deficits. Source: Ebri.org Ten Ways Behavioral Finance Can Boost Retirement Security Abstract: The insights of behavioral finance have the potential to help employers, plan sponsors and plan administrators make changes that can yield a substantial difference in the actions of employees and plan participants. This 2-page paper provides ten tips based on the principles of behavioral finance for helping workers achieve a secure retirement. Source: Ifebp.org »» Click here for More Studies, Research, and White Papers Participant Communications and Education Are Your Participant Education Programs Failing? Abstract: Many 401k plan sponsors seek to reduce their potential fiduciary liability by electing to be a Section 404(c) plan. One of the requirements in the DOL regulation is that the fiduciary provide the participant with sufficient information to make an informed investment decision. While it is important to make sure that participants get sufficient information, it may be more critical to make sure that they are able to understand, and act based on that information. This column takes a closer look at the plan sponsor’s mission of providing understandable plan and investment information. Source: Blr.com »» Click here for more on Employee Communications and Education Court and Legal Wong vs. Fidelity -- A Sign of the Times Abstract: A class action complaint1 was filed by Andre Wong, et al, representing the T-Mobile USA, Inc. 401k Retirement Plan against Fidelity Management & Research and a number of its affiliates for self-dealing and a breach of fiduciary responsibility. This could produce unintended consequences of limiting investment choices to participants in the future. Source: Chaoco.com Appeals Court Rejects Disney 401k Participants' Fiduciary Breach Complaint Abstract: A federal appeals court unanimously rejected a complaint by participants in a Walt Disney Co. 401k plan that fiduciaries violated their duties by offering the Sequoia Fund, a mutual fund that several years ago plummeted in net asset value. Source: Pionline.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC Senate Tax Extenders Bill Has Disaster Provisions Impacting Retirement Plans Abstract: Senate Finance Committee Chairman Charles Grassley has introduced the Tax Extender and Disaster Relief Act of 2019 (S. 617). The primary aim of the legislation is to extend a number of expired or expiring tax provisions, but it is also being used to provide tax-related relief provisions specific to retirement savings arrangements apply to distributions taken from IRAs and tax-qualified employer-sponsored retirement plans. Source: Ascensus.com »» Click here for more on Legislative and Washington Actions Compliance and Regulatory Conducting an Operational Compliance Review Abstract: Prudent plan sponsors are proactive, have up-to-date procedures and guidelines, and periodically conduct an operational compliance review, or self-audit. Use these eight questions to help you pinpoint areas that may need to be addressed in your review. Source: Findley.com Abstract: Qualified plans must perform annual testing to be sure that the plan doesn't unfairly discriminate in favor of "highly compensated employees" or exceed the contribution limits set forth by the IRS. Depending on your plan provisions, it isn't just one calculation, but a series of tests that show that your plan is not discriminatory. Since most retirement plans operate on a calendar year basis, testing season is now. Here are some definitions to get you through the basics of compliance testing. Source: Pensysinc.com »» Click here for more Compliance and Regulatory Material Marketplace News Big Green 401k Retirement Plan Announced 401k/Student Loan Repayment Program Introduced by Thrive »» Click here for More Marketplace News
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