Newsletter for March 18, 2019
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The 19th Edition of the 401k Averages Book has just been released with all new 401k fee charts and tables. Use the 401k Averages Book to better understand investment, recordkeeping and revenue sharing expenses for 401k plans. Still the most recognized source for comparative, non-biased 401k average cost information. Click here for more information.
In This Issue
Fiduciary and Plan Governance
How QDIOs Have Changed the Fiduciary Role of 401k Plan Sponsors
Abstract: Target-date funds are the fastest growing segment on the 401k investment menu. In the more than ten years since they've become a QDIO staple in 401k plans, target-date funds have certainly changed the retirement prospects for employees. How have these investment vehicles changed the roles, responsibilities, and even the fiduciary liability of the plan sponsor?
Source: Fiduciarynews.com
Why Your Plan's IPS Is Probably a Fiduciary Landmine
Abstract: An IPS is a useful tool to help retirement plan fiduciaries demonstrate that a prudent process has been followed when selecting and monitoring plan investments. A well-constructed IPS is considered a best practice and establishes guidelines for selecting and monitoring plan investments while providing a framework for making critical fiduciary decisions. However, many plans that have an IPS are using one that likely creates more risk for their fiduciaries, rather than less risk.
Source: Greenspringadvisors.com
Six Steps to Lower 401k Fees
Abstract: 401k plans are expensive. Plan fees, taken as a percentage of the assets, can add up to a huge chunk of change that can take years off of your or your employees' retirements. A two percent fee doesn't sound like daylight robbery, but over 35 years, that little fee can consume up to half of your retirement earnings. All of this is to say that minimizing 401k fees is crucial for retirement success. Of course, easier said than done.
Source: Forusall.com
»» Click here for more Fiduciary and Plan Governance Material
General Items
Three Ways People May Save for Retirement in the Future
Abstract: If we can't count on more employers to voluntarily offer retirement benefits or on employees saving on their own, what can we do to help American workers build a financially secure retirement? Recent actions at the state and federal levels point to a system that could cover more people without relying solely on individual employers to sponsor their own retirement plan.
Source: Pewtrusts.org
Insight: Studies, Research, and White Papers
How Well Do 401k Plan Sponsors Support Participants?
Abstract: Tools like managed accounts and target-date funds continue to gain ground, and more than one-third of companies now offer invest. advice to participants, more findings from PSCA's 61st Annual Survey reveal. There are several ways that companies provide investment support to participants through the availability of managed accounts, target-date funds, automatic features/QDIAs, and personalized invest. advice from professionals.
Source: 401kspecialistmag.com
Cerulli Finds All Talk, No Action Regarding DC Plan ESG Investment Adoption
Abstract: Cerulli Associates found fee sensitivity and the notion that environmental, social and governance (ESG) investing entails a trade-off in performance are two broadly applicable headwinds to ESG adoption.
Source: Plansponsor.com
ESG Options Scarce in 401k Plans
Abstract: By virtually any measure, the demand for socially conscious investment products has never been greater. Thanks in large part to support from women and young investors, investment strategies that focus on environmental, social and governance issues reached $12 trillion last year. Yet when it comes to the primary way in which younger generations invest, through company-sponsored retirement savings plans, their desire to match their investments and values is falling on deaf ears.
Source: Investmentnews.com (registration may be required)
»» Click here for More Studies, Research, and White Papers
Items of Special Interest to Service Providers
Seven States With Major 401k Fiduciary Proposals
Abstract: If you need a convenient, "all-in-one-place" overview of what's happening at the state level, Drinker Biddle's got it. The Best Interest Compliance Team at the legal powerhouse put together the following list of bills, proposals, regs and requirements now put forth involving fiduciary and related matters.
Source: 401kspecialistmag.com
Court and Legal
Bankruptcy Case Highlights Importance of Promptly Transferring Retirement Assets in Divorce
Abstract: When a couple divorce, it is not uncommon for one partner to have accumulated significantly larger retirement accounts than the other. In such cases the parties generally divide IRA accounts pursuant to Internal Revenue Code 408(d)(6) and/or enter into a qualified domestic relations order to divide a 401k or other qualified retirement plan. The importance of moving promptly to divide and transfer title to retirement accounts in divorce was highlighted in a Bankruptcy Court case from 2018.
Source: Eforerisa.wordpress.com
MIT 401k Plan Participants Not Entitled to Jury Trial of ERISA Breach of Fiduciary Duty Claims
Abstract: The District of Massachusetts court struck the plaintiffs' jury-trial demand in their ERISA complaint for damages and equitable relief against 401k plan fiduciaries. The court followed the "great weight of authority" in ruling that there is no right to trial by jury in ERISA actions for breach of fiduciary duty.
Source: Mwe.com
Mixed Ruling in Oracle ERISA Suit Strongly Favors Defense
Abstract: Despite a setback for Oracle at the class certification stage, a new ruling out of a federal court in Colorado pushes back strongly against many -- but not all -- of the plaintiffs' claims.
Source: Planadviser.com
»» Click here for more Court and Other Legal Issues
Compliance and Regulatory
Frequent 401k Audit Finding Series - Documentation Failures
Abstract: During our 401k audits, we see failures occurring at both the plan level and the participant level. Documentation failures arise when transactions occurring in the plan can't be supported by written direction.
Source: 5500audit.com
Don't Miss These Retirement Plan Deadlines
Abstract: Given that a variety of qualified retirement deadlines are approaching, this article is intended to alert plan sponsors about applicable major qualified retirement plan deadlines that fall in the first half of 2019. (Note that we have not included a complete list of all deadlines applicable to qualified plans, but instead focused on the more important ones.)
Source: Ogletree.com
Summary Plan Descriptions: You Gotta Have Them, So Make the Most of Them
Abstract: HR/benefits professionals are probably well versed in the SPD requirements. For the rest of you, they're briefly summarized here. In addition, this article describes three trending practices that may make it easier to both meet your SPD compliance obligations and further your overall benefits administration and talent management objectives.
Source: Laboremploymentperspectives.com
It's All Fun and Games Until a Loan Defaults
Abstract: A common feature many retirement plans have is participant loans. This sounds like a great idea to encourage employees to save for retirement by giving them a way to access their money if they need to. That's the theory, anyway, until something goes wrong.
Source: Ferenczylaw.com
»» Click here for more Compliance and Regulatory Material
Marketplace News
Newport Group to Purchase PNC's Vested Interest DC Recordkeeping Business
PSCA Honors Zvi Bodie With 2019 Lifetime Achievement Award
»» Click here for More Marketplace News
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