Cross-Selling Poised to Be Next 401k 'Battleground' Issue
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Items of Special Interest to Service Providers Cross-Selling Poised to Be Next 401k 'Battleground' Issue Abstract: Cross-selling products and services to 401k plan participants -- on the part of both recordkeepers and financial advisers -- is shaping up to be among the most contentious issues in the retirement-plan market. The issue comes down to the use of participants' data: Should service providers and advisers be able to use individuals' information, such as investment choices and proximity to retirement, to market and sell non-retirement-plan-related products to them? Source: Investmentnews.com (registration may be required) Are Recordkeepers Friend or Foe to 401k Advisers? Abstract: As they introduce new products and services, recordkeepers of defined contribution plans are infringing on 401k advisers' traditional turf and threaten to lure away clients. They are offering services to retirement plan participants that are raising the hackles of RPAs. Source: Investmentnews.com (registration may be required) Fiduciary and Plan Governance 401k Financial Advisors: Core Responsibilities and Risks Abstract: This guide is aimed at helping you avoid getting stuck with a sub-par advisor who prevents your plan from flourishing. It describes what a 401k financial advisor can do for your business. Source: Forusall.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers The Cobbler's Shoes: How Asset Managers Run Their Own 401k Plans Abstract: Callan analyzed the practices of asset managers in running their own 401k plans, using U.S. Department of Labor data from 2016 and comparing that dataset to a broader population of 55,000 plans. The 26-page analysis shed light on how the investment management industry, the ultimate stewards of 401k plans, performed on the key issues of participant behavior and investment design in the plans for its own employees. Source: Callan.com Defined Contribution Plans and the Challenge of Financial Illiteracy Abstract: Study analyzes data from the 2015 National Financial Capability Study to show that people whose only exposure to investment decisions is by virtue of their participation in an employer-sponsored 401k plan are poorly equipped to make sound investment decisions. This lack of financial literacy is critical both because of the financial consequences of poor financial decisions and because of a legal structure that relies on participant choice to limit the fiduciary obligations of the employer with respect to the structure and options provided by the retirement plan. Source: Ssrn.com »» Click here for More Studies, Research, and White Papers 403b Plans IRS Indicates 403b Initiatives Coming This Summer Abstract: IRS officials have recently indicated that the agency expects to launch audit initiatives this summer targeting 403b plan compliance. However, 403b plans are in a remedial amendment period, and the IRS has offered much help for them to be in compliance with regulations. Source: Planadviser.com »» Click here for More 403b Material Court and Legal Excessive Fee Suit Filed Against Greystar Management Abstract: A participant in the Greystar 401k Plan has filed a proposed class-action lawsuit against the property management firm alleging it breached its fiduciary duties under ERISA by allowing excessive administrative and investment fees to be charged. The less than $250 million plan is accused of failing to employ a prudent and loyal process in evaluating investment and administrative fees. Source: Planadviser.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC New Bill Means Major Increase in RMD Age Abstract: Four-and-a-half years is pretty significant in your 70s, but that's how much longer seniors could wait to take required minimum distributions under a new Senate bill. The Retirement Security & Savings Act would increase the age for required minimum distributions to age 75 by 2030. Source: 401kspecialistmag.com Legislation Paves Way for Retirement Match on Student Loan Repayments Abstract: A key member of Congress has reintroduced legislation that would permit 401k, 403b, SIMPLE, and governmental 457b retirement plans to make matching contributions to workers as if their student loan payments were salary reduction contributions. Source: Napa-net.org »» Click here for more on Legislative and Washington Actions Cyber and Plan Security Stealing From Colleagues? Fraud and Embezzlement in 401k Plans Abstract: Fraud and embezzlement occur more routinely in the world of 401k (and other employee benefit) plans than any would like to believe. It's hardly accidental that the DOL and the IRS remain keenly interested in the incidence of fraud and embezzlement in 401k plans. Their level of scrutiny will not decrease, and plan sponsor's fiduciary obligations and vigilance practices will continue to require oversight by ERISA professionals. Source: Lexology.com Cybersecurity Retirement Risks Trouble Benefits Leaders Abstract: The $5 trillion in retirement plans have become a "tempting target" for hackers to access sensitive information held by plan providers in the industry, so two legislators asked the Government Accountability Office to examine data protections, processes and procedures within the private retirement system. Source: Workforce.com Driving Cybersecurity With Participants and Providers Abstract: Among a plan sponsor's responsibilities, encouraging and enforcing cybersecurity are not the first tasks that come to mind. But, as modern technology takes over the common workplace, the concept of cybersecurity for retirement plans has started to see attention. Plan sponsors should evaluate providers' cybersecurity practices, but there are also steps they and plan participants can take to safeguard retirement accounts. Source: Planadviser.com »» Click here for more on Cybersecurity Issues State-Based Private-Sector Retirement Programs 20,000 Savers So Far in New Oregon IRA Abstract: To get Oregon workers better prepared, the state took the initiative in 2017 and started rolling out a program of individual IRA accounts for workers without a 401k on the job. More than 60 percent of the workers so far are sticking with the program. As of last November, about 20,000 of them had accumulated more than $10 million in their IRAs. Source: Bc.edu Colorado Set to Join Auto-IRA Parade Abstract: A measure that would create a board to study appropriate approaches to increase retirement savings by private-sector workers in Colorado reached the desk of Gov. Jared Polis on May 13 and awaits his signature. Senate Bill 19-173 calls for the creation of a Colorado Secure Savings Plan Board that would study the feasibility of creating a Colorado Secure Savings Plan to increase retirement saving by private-sector workers in Colorado. Source: Napa-net.org Compliance and Regulatory Beyond Compliance: Auditing 401k Plans Abstract: Auditing 401k plans may not be the most exciting or glamorous function ERISA attorneys, tax advisors, or CPAs supervise, but -- for the employers/clients out there who sponsor 401k plans -- it's important to think about a 401k audit as more than just a means of detecting basic compliance issues. Source: Allthingserisa.com ERISA Advisory Council to Review State Unclaimed Property Fund Procedures Abstract: The 2019 Advisory Council on Employee Welfare and Pension Benefit Plans, has said that it will be reviewing transfers of uncashed checks from ERISA plans to state unclaimed property funds and the procedures states use with those funds. The review is relevant to the effort to locate plan missing participants and provide them their funds. Source: Napa-net.org IRS Provides Welcome Relief From High VCP Fees Abstract: With Revenue Procedure (Rev. Proc.) 2019-19, the IRS updates the Employee Plans Compliance Resolution System by expanding the availability of self-correction options for more kinds of plan failures. The IRS anticipates that this expanded guidance will increase plan compliance and reduce some costs for employers. Source: Ascensus.com New IRS Rules Allow Retirement Plan Sponsors to Self-Correct Broader Range of Plan Failures Abstract: The IRS recently issued a new version of its Employee Plans Compliance Resolution System that gives sponsors of tax-qualified retirement plans additional options for self-correcting plan failures. The new EPCRS allows plan sponsors to use the Self-Correction Program in several circumstances, rather than requiring a Voluntary Compliance Program filing with the IRS and payment of the applicable user fee. Source: Hansonbridgett.com »» Click here for more Compliance and Regulatory Material
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