Newsletter for June 17, 2019
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Infographic: Breakdown of Small Plan 401k Fees
A new infographic "Breakdown of Small Plan 401k Fees" has been created in conjunction with the release of the 401k Averages Book 19th Edition. Please feel free to use the visually appealing infographic for your clients and prospects. The 401k Averages Book remains the most recognized source for comparative, non-biased 401k average cost information. Click here to get your copy of the infographic.
In This Issue
Insight: Studies, Research, and White Papers
Top 401k Plans Ranked by Industry
Abstract: New analysis from MONEY pegs top company retirement plans in 14 different industries and compares the average participant account balance to industry average 401k balance.
Source: 401kspecialistmag.com
2019 401k Participant Survey
Abstract: New research from Schwab Retirement Plan Services finds that although 401k participants believe they need $1.7 million, on average, to retire, many are not investing enough to reach that goal. The nationwide survey of 1,000 401k plan participants also reveals the outsized role of the 401k in Americans' financial lives, with most saying it is their only or largest source of retirement savings.
Source: Schwab.com
How America Saves 2019
Abstract: The 18th edition of "How America Saves" delivers a 121-page comprehensive analysis of the retirement savings behavior of 5 million participants in about 1,900 defined contribution retirement plans for which Vanguard provides recordkeeping services. Our data-rich report examines trends in how participants accumulate, manage, and access retirement savings.
Source: Vanguard.com
»» Click here for More Studies, Research, and White Papers
General Items
How to Maximize Roth Savings Through a 401k Plan
Abstract: A "Roth" retirement account is the greatest savings vehicle ever invented, because all investment profits in a Roth account are totally income-tax-free. The only problem is, how do you get money into a Roth account without undue tax cost? This article looks at a case study that will illustrate little-known ways that some workers can maximize their Roth contributions to a 401k at a low (or no) tax cost.
Source: Morningstar.com
401k Plans Loosen Vesting as Labor Market Gets Tighter
Abstract: Plan sponsors often choose to implement graded vesting schedules that gradually increase to 100% over a specified period of time to reduce both plan costs and employee turnover. While experts agree that vesting schedules reduce costs, they question whether they indeed lower turnover, saying today's increasingly mobile workers will jump to new jobs for better-paying positions regardless of the money they leave behind in unvested company contributions.
Source: Investmentnews.com (registration may be required)
Fiduciary and Plan Governance
3(21) vs. 3(38) Fiduciary: An ERISA Attorney Breaks It Down
Abstract: Company fiduciaries have a duty to seek professional help with investments if they need it. An ERISA attorney who's spent over 35 years helping hundreds of 401k plan sponsors explains the choices and decision issues.
Source: Forusall.com
401k Plan Administrator and Sponsor Duties
Abstract: The IRS requires that workplace retirement plans remain in compliance with a large array of regulations, so it's important for administrators and sponsors to regularly oversee the plans with which they are entrusted, and perform a variety of duties. This article outlines the difference between plan administrators and sponsors, and the responsibilities of each.
Source: Humaninterest.com
»» Click here for more Fiduciary and Plan Governance Material
403b Plans
Pennsylvania Law Requires Multiple Recordkeepers for 403b Plans
Abstract: A new law in Pennsylvania will require school districts sponsoring certain retirement plans to use at least four service providers, which advisers say runs counter to best practices and will perpetuate an environment of higher recordkeeping and investment-management fees.
Source: Investmentnews.com (registration may be required)
»» Click here for More 403b Material
Court and Legal
Supreme Court to Review What It Takes for a Plan Participant to Have Actual Knowledge
Abstract: The Supreme Court granted certiorari in a case from the 9th Circuit Court of Appeals involving the statute of limitations applicable to claims under ERISA. The issue to be decided by the Supreme Court is, what does it mean for a plan participant to have "actual knowledge" of a potential claim to start the running of the statute of limitations?
Source: Blankromeworkplace.com
Appellate Court Affirms Award of 401k Benefits Under QDRO Issued After Participant's Death
Abstract: A federal appellate court has upheld a trial court's determination that a deceased plan participant's former spouse is entitled to part of the participant's 401k plan benefit, even though the participant had remarried and the qualified domestic relations order (QDRO) assigning benefits to the former spouse was issued after the participant's death.
Source: Thomsonreuters.com
»» Click here for more Court and Other Legal Issues
Legislative and Washington DC
What the SECURE Act Could Mean for Businesses
Abstract: Congress is coming tantalizingly close to making it simpler, easier and less costly for small-business owners to provide retirement plans for their employees, extending the prospect of retirement security to millions more Americans. The SECURE Act represents a comprehensive effort to enhance retirement security. This article addresses a handful of key provisions within the legislation that could make a difference in encouraging more businesses to offer retirement plans.
Source: Massmutual.com
»» Click here for more on Legislative and Washington Actions
Cyber and Plan Security
Implementing Cybersecurity Best Practices for Plan Participants
Abstract: Cybersecurity has become a prevalent concern in the retirement industry. Surprisingly, many plan breaches are not all due to third-party attackers; rather, it can stem from the misconduct by employees. Therefore, it is in the best interest of plan sponsors to provide guidelines to their participants so these vulnerabilities can be prevented.
Source: Planpilot.com
»» Click here for more on Cybersecurity Issues
Compliance and Regulatory
2019 DC Plan Compliance Calendar
Abstract: This calendar is designed to provide a general overview of certain key defined contribution plan compliance dates.
Source: Findley.com
DC Retirement Plan Oversight - Considerations for Terminated Participants
Abstract: The process to force out terminated employees with balances under $5,000 does require thoughtful engagement by the plan sponsor; however, there could be significant benefits for plan sponsors and their employees, as well as for terminated participants. Regardless, managing terminated participants is an important retirement plan oversight topic that should be reviewed periodically and documented.
Source: Fiallc.com
Can a Company Implement a Match Safe Harbor Mid-Year?
Abstract: Human resources departments are working to follow either a calendar or fiscal year plan of important notices, paperwork, and changes for employees. Is it possible, then, to make a change mid-year and implement a match safe-harbor 401k plan?
Source: Hallbenefitslaw.com
»» Click here for more Compliance and Regulatory Material
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