Newsletter for July 22, 2019
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In This Issue
Fiduciary and Plan Governance
Is Fiduciary Responsibility Retroactive?
Abstract: A federal judge has weighed in on a question relevant to new plan committee fiduciaries: When and how does their liability for the decisions of previous committee members begin?
Source: Napa-net.org
How Not to Hire an ERISA Auditor
Abstract: Selecting an auditor for an ERISA plan is one of those fiduciary responsibilities which has been a continuing concern of the Department of Labor. If you are a plan sponsor with that fiduciary responsibility, here are a few mistakes to avoid in the auditor selection process.
Source: Retirementplanblog.com
»» Click here for more Fiduciary and Plan Governance Material
Insight: Studies, Research, and White Papers
2019 Survey Reveals Most Popular Employee Benefits
Abstract: Employers continue to place a lot of value in the employee benefits they offer their workforce, according the SHRM 2019 Employee Benefits Survey. SHRM conducts the survey annually to gather information on the types of benefits employers are offering their employees and to report on trends.
Source: Xperthr.com
How America Saves: Small Business Edition
Abstract: Vanguard issued its sixth annual "How America Saves: Small Business Edition," a comprehensive assessment of plan design trends and participant savings behavior in small business 401k plans. The new research finds that small business plan participants are benefiting from enhanced plan design features, including professionally managed allocations, which have led to increased plan participation and optimized portfolio construction. Report is 36-pages.
Source: Vanguard.com
»» Click here for More Studies, Research, and White Papers
Items of Special Interest to Service Providers
Goldman Sachs Has What Other 401k Firms Want
Abstract: Goldman Sachs is poised to reap big profits from the 401k market. I'm not talking about its traditional asset management business, however, it's in wealth management that the firm could make its biggest mark.
Source: Investmentnews.com (registration may be required)
Three Aspects of Retirement Affected by Divorce
Abstract: In terms of finances, especially in retirement, divorce creates new challenges and planning opportunities. The increase in divorced and single retirees has created a need for advisers to understand different retirement planning strategies.
Source: Investmentnews.com (registration may be required)
»» Click here for More 403b Material
Court and Legal
Adidas Sued Over Excessive Fees for 401k Participants
Abstract: Participants in the Adidas Group 401k Savings and Retirement Plan have filed a proposed class action lawsuit against Adidas America over the plan's administrative and investment fees. According to the complaint, for every year between 2013 and 2017, the administrative fees charged to plan participants were greater than a minimum of approximately 75% of its comparator fees when fees are calculated as cost per participant. And for every year between 2013 and 2017 but two, the administrative fees charged to plan participants were greater than 80% of its comparator fees when fees are calculated as a percent of total assets.
Source: Planadviser.com
SunTrust Wins Narrow Summary Judgement in Long-Running ERISA Suit
Abstract: A federal court has rejected the argument that defendants were aware that their predecessor fiduciaries had breached their duties in selecting affiliated funds and thus that they breached their own duties by failing to take adequate steps to remedy the original alleged breaches.
Source: Planadviser.com
»» Click here for more Court and Other Legal Issues
Legislative and Washington DC
A Closer Look at Legislative Proposals Impacting Retirement
Abstract: Although the question of whether a retirement "crisis" exists (and if so, to what extent) is still the subject of considerable debate, several legislative proposals have been recently introduced or reintroduced that could have a significant impact on retirement coverage as well as on the ability of individuals to manage important retirement-related risks. How much might some of the recent legislative proposals for expanding access to employer sponsored retirement plans improve retirement income adequacy for current workers? This paper examines this by simulating the impact of some of the more important aspects of current legislative proposals.
Source: Ssrn.com
Scalia Announcement Signals No Change in Direction for DOL
Abstract: President Donald Trump's announcement that he plans to nominate Eugene Scalia as secretary of the U.S. Department of Labor is seen as a continuation of the DOL's efforts to roll back Obama-era policies. John Husband, an attorney with Holland & Hart LLP in Denver, Colorado, expects Scalia to continue most of the current DOL policies and the direction the department has taken over the last couple of years.
Source: Blr.com
»» Click here for more on Legislative and Washington Actions
Multiple Employer Plans (MEP)
IRS Proposes Rule to Ease Liability Under 401k Multiple Employer Plans
Abstract: The IRS has proposed a rule that would make 401k multiple employer plans (MEPs) more attractive, especially for small employers, by addressing the risk posed to a MEP by one member's bad actions.
Source: Shrm.org
Fiduciary Clarity Needed for Successful Open MEP Expansion
Abstract: Should the SECURE Act become law and permit open multiple employer plans to exist without a common nexus, one of the biggest benefits for advisers will be the increased ability to scale their practices. But, open MEPs, as detailed in the SECURE Act, offer a structure for a small plan to get maximum fiduciary support, experts say, but the roles and responsibilities of all the parties involved can be hard to keep straight.
Source: Planadviser.com
»» Click here for more on Multiple Employer Plans
Compliance and Regulatory
Plan Sponsors: You Should Have a Model QDRO
Abstract: ERISA requires sponsors of qualified retirement plans to maintain written procedures for the administration of qualified domestic relations orders, and the plan administrator has an obligation to ensure that a domestic relations order received by the plan is "qualified" before making the payments or taking other actions contained in the order. While a plan sponsor is not required to maintain a model QDRO for its retirement plans, the development of a model QDRO can make QDRO administration more efficient and produce better results for both the affected participant and the alternate payee.
Source: Employeebenefitsupdate.com
IRS Issues Guidance to Plan Document Providers, TPAs, and Plan Sponsors
Abstract: Over recent weeks, the IRS has issued several items of guidance that are important to plan document providers, TPAs, plan sponsors, and others involved with qualified retirement plans. The guidance includes the 2019 Operational Compliance List, revisions to the plan correction (EPCRS) procedures, and a limited expansion of the determination letter program for individually designed plans. The guidance is reviewed here.
Source: Asc-net.com
Top 10 Areas of Focus in IRS Investigations of Retirement Plans
Abstract: At any point an IRS agent may contact a plan sponsor that its plan has been selected for audit. Audits are never pleasant, but to minimize the pain, a plan sponsor may consider a compliance self-review to ensure that the plan is operating correctly, its plan documents comport with plan operation, and plan records are complete and organized before the IRS comes knocking. Here are the top 10 issues of IRS focus in its audit of qualified plans.
Source: Jdsupra.com
PBGC's Missing Participants Program for Defined Contribution Plans
Abstract: Did you know that the Pension Benefit Guaranty Corporation (PBGC) administers a missing participants program for defined contribution plans? We ask because PBGC has indicated, informally, that few defined contribution plans have taken advantage of this program.
Source: Truckerhuss.com
»» Click here for more Compliance and Regulatory Material
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