Things 401k Plan Sponsors are Supposed to Do, But Aren't
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In This Issue
Fiduciary and Plan Governance Things 401k Plan Sponsors are Supposed to Do, But Aren't Abstract: For 401k plan sponsors, not doing what you're supposed to do is a big problem because you're a plan fiduciary and that might incur liability. This article is about things you should be doing as a 401k plan sponsor, but you're probably not doing anyway. Source: Jdsupra.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers How Millennials, Small Businesses, and the Gig Economy are Set to Disrupt the 401k Marketplace Abstract: Given Millennials' increasing reliance on the gig economy as a primary source of income, and the fact that they are now the largest generation in the U.S. workforce, the 401k industry and its dependence on traditional business structures is ripe for disruption over the next decade and beyond. Source: Mtrustcompany.com Is It Time to Pair an Emergency Savings Fund With a 401k Plan? Abstract: Given the high percentage of workers who say they could not cover an emergency expense, a new report examines the case for an employer-based emergency savings option -- possibly in combination with a DC plan -- to help prevent workers from raiding their DC plans when emergencies strike. Source: Napa-net.org »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers Standard of Care for Rollover Advice Abstract: The standard of care for rollover recommendations has been top of mind for broker-dealers beginning with the issuance of the Department of Labor's now-vacated fiduciary rule, and more recently with the SEC's Regulation Best Interest, raising the question of the extent to which the SEC standard of care for rollover recommendations differs from the DOL's. Source: Brokerdealerlawblog.com Retirement Has Become the Lynchpin of Complete Advisory Practices Abstract: Few advisers started their careers focused on defined-contribution plans like 401ks. Most DC practices grew from either wealth management or employee benefits firms leveraging relationships to cross-sell DC plans. But that is changing, with retirement becoming the lynchpin of a successful and comprehensive advisory practice. Source: Investmentnews.com (registration may be required) Can the SEC and DOL Sing in Harmony? Abstract: "Harmonization" is the buzzword that we keep hearing from regulators of the retail advice space. The SEC used the word in the title of its recent concept release on private securities offering exemptions. DOL Assistant Secretary Preston Rutledge used the same word in recent comments on the SEC's Reg BI by stating that DOL's goal is to "align, build up, and harmonize with [the SEC's agenda]." In the coming months, both the SEC and DOL are expected to begin issuing a number of new rules and proposals as these "harmonization" efforts come into daylight. Key areas of focus may include rollover recommendations, electronic disclosure, and permissible investments. Source: Groom.com 403b Plans Abstract: Loans are a particularly difficult issue in 403b plans. 403b plans funded with individual annuity contracts and custodial accounts have contract-level requirements applicable to loans that must be addressed. The contract rights attached to the individual annuities and custodial accounts inhibit certain plan level compliance initiatives. Additionally, the rules for loans under Code Section 72(p) apply a single loan limit to all plans of the employer. Source: Ntsa-net.org »» Click here for More 403b Material Court and Legal Schlichter Rattles Fidelity in Latest 401k Lawsuit Abstract: Jerry Schlichter, who has won $450 million for employees claiming retirement plan mismanagement, has Fidelity Investments scrambling over the possibility that he may call its chairman and CEO to testify in a case involving the Massachusetts Institute of Technology. Source: Bizjournals.com Former RK Employee Sentenced in Escheatment Scheme Abstract: A former recordkeeper employee has been sentenced to four years in prison for stealing funds from dormant participant accounts. Scott Capps, 48, of Coatesville, PA was sentenced to 48 months' incarceration, three years' supervised release, restitution of $2,137,580 and forfeiture of $648,600 by United States District Judge Michael M. Baylson for a fraud scheme perpetrated while he was an employee of Vanguard. Source: Asppa.org The Beginning of the End for 401k Class Actions? Ninth Circuit Enforces Individual Arbitration Abstract: This Ninth Circuit decision will likely be the subject of a petition for rehearing and possibly a petition for certiorari at the Supreme Court. Nevertheless, it is an important decision that may lead employers to consider adding arbitration provisions with class waivers to their employee benefit plans. Aside from individual benefit claims, most suits against ERISA plans in the past several years have been filed as class actions. At least in the Ninth Circuit, it appears that employers can combat this trend by requiring plan participants to engage in individual arbitration of their ERISA claims. Source: Ogletree.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC SECURE Retirement Legislation on Hold in the Senate Abstract: Congress will soon be returning to Washington from its summer recess. The question for those interested in retirement policy is whether pension reform will finally move forward this year. The answer will depend on whether several key senators agree to lift the "holds" they have placed on the legislation. Source: Truckerhuss.com »» Click here for more on Legislative and Washington Actions Cyber and Plan Security Securing Retirement: 401k Plan Cybersecurity Abstract: Fiduciaries owe a duty of loyalty to plan participants and must discharge their duties solely in the interest of plan participants and beneficiaries. Ignoring online threats could potentially violate this duty. This article reviews some proactive steps plan fiduciaries can take to protect participant data and account balances. Source: Shrm.org »» Click here for more on Cybersecurity Issues State-Based Private-Sector Retirement Programs State-Run Auto-IRAs Will Help Close the Coverage Gap Abstract: Experts view the state-run payroll deduction individual retirement account programs as a positive for the nation in terms of helping to bridge the coverage gap, as well as a source of potential future clients for retirement plan advisers. Because the businesses being mandated to join these programs, in Oregon, California, and Illinois, wouldn't otherwise have offered their workers a retirement plan, the experts do not view the state-run auto-IRAs as competition to advisers. Source: Planadviser.com Compliance and Regulatory DOL Clarifies Employers' Retirement Plan Obligations Under USERRA Abstract: On August 9, 2019, the Department of Labor issued USERRA Fact Sheet 1, providing guidance to employers about their pension obligations to reemployed service members under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). Source: Seyfarth.com »» Click here for more Compliance and Regulatory Material
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