Newsletter for October 21, 2019
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Are all $5,000,000 401k Plans Created Equal?
The findings might surprise you. This visually appealing infographic was created by using data from the 401k Averages Book to compare the average costs of two $5,000,000 401k plan benchmarks. Click here to receive a copy of the infographic and see what we found out.
In This Issue
General Items
Projected 401k and Retirement Plan Limits for 2020
Based on the actual and projected CPI, there is little doubt that we will see increases in the pension limits for 2020. Below are our projected changes. Remember, these are unofficial projections. The IRS hasn't officially announced the 2020 limits and will not do so until late October.
Source: 401khelpcenter.com
Recordkeeper, Plan Sponsor Charged in 401k Account Theft
The apparent "hack" of a 401k participant's account has led to a suit against the plan sponsor, the recordkeeper and the plan trustee/custodian to recover the stolen funds. The suit claims that in September and October 2016, an unknown person or persons managed to steal plaintiff Naomi Berman's retirement savings by withdrawing a total of $99,000 in three separate unauthorized distributions from her account in the Estee Lauder Companies 401k Savings Plan.
Source: Napa-net.org
Fiduciary and Plan Governance
401k Service Provider Contract Considerations
Whether a small plan with only a handful of participants or a large plan with tens or hundreds of thousands of participants, every 401k plan needs to have certain services performed for it. A plan is just a plan. It is in large part implemented by service providers, who operate pursuant to various agreements. This Q&A identifies several important types of service providers and what to watch out for in their contracts.
Source: Greensfelder.com
The Truth About Your Need of a 401k Investment Policy Statement
When you're a 401k plan sponsor, you hear a lot about an investment policy statement (IPS) and how you need one. Yet most sponsors like you don't know what it is and what it does. This article breaks down what an IPS is, what it does, and what it doesn't do.
Source: Jdsupra.com
»» Click here for more Fiduciary and Plan Governance Material
Insight: Studies, Research, and White Papers
Retirees Live a 20th Century Retirement in the 21st Century, Survey Finds
Today's retirees are the last generation in the United States to live a retirement shaped by the forces of the prior century, standing in stark contrast to baby boomers, Generation X, Millennials and even Generation Z, according to the 2019 Wells Fargo Retirement study, which examines the attitudes and savings of working adults and retirees. The survey spotlights the importance of a planning mindset as people in their working years must shoulder the burden of funding their own retirement.
Source: Businesswire.com
In-Plan Guaranteed Income Will Always Be a Challenge
There is clearly a growing interest among retirement plan industry stakeholders in providing guaranteed income annuity options within defined contribution plans, yet consensus remains elusive. BlackRock analysts tackle the timely and vexing issues of retirement income strategies and the potential greater use of in-plan annuity products in a new white paper.
Source: Planadviser.com
»» Click here for More Studies, Research, and White Papers
Items of Special Interest to Service Providers
Technical Best Practices for Managing RIA Cyber Risk
In the past, the task of identifying cyber risk of any size organization fell mostly to the Chief Information Security Officer and focused on utilizing the "governance, risk, and compliance" model. The updated model, "integrated risk management," goes beyond technology to include people and process. This article introduces a more formal approach to RIA cybersecurity.
Source: 401kspecialistmag.com
How Retirement Plan Advisers Justify Their Fees
Despite fee compression, some retirement plan advisers have begun pushing back, pointing out to clients all of the value they bring to retirement plans and, in some cases, negotiating slightly higher fees for the work they do. One adviser charges a flat fee up to certain asset levels, and then additional basis points as plans grow, while another emphasizes the detailed, time-intensive fiduciary work he does for clients when asking for a fee increase.
Source: Planadviser.com
Are 401k Advisors (Getting) More Familiar With CITs?
This heightened fiduciary focus and awareness on the part of plan sponsors and their advisor consultants are not going away. If you can get the same investment in a cheaper CIT wrapper, why not offer it up to plan sponsor clients, especially in the current fiduciary frenzy? It’s a vexing question put to Nuveen, who recently released their Nuveen TIAA Lifecycle Blend CIT series.
Source: 401kspecialistmag.com
Target-Date Funds
Five Lessons Packaged Target-Date Solutions Can Learn From Customization
Selecting a target-date solution is a fiduciary act, and plan sponsors must work through the distinctions between custom and packaged approaches in order to decide which is the better fit for participants in their own plans. However, the choice isn't necessarily black and white. Here are five principles that can raise the bar for packaged target-date solutions.
Source: Alliancebernstein.com
Participants Invested in TDFs Contribute Less to Retirement Accounts
Retirement plan participants who invest in target-date funds contribute less to their plans than participants who don't use them, an analysis from Alight Solutions finds. This surprising actions from retirement plan TDF investors offer lessons for plan sponsors and indicate a need for more innovation in TDF design.
Source: Plansponsor.com
»» Click here for more on Target-Date Funds
Legislative and Washington DC
Two New Executive Orders Promise to Impact Retirement and Health Plan Guidance
On October 9, 2019, President Trump signed two executive orders that will likely have the potential to materially impact how the Department of Labor's Employee Benefit Security Administration, the Department of the Treasury, the Internal Revenue Service, and other agencies regulate retirement and health plans.
Source: Groom.com
EBSA Reorganization May Bring Positive Changes
Industry sources speculate that the DOL's new structure for its Employee Benefits Security Administration will result in more guidance and fairer enforcement.
Source: Planadviser.com
»» Click here for more on Legislative and Washington Actions
Compliance and Regulatory
Year-End Audit: Comply With Confidence
Want to have a less stressful and successful employee benefit plan year-end audit? Here are six steps that can help.
Source: Tra401k.com
Evaluating the Impact of Mergers and Acquisitions on the Employee Benefit Plans
When anticipating a merger or acquisition, coordinating and analyzing the impact of changes in employee benefits is often the last item of consideration. This 6-page guide will draw attention to the issues facing organizations when there are changes in ownership or changes in the sponsorship of an employee benefit plan.
Source: Multnomahgroup.com
»» Click here for more Compliance and Regulatory Material
Marketplace News
Nuveen Adds Target-Date CIT Series to Its Retirement Product Suite
»» Click here for More Marketplace News
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