Department of Labor Proposes New Electronic Disclosure Rule
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Newsletter Sponsor 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
Compliance and Regulatory Department of Labor Proposes New Electronic Disclosure Rule Consistent with President Donald J. Trump's Executive Order 13487, the U.S. Department of Labor today announced a proposed rule to allow online retirement plan disclosures to reduce printing and mail expenses. Source: 401khelpcenter.com Fact Sheet on Proposed Electronic Disclosure Safe Harbor A plan administrator would be permitted to furnish documents by means of electronic delivery to plan participants and beneficiaries with valid electronic addresses unless they affirmatively opt-out of electronic delivery. The DOL has published a fact sheet on this proposed electronic disclosure safe harbor. Source: Benefitsforward.com Moving From Paper to Digital as the Default Delivery Method for Retirement Plan Disclosures The DOL released a proposed rule that seeks to modernize the disclosure rules for ERISA covered retirement plans. If finalized, the proposed rule could lead to a dramatic shift for retirement plans and service providers from paper formats to electronic formats that could lead to greater participant engagement and reduced mailing costs. Source: Groom.com Undocumented Workers Become a Missing Participant Problem It can happen and has happened; a retirement plan sponsor discovers an undocumented worker is participating in the retirement plan. Nothing in ERISA says an undocumented worker cannot participate in a retirement plan, but making a distribution to one could be a problem. Source: Plansponsor.com »» Click here for more Compliance and Regulatory Material General Items Automated Emergency Savings Funds: Why Retirement Plan Sponsors Should Consider Offering Them For retirement plan sponsors, these programs cost nothing while offering several benefits. Some retirement plan recordkeepers have seen the synergy of offering automated after-tax savings as well and have begun to roll out these products as an add-on offering. Source: Cammackretirement.com Natural Disasters Damage Retirement Accounts, Too Natural disasters are known to damage communities and properties. Less understood, however, is the harm they can cause to participant retirement accounts. What options do participants have when a natural disaster affects them, and are there steps plan sponsors can take to reduce the impact on retirement savings? Source: Plansponsor.com Fiduciary and Plan Governance 401k Plan Sponsors' Fiduciary Obligation to Former Employees There is fiduciary ramification raised when former employees leave their money in their old company's 401k plan. At the very least, employers have a responsibility to educate their former employees regarding their choices and clearly explaining the impacts of each choice available. Also, fulfilling the obligations of a plan sponsor can increase administrative costs when it comes to ex-employees. They still need to provide the required notices and ultimately keep track of them if they have moved. Source: Fiduciarynews.com Great 401k Participant Features That Can Land You in Plan Sponsor Hot Water Within a 401k Plan, some options are truly beneficial to plan participants when it comes to increasing retirement savings or allowing access for a participant's benefit. The problem with these options is that if you and/or your plan provider aren't careful, there may be a compliance headache coming your way. Source: Jdsupra.com How Will the SEC's Best Interest Rules Impact Plan Sponsors? The SEC adopted a new set of rules and related interpretations that include increased standards for broker-dealers and offers clarification around the duties of registered investment advisors. These rules are focused on retail investors including individual retirements accounts, health savings accounts, and retirement rollover plans. This new guidance is expected to impact the advice plan participants receive. Source: Hallbenefitslaw.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers Five Key Points on 401k Plan Fees From ICI Research Thanks to innovation and a competitive market, 401k mutual fund fees keep falling. ICI has a window into this information through our study of the cost of providing 401ks, in which they take a close look at the expenses and fees of mutual funds incurred by 401k plan investors, and in related research on fund fees through a collaborative research effort between ICI and BrightScope. Source: Ici.org »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers The Importance of TPA/Advisor Cross-Pollination TPAs and advisors can and should collaborate, argued Jeffrey Acheson, Chief Business Development Officer/Divisional President, Independent Financial Partners, at an Oct. 21 session of the ASPPA Annual Conference. Acheson stressed the importance of "cross-pollination," telling attendees, "People are best served by teams" and suggesting that it can be productive for professionals with otherwise divergent backgrounds and roles to "think of each other as in-source staff" and to "go to clients in a unified manner." Said Acheson, "when it's not in your sweet spot, bring in an expert. Establish a relationship in which you're in-source with each other." Source: Asppa.org Recordkeepers Face Challenges Coordinating Participant Fee Disclosures Noting that not all disclosures are the legal responsibility of the recordkeeper, a speaker at an ASPPA Annual Conference session suggested some best practices for drafting service agreements and handling participant fee disclosures for plan sponsor clients. It is a good practice for recordkeepers to clearly set forth in the service agreement which disclosures they are providing and which they are not accepting responsibility to draft and provide. Source: Asppa.org 403b Plans IRS Guidance on Initial and Recurring 403b Remedial Amendment Periods Groom Attorneys provide an extensive explanation of the IRS' new guidance on 403b plan remedial amendment periods. Since the finalization of the updated 403b regulations in 2009 introduced a written plan document requirement for 403b plans generally effective for 2010, the IRS has been gradually issuing guidance on the timing requirements for adopting and amending 403b plans. Source: Groom.com »» Click here for More 403b Material Court and Legal New Case Raises Difficult Questions About ERISA Remedies for 401k Account Thefts A recently filed ERISA case raises extremely troubling questions about the safety of 401k plan participant account assets and the proper allocation of financial responsibility when account assets are stolen. For the 401k plan industry as a whole, the facts of this case expose some ugly truths about the potential vulnerability of 401k plan assets to theft. Source: Groom.com How 401k Bankruptcy Exemption Can Be Lost A recent case decided by the United States District Court for the District of Connecticut discusses some of the issues that can arise when an individual who is the principal owner of a small business files for bankruptcy and seeks the protection of the retirement funds exemption for amounts held for the owner's benefit in the business' qualified retirement plan. Source: Blankrome.com »» Click here for more Court and Other Legal Issues Multiple Employer Plans (MEP) Expanding Retirement Plan Coverage Through Association Retirement Plans In an effort to expand retirement plan coverage to more Americans, the DOL recently finalized a regulation that should simplify the administrative burdens, and thereby reduce costs, for sponsoring and maintaining a defined contribution retirement plan for smaller employers. Under the Regulation, smaller employers, including "working owners," can band together to participate in defined contribution multiple employer plans, sometimes referred to by the DOL as "association retirement plans." Source: Troutman.com »» Click here for more on Multiple Employer Plans Marketplace News Three firms Partner to Deliver Bundled Fiduciary 401k Services Cetera Adds Participant Advice to Fee-for-Service Payment Model Fiduciary Education Launches Online Course on Successful DC Plan Design »» Click here for More Marketplace News
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