Newsletter for December 2, 2019
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In This Issue
Compliance and Regulatory
2020 Retirement Plan Compliance Calendar
For defined contribution plan years starting on January 1, this retirement plan compliance calendar lists key IRS, PBGC, and DOL reporting and disclosure deadlines.
Source: Mercer.com
2019 End of Year Plan Sponsor "To Do" List for Qualified Retirement Plans
As 2019 comes to an end, Snell & Wilmer presents their traditional End of Year Plan Sponsor Qualified Retirement Plans "To Do" List. This "To Do" List offers items on which you may want to act before the end of 2019 or in early 2020.
Source: Swlaw.com
2020 Key Administrative Dates and Deadlines for Calendar-Year DC Retirement Plans
The calendar lists relevant 2020 administrative dates encountered by most defined contribution plans (401k, 403b, profit sharing, etc.), including deadlines for quarterly benefit statements, participant disclosures, and safe harbor notices. The calendar also provides a short description of the actions required to meet each deadline.
Source: Milliman.com
EPCRS Not an Option for Some Self-Identified Plan Errors
The Employee Plans Compliance Resolution System is a powerful self-correction tool provided by the IRS, giving plan sponsors the opportunity to right almost any self-identified error under its three component programs. But what about errors that can't be corrected in EPCRS?
Source: Employeebenefitslawgroup.com
»» Click here for more Compliance and Regulatory Material
General Items
Retirement Savings for the Self-Employed
As traditional pensions have disappeared, many workers expect to rely heavily on a 401k as their primary source of income in retirement. But not everyone has access to an employer-sponsored plan. Roughly 30% of employers -- most often small businesses -- don't offer retirement benefits to employees, according to the Transamerica Center for Retirement Studies. And those who are self-employed are also on their own when it comes to saving for retirement. If you're in one of these groups, you have options.
Source: Nasdaq.com
Fiduciary and Plan Governance
Defined Contribution Retirement Plan Committee Composition: What Is Ideal?
Offering a competitive retirement plan is one of the most important benefits an organization can provide to its employees. However, given the complexity, required resources, and potential for liability related to operating a retirement plan, establishing a committee to share in the fiduciary responsibility and oversee the plan's governance is considered best practice. While the reasons for having a retirement plan committee may be clear, who should serve on the committee is not. With no guidance from ERISA, the DOL, organizations are often left questioning the best composition for their committee.
Source: Cammackretirement.com
What Is a 401k Investment Policy Statement?
It's not required by law, but it has become a best practice. And there's a good reason for this. The 401k Investment Policy Statement offers plan sponsors an avenue for safety, but only if they're careful. What is a 401k IPS? What's is supposed to do? If it's not required, why are we talking about it? This is the first in a series of articles designed to answer the basic questions 401k plan sponsors have concerning investment policy statements.
Source: Fiduciarynews.com
Fiduciary Lawsuits Highlight Importance of Service Provider Agreement Legal Reviews
Fiduciaries and their legal counsel need to review both the agreements and fee structures they have with all service providers to ensure they are paying reasonable fees and there are no hidden fees or unexpected costs in the contracts. Regular review of both contracts and fees, as well as confirming payments align with these fees, is only part of the process.
Source: Hallbenefitslaw.com
»» Click here for more Fiduciary and Plan Governance Material
Items of Special Interest to Service Providers
SEC Publishes FAQs on CRS
The Securities and Exchange Commission published answers to frequently asked questions about its invest. advice rule that takes effect next year. The FAQs pertained to one section of the four-part invest. advice rule known as Form CRS, a new disclosure meant to help retail investors understand a firm's services, fees, conflicts of interest and disciplinary history. Broker-dealers and registered investment advisers must file the form with the SEC between May 1 and June 30 next year.
Source: Investmentnews.com (registration may be required)
Ways to Make Default E-Delivery Even More Effective
Recordkeepers and other service providers have submitted generally positive comment letters to the Department of Labor regarding its proposed e-delivery default rule, but they also have some specific suggestions for improving the proposal.
Source: Planadviser.com
Plan Automation
Auto-enrollment's Long-Term Effect on Retirement Saving
401k savings plans are increasingly offering auto-enrollment coupled with higher employee default deferral rates. Auto-enrollment almost doubles plan participation and successfully gets participants who might not have otherwise saved saving. However, it can also result in participants saving less than those who voluntarily opt-in and set their own deferral rate. Auto-enrollment combined with auto-escalation creates better participation and savings outcomes.
Source: Troweprice.com
»» Click here for more on Automatic 401k Plan Features
Court and Legal
DOL Sues Ben Shinn Trucking Over Handling of 401k
The DOL has filed a lawsuit against Iowa trucking company Ben Shinn Trucking for allegedly failing to remit about $465,000 in employee salary deferral contributions to the company's retirement plan. The lawsuit against Ben Shinn Trucking and owner Roger Shinn was filed in U.S. District Court in Des Moines on Nov. 18.
Source: Landline.media
Settlement Announced in Invesco Self-Dealing Suit
Parties in a lawsuit accusing Invesco of self-dealing in its 401k plan have filed a Notice of Settlement. It may seem strange that Invesco has agreed to settle the case since a U.S. District Court Judge previously granted summary judgment in favor of Invesco. However, in that opinion, the court also allowed the plaintiffs 20 days to file an amended complaint and the plaintiff was in the process of doing so.
Source: Plansponsor.com
Court Upholds ERISA Plan's Forum Selection Clause
Citing ERISA 502(e)(2), which provides that an action may be brought in the district where the plan is administered, where the breach took place, or where a defendant resides or may be found, the employee argued that, despite the plan's forum selection clause, ERISA gave her the right to litigate in her choice of the three venues. The court found, however, that while ERISA sets forth three possible venue options, it does not expressly invalidate forum selection clauses in employee benefit plans.
Source: Thomsonreuters.com
Podcast: Supreme Court May Resolve Key ERISA Statute of Limitations and Proprietary Fund Litigation Questions
In this Ropes & Gray podcast, litigation & enforcement partners Amy Roy and Dan Ward, and ERISA and benefits partner Josh Lichtenstein, discuss 401k litigation risk assessment and management. They review current trends in proprietary funds litigation, the key legal issues surrounding the statute of limitations for claims arising under ERISA, and the upcoming Intel case before the Supreme Court that could have significant ramifications for 401k plan sponsors and employers.
Source: Ropesgray.com
»» Click here for more Court and Other Legal Issues
Cyber and Plan Security
Lawsuit Raises Tough Questions About ERISA Remedies for 401k Account Thefts
A recently filed ERISA action raises troubling questions about the safety of 401k plan participant account assets and the proper allocation of financial responsibility when account assets are stolen. The case alleges that the Estee Lauder 401k Plan, acting through its recordkeeper, Alight Solutions LLC (formerly Hewitt Associates, LLC), processed a series of three unauthorized distributions from the plaintiff's account in the amounts of $12,000, $37,000 and $50,000, respectively, over the course of approximately three weeks.
Source: Psca.org
»» Click here for more on Cybersecurity Issues
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