Deloitte Defined Contribution Benchmarking Survey
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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
Insight: Studies, Research, and White Papers Deloitte Defined Contribution Benchmarking Survey In the era of 100-year lives and with the workforce participation rate among those age 65 or older surpassing 20 percent for the first time in more than 50 years, Americans' notion of "normal retirement" is changing. Deloitte's biennial Defined Contribution Benchmarking Survey shows how plan sponsors are working to address increasingly diverse retirement needs. Source: Deloitte.com Amid Shifting Landscape, Notion of 'Normal Retirement' Is Changing With longer life expectancies and workforce participation rates pushing past age 65, Americans' notion of "normal retirement" is changing, according to a biennial survey. The 2019 edition of Deloitte's Defined Contribution Benchmarking Survey confirms this trend, showing that many employees continue to work even though they are eligible to retire. In fact, the workforce participation rate among those age 65 or older has surpassed 20% for the first time in more than 50 years, the study notes. Source: Napa-net.org Canadian Millennials Facing Challenges Around Saving for Retirement: Survey Among all survey respondents, 77 percent said they expect there will be a significant shortfall in retirement savings. A majority also said more Canada Pension Plan/government benefits will be required to support income needs (82 percent), that the federal government must do more to protect pension plans (89 percent) and that Canada will need to overhaul public and private pension and retirement savings (83 percent). Source: Benefitscanada.com Is Your Defined Contribution Plan Ready for 2020? Defined contribution plan assets have soared in recent years, rising about 90% between 2007 and mid-2019. And they are only set to climb further as defined benefit plans continue to decline and employers turn to DC plans as the sole source of retirement income for their employees. This trend is driving more innovation, more focus on compliance and competitive fee structures. This article suggests action steps in three broad areas -- financial wellbeing, investments and plan compliance -- to help DC plan sponsors address the challenges of 2020 and beyond. Source: Willistowerswatson.com »» Click here for More Studies, Research, and White Papers General Items Great 401k Features That Aren't a Fit for Every Plan Sponsor Retirement plan sponsors are sold services that many really don't need. There isn't a retirement plan solution that is appropriate for every plan sponsor. What a retirement plan sponsor should get is something that actually fits their needs. This article is about the many services offered to retirement plans that a plan sponsors might want to say "no thanks" to. Source: Jdsupra.com Five Features That Retirement Plans Can Do Without There are many retirement plan features that add tremendous value to both plan sponsors and participants. However, there are also numerous plan features that are relatively useless, mostly because they are impossible for participants to understand, cause administrative nightmares, and/or add little in the way of benefit to plan sponsors or participants. Here are the top five. Source: Cammackretirement.com Fiduciary and Plan Governance Are 401k Fiduciaries Correctly Benchmarking Their Funds? One limitation with which we all struggle is that we are creatures of habit. We get used to something and stick with it. For named fiduciaries of ERISA-covered retirement plans, Modern Portfolio Theory may be one. This concept has been around so long, we just take for granted that all one must do is satisfy MPT and all is well. However, the two court cases are now requiring fiduciaries of participant investment-directed 401k and ERISA 403b plans to change how they traditionally benchmarked their funds. Source: 401kspecialistmag.com Answering a Key Question in a Request for Proposal One question that a plan sponsor always asks respondents to an RFP for investment management services is to describe their investment philosophy. Plan sponsor going to the trouble and expense of issuing an RFP deserves an answer to this question from a respondent that is forthright, commonsensical, and well-thought-out. A fiduciary should be the leader of the pack in its relationship with a plan sponsor, especially in cases where an RFP calls for the services of a discretionary fiduciary, such as an ERISA section 3(38) investment manager. Source: Morningstar.com »» Click here for more Fiduciary and Plan Governance Material Items of Special Interest to Service Providers Aligning a Plan Sponsor's Business Objectives and Plan Design Today's 401k plan and recordkeeping solutions are flexible enough that every employer can have a plan that is tailored to their needs while staying within the standardized plan offerings. As a financial advisor, you can add value by educating your plan sponsor clients about their plan design options and illustrating how plan features can drive savings outcomes. As you design the agenda for your next plan meeting, consider incorporating some of the following plan design discussion items on your agenda. Source: Newportgroup.com Opportunities for Advisors Adopting New Communication Technologies Redtail Technology's AdvisorComms 2019 survey finds that advisors are largely relying on -- or limiting their methods of communication with their clients, such as practices to using -- the "traditional" in-person meetings and phone calls. While it may be comfortable to rely on tried and true methods of communication, a new study suggests that advisors could do more to effectively reach their target audience. Source: Napa-net.org Court and Legal Supreme Court Hears Polarized Arguments in Intel ERISA Case While not divided across political lines, the parties in Sulyma v. Intel Corporation Investment Policy Committee views the question of what establishes "actual knowledge" of an alleged fiduciary breach under ERISA very differently. Source: Planadviser.com Top Five ERISA Litigation Developments of 2019 As 2019 draws to a close, it is a good time to reflect on the biggest developments in ERISA litigation this past year. If this year is any indication, we expect 2020 to include landmark Supreme Court opinions and more. Source: Icemiller.com Supreme Court Ruling in Intel ERISA Statute of Limitations Suit Could Have Far-Reaching Implications The "actual knowledge" question is an important one because it concerns a critical threshold issue in ERISA fiduciary duty claims. Of the near 80,000 ERISA cases filed in the past decade, a major share of the litigation has included suits against plan fiduciaries for allegedly breaching their fiduciary duties, and the statute of limitations is potentially implicated in many such cases. Given the importance of this issue, Groom attorneys attended the oral arguments, which are summarized here. Source: Groom.com »» Click here for more Court and Other Legal Issues Compliance and Regulatory 401k Administration Checklist for the 2020 Plan Year Annual 401k administration tasks generally fall into one of four categories: nondiscrimination testing, Form 5500 reporting, participant disclosure, and plan document maintenance. If you're an employer, it's recommended that you manage the completion of these tasks using a checklist. A checklist can serve another important purpose, monitoring your 401k provider's job performance. As a 401k fiduciary, you can't simply assume your 401k provider is doing a good job. You must monitor them to ensure they're completing assigned tasks timely. A checklist can help you meet this important fiduciary responsibility. Source: Employeefiduciary.com This revenue procedure clarifies which amendments are treated as integral to a plan provision that fails to satisfy the qualification requirements of the Internal Revenue Code by reason of a change to those requirements made by the recently published regulations under sections 401(k) and 401(m) relating to hardship distributions of elective deferrals. This revenue procedure also extends the deadline, applicable to pre-approved plans, for adopting an interim amendment relating to those regulations. The deadline is extended to December 31, 2021. Source: Irs.gov »» Click here for more Compliance and Regulatory Material
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