SECURE Act Makes Significant and Immediate Pension Law Changes
|
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
Legislative and Washington DC SECURE Act Makes Significant and Immediate Pension Law Changes The most far-reaching pension reform legislation in 13 years was passed by Congress as part of the budget bill funding the federal government for the remainder of the fiscal year. The Setting Every Community Up for Retirement Enhancement Act of 2019 was added as Division O to the Further Consolidated Appropriations Act, 2020. Of critical importance to plan sponsors: The effective dates in the original bill were left unchanged. As a result, many of the new law's provisions will become effective on January 1, 2020. Source: Truckerhuss.com The SECURE Act represents the most significant retirement plan legislation in more than a decade. This legislation benefits both employers and employees by providing administrative relief along with expanded retirement plan coverage and increased savings opportunities to improve retirement security. This is a two-page summary. Source: Pentegra.com Listing of Effective Dates for SECURE Act Provisions The SECURE Act will make substantial and highly technical changes to some very specific elements of retirement plan laws. This is a list -- in chronological order -- of the effective dates for these changes to help in prioritizing what to pay attention to first. Source: Businessofbenefits.com »» Click here for more on Legislative and Washington Actions Fiduciary and Plan Governance Due Diligence Process for Managed Accounts (Podcast) What elements should you consider when evaluating a managed account service provider? This podcast dives into the due diligence process for evaluating managed account service providers. It covers: Why customization does not "turn off" the need for due diligence, what specific topics to address with a managed accounts service provider, what to do if a service provider cannot fulfill the requirements of the due diligence process, and tips and examples of the process from client interactions. Source: Francisinvco.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers Transamerica Retirement Survey: A Compendium of Findings About U.S. Workers The Compendium provides in-depth perspectives on retirement. This 222-page report offers 30+ key indicators of retirement readiness, preparations, and attitudes among workers by employment status (full-time, part-time), generation, gender, household income, level of education, and race/ethnicity. Source: Transamericacenter.org »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers Retirement Plan Providers Can Either Get Big or Get Smart As retirement plan providers grapple with ever-increasing fee pressure, they also contend with evolving expectations from plan sponsors and participants for better, faster, and more comprehensive service offerings. According to findings from The Cerulli Report-U.S. Retirement Markets 2019, maintaining profitability while meeting these expectations will require firms to achieve economies of scale and prioritize technology initiatives. Source: Cerulli.com A New Way to Think About Building a Retirement Plan Practice There are roughly eight million small businesses with employees in the United States. The Investment Company Institute reports that there are 555,000 401k plans in the U.S. as of June 2019. That leaves a lot of opportunity for both advisers and the retirement industry, overall. That opportunity may be realized by proactively offering 401k alternatives to these small businesses. Establishing business relationships with companies that may be interested in a SIMPLE, SEP or payroll deducted IRA may create openings down the road for 401k plans, financial planning, risk management, business planning, and other services. Source: Planadviser.com 403b Plans The Plan Sponsor Council of America conducted a survey of 403b plan sponsors in October 2019 to determine their priories for their retirement plan in 2020. The survey also assessed what changes are planned in 2020 to address those priorities. Nearly three hundred 403b plan sponsors responded to the survey, representing a diverse group of organizations. This is the 15-page report on the survey results. Source: Psca.org »» Click here for More 403b Material Court and Legal Cintas Corporation Accused of ERISA Fiduciary Breaches A new ERISA lawsuit filed in the U.S. District Court for the Southern District of Ohio names as defendants the Cintas Corporation, its board of directors, its retirement plan investment committee, and some 30 John Does. Among other allegations, the national work uniform provider is accused of permitting high-cost mutual funds to persist on the retirement plan menu while cheaper but otherwise identical funds were available. Source: Planadviser.com Third-Party Sued for Alleged Fiduciary Breach Involving Retirement Plans A recent lawsuit, Chavez, et al. v. Plan Benefits Services, Inc., et al., focuses on a dispute regarding two benefit plans, a retirement plan, and a health and welfare plan sponsored by Training, Rehabilitation & Development Institute. The plan participants did not sue TRDI, the plan sponsor, but rather third-party entities responsible for marketing and supporting these plans. Source: Hallbenefitslaw.com »» Click here for more Court and Other Legal Issues Cyber and Plan Security Cyberfraud: Must a Plan's Security Policies Meet the Duty of Prudence? Criminals attempting to steal employees' benefits is not a new issue. However, the means by which they commit such crimes have changed with the advancement of technology and how benefits are paid. Two recent cases alleging breach of fiduciary duty under ERISA in connection with the distribution of participant account balances in DC plans highlight the compliance and litigation risks associated with plan losses. This article provides an in-depth analysis of these cases. Source: Groom.com Cybersecurity: Don't Assume Outsourced Administration Is Duty-Free For years, there has been a persistent trend toward outsourcing retirement plan recordkeeping and other administrative responsibilities. But service providers will be quick to remind plan fiduciaries that lightening the administrative load does not include transferring fiduciary duties. When selecting and monitoring a service provider, one key issue facing retirement plan fiduciaries is their duty with respect to the privacy and security of plan participant data. Source: Ntsa-net.org »» Click here for more on Cybersecurity Issues Multiple Employer Plans (MEP) Could Multiple-Employer Plans Be a Game Changer for Retirement Security? Open MEPs are an exciting policy change, but it is far from clear how they will work in practice. Their effectiveness in improving retirement-plan quality and their overall appeal depends on how this niche industry reacts. There is also the matter of how regulators nudge MEPs along, as they will have to balance concerns regarding the soundness and proper regulation of these plans with maintaining their appeal to the industry for use and promotion. This article discusses a few questions employers and plan sponsors may have around open MEPs. Source: Morningstar.com »» Click here for more on Multiple Employer Plans Compliance and Regulatory For HR teams, the end of the year often means wrangling end-of-year payroll, planning out headcounts, making sure employees use up vacation days and remaining funds, and tying up all the other loose ends to set things up right for the new year. And then there's end-of-year retirement plan compliance to deal with, which is no small task, regardless of your plan size. This checklist lays out three steps to help you maintain full compliance and keep your year-end stress free. Source: Forusall.com IRS Reiterates Requirement to Sign Plan Documents and Amendments At the heart of tax-qualified retirement plan compliance is a requirement to timely adopt plans and plan amendments. Failure to adopt plan amendments when required can result in plan disqualification. Accordingly, it is very important for plan sponsors to prove that amendments were properly executed in a timely manner. In a General Legal Advice Memorandum from the IRS’s Office of Chief Counsel dated December 13, 2019, the IRS provided a reminder of this important qualification requirement and the ramifications of noncompliance. Source: Erisapracticecenter.com Planning for 2020: Changes to Hardship Distribution Rules and Amendment Deadlines Under the recently issued final regulations implementing the changes to the hardship distribution rules under the BBA of 2018, for retirement plans that permit hardship distributions, there are two mandatory changes that must be made beginning January 1, 2020, and several other voluntary changes that may (but are not required to be) made by plan sponsors. Source: Pbwt.com »» Click here for more Compliance and Regulatory Material Marketplace News PSCA Releases Its 62nd Annual Survey Results Empower Retirement Drives $8 Billion in New Sales in Healthcare Sector »» Click here for More Marketplace News
This eNewsletter is a digest of information published by a variety of web-based sources on 401k and related issues and is published as a service to our users. 401khelpcenter.com, LLC is not the author of the material unless specifically noted. Articles are copyrighted to their publishers. If you believe that your work has been copied in a way that constitutes copyright infringement, please contact the source site immediately. Hyperlinks in this document are provided as a convenience and we disclaim any responsibility for information, services or products found on websites linked hereto. All links were tested before this eNewsletter was e-mailed to you to ensure that they are still functional, but publishers do move or delete articles. Therefore, we can't guarantee that the links provided will remain operational. 401khelpcenter.com does not endorse, approve, certify, or control this material and does not guarantee or assume responsibility for the accuracy, completeness, efficacy, or timeliness of the material. Use of any information obtained from this material is voluntary, and reliance on it should only be undertaken after an independent review of its accuracy, completeness, efficacy, and timeliness. Reference to any specific commercial product, process, or service by trade name, trademark, service mark, manufacturer, or otherwise does not constitute or imply endorsement, recommendation, or favoring by 401khelpcenter.com. Opinions expressed are those of the author of the article and do not necessarily reflect the positions of 401khelpcenter.com. THIS NEWSLETTER IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE INVESTMENT, TAX, ACCOUNTING, OR LEGAL ADVICE. Copyright © 2019 by 401khelpcenter.com, LLC. All rights reserved. No reproductions without prior authorization, but you are free to email this copy (in its entirety) along to colleagues or clients. This newsletter may not be posted to any website. 401khelpcenter.com, LLC
|
