New Retirement Mindset Driving Savings Behavior
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Insight: Studies, Research, and White Papers New Retirement Mindset Driving Savings Behavior The image of an older couple strolling the beach is fast joining the "museum of retirement cliches," along with traditional approaches to retirement planning, a new study suggests. Retirement is no longer about reaching a certain age but is more of a mindset, and American workers close to retirement are eagerly looking forward to the next chapter in their lives, according to the survey results from the Empower Institute. Source: Napa-net.org From Traditional to Transitional: How the Nation's Retirement Model Is Changing Nearly six in 10 employers (57 percent) believe that within the next five years their workers will retire at older ages than today. For many, the very definition of retirement is changing, as bridge jobs, gig work and encore careers replace the traditional notion of a fixed end to one's working life. Those are just a few of the findings from MetLife's new Evolving Retirement Model Study. It finds the traditional model of retirement -- which assumed a fixed career end date and employer-paid benefits -- is being replaced by a more transitional model. Source: Metlife.com Retirement Account Balances at Record Levels Fidelity released its quarterly analysis of retirement savings trends, including account balances, contributions and savings behaviors, across more than 30 million 401k, IRA and 403b retirement accounts. Positive savings behaviors among employees, enhancements to workplace savings plans and strong market conditions in Q4 2019 caused average account balances to reach record levels, as well as significant increases over the previous decade. Source: Businesswire.com »» Click here for More Studies, Research, and White Papers General Items Roth 401k vs. Roth IRA -- What's the Difference? Roth accounts are popular retirement savings options for many. Roth IRAs and Roth 401k accounts can both be options for some investors. What's the difference between these two types of accounts? Source: Thestreet.com Items of Special Interest to Service Providers Plan Advisers Get Some Relief on Proposed California Privacy Regs California issued a range of proposed revisions to its sweeping Consumer Privacy Act, including changes that specifically affect employer-sponsored retirement plans. A big question for retirement plan service providers is whether they would be exempt from some of those requirements, much as employers are. Source: Investmentnews.com (registration may be required) 403b Plans Tips to Reduce Participant Count to Avoid Financial Audit Requirement "We are a small nonprofit that sponsors an ERISA 403b plan. Until now our plan has been small enough to avoid the plan financial audit requirement, but, due to a lot of former employees retaining balances in the plan, we will now have more than 100 participants on 1/1/2020. We can use the 80/120 rule to avoid an audit for 2020, but I want to be proactive here to avoid crossing the 120-participant threshold that would require audits in the future. Are there any steps I can take to reduce the number of participants in the plan?" Source: Plansponsor.com The impact of the SECURE Act is well-known in many respects. Among the lesser-known impacts of the new law are those on 403b plans. A Feb. 11 NTSA webinar discussed them. Here is a summary. Source: Ntsa-net.org »» Click here for More 403b Material Target-Date Funds Choosing Target-Date Funds: A Suitability Assessment The choice of a target-date fund should be influenced by a range of participant characteristics and behaviors, as well as plan sponsors' objectives for the plan and their investment philosophies. Plan sponsors and their advisors/consultants should think carefully about the list of considerations provided here and document the decision-making process leading to their TDF choices. Source: Jpmorgan.com »» Click here for more on Target-Date Funds Multiple Employer Plans (MEP) A Valid MEP/PEP Assessment Requires Inclusion of the "Group of Plans" The one SECURE Act topic which seems to be at the forefront of a significant number of professionals is the attempt to make sense of the new MEP and PEP rules. Commentators seem to be taking a common misstep in that (with rare exception) each of these analyses is missing the assessment of the use of the "Group of Plans," or "GoP," in relation to MEPs and PEPs. Source: Businessofbenefits.com »» Click here for more on Multiple Employer Plans Compliance and Regulatory What Are the Administrative Procedure Changes Under the SECURE Act? This article discusses notable changes in the SECURE Act that deal with changes to administrative provisions of plans. SECURE Act, Title II: Administrative Improvements, includes administrative improvements for employers running qualified plans. Source: Belfint.com Let Participants Know About Birth and Adoption Expenses Withdrawals When it comes to changes to your retirement plan, make sure your employees know changes in the law that affect them. One such change is that the SECURE Act amends the tax code to add exception from the 10% early distribution tax: any qualified birth or adoption distribution up to $5,000. Source: Therosenbaumlawfirm.com Getting Ready to Include Part-Time Employees in Retirement Plans The SECURE Act includes a mandatory requirement for 401k plan sponsors to allow long-term part-time employees to participate in the plan. 401k plan sponsors need to understand all the parts of the new requirement and, for some, the long-term effects on plan administration. Source: Plansponsor.com What You Need to Know About the SECURE Act: Mandatory Provisions The SECURE Act contains a number of provisions that affect individuals as well as employers with respect to their retirement programs. Some of the provisions are required and some are optional. This article will address the mandatory provisions of the SECURE Act affecting retirement plans and IRAs. Source: Mcdonaldhopkins.com Failure to Provide ERISA-Required Plan Document to Participant Costs Plan Sponsor $41,000 ERISA plan failures often result in corrective actions and monetary penalties. ERISA penalties apply to all types of benefit plans, so while the case at hand is a medical benefits plan, monetary fines for failure to provide plan documents could and do apply to retirement plans, disability plans, executive compensation, and other employer-provided benefit plans. Source: Hallbenefitslaw.com Avoid the IRS's Nuclear Option - Sign That Plan Document The IRS has stated that on audit, agents should pursue plan disqualification for a failure to produce a signed plan document. The IRS was responding to a 2018 Tax Court decision that held that the failure to produce the signed plan document would not subject the plan to disqualification upon the finding of credible evidence that the document had been signed. Source: Beneficiallyyours.com »» Click here for more Compliance and Regulatory Material Marketplace News Swisher Exits Pentegra, Launches Waypoint Fiduciary New Tool Translates Retirement Savings to Projected Monthly Value »» Click here for More Marketplace News
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