Reimagining the Participant Experience for a Digital World
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In This Issue
Insight: Studies, Research, and White Papers Reimagining the Participant Experience for a Digital World The retirement industry is in a period of upheaval. Several trends are converging at once, prompting retirement providers to rethink their business model and approach to participant engagement. This 16-page report examines the trends driving change and provides practical strategies for reimagining the participant experience in a digital world. Source: Broadridge.com Fees for Large and Small 401k Plans Continue to Fall More good news about fees and fee compression as plan sponsors and participants increasingly realize the long-term implications they can have on retirement. Both large and small plans saw cheaper prices for investment and administration, regardless of the situation and scenario. Source: 401kspecialistmag.com »» Click here for More Studies, Research, and White Papers Fiduciary and Plan Governance When Do Index Funds Raise a Fiduciary Issue With 401k Plan Sponsors? Recent news stories have told of outflows from active funds to passive funds, with index funds either nearly passing or already passed active funds in total market share. While individual investors are free to choose whatever investment they desire, 401k plan sponsors find themselves in a unique fiduciary position when it comes to approving plan investment menu options. Source: Fiduciarynews.com Reasons Exist to Turn a Cold Shoulder to Company Stock in DC Plans With the wave of stock drop litigation a decade ago, the offering company stock in defined contribution plans has decreased. But, should plan sponsors offer company stock as an investment option? Robyn Credico, North America Defined Contribution practice director at Willis Towers Watson in Arlington, Virginia, says -- from a participant and fiduciary risk perspective -- no. Source: Plansponsor.com Investment Policy Statements for DC Plans Fiduciaries are not only re-examining their current investment decision-making practices, but they are also seeking to ensure that those practices allow for enough flexibility in implementation to maximize the likelihood of investment success, while protecting the plan sponsor from potential litigation. Central to the idea of a well-managed program, a clearly articulated investment policy statement serves as the foundation of sound governance and a robust oversight process. This 6-page paper summarizes the key elements of an IPS and discusses the ways great policy design can ultimately drive a successful DC plan. Source: Russellinvestments.com »» Click here for more Fiduciary and Plan Governance Material Items of Special Interest to Service Providers Fidelity Rewrites Their 401k Rollover Script The recordkeeping king eschews its own defined contribution scripture to reflect the reality of inertia, better technology and the fact that IRAs are no longer yield so much milk and honey in a zero-fee, zero-commission world. Fidelity has reversed its long-standing push for 401k rollovers by agreeing to advise assets that stay with the old plan sponsor. Source: Riabiz.com 403b Plans The SECURE Act's 403b Custodial Account "Distribution" Does Not Create IRAs The SECURE ACT introduced a concept that was not known well beyond a handful of 403b practitioners, which is the "distribution" of 403b individual custodial accounts from 403b plans. The lack of understanding of what this actually means has even led one commentator in a highly respected trade organization's technical piece to claim that this rule transforms 403b custodial accounts into IRAs. Source: Businessofbenefits.com March 31st Deadline for 403b Plan Sponsors If your organization sponsors a 403b plan for employees and has not adopted an up-to-date written plan document that complies with the applicable regulations, you have until March 31, 2020, to do so. Failure to do could cause substantial negative tax consequences for employees (and the organization) or cause the organization to incur substantial penalties to avoid those consequences. Source: Benefitslawadvisor.com »» Click here for More 403b Material Court and Legal Supreme Court Justices Unanimously Side With Retirement-Plan Participant In a unanimous decision written by Justice Samuel Alito, the Supreme Court held that a plaintiff does not necessarily have actual knowledge of the information contained in disclosures that he receives but does not read or cannot recall reading. To satisfy the actual knowledge requirement, the plaintiff must "in fact have become aware of that information." Source: Scotusblog.com Share Class Choices Challenged in New 401k Lawsuit The lawsuit says for at least 18 of the 27 mutual fund share classes available within The Vail Corporation plan, the same issuer offered a different share class from that selected by the plan that charged lower fees, and consistently achieved higher returns. Source: Planadviser.com SCOTUS ERISA Ruling May Open Floodgates for Increased Lawsuits In a unanimous decision, the Supreme Court declined to limit the timeframe in which disgruntled employees could bring suit challenging the investment decisions made by plan fiduciaries. This development opens employers and retirement plan fiduciaries up to an increased risk of legal challenges while heightening the standard for evaluating breach claims and class action certifications. Source: Fisherphillips.com Ignorance Is Bliss (If You Are an ERISA Plaintiff) This case is significant because it means that lawsuits challenging an ERISA fiduciary's decision may be brought up to six years after the decision was made unless the fiduciary can prove the plaintiff had actual knowledge of the decision at least three years prior to the filing of the lawsuit. Under this standard, it is not enough that information about a decision was provided to participants and, instead, fiduciaries will likely need to prove participants actually received and read the information, and understood what the information meant. Source: Hansonbridgett.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC 2020 Legislative and Regulatory Outlook for Retirement Plans Retirement plan sponsors have much to consider in the wake of reforms enacted last December by the SECURE Act. Also, bipartisan congressional interest in passing a new round of "next-generation" retirement reforms remains high, although the challenges of a divided government, limited legislative vehicles, and a short election-year legislative calendar make the outlook uncertain. This article examines legislative and regulatory trends so plan sponsors can anticipate the changes. Source: Mercer.com »» Click here for more on Legislative and Washington Actions Compliance and Regulatory IRS Whistleblower Informs ARA of Change that Could Doom Voluntary Corrections Driven by an apparent desire to clean up its case backlog, the IRS is planning a shift in procedures that might mean the end of the VCP program and subject a massive number of plans to an audit. Word of the dramatic shift in focus was brought to the attention of the American Retirement Association by an anonymous IRS whistleblower. The existence of the forthcoming shift in procedure was confirmed independently. Source: Napa-net.org Puerto Rico Issues Post-Earthquake Rules for Qualified Retirement Plan Distributions and Loans The Puerto Rico Treasury Department issued Internal Revenue Circular Letter Number 20-09 to provide special rules and procedures applicable to distributions from qualified retirement plans and individual retirement accounts following the recent earthquakes. This is a summary of the most significant provisions. Source: Littler.com Retirement Plan Financial Audit Processes Are Evolving The main purpose of the financial audits required of retirement plans with 100 or more employees is to give the DOL insight into the plan's operations and whether or not the plan is operating in accordance with the plan documents. New processes and systems for performing these audits can cut costs for plan sponsors, streamline the work and allow for any discrepancies to be caught earlier. Plan sponsors should evaluate the process and system their auditors use to perform the plan financial audit. Source: Plansponsor.com »» Click here for more Compliance and Regulatory Material Marketplace News 401k Plan Fees Continue to Decline ERISApedia Releases Compliance Source About Plan Corrections »» Click here for More Marketplace News
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