401k Plan Sponsors Fiduciary Duty in Light of Coronavirus Fear
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Fiduciary and Plan Governance 401k Plan Sponsors Fiduciary Duty in Light of Coronavirus Fear Time will tell if the 2020 Coronavirus becomes virulent that created long-term buying opportunities for alert investors or if it is merely a repeat of the 2002/2003 SARS scare. There's no doubt both strains are deadly, and there's nothing wrong with preparing for the worst in terms of personal choices. Now is the time for 401k plan sponsors to seize their fiduciary mantle and provide the guidance and tools plan participants need to dodge emotional decisions that could ruin their chance for a comfortable retirement. Source: Fiduciarynews.com Seven Strategies for Building a Strong 401k Committee There is so much great information online to help you set up and manage a 401k committee. In the last several months alone there have been over 50 articles on committee best practices. To save you time, in this piece you'll find seven of the best articles for building a strong 401k committee filled with common (and not-so-common) strategies to consider. Source: 401kbestpractices.com Creating an Effective Investment Policy Statement Not all investment policy statements are created equal and there are a few topics every IPS should cover. Learn about what should be included in an effective investment policy statement and how a well-crafted IPS can lighten the load of a committee that's tasked with difficult plan decisions. Source: Planpilot.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers DC Plan Sponsors Increasingly Embrace Auto-Escalation as Default Option Ten years ago, many DC plan sponsors that offered escalation features required participants to opt-in, but that appears to be changing, according to a new survey. A NEPC survey shows that 76% of corporate plans and 54% of healthcare plans have included an automatic enrollment feature into their plan designs as a measure to help increase overall plan participation. Source: Napa-net.org »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers Advisors: ERISA and Fiduciary Process Have Evolved, Have You? While as a legal matter, ERISA fiduciaries will continue to be measured by their process, rather than results, advisors who can produce measurable results and quantify their value around participant outcomes and process are the leaders who will prosper in the Fiduciary 3.0 world which will build upon Fiduciary 2.0 but with an increased emphasis upon retirement readiness, cybersecurity, wellness and plan participant engagement and education. Source: Wagnerlawgroup.com 403b Plans Questions to Expect From Your 403b Plan Auditor This document was prepared by the AICPA Employee Benefit Plan Audit Quality Center to provide examples of the types of questions that plan management may be asked by the plan's independent auditor. The plan auditor may also ask plan management other questions that are not on this list. Source: Schneiderdowns.com Reminders About 403b Plans and Hardship Distributions This is a reminder about two compliance issues that might need plan sponsor attention at this time: the March 31, 2020 deadline for correcting 403b plan documents and the need for operational compliance with hardship distribution procedural changes for 401k and 403b plans. Source: Segalco.com Legislation Would Allow 403bs to Invest in CITs The bill introduced to Congress is designed to ensure public sector and nonprofit retirement plans have the same access to low-cost investments as for-profit retirement plans do. Source: Planadviser.com »» Click here for More 403b Material Court and Legal Access to Retirement Plan Data: The Next Wave of Fiduciary Litigation? As retirement plan administration has become more and more digitized over the years, retirement plan sponsors and recordkeepers have become the custodian of a variety of sensitive plan participant data. Often, this information can paint a very accurate picture of a plan participant's financial wellness and retirement strategy. The value of this information is not lost on certain vendors who collect and retain it, and the use of this data is the focus of an emerging area of retirement plan fiduciary litigation. Source: Mmmlaw.com Alight, Estee Lauder Settle Case of Plundered 401k A participant who saw $99,000 vanish from her 401k via unauthorized distributions has settled with her former employer, Estee Lauder, as well as recordkeeper Alight Solutions. Source: Investmentnews.com (registration may be required) District Court Rules in Favor of Fiduciaries in Recent Prudence, Loyalty Breach Claim A recent lawsuit argued in the federal appeals court for the Southern District of New York handed a win to plan fiduciaries on a prudence and breach of loyalty claim lawsuit. In the case, Patterson v. Morgan Stanley, the court dismissed an appeal filed by Morgan Stanley stating that, contrary to Plaintiff's claims, ERISA "does not require clairvoyance on the part of plan fiduciaries, nor does it countenance opportunistic Monday-morning quarter-backing on the part of lawyers and plan participants who, with the benefit of hindsight, have zeroed in on the underperformance of certain investment options." Source: Hallbenefitslaw.com Salesforce Is Latest National Employer to Face ERISA Fee Litigation The latest ERISA lawsuit filed in federal court is targeting Salesforce for several alleged fiduciary breaches in the operation of its defined contribution retirement plan. The complaint was filed in the U.S. District Court for the Northern District of California and seeks class-action status on behalf of a sizable group of retirement plan participants and beneficiaries. Named as defendants are Salesforce itself, along with its board of directors and its investment advisory committee. Source: Planadviser.com »» Click here for more Court and Other Legal Issues Cyber and Plan Security Are Your Practice(s) Cyber Secure? Fraudulent distribution requests are on the rise and it is not always clear who is responsible and/or who is at fault for security breaches that deplete an unsuspecting participant’s retirement savings. Data privacy is an emerging concern for ERISA plan fiduciaries and service providers alike, do you know where your liabilities are? Source: Asppa.org »» Click here for more on Cybersecurity Issues Compliance and Regulatory Coronavirus Adds to Employer To-Do List, Check Employee Benefits An employer may wish to consult employee benefits counsel to determine whether an employee who has contracted Covid-19 or who is subject to quarantine could qualify for a hardship distribution under its 401k plan. Source: Bloomberglaw.com A plan administrator may, but is not required to, allow a cure period during which a delinquent participant loan may be brought back into compliance without triggering a deemed distribution. If allowed, the cure period must be specifically provided for in the written plan document. This recently updated article discusses common scenarios involving the cure period. Source: Irs.gov Compliance Checklist 2020 for Plans Subject to ERISA This checklist incorporates DB, DC, and ERISA 403b requirements and provides information on the materials that you will need to file, filing due dates and agencies to which the filings should be made. Source: Retirepru.com
»» Click here for more Compliance and Regulatory Material Marketplace News Steidle Pension Solutions Announces the Launch of 401k Payroll Integration Service Aon to Merge with Willis Towers Watson in Reported $30 Billion Deal »» Click here for More Marketplace News
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