Special Coverage: The Coronavirus Pandemic and 401k Plans
|
Special Coverage: The Coronavirus Pandemic and 401k PlansIn This Issue
Fiduciary and Plan Governance Retirement Plan Fiduciary Action During Events Like COVID-19 As many people shift to work-at-home arrangements and businesses lay off workers due to the uncertainty of the business world in the next few months, it is imperative that retirement plan fiduciaries not allow these conditions to postpone their oversight of retirement plans. Several issues that bear watching are reviewed here. Source: Barran.com Plan Fiduciaries Beware! Strategies for Avoiding Cybersecurity Breach of Benefit Plan Documents Plan fiduciaries have numerous responsibilities under the law when administering programs and handling participant funds and benefits, including the responsibility to make sure the technology they choose to use is secure. A cybersecurity breach, especially one that exposes personal identification information or leads to a loss of funds, can create significant liability for the plan. Here's what you should do. Source: Hallbenefitslaw.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers Is Too Much Choice an Issue in DC Plan Investment Options? Canadian defined contribution plans offer a range of investment choices, from a single balanced fund, in some cases, to more than 25 options. Many believe in offering more investment choices in a defined contribution pension plan as part of an overall retirement savings plan. Four key factors contribute to this view. Source: Benefitscanada.com »» Click here for More Studies, Research, and White Papers 403b Plans Next Steps for 403b Plan Sponsors Now that plan documents will be cleaned up, 403b plan sponsors can focus on strategic tasks such as plan design changes and on complying with the new legislation. Source: Plansponsor.com »» Click here for More 403b Material Court and Legal Sharing of Workers' 401k Data "New Frontier" in Litigation The 1974 law governing employee benefits plans is silent on how that information should be handled when it's transferred to a third-party vendor like a recordkeeper. Courts are being asked if the data constitutes a plan asset that imposes specific obligations on the person or people who manage the plan under ERISA. If the courts agree, it could drastically add to the list of people who could be held liable for a breach of fiduciary duty and lead to increased litigation. Source: Bloomberglaw.com Judge Moves Forward Suit Over Walgreen Plan TDF Mismanagement In a concise order, U.S. District Judge Charles Ronald Norgle of the U.S. District Court for the Northern District of Illinois has declined to dismiss a lawsuit alleging fiduciaries of the Walgreen Profit-Sharing Retirement Plan breached their fiduciary duties by selecting and retaining poorly performing target-date funds for the plan. The judge rejected the defendants' argument that the complaint cannot be based solely on the funds' underperformance but must contain more specific allegations. Source: Plansponsor.com New Lawsuit Accuses Wells Fargo 401k Plan Fiduciaries of Self-Dealing A proposed class-action lawsuit has been filed against alleged fiduciaries of the Wells Fargo & Co. 401k plan alleging violations of ERISA fiduciary duty and prohibited transaction provisions. Motives behind keeping higher cost, underperforming funds in plan alleged in the lawsuit include providing seed money for Wells Fargo to launch new fund products. Source: Plansponsor.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC Senate Bill Expands Retirement Plan Access for Coronavirus Impact Senate Majority Leader Mitch McConnell, on behalf of the Senate Republican caucus, introduced the Coronavirus, Aid, Relief, and Economic Security (CARES) Act, which includes key provisions advocated by the American Retirement Association affecting hardship distributions and plan loans. Source: Napa-net.org »» Click here for more on Legislative and Washington Actions Cyber and Plan Security Retirement Plan Providers Confront Need for Cybersecurity Measures Cybersecurity has emerged as a top issue for retirement specialist advisors, 80% rate data security/cybersecurity very important, deeming it the single most important factor when evaluating recordkeepers. At the same time, it represents a growing concern and significant expense for plan providers, particularly recordkeepers and third-party administrators. Source: Cerulli.com »» Click here for more on Cybersecurity Issues Compliance and Regulatory Considering a Loan Cure Period to Avoid Participant Loan Defaults The IRS says in a recent Issue Snapshot that a plan sponsor 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. Source: Plansponsor.com Are You Looking for Missing Participants? It's important to be diligent in monitoring the plan for uncashed checks or nonresponsive participants. The DOL has made it clear that this is a fiduciary duty of the plan sponsor. Service providers often can help identify accounts that may need special attention, so sponsors should coordinate efforts to establish proper procedures and designate an individual or team to ensure necessary follow-up efforts are taken. Source: Findley.com 401k Hardship Withdrawals Can Help With Employees' Coronavirus-Related Costs One way that employers can assist employees faced with coronavirus-related costs and expenses today (no Congressional action or immediate employer action required) is that employers can permit employees to take hardship withdrawals from their 401k plan accounts to meet coronavirus-related expenses. The employee will still need to meet the requirement that the distribution is necessary to satisfy the financial need. There are two possible mechanisms for permitting these hardship withdrawals. Source: Stevenslee.com Tax Credit for Small Employer Start-Up Plans Many employers are unaware that, in certain circumstances, they may be eligible for a valuable tax credit in connection with their establishment of a retirement plan. Although this particular tax credit has been available for almost two decades, it is still surprising to see the general lack of awareness that most plan sponsors have regarding this tax-saving opportunity. This article is intended to familiarize readers with this tax credit so that they can attempt to evaluate its application to their tax situation. Source: Legacyrsllc.com »» Click here for more Compliance and Regulatory Material Marketplace News CAPTRUST Adds $5.5 Billion Advisory Firm, Welch Hornsby Howard Capital Management Launches New Features for 401k Optimizer® Tool »» 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 © 2020 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
|
