Helping Your 401k Participants During the Coronavirus Crisis
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General Items Helping Your 401k Participants During the Coronavirus Crisis With the spread of the coronavirus and the resulting closures and cutbacks, many 401k participants are working reduced hours. Many of those employees do not have high incomes or significant savings. As a result, they are likely facing financial crises, including possible eviction, loss of credit, and inability to purchase necessities. Employers, in their roles as plan sponsors, may be able to help those participants. Source: Fredreish.com Fiduciary and Plan Governance Court Finds Fault With Fiduciary Fee Review A federal judge has found that a provider breached its fiduciary duty of overseeing its 401k by failing to monitor proprietary funds and its recordkeeping expenses, though it was not obligated to consider options other than mutual funds. Source: Asppa.org Critical Qualified Plan Fiduciary Issues for Employers to Consider in Light Of Covid-19 With the business disruptions and market turbulence being wrought by COVID-19, many employers sponsoring qualified retirement plans are facing key decisions about their plans. Some of the most important fiduciary issues an employer may wish to consider in light of COVID-19 and depending on the type of qualified plan it sponsors are reviewed here. Source: Benefitslawadvisor.com How 401k Plan Sponsors Should Deal With the Rollercoaster Stock Market When the stock market isn't doing well (such as now), many plan sponsors are paralyzed by panic as they realize that their retirement savings are being wiped out. As plan sponsors, you are a plan fiduciary. You can't afford to be paralyzed with panic. This article is all about how you can manage the rollercoaster stock market and properly manage your plan. Source: Jdsupra.com »» Click here for more Fiduciary and Plan Governance Material Items of Special Interest to Service Providers How the COVID-19 Crisis Is Affecting 401k Sales There is no doubt that 401k and 403b plan sales have stalled as a result of the COVID-19 crisis. Retirement plan advisers and recordkeepers are putting on a brave face but, other than anecdotal sales, nothing is getting closed. Plan sponsors have more important things to focus on than changing their defined-contribution adviser or recordkeeper. Source: Investmentnews.com (registration may be required) Plan Communications Bear Market Communication Tips for DC Plan Sponsors The bear market is challenging DC plan sponsors to reinforce timeless investing principles while also conveying new rules that bring relief to participants. Good communication practices are a key ingredient to achieving success in both these areas. How can DC plan sponsors cut through the anxiety to help participants make informed decisions? Here are ways to communicate with greater impact. Source: Alliancebernstein.com Communicating With Employees During COVID-19 The coronavirus threat people around the world are facing has left plan sponsors in unknown waters, navigating several tactics to connect with their employees. Sources suggest topics to address with retirement plan participants and methods to do so in this environment of limited face-to-face contact. Source: Plansponsor.com »» Click here for more on Plan Education and Communications Legislative and Washington DC Five Things People Miss (or Get Wrong) About the CARES Act The legislation is still very new, and amidst the scramble for answers and action, some things will inevitably get overlooked, and other important things will be misconstrued. Here are five things you'll want to keep straight. Source: Asppa.org »» Click here for more on Legislative and Washington Actions Cyber and Plan Security Alleged Fraud Drains Retiree's 401k; Plan's Administrator Facing Federal Probe When Heide Bartnett went to the mailbox in January 2019 and opened up her 401k statement, she expected to see a robust balance. Instead, she saw lines of zeros and an unauthorized $245,000 withdrawal. She filed a federal lawsuit in Chicago against Abbott and Alight Solutions alleging they failed to protect her retirement savings plan and seeking to recover the $245,000 plus damages. While Bartnett's lawsuit is focused on a single alleged victim, the problem of 401k cyberfraud is widespread, experts say. Source: Chicagotribune.com »» Click here for more on Cybersecurity Issues Multiple Employer Plans (MEP) RFP Guide for Selecting DC Plan Service Providers for Association Retirement Plans The SPARK developed this tool for preparing and evaluating Requests for Proposal for Association Retirement Plans, which are a special type of defined contribution plan, to assist Associations and advisors/consultants in this important task. While the use of this tool is completely voluntary, the Society is encouraging widespread use of this tool to enable service providers to prepare consistent responses, resulting in reduced response time and improved evaluations. Source: Sparkinstitute.org »» Click here for more on Multiple Employer Plans Compliance and Regulatory The Annual Retirement Plan Checkup: An Exercise in Preventive Medicine The primary reason that medical professionals recommend an annual checkup is that problems found early, especially when they are minor, generally are easier to fix. For the same reason, a comprehensive retirement plan checkup can help plan sponsors identify existing or potential issues and fix them before they negatively impact plan participants. Source: Pnc.com COVID-19 Extensions for Retirement Plan Filings and Payments Grappling with COVIT-19 issues has certainly been difficult, but retirement plan filings and payments are still required. The Internal Revenue Service has provided relief for some of them by granting extensions. Here is a summary of those extensions. Source: Retirementplanblog.com The CARES Act Contains Changes to Retirement Plan Withdrawal Rules: What Are They? With the nuances of the existing rules as well as the onslaught of new loan and hardship withdrawal guidance under the CARES Act, company retirement plan fiduciaries must be careful to avoid non-compliance pitfalls that could result in costly penalties. This article provides an overview of existing IRS loan and hardship requirements, updates to loans and hardship withdrawals under the CARES Act, and considerations for employers as they navigate what is likely to be a deluge of retirement plan withdrawal requests in the weeks and months ahead. Source: Hallbenefitslaw.com Before You Adopt Those COVID-19 Loan and Distribution Provisions It is important to understand that recordkeepers will not be the ones on the hook for any hasty decisions that are made regarding the CARES Act retirement plan distribution and loan provisions. That liability will rest squarely on the shoulders of the plan fiduciaries. And, as with any fiduciary decision, a prudent process should be followed, and that prudent process is probably going to take longer than five days. Should plan sponsors adopt the new loan and/or distribution rules? Here are some things to consider. Source: Cammackretirement.com Retirement Contributions and the Paycheck Protection Program The CARES Act creates a Paycheck Protection Program to help small businesses affected by the COVID-19 crisis by covering their near-term operating expenses and providing incentives to retain employees. Questions have arisen as to how "payments of retirement benefits" are considered when employers are making various payments to retirement plans. Source: Asppa.org Some recordkeepers/TPAs are already reaching out to plan sponsors on decisions regarding the optional provisions of the CARES Act, notably COVID-19 related distribution and loan options, but while some are waiting for instructions, others have made some assumptions. While this is certainly a moving target, and subject to change, NAPA compiled option information into an online table for your reference. Source: Napa-net.org »» Click here for more Compliance and Regulatory Material Marketplace News Securian Waives 401k COVID-19 and Hardship Distribution Fees PCS Retirement Announces the Rollout of the ManagedPlan Fiduciary Investment Advisors Acquired by Insurance Brokerage Empower Waives Fees on New Loans and Hardship Withdrawals Tickeron Announces AI-Generated 401k Reporting and Analysis Tool »» Click here for More Marketplace News
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