Pandemic Highlights Reasons for Reviewing Plan Fees
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Fiduciary and Plan Governance Pandemic Highlights Reasons for Reviewing Plan Fees The events of the past few months have had a dramatic impact on nearly every business. Now, more than ever is a time to review expenses and cut back where possible. One possible area to explore cost savings is in your 401k or other related retirement savings plan. Plan sponsors might start here for a variety of reasons. Here are some insights. Source: Plansponsor.com Evaluating Your Plan's Recordkeeper Your fiduciary responsibility to your plan participants includes periodically evaluating your plan's recordkeeper to ensure their processes facilitate the correct execution and reporting of transactions, adherence to federal and state regulations, in addition to the reasonableness of fees in relation with the quality of services provided. Learn more in this piece about the role a plan recordkeeper plays and some of the factors plan sponsors should consider when choosing and evaluating a recordkeeper. Source: Planpilot.com »» Click here for more Fiduciary and Plan Governance Material General Items Developing a Strategy for Moving From Pension to 401k Benefits Budgeting for next year's cost of employer-provided benefits can seem daunting, especially when an organization sponsors both a defined benefit pension plan and a 401k defined contribution plan. Is it time to consider moving away from the defined benefit pension plan to avoid volatility and risk? If so, plan sponsors should develop a well-thought-out process for analyzing the alternatives and impact to both employer costs and participant benefits. The overall strategy and objectives should be reviewed. Source: Findley.com Items of Special Interest to Service Providers Fiduciary Lessons From COVID-19 Crisis Human resources and finance professionals who are on the front lines, managing their organization's retirement plan, are not stupid, but they juggle many responsibilities and, understandably, can be overwhelmed by ERISA's complexities and anachronistic language. In the wake of the COVID-19 crisis, those advisers and providers that are transparent, providing facts in a clear format, and avoid conflicts will not only be in demand, but they might also be able to command higher fees. Source: Investmentnews.com (registration may be required) Insight: Studies, Research, and White Papers Most US Employers Plan to Make 401k Assets Easier to Access During Pandemic A majority of 816 U.S. companies surveyed in April by Willis Towers Watson said they have made, or plan to make, access to 401k plan assets easier for employees during the COVID-19 pandemic. Nearly two-thirds of respondents (65%) said they increased access to in-service distributions, essentially an employee's ability to take a distribution from an employee-sponsored retirement plan without terminating his or her employment, while another 16% were either planning or considering to do so in 2020. Fewer surveyed employers (12%) said they suspended matching contributions for retirement plans. Source: Hrdive.com DC Plan Participants Continue to Save During COVID-19 Pandemic Americans continued to save for retirement through defined contribution plans early this year despite uncertain market conditions during the COVID-19 pandemic. The study tracks contributions, withdrawals, and other activity, based on DC plan recordkeeper data covering more than 30 million participant accounts in employer-based DC plans. Source: Ici.org The Collective Investment Trust: An Important Piece in the Retirement-Planning Puzzle Learn about the many advantages of considering CITs as investment vehicles in defined benefit and defined contribution plans, including myths surrounding CITs and the benefits for advisors, consultants, and plan sponsors. Source: Wilmingtontrust.com »» Click here for More Studies, Research, and White Papers 403b Plans Improving Investment Outcomes for 403b Plan Participants With CITs BlackRock provides an overview of the features of CITs, why plan sponsors use CITs in 401k plans, the potential cost savings for 403b retirement savers if CITs were permitted as an investment option in all 403b plans, and ongoing legislative efforts to change the law, including the IRC, to allow all 403b plans to have the option to invest in CITs. Source: Blackrock.com »» Click here for More 403b Material Target-Date Funds COVID-19 Market Tests Basic TDF Design Target-date funds saw negative returns across the board during the first quarter, but those with aggressive stock allocations at their target dates hit those nearing retirement hardest, according to a report from Morningstar. Source: Investmentnews.com (registration may be required) »» Click here for more on Target-Date Funds State-Based Private-Sector Retirement Programs New Mexico Enacts Retirement Savings Plan and Marketplace New Mexico is the latest state to dive into the retirement pool for private-sector and nonprofit employers, enacting legislation to create both a state-run savings program and a retirement marketplace. New Mexico is the first state to try implementing two different arrangements at the same time. The marketplace must begin operating by July 1, 2021, with a six-month delay for the savings program. Source: Mercer.com Compliance and Regulatory Summary Table and In-Depth Analysis of COVID-19 Legislation To assist employers and public retirement systems with the myriad of changes, Ice Miller has cataloged the provisions of the FFCRA and CARES Act that impacts employer-sponsored retirement plans, health plans, and other benefits in a table format. They have summarized the statutory provisions as well as related regulatory guidance that has been issued as of the date of this publication. The table includes a high-level discussion of the law and practical considerations. For a more in-depth analysis, they have provided a comprehensive discussion of each provision. Source: Icemiller.com IRS Issues CARES Act Guidance: Retirement Plan Distribution and Loan Provisions The IRS recently issued guidance in the form of questions and answers regarding the retirement provisions of the CARES Act set forth in Section 2202. While not addressing all open issues, the Q&As provide retirement plan sponsors with several helpful clarifications regarding the CARES Act retirement provisions. Source: Bsk.com COVID-19 and Late Remittances of Employee Deferrals to 401k Plans What many employers have not focused on doing is ensuring that employee contributions (elective deferrals and loan repayments) to their 401k plans continue to be deposited into the plans in a timely manner. Recently, and in light of COVID-19, the DOL, in EBSA Disaster Relief Notice 2020-01, issued guidance intended to relax the timely remittance requirement for employers unable to satisfy the general rules. Source: Benefitslawadvisor.com Got Questions About the CARES Act and Retirement Plans? The IRS released a set of FAQs on its website focusing exclusively on coronavirus-related relief for retirement plans and IRAs. The Retirement Plan FAQs provide much-needed direction for plan sponsors and recordkeepers. This article covers the highlights of the Retirement Plan FAQs. Source: Wnj.com Who Qualifies for Coronavirus-Related Distributions? Section 2202 of the CARES Act gives favorable tax treatment to certain retirement plan distributions. If a distribution qualifies as a "coronavirus-related distribution," the recipient gets special breaks. The retirement plans charged with administering these rules do not have to worry, they can rely on the employee's self-certification that he or she passes the CRD qualification tests. Source: Morningstar.com »» Click here for more Compliance and Regulatory Material
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