Risk Management for ERISA Plans in Uncertain Times
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Click Here for Our Resource Page on Retirement Plans and the Coronavirus PandemicIn This Issue
Fiduciary and Plan Governance Risk Management for ERISA Plans in Uncertain Times The central tenets of ERISA are to provide as much freedom as possible, within minimal parameters, to draft ERISA plans, and then to honor the terms of the plans. COVID-19 may very well cause increased ERISA plan claim filings, so now is the time for plan sponsors to review their ERISA plans and consider (or reconsider) plan provisions that manage an increased claim risk. Source: Beneficiallyyours.com Cash Flow Considerations Related to DC Retirement Plans Under COVID-19 In the last three months, many employers have had significant decreases in their top-line revenue and have attempted to cut costs to offset that revenue decrease. The IRS has provided relief to retirement plans through the CARES's act to assist plan participants to manage through these difficult times. This article shares some strategies for managing cash flows as it relates to defined contribution retirement plans from an employer perspective. Source: Meadenmoore.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers DC Plan Response to CARES Act Varied by Industry and Recordkeeper, Survey Callan conducted a mid-April survey to assess what defined contribution plan sponsors have done in response to the CARES Act and the recent economic turmoil spurred by the pandemic. The survey includes responses from 63 non-government plan sponsors, and in general, found that plan sponsor actions were primarily influenced by the industry they are in and the actions taken by their recordkeeper. Source: Callan.com Divorce Seen as Heavy Contributor to Early 401k Withdrawals Compared to large purchases, Americans were more likely to take early withdrawals from their retirement accounts during a divorce or after losing a job, according to research by the University of Michigan. Mortgage payment distress was also a major factor leading families to withdraw funds, according to a working paper by economists Frank Stafford of the University of Michigan and Thomas Bridges of the University of Delaware. Source: Napa-net.org »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers Five Ways to Modernize Your Next Recordkeeper RFP For many advisors, recordkeeper RFPs conjure up thoughts of endless amounts of documents, countless back-and-forth conversations with candidates, and immense amounts of effort and time. While it's true that the recordkeeper RFP is an involved process that requires a generous amount of effort, many advisors fail to take certain steps to help expedite and modernize their RFP process. To help you form a better recordkeeper RFP process, here are five ways you can modernize your next RFP. Source: Fi360.com Advisers Giving Back: Attila Toth and Portfolio Evaluations Investing in the local community has been an important part of the firm's identity from its founding in 1992, and it makes sure to involve its staff members’ spouses and families to make its giving even more meaningful. Source: Planadviser.com Court and Legal Land O'Lakes Faces 401k Excessive Fee Suit Law firm Capozzi Adler has struck again, this time with a lawsuit against fiduciaries of the Land O'Lakes Employee Savings & Supplemental Retirement Plan. As with the other complaints filed by the firm on behalf of retirement plan participants and beneficiaries, it alleges that plan fiduciaries breached their fiduciary duties under ERISA by failing to objectively and adequately review the plan's investment portfolio with due care to ensure that each investment option was prudent in terms of cost and by maintaining certain funds in the plan despite the availability of identical or similar investment options with lower costs and/or better performance histories. Source: Plansponsor.com Plan Sponsor, Provider Sued for Adding Untested CITs to 401k Participants in the Schneider Electric 401k Plan have sued plan fiduciaries and Aon Hewitt Investment Consulting for breach of fiduciary duties and prohibited transactions under ERISA. The 92-page complaint includes several other allegations, including that the plan sponsor was motivated by its relationship with the provider for its defined benefit plans. Source: Plansponsor.com Split Decision in Excessive Fee Suit A federal judge has rendered a split decision in an excessive fee suit, though it seems fair to say that, at least in the judgment of this court, the Schlichter-represented plaintiffs' experts didn't live up to their "billing." The suit was filed by the law firm of Schlichter Bogard & Denton, LLP representing a class of participants against the fiduciaries of the Banner Health Employees 401k plan. Source: Asppa.org »» Click here for more Court and Other Legal Issues Legislative and Washington DC The HEROES Act: Key Retirement, Health and Welfare, and Tax Provisions The House of Representatives recently passed the fourth round of legislation in response to the COVID-19 pandemic. The HEROES Act is unlikely to advance in the Senate, and the White House has threatened to veto the bill. However, the Act reflects the House Democratic majority's priorities, and some of the provisions could be included as part of a bipartisan compromise package. This alert first summarizes key provisions of the HEROES Act impacting retirement plans and health insurance. It then discusses other provisions that may impact employers and individuals. Source: Groom.com »» Click here for more on Legislative and Washington Actions Compliance and Regulatory DOL Finalizes Safe Harbor Regulation for Retirement Plan Electronic Disclosures Overall, the rule could greatly expand the electronic delivery of retirement plan notices. Importantly, the rule would allow plans to use mobile applications to deliver notices and disclosures, possibly paving the way for greater overall plan engagement by retirement plan participants. Nevertheless, the rule is not without its challenges, and it remains to be seen whether the administrative demands of the rule will outweigh its usefulness for the majority of plans. Source: Groom.com Email Option Added to Final Electronic Disclosure Rule for Retirement Plans The DOL finalized a new rule that allows ERISA retirement plan sponsors to provide certain required disclosures to participants and beneficiaries electronically. The final rule adds an option to email covered disclosures directly to recipients, but otherwise is substantially the same as the proposed rule. Employers should start collecting valid email addresses from plan participants, including terminating employees still covered by the plan. Source: Hansonbridgett.com Secure Act Deep-Dive: Inclusion of Part-Time Employees Many of the SECURE Act provisions seek to expand retirement plan coverage for Americans. This includes the new requirement for 401k plans to permit long-term part-time employees the right to make elective deferrals. While this is a positive step for employees, for retirement plan sponsors, it is likely to be the SECURE Act provision with the most significant administrative burden. Source: Cammackretirement.com COVID-19 Employee Benefits Round-Up The legal and regulatory response to COVID-19 continues to modify the compliance landscape for employers, and this includes new requirements and options for employer-sponsored health and retirement plans. Read this 2-page review to learn more about some of the recent changes. Source: Barran.com Ten Things You Might Have Missed About E-Delivery The much-anticipated final rule was rolled out early on the morning of May 21. While fundamentally similar to the rule proposed last October, it did include some modifications in response to comments received. Chances are you've not yet delved deeply into the Labor Department's final rule on default electronic disclosure. Regardless, here are some things you might have missed. Source: Asppa.org DOL Issues Final Rule on Electronic Delivery The DOL published a final rule that allows retirement plan administrators to use an electronic "notice-and-access" method of delivery for required disclosures to participants in employee retirement plans. The final rule is fundamentally similar to the original proposed rule published in October 2019. The rule takes effect on July 26, 2020. It is anticipated that the rule will reduce administrative expenses and make the disclosures more readily accessible for retirement plan participants. Source: Icemiller.com »» Click here for more Compliance and Regulatory Material
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