Fiduciary Oversight of 401k Plans Is Vital During Uncertain Times
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Newsletter Sponsor 401k Averages Book 20th Edition Infographic With the release of the 401k Averages Book 20th Edition we have updated our infographic "Are all $5,000,000 401k Plans Created Equal?" …and the findings might surprise you. The infographic compares the average costs of two $5,000,000 401k plan benchmarks. Click here to receive a copy of the infographic and see what we found out. Click Here for Our Resource Page on Retirement Plans and the Coronavirus PandemicIn This Issue
Fiduciary and Plan Governance Fiduciary Oversight of 401k Plans Is Vital During Uncertain Times Plan Sponsors and those charged with the oversight of their 401k plan need to remain diligent in ensuring the safety of their participant's 401k accounts. Here are 11 items you need to make sure you're doing. Source: Linkedin.com Fiduciary Obligations With Respect to a Brokerage Window This article reviews two recent cases that considered claims by participants in 401k participant-directed investment plans that plan fiduciaries failed to prudently monitor investments in what fiduciaries claimed were brokerage windows or "similar plan arrangements." The article starts with a summary of what we know and what we don’t know about the legal status of brokerage windows and similar plan arrangements. Source: Octoberthree.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers There has never been a more challenging time to invest for retirement. A combination of unprecedented market volatility and complex new rules involving contributions, withdrawals, and tax implications have exposed a need for increased guidance and advice on the part of retirement plan providers. Additionally, with record job losses in recent months, much of the money accumulated in these plans may potentially be lost if participants choose another provider for a rollover. According to the J.D. Power 2020 U.S. Retirement Plan Participant Satisfaction Study few providers are successfully addressing this growing need. Source: Businesswire.com Retirement Tier Widely Recommended for DC Plans As more Americans shift from saving to spending in retirement, the majority of consultants of large 401k plans say plan sponsors should add a retirement tier and retiree-focused investment options to retain retirees and to help them manage their assets in retirement. A retirement tier is a range of products, solutions, tools, and services to support participants who are near, entering or in retirement. Source: Plansponsor.com What Constitutes Retirement Plan Leakage Previous studies substantially overestimate leakage from retirement accounts, according to a new analysis of tax data by Investment Company Institute economists Peter Brady and Steven Bass. The economists define "leakage" as early withdrawals from retirement accounts used for non-retirement purposes. While this is good news, the analysis still reveals that retirement account leakage is a big problem. And the types of retirement plan distributions weeded out for the economists' definition of leakage raise a question. Source: Planadviser.com Are 401k Menus Out of Balance? Amid historic market volatility, a new survey of retirement plan sponsors and retirement plan advisors reveals gaps in focus and perception about the role of fixed-income investments in a fully diversified 401k menu. The new survey found that equity options outnumber fixed income by approximately 3:1 on plan menus, regardless of plan size. Source: Asppa.org New Research Collaboration Combines 401k and Spending Data on a Large Scale for the First Time In a first for the industry, EBRI is working with J.P. Morgan Asset Management to extract detailed insights into people's behaviors around spending and saving to help policymakers, plan sponsors, and plan providers improve retirement outcomes, utilizing their various databases. The effort leverages 22 million Chase households and 27 million 401k plan participant records, offering the first truly holistic view of how U.S. households spend and save. Source: Prnewswire.com Retirement Assets Total $28.7 Trillion in First Quarter 2020 Total US retirement assets were $28.7 trillion as of March 31, 2020, down 11.9 percent from December 31, 2019. Retirement assets accounted for 33 percent of all household financial assets in the United States at the end of March 2020. Source: Ici.org »» Click here for More Studies, Research, and White Papers Court and Legal Vantage Benefits Administrators co-owner Jeffery Richie, 55, and his wife (and co-owner) Wendy Richie, 59, have pled guilty to several counts in federal court for their role in a $15 million embezzlement scheme. Source: Napa-net.org 401k Plan Sued for COVID-19-Related Missteps If you were wondering how long it would take someone to file suit regarding events related to the COVID-19 pandemic, wonder no more. In what seems to be the first suit filed against a 401k plan post-COVID-19 outbreak, the suit was brought by plaintiffs and former participants against the Behan Bros, Inc. Retirement Plan. Behan Brothers is a construction company located in Middletown, RI. The plan all participated in was a profit-sharing 401k plan, albeit one without participant direction. Source: Napa-net.org »» Click here for more Court and Other Legal Issues Cyber and Plan Security Coping With the Increase in 401k Cyberattacks and Fraudulent Plan Distributions Plan sponsor employers and employees participating in 401k or other retirement plans should be aware of cybersecurity breaches and unauthorized plan distributions. The heightened level of plan distributions coupled with the security risks associated with electronic communications and the "new normal" of working remotely, sometimes on personal computers, may increase the exposure of participants' confidential and personal data to cybercriminals. While employees may envision their 401k plans as safely tucked away for retirement, their accounts may be vulnerable to cyber fraud. Source: Gtlaw.com »» Click here for more on Cybersecurity Issues Compliance and Regulatory Guidance for Coronavirus-Related Distributions and Loans From Retirement Plans Under the CARES Act This IRS notice provides guidance relating to the application of section 2202 of the CARES Act for qualified individuals and eligible retirement plans. The guidance in this notice is intended to assist employers and plan administrators, trustees and custodians, and qualified individuals in applying section 2202 of the CARES Act, including guidance on how plans may report coronavirus-related distributions. Source: Irs.gov Is a 401k Match Contribution Tax Deductible? Many employers match a portion of the employee's contribution, giving them an extra boost toward their retirements. This offers tax advantages to both the employees and the employers, and we'll discuss the details below. However, this is where the tax implications get a little murky: can employees deduct employer contributions alongside their own? Can companies reduce their tax bills by matching contributions? This article explores the tax implications of matched 401ks from the employee and employer perspective to make sure that 401k tax deductions are as clear as they can be. Source: Humaninterest.com DOL Publishes RFI on PTEs Involving PEPs The DOL has just announced its Request for Information on Prohibited Transactions involving Pooled Employer Plans under the SECURE Act and other multiple employer plans. According to a press release, the RFI is "an opportunity for the public to provide data and information that may be used to evaluate whether the Department's Employee Benefits Security Administration (EBSA) should propose a new prohibited transaction class exemption." Source: Asppa.org IRS Determination Letter Program: Upcoming Deadlines and Recent Developments The retirement plan community got a shock five years ago when the IRS dramatically cut back its 60-year-old program of providing employers with the comfort of a determination letter on the tax qualification of their plans. With the IRS's limited re-opening of its determination letter program, this summary highlights upcoming deadlines and recent developments. Source: Groom.com »» Click here for more Compliance and Regulatory Material Marketplace News SEI Investments Adds Three SSGA Index CITs to 401k lineup PAi Enhances Small Market 401k Plan Solution ShareBuilder 401k Offers Free Setup for New Plans Empower Launches Ad Campaign to Elevate Importance of Retirement Savings
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