Projected 2021 Retirement Plan Limits
|
Click Here for Our Resource Page on Retirement Plans and the Coronavirus PandemicNewsletter 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. In This Issue
General Items Projected 2021 Retirement Plan Limits Most key Internal Revenue Code limits for qualified retirement plans won't increase in 2021, Mercer projects. The 415(c) maximum annual addition and the 401(a)(17) limit on retirement plan compensation will likely rise to the next rounding increment, but these limits are so close to the rounding breakpoint that even minimal deflation may keep the amounts at the 2020 levels. Source: Mercer.com Fiduciary and Plan Governance Recent Developments in ERISA Plan Investment Regulation The Department of Labor has issued guidance on private equity in 401k plan designated investment alternatives and a proposed regulation on environmental, social, and governance investing. Source: Morganlewis.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers NEPC's Defined Contribution Flash Poll In the second quarter, NEPC conducted a flash poll on defined contribution plan sponsor views and reactions in light of COVID-19. The findings quell some of the largest fears about the potentially detrimental impact of the pandemic and economic disruption on retirement savings. Source: Nepc.com Initial Impacts of Coronavirus on Global Defined Contribution Plans This 6-page report provides a snapshot of initial policy responses related to participant access to DC plans in various global markets as of May 15, 2020. For context, while the coronavirus pandemic has affected 188 countries, the timing and intensity of the pandemic has varied significantly across the world. Country practices and retirement plan systems vary globally. As such, a country's policy decision may not only reflect their stance towards DC plan assets but also whether the country has a robust safety net or other significant sources of guaranteed income. Source: Dciia.org Studies Show Retirement Plan Gains, Resiliency Retirement plans made gains in 2019 and, although they've been challenged by a pandemic and sudden economic downturn, they show surprising resiliency, two recent studies show. And there is more positive news. Source: Asppa.org Despite Challenges, 401k Plan Design Drives Positive Outcomes Despite a slight decrease, 401k plans that auto-enroll continue to drive far greater participation, according to an annual report that examines the latest trends in participant behavior and plan design. In its 2020 Reference Point report, T. Rowe Price found that in 2019, participation in the firm's auto-enrollment plans was 85.3%, outstripping non-auto-enrollment plans by more than 40 percentage points. Overall, the firm reports that more than 61% of plans at T. Rowe Price automatically enroll participants. Source: Napa-net.org Beyond Plan Audit Compliance: Improving the Financial Statement Audit Process This report was produced by the DOL's ERISA Advisory Council. In this 28-page report, the 2019 ERISA Advisory Council examined the regulations and guidance implementing the independent qualified public accountant annual examination of financial statement requirements under Section 103 of ERISA to determine whether changes could enhance the safety of plan assets, the effectiveness of the plan's design, the efficiency of the plan's operations, and the compliance of the plan with ERISA, the Code, and other applicable laws. Source: Dol.gov Voluntary Transfers of Uncashed Checks From ERISA Plans to State Unclaimed Property Programs This report was produced by the DOL's ERISA Advisory Council. In this 48-page report, the 2019 ERISA Advisory Council explored whether there are circumstances under which a defined benefit or defined contribution pension plan might consider voluntary transfers of uncashed distribution checks to a state unclaimed property program to advance the goal of reuniting participants and beneficiaries who cannot be found or who are nonresponsive with their retirement savings. Source: Dol.gov »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers 401k Sales Will Continue to Fall: Survey The COVID-19 crisis has hammered retirement plan sales so far this year, and things will likely get worse, according to a report this week from LIMRA's Secure Retirement Institute. Sales were up 17% in the first quarter of the year compared with the first quarter of 2019, though they fell sharply during the second quarter, coming in 21% lower than a year prior, the report found. Source: Investmentnews.com (registration may be required) Court and Legal Retirement Plan Excessive Fee Litigation Heats Up This Summer Until recently, it appeared that plaintiffs' firms had taken a hiatus from excessive fee litigation targeted at large companies. Now there has been an uptick in fiduciary litigation involving 401k and 403b plans of private employers. Last month, at least three new excessive fee cases were filed in Wisconsin and at least seven additional excessive fee cases were filed in other jurisdictions. Source: Quarles.com Coronavirus Benefits Lawsuits Have Begun Former participants in a 401k profit-sharing plan recently filed suit in Federal court in New Jersey seeking recovery of investment losses allocated to their accounts by the employer-sponsor. The losses were incurred when the employer imposed a special valuation date of April 30, 2020, to reflect the plan's investment losses incurred during the COVID-19 lockdown. This mid-year valuation reduced the account balances available for distribution to the former participants. Source: Gct.law »» Click here for more Court and Other Legal Issues Cyber and Plan Security New Cybersecurity Decision Highlights Potential Claims Against Plan Sponsors Based on long-standing ERISA law, it seems likely that plan sponsors will be held accountable for failing to fulfill their fiduciary responsibilities of prudence and loyalty when the vendors they hire allow a breach to occur. However, one reason the law has not been clarified to date is that often these participant claims have been settled quietly. Even a much-publicized lawsuit against Estee Lauder and its plan committee ended up being settled before trial. A pending suit against Abbott Labs could proceed to trial and there have also been two preliminary decisions in another case with the potential to clarify the rules. Source: Cohenbuckmann.com »» Click here for more on Cybersecurity Issues Fiduciary Rule New DOL Fiduciary Rule Package: What You Really Need to Know The DOL's new fiduciary rule package, issued on June 29, 2020, has three important components. This article describes in more detail the rules for determining whether a person is a fiduciary (including by way of providing "investment advice" under the "five-part test"), the DOL's views on the "five-part test" and rollover advice, the consequences of being a fiduciary, and the proposed exemption. Source: Erisapracticecenter.com Attempting to assess the impact of DOL's newly proposed fiduciary "prohibited transaction exemption" is almost like trying to figure out a Rubik Cube, given all of the moving pieces. But ultimately there may not be many parties who actually will need it. Consider these points when trying to figure out how this new rule affects things. Source: Businessofbenefits.com »» Click here for more on the DOL's Fiduciary Rule Compliance and Regulatory Finally! Leniency on Those Pesky Annual Notice Deliveries Recognizing that over the last 20 years, technology and the workplace have changed, the DOL published a new e-delivery safe harbor at the end of May. In it, the DOL allows a plan sponsor to distribute annual notices and required disclosures to participants via a variety of electronic and virtual channels if they initially provide notice of internet availability. Source: Francisinvco.com IRS Issues Operational Compliance List for 2020 The IRS issued the 2020 Operational Compliance List for tax-qualified retirement plans. The Operational Compliance List is mandated by IRS Rev. Proc. 2016-37 and notifies plan sponsors and service providers of changes to the tax-qualification requirements that became effective during the 2020 calendar year. Source: Westlaw.com »» Click here for more Compliance and Regulatory Material Marketplace News Lincoln Rolls Out "Next-Generation" 401k Auto Feature: Auto Income Vanguard to Outsource Its Retirement Plan Recordkeeping Operations DOL Announces Appointments to ERISA Advisory Council Alight to Offer Retirement Clearinghouse Auto Portability Solution Alliance Partners With iJoin for 401k and 403b Offering
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
|
