Avoiding COVID-19 Benefits-Related Litigation
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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
Court and Legal Avoiding COVID-19 Benefits-Related Litigation The COVID-19 pandemic has brought about a staggering number of changes for employers in the past few months, requiring them to make significant changes to workplace processes and policies virtually on the fly. In this environment, it's important to review employee benefits plans to ensure these changes have not triggered any adverse consequences. Source: Hallbenefitslaw.com Federal Court Dismisses ERISA Claims Against 401k Fiduciaries ERISA requires plan fiduciaries to act prudently and loyally when making decisions about the plan. In Martin v. CareerBuilder, a federal district court held that the complaint's allegations about expensive recordkeeping costs and imprudent investment options failed to give rise to an inference that the defendants violated their ERISA obligations. Source: Employeebenefitsblog.com »» Click here for more Court and Other Legal Issues General Items Key Concepts You Should Be Aware of as a 401k Plan Sponsor Times change and seasons change. Yet, some things remain the same. When it comes to sponsoring a 401k plan, some key concepts never change, whether there is a global pandemic going on or not. This article is about the key concepts that 401k plan sponsors need to understand. Source: Jdsupra.com Fiduciary and Plan Governance Review Investment Policy Statements for ESG Investment Compliance As the DOL increases its investigations and inquiries into ESG investments held by retirement plans, plan fiduciaries should review their plan investments and policies to (i) determine if their retirement plans hold any ESG-type investments, and (ii) if they do hold such investments, (a) review their investment policy statements and evaluate whether such policies comply with the current rules for ESG investments, and (b) confirm whether such investments remain appropriate for the plan. Source: Haynesboone.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers Participants Talk Saving, Retirement Plans, and Risk; Research Plan Sponsors and their advisors consider many factors when evaluating and defining retirement plan design. One of those should be understanding participant sentiments about saving and retirement benefits. Use findings from our 8th national survey to add insight and value in your discussions and deliberations about participant behaviors and plan features. Source: Americancentury.com 401k Survey Finds Savings Goals and Stress Levels on the Rise Anxiety about long-term retirement savings is up according to a new survey from Schwab Retirement Plan Services, and so is participant engagement. The nationwide survey of 1,000 currently employed 401k plan participants finds that saving enough for a comfortable retirement continues to be their leading source of significant financial stress. Two in five participants also say they made a change to their 401k account due to COVID-19, citing rebalancing and increasing contribution rates as the most common changes. Source: Businesswire.com The Latest on Participant Behavior During the Pandemic While various shifts were seen in savings plan contributions and withdrawals in the first few months of the outbreak, there have been some improvements as of late, according to data from Ascensus. In the first few months of the COVID outbreak, the firm reported on a relatively small percentage of retirement plans that had stopped making contributions altogether due to business interruptions. But on a more positive note, as of the end of June, most of these plans have shown encouraging signs of recovery and are taking steps to return to pre-pandemic levels of savings plan contributions. Source: Napa-net.org »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers DOL Motives for Fiduciary Rule Questioned in Public Comments Much of the financial services industry's commentary about the proposal has been positive, with various commenters voicing appreciation that multiple national-level conflicts of interest rules are now aligned. Not everyone is pleased with the DOL's proposal, however. Consumer groups and advocates of the fiduciary adviser industry want the Department of Labor to reconsider aspects of its proposed fiduciary rule. Source: Planadviser.com 403b Plans Are There Partial Terminations of 403b Plans? The "partial termination" rules are pretty straightforward, and TPAs and recordkeepers all know where to draw the line and provide guidance to their clients. Or so you would think. But the 403b termination vesting rules are vastly different than those for 401k plans. You'll find that there just aren't any in the Tax Code, ERISA, or Tax regulations. Source: Businessofbenefits.com »» Click here for More 403b Material Cyber and Plan Security Know Your Rights Under ERISA to Prevent Pension Fraud Although the defined benefit plan may be falling by the wayside, many believe that pensions are still a hotbed for fraud. This belief is due in large part to the general nature of a pension and the large amounts of money accumulated over time that is inaccessible to the intended recipient until some future point in time. Under ERISA, employers and fund managers can be held liable for damages sustained when employees are defrauded of their pension assets. Source: Eisneramper.com »» Click here for more on Cybersecurity Issues Multiple Employer Plans (MEP) SEP, MEP, or PEP: Identifying The Key Differences in Retirement Plans This 24-page white paper explains the differences between single-employer, multiple-employer, and pooled-employer plans, as well as other group programs for offering retirement benefits. Source: Ferenczylaw.com »» Click here for more on Multiple Employer Plans Compliance and Regulatory Safe Harbor 401k 2020 Establishment Deadline As you might expect, preparation and planning are always necessary to establish a new tax-qualified plan or redesign an existing one. The same holds for a Safe Harbor Plan. Therefore, even with the new Safe Harbor Plan establishment timing flexibility under the SECURE Act, now is the time to begin to consider whether a safe harbor feature is right for your company or your client's plan to ensure that it can be fully operational in advance of the applicable deadline. Source: Legacyrsllc.com DOL's ESG Proposal Blasted by Commenters The DOL's proposed rule addressing environmental, social, and governance factors in selecting plan investments received more than 1,500 comment letters during the 30-day comment window, with many taking issue with the proposal. Source: Napa-net.org DOL's New Rules Don't Have to Slow DC Plan ESG Adoption Demand for ESG investing is growing among DC plan participants, but with plan sponsors facing many choices and proposed new DOL rules, what’s the best approach? Two in three sponsors feel that integrating ESG factors into their investment approach is a fiduciary duty. But about four in 10 say their biggest obstacle is understanding the many ways to offer ESG. Source: Alliancebernstein.com What Employers Should Know About the DOL Final Rule for Electronic Disclosure On May 27, 2020, the DOL issued a final rule that makes it easier for employers to provide required disclosures to retirement plan participants and beneficiaries. The final rule provides two additional safe harbors for the production of retirement plan disclosures via electronic media: the "Notice and Access" safe harbor and the "Direct Delivery Via Email" safe harbor. Here are the key points that employers should know about the new safe harbors. Source: Thompsoncoburn.com IRS Issues Safe Harbor Explanations for Eligible Rollover Distributions The IRS on Aug. 6 in Notice 2020-62 issued safe harbor explanations for eligible rollover distributions. The notice modifies the two model notices in Notice 2018-74. Those safe harbor explanations reflect relevant law as of Sept. 19, 2018: one safe harbor is for payments not from a designated Roth account, and the other is for payments from a designated Roth account. Source: Asppa.org »» Click here for more Compliance and Regulatory Material Marketplace News Nationwide to Waive Fees for New Retirement Plan Clients in 2020 Ascensus Launches READYSAVE™ Retirement Mobile App Northwest Plan Services Rebrands to NWPS
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