2020 Plan Investment Trends
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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
Insight: Studies, Research, and White Papers PSCA and NAPA surveyed plan sponsors and retirement plan advisors (separately) between January 21 and February 21, 2020, regarding current plan menu designs and investment trends. This is a 44-page report. Source: Psca.org »» Click here for More Studies, Research, and White Papers General Items Fall Back Into Your Role as a 401k Plan Sponsor Summer seems to be a time of enjoyment where we slack off a little. With the coming of Fall, it's a perfect time for 401k plan sponsors to snap back into shape in their role as plan fiduciaries. Here are some reasons why. Source: Jdsupra.com Tips to Help Protect 401k Participants From Fraud in Turbulent Times We know fraudsters are looking to exploit elements of the CARES Act that provide retirement plan sponsors the ability to allow in-service distributions, loans, and withdrawals free of fees. The combination of the work-from-home model most workers are experiencing, coupled with the anxiety and emotional distress retirement plan participants could be feeling given market volatility and job losses related to the pandemic provides a ripe target. Here are several tips plan sponsors can share with participants to promote fraud prevention. Source: 401kspecialistmag.com Fiduciary and Plan Governance Don't let plan fees scare you. Exorcise your fear by understanding the services performed by your service providers, how your providers are paid, and what their fees are. Then look at the fees charged by other providers to plans of a similar size to yours. Keep calm throughout the process knowing that DOL doesn't expect plan sponsors to have hired the cheapest providers. Source: Alliant401k.com »» Click here for more Fiduciary and Plan Governance Material Court and Legal Lessons From a Rare ERISA Excessive Fee Suit Dismissal The complexity of retirement plan lawsuits often makes district court judges reluctant to approve early dismissal motions plaintiffs, but Salesforce has succeeded in defeating a complaint alleging it committed various fiduciary breaches. Source: Plansponsor.com Abbott Defendants are Dismissed From Plan Cybertheft Lawsuit-At Least for Now The plaintiff named Abbott Labs as a defendant, but the court dismissed these claims on the ground that the plaintiff did not show that Abbott Labs acted as a fiduciary or was identified as a fiduciary in the plan document. No acts were specified that linked Abbott to the alleged theft, and a complaint must allege that Abbott acted in a fiduciary capacity when it took actions that were the basis for the lawsuit. Source: Cohenbuckmann.com SCOTUS Seeks Fed Input on Excessive Fee Suit The nation's highest court has sought the federal government's input on a case that the law firm of Schlichter Bogard & Denton says is having a "chilling effect" on excessive fee litigation. Specifically, the U.S. Supreme Court has "invited" the Acting Solicitor General to "file a brief in this case expressing the views of the United States" in a suit brought against Northwestern University and the fiduciaries of its 403b plan. Source: Napa-net.org Stock Drop Litigation Cases and COVID-19: Retirement Plans Beware! During times of stock market volatility, there is typically an increase in the number of ERISA claims filed seeking recovery of investment losses. The COVID-19 pandemic certainly qualifies as a market volatility event, giving plaintiffs an opportunity to bring breach of fiduciary claims based on company stock losses in qualified retirement plans. Source: Hallbenefitslaw.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC Biden Proposes 401k Change to Equalize Benefits Biden's proposal is designed to equalize benefits across the income levels through a tax credit. Although the details are still somewhat hazy, Biden's camp says that low- and middle-income workers would get a comparable tax break to high-bracket earners. Source: Cpapracticeadvisor.com »» Click here for more on Legislative and Washington Actions State-Based Private-Sector Retirement Programs State-Sponsored Retirement Plans for Private-Sector Workers Concerned with the retirement security of their workers, some state legislatures have enacted laws that create state-sponsored retirement savings plans for private-sector workers. Many other states are considering similar action. Which states have enacted or proposed legislation that would enable them to offer retirement savings programs to private-sector workers? Source: Retirementlc.com Cyber and Plan Security Cybersecurity More Effective if Regularly Reinforced, Study Says Memory fades. But how fast? Within six months, at least regarding cybersecurity protocols, according to a study of how long employees retained the security measures they had learned. Researchers who studied 409 employees found that they were able to identify which emails were legitimate and which were phishing immediately after a security awareness and education program was conducted, and even four months after. But after half a year had elapsed, that was not the case. Source: Asppa.org »» Click here for more on Cybersecurity Issues Multiple Employer Plans (MEP) Are MEPs the Next Big Target for Lawsuits? At least three cases were filed recently against providers of multiple employer plans, and two other cases have been settled. This year also has seen a wild rise in the number of 401k lawsuits, though relatively few of them have involved MEPs. Source: Investmentnews.com (registration may be required) »» Click here for more on Multiple Employer Plans Compliance and Regulatory Puerto Rico Qualified Retirement Plans: 2020 Year-End Amendments Deadline Coming Soon Unlike the Internal Revenue Service, which each year issues a list of required amendments to U.S. qualified plans and their respective adoption due dates, the Puerto Rico Department of the Treasury seldom requires mandatory amendments to Puerto Rico qualified plans. The year 2020, however, has been an exception to the general rule. Specifically, if during 2020, a Puerto Rico qualified plan allowed participants to receive in-service hardship withdrawals on account of either the COVID-19 pandemic or the earthquakes that affected the island at the beginning of the year, the official plan document must be amended by December 31, 2020. Source: Ogletree.com What are the Available Safe Harbor Plan Formulas? 401k plans are subject to nondiscrimination tests to ensure that a disproportionate share of the elective participant deferral is not those of the HCEs. The discrimination tests can be avoided if the employer sponsors a safe harbor plan. Safe harbor plans allow employers to disregard the nondiscrimination test if they make a generous, pre-approved employer contribution amount to all eligible employees. The minimum safe harbor employer contribution formulas available are reviewed here. Source: Belfint.com Correction Options for Retirement Plan Errors In a highly regulated industry with complicated rules that always have exceptions (except when the exception does not apply) sooner or later a failure to follow the plan document will take place. Such operational errors can be corrected through the IRS Employee Plan Compliance Resolution System in one of three ways. Source: Belfint.com Required Minimum Distributions As we approach the end of the calendar year, it is important to be reminded about one frequently overlooked retirement plan requirement. Upon attainment of age 72, certain participants of a tax-qualified retirement plan may be required by federal tax law to withdraw a minimum amount from such a plan each year. These mandatory distributions are known as "required minimum distributions." Source: Legacyrsllc.com »» Click here for more Compliance and Regulatory Material Marketplace News UK Firm to Launch PEP Recordkeeping Solution in the U.S Transamerica Retirement Launches Student Loan Repayment Program
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