2020 PLANADVISER Retirement Plan Adviser Survey
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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
Items of Special Interest to Service Providers 2020 PLANADVISER Retirement Plan Adviser Survey Retirement plan advisers, perhaps more than any other experts in our industry, have a good sense of the relative strength of the products and services offered by investment and recordkeeping providers. This 2020 Retirement Plan Adviser Survey amasses data from the adviser community to discover how these individuals select providers and funds, plus, as in other years, to pick up on any developing trends. Source: Planadviser.com (registration may be required) New Fiduciary Rule Provides More Protection for Rollover Advice The DOL's recently released fiduciary rule imposes higher standards on fiduciaries giving rollover advice. However, fewer advisors would be subject to a fiduciary standard than under the Obama administration's Fiduciary Rule. The new rule is similar to the SEC's Reg BI which recently became effective for retail accounts. Here's what would and would not change under the new standards for rollover advice. Source: Penchecks.com DOL Revives Five-Part Fiduciary Test; Offers New Guidance on Rollover Advice The DOL amended the Code of Federal Regulations to execute the Fifth Circuit's order, which effectively reinstated the Department's "five-part test" as outlined in its 1975 regulation defining invest. advice fiduciaries under the Code and ERISA. Also, the Notice affirms that advice about rolling a distribution to an IRA or another plan can be considered fiduciary invest. advice if the five-part test is met and the rollover is part of an ongoing investment relationship, even if the rollover is the first action of that relationship. Source: Hallbenefitslaw.com Fiduciary and Plan Governance How to Diversify Retirement Plan Committees This year, in particular, with the protests that sprung up across the country following the death of George Floyd, has shown many companies the importance of having a truly diverse workforce. And that principle should extend to the retirement plan committee as well as the workforce, experts say. With representation being top of mind in 2020, companies are reconsidering the makeup of their workforces and their retirement plan committees. Source: Planadviser.com The Dark Side of 401k Fiduciary There's a common characteristic that links exemplary fiduciaries; it's their non-negotiable approach to moral discernment. They demonstrate a greater neurological capacity for binding procedural justice (moral discernment) with procedural prudence (prudent decision-making). Unfortunately, the exemplary fiduciary is becoming a rarity. There are three reasons why. Source: 401kspecialistmag.com DOL Submits Final ESG Rule to OMB Release of the DOL's final rule addressing environmental, social, and governance factors in selecting plan investments appears to be imminent. Following a 30-day comment window that ended July 30 and more than 8,000 comment letters, the DOL on Oct. 14 submitted a final rule to the Office of Management and Budget for review. Source: Ntsa-net.org »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers The Evolving DC Landscape: The Expanding Role of OCIOs New research from PGIM sheds light on the use of outsourced chief investment officers by defined contribution plan sponsors. In a divergence of opinion, OCIOs seem to underweight their expertise in implementing institutional-quality structures, indicating that the top reasons for being hired by their clients were the perceived mitigation of fiduciary risk and the plan sponsors' lack of resources. Source: Pgim.com White Paper: A Retirement Dashboard for the United States Because most workers change jobs (and hence retirement plans) multiple times during their career, developing a comprehensive picture of one's retirement preparations can be challenging. Other countries have developed national, online retirement "dashboards." These are websites that not only include a registry or tracking system but also offer expanded functions such as recovering and consolidating lost accounts, projecting estimated future income, expanding financial literacy, and providing unbiased financial advice to users. This paper discusses the possibilities for a retirement dashboard for the United States. Source: Brookings.edu »» Click here for More Studies, Research, and White Papers Court and Legal Schlichter Strikes a $40 Million Settlement Noting that the settlement agreement is "fair, reasonable, and adequate, and within the range of possible approval," the parties in an excessive fee suit have come to terms. The settlement comes in a case involving Reliance Trust and its role regarding the Insperity 401k plan, in which the plaintiffs -- represented by the law firm of Schlichter Bogard & Denton -- are enrolled. Source: Napa-net.org A new 401k lawsuit filed against Nestle USA targets the administrative and managed accounts fees the plan's participants have paid since 2014. Unlike most other excessive fee claims filed amid this year's enormous surge in 401k litigation, investment management costs are not at issue in the case. Rather, the plaintiffs in the class-action lawsuit cite recordkeeping and administrative costs that were allegedly more than twice as expensive as what the nearly $4.3 billion plan could have negotiated. Source: Investmentnews.com (registration may be required) »» Click here for more Court and Other Legal Issues Cyber and Plan Security Cybertheft Lawsuit: Claims Dismissed Against Plan Sponsor but Move Forward Against Recordkeeper For the court, the determinative issue at this stage of the litigation was the fiduciary status of each of the defendants. As described here, the court concluded that Alight was the only defendant sufficiently alleged to be a fiduciary, and thus dismissed all claims against the Abbott Labs defendants but allowed the claims against Alight to move forward. The case highlights the evolving nature of ERISA cyber-security litigation and represents the second case where plaintiffs survived a motion to dismiss alleging that plan service providers were fiduciaries when allegedly failing to prevent cyber fraud from draining participant accounts. Source: Groom.com »» Click here for more on Cybersecurity Issues Compliance and Regulatory The To-Do List for 401k Plans: 2020-2021 Edition Being a retirement plan sponsor is a tremendous responsibility and the problem is that most plan sponsors don't understand that. Plan sponsors often act passively because they hire retirement plan providers to help them. The problem is that fiduciary responsibility doesn't allow plan sponsors the luxury to be passive when the buck stops with them. So that means you need to be active and understand what's going in the retirement plan industry that can impact your plan. With changes in how retirement plans are run and constant concerns with rampant 401k litigation, here is a to-do list. Source: Jdsupra.com Should Retirement Plan Sponsors Be Limiting Plan Loans? 401k plan loan regulations provide plan sponsors with a great deal of flexibility in this area, including the ability to be overly permissive, quite restrictive, or somewhere in between for their loan policy. What limits do you think are appropriate for the number of outstanding retirement loans? Or should such loans be unlimited? Source: Cammackretirement.com IRS Offers Guidance on RMDs considering CARES Act and SECURE Act The IRS issued Notice 2020-51, which gives guidance on the waiver of required minimum distributions for 2020 from certain retirement plans under the CARES Act and the required beginning date for RMDs under the SECURE Act. The Notice also provides two sample amendments that employers may use to give plan participants and beneficiaries whose RMDs are waived a choice of whether to receive the waived distribution. Source: Hallbenefitslaw.com New IRS Guidance About New Long-Term Part-Time Employee Eligibility Rules for 401k Plans This article focuses on perhaps the biggest responsibility for employers that will begin with their 2021 plan years, keeping track of long-term part-time employees and allowing them to make deferral elections under their 401k plans. Source: Employeebenefitslawreport.com The Tax Cuts and Jobs Act, enacted in December 2017, made significant changes to the plan loan offset rollover eligibility and tax reporting. The changes add a significant amount of complexity to tax reporting for these loans, and as a result, the industry has been slow to implement the changes. In August 2020, the IRS published proposed regulations that provide more detail on the requirements of the new provisions. Under the new regulations, there are now three different terms for a loan that is distributed, and each has rollover rules specific to it. Source: Ntsa-net.org »» Click here for more Compliance and Regulatory Material Marketplace News Pentegra Introduces ETF-based Risk Managed Model Portfolios JPMorgan Chase Launches 401k Micro-Market Solution TRAU and RPAG Partner on RPAG University
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