Projected 401k and Retirement Plan Limits for the Tax Year 2021
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General Items Projected 401k and Retirement Plan Limits for the Tax Year 2021 The IRS hasn't officially announced the 2021 limits yet, but based on the actual and projected CPI, most key Internal Revenue Code limits for qualified retirement plans won't increase in 2021. Here are our projected changes. Remember, these are unofficial projections. Source: 401khelpcenter.com Wells Fargo Cuts 401k Match for High Earners Wells Fargo & Co., which is reducing costs, told its employees Wednesday that it is revamping its benefits program. The changes, which are intended to benefit lower-paid workers, or the majority at the bank, include eliminating the matching contribution to 401k plans of up to 6% of salary for employees who make more than $250,000 annually. Source: Investmentnews.com (registration may be required) Fiduciary and Plan Governance Advisers Can Spearhead Retirement Plan Committee Setup and Training When it comes to fiduciary training for retirement plan committees, experts generally say a plan adviser can take the lead and use the occasional help of an ERISA attorney. Plan sponsors can trust advisers to help with committee decisions and training. Source: Plansponsor.com Time to Catch Up on Those 401k Plan Committee Meeting Minutes You got past another October 15 filing date for the Form 5500 for your 401k plan. Now you can focus on your 2020 plan year and start making sure you have your 401k plan house set for the end of this year. Keeping detailed minutes from the meetings of your 401k plan oversight committee is an important part of this process. Here are a few simple tips for keeping detailed and effective 401k committee meeting minutes. Source: Linkedin.com Consider Who Is Paying When Benchmarking Retirement Plan Fees Are plan sponsors' responsibilities for making sure retirement plan fees are reasonable different when the plan sponsor pays versus when plan participants pay? There is less risk when a plan sponsor pays retirement plan fees, but that doesn't necessarily mean the benchmarking should be different than if participants pay. Source: Plansponsor.com Fiduciary Insurance Costs Soar Amid New 401k Litigation The extreme pace of new 401k lawsuits this year is showing the legally precarious spot most plan fiduciaries occupy, and that position is only becoming more difficult. It is rare for a plan to have a near-perfect design and watertight documentation showing the prudent process that went into it. And aside from that, the biggest source of protection from those lawsuits, fiduciary liability insurance, is getting harder to come by. Source: Investmentnews.com (registration may be required) »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers More Participation Equals More Savings, Fidelity Study of Retirement Plans Finds Employees who participate in both the 401k plan offered by their company and their company's employee stock purchase plan tend to contribute an average of 32% more to their 401k than employees who only participate in the 401k, according to recent research from Fidelity Investments. Source: Investmentnews.com (registration may be required) Hopes of Greater Diversity as DOL Allows Private Equity in 401k Plans Employer-sponsored 401k plans feature mainly low-cost and highly liquid investment products. However, guidance issued this year by the DOL allows providers of higher-cost and less-liquid private equity investments to offer the products to 401k plan sponsors. In June, the DOL clarified that private equity investments are allowed in 401k plans if they are within professionally managed asset allocation funds and are evaluated for risks and benefits by the responsible plan fiduciary. Source: Ft.com »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers Advisers Can Help Retirement Plan Sponsors Regroup for 2021 Heading into 2021, employers are looking to financial advisers for help with education and communication for their retirement plans. While COVID-19 has been the dominant force affecting nearly every aspect of life this year -- including retirement plans -- expert sources say retirement plan legislation, litigation, education, and a push for diversity in and outside of plans were the other big takeaways of this year for the industry, as well as what will shape financial wellness going into the new year. Source: Planadviser.com 401k Recordkeepers Are Near Final Stage of 'Consolidation Curve' Like many other fragmented industries, the 401k business is consolidating rapidly. That consolidation process, which happens in four stages, is driven by recordkeepers and retirement plan adviser aggregators. There are lessons from numerous other industries that have gone through the full consolidation process. Source: Investmentnews.com (registration may be required) 403b Plans A New Education Priority for 403b Plans? There's been a shift in emphasis on retirement plans in the non-profit sector. For the first time, organizations that provide 403b plans reported that retirement planning, rather than increasing participation, was their top focus for employee education, according to the 12th annual 403b Plan Survey from the Plan Sponsor Council of America. Source: Napa-net.org »» Click here for More 403b Material Cyber and Plan Security ERISA/Cybersecurity Considerations in the COVID Age Plan fiduciaries are now faced with the detailed compliance requirements of ERISA and cybersecurity laws including data breach matters. So, what can fiduciaries do to minimize their cybersecurity liability? Source: Foley.com »» Click here for more on Cybersecurity Issues Compliance and Regulatory IRS Issues Guidance on Payments to State Unclaimed Property Funds The IRS on Oct. 16 modified guidance and clarified rules to address payments made to state unclaimed property funds. The IRS announced the changes in Revenue Procedure 2020-46 and Revenue Ruling 2020-24. Source: Asppa.org The SECURE Act has new eligibility and vesting rules for long-term, part-time employees. This article summarizes these new requirements and offers some considerations for 401k plan sponsors to weigh as they turn their attention to compliance with these requirements, which are effective for plan years beginning after December 31, 2020. Source: Verrill-law.com Qualified Birth or Adoption Distributions Q&As The SECURE Act includes a provision permitting qualified childbirth and adoption expenses to be distributable events. And for its part, the IRS has issued guidance to provide some clarity on the new distributable event and how it works. This is a Q&As relevant to qualified childbirth and adoption expenses as distributable events. Source: Ntsa-net.org The 401k Problems With Former Employees One of the lurking dangers in your 401k plan is former employees who still have account balances in your plan. You should minimize your liability exposure by trying to get these former participants to roll out their account balance or cash them out if they are under the cash-out provision. Source: Jdsupra.com »» Click here for more Compliance and Regulatory Material Marketplace News UBS Rolls Out Small-Business 401k Fiduciary Program Empower Retirement Achieves $110 Billion in New Retirement Plan Sales Groom Law Group Adds to Its ERISA Litigation and Plan Sponsor Teams Voya Launches New Spanish-Language Experience for Retirement Plan Customers
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