Judge Throws the Book at TPA Embezzlers
|
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 Judge Throws the Book at TPA Embezzlers The owners of Vantage Benefits Administrators have been sentenced by a federal judge for their role in a $15 million embezzlement scheme. Vantage Benefits Administrators co-owners Jeffery Richie, 55, and his wife Wendy Richie, 59, pled guilty to several counts in federal court for their role in the aforementioned embezzlement scheme in June. In all, the pair admitted to more than 90 unauthorized distribution requests from 13 pension plans and seven retirement plans from 2014 and 2017. Source: Asppa.org Lawsuits against 401k sponsors have been pervasive this year, with nearly 100 new cases alleging breaches of fiduciary duties in connection with the fees workers incur. That trend has coincided with a steep rise in cost for fiduciary liability insurance and a lower ceiling on limits. The volume of new claims is higher than usual, though so is the number that have been dismissed. Whether many of the defendants in the recent wave of cases can get claims dismissed at an early stage will influence how likely other defendants will be to fight claims rather than settle. Source: Investmentnews.com (registration may be required) Retirement Plans Will Likely Face More Litigation in 2021 Plan sponsors should keep a close watch on retirement plan litigation, as the effects of COVID-19 might spark new lawsuits. The market volatility experienced in March and April, coupled with the cybersecurity risks of remote work, could position some employers to face litigation in the new year, industry experts say. Source: Planadviser.com »» Click here for more Court and Other Legal Issues Fiduciary and Plan Governance Choosing a QDIA Under the Final Rule Governing the Selection of Plan Investments The DOL issued a final rule that amends the long-standing regulations that govern the selection of retirement plan investments by fiduciaries. One of the provisions is a prohibition on the use of an ESG fund as a QDIA. Plan fiduciaries that choose a fund that involves ESG screening strategies are taking a risk that the fund is not a permissible QDIA. Source: Boutwellfay.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers 2020 Defined Contribution Plan Sponsor Survey We are approaching a new stage in the evolution of DC while standing in the middle of a heightened fiduciary risk environment. Plan sponsors are facing a crossroad and are asking themselves: How do we manage risk today while planning for tomorrow, and what is our role as DC plans evolve from supplemental savings plans to primary retirement and savings vehicles? Results of the Willis Towers Watson's 2020 U.S. Defined Contribution Plan Sponsor Survey. Source: Willistowerswatson.com In contrast to the response during the 2008-09 financial crisis, more than 90 percent of employers will make their retirement plan contributions this year, though smaller organizations are more likely to have suspended or reduced plan contributions in the wake of the COVID-19 pandemic, according to this 7-page PSCA snapshot survey of retirement plan sponsors. Though most companies are not making changes to plan contributions this year, smaller organizations have been more impacted by current conditions and are thus more likely to have suspended or reduced plan contributions. Source: Psca.org Employers continue to evaluate company stock in light of litigation and single-stock risk as well as its impact on retirement accumulations. Plan sponsor interest surged in response to the 2014 Dudenhoeffer case. This 16-page paper begins with an overview of factors unique to company stock in DC plans. Next, it provides an overview of the characteristics of plan sponsors that actively offer company stock and the nature of company stock restrictions. It then considers two simple regression models, incorporating both participant demographics and plan design features, that examine holdings of company stock. Finally, it concludes with a discussion of our findings and with implications for plan sponsors. Source: Vanguard.com Employers Set Sights on Innovative 401k Plan Design Changes To boost their plans' value and enhance their employees' overall financial wellbeing, U.S. employers are eyeing innovative features for their defined contribution plans, according to a new survey. A Willis Towers Watson plan sponsor survey found that two in three employers either have or are very interested in adding at least one innovative design feature to their plan. Source: Napa-net.org »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers CITs Are Sweeping Through the Retail 401k Market At the 2020 InvestmentNews RPA Convergence CIO Roundtable and Think Tank, Jamie Battmer, chief investment officer for Resources Investment Advisors, said collective investment trusts were gaining so much momentum that "40 Act funds [in 401k plans] are going the way of checkbooks." There are many compelling reasons for this rather swift transformation in the retail 401k market. There are also still many questions about collective investment trusts, or CITs, but none of them seem to be show killers. Source: Investmentnews.com (registration may be required) Multiple Employer Plans (MEP) Pooled Employer Plans Glossary Pooled Employer Plans become a real thing as of the first of the year, though there is still a lack of guidance related to them. Many of you may now be pressed on the question of whether or not you or your clients should choose this road. This glossary should help you in your assessment of these arrangements. Source: Businessofbenefits.com Pooled vs. Single-Employer 401k Plans - Are PEPs for You? Supporters claim PEPs can offer lower fees for retirement savers and greater liability protection for business owners than a single-employer 401k plan. If you're a business owner, you should understand the differences between PEPs and SEPs to make the best choice for your company. Source: Employeefiduciary.com »» Click here for more on Multiple Employer Plans Compliance and Regulatory DOL Issues Final Rule on Proxy Voting and Shareholder Rights The DOL has announced a final rule establishing a regulatory framework for private employee benefit plans' fiduciaries to follow when they exercise shareholder rights, including proxy voting, and select and monitor proxy advisory firms. The final regulation includes delayed compliance dates to January 31, 2022, for certain recordkeeping and proxy voting requirements. Source: Planadviser.com Preparing for the End of the Plan Year Generally, retirement plans have compliance requirements that must be met annually, quarterly, or when some event happens. The end of the plan year tends to be a busy time for administration, as plan sponsors and service providers work to ensure that all requirements are met before another plan year has ticked away. But 2020 has presented unbelievably unique challenges. The CARES Act has provided us with some solutions to COVID-related problems, as well as several new twists to our usual operations. Source: Ferenczylaw.com Advance Copies of 2020 Form 5500 Released The DOL, IRS, and the Pension Benefit Guaranty Corporation have released advance copies of the 2020 Form 5500 and Form 5500-SF, as well as their schedules. They will be used for reporting information about the 2020 plan year. Source: Asppa.org IRS Issues Final Rollover Rules for Qualified Plan Loan Offsets The Internal Revenue Service released final regulations on December 7th relating to amendments made by the Tax Cuts and Jobs Act providing an extended rollover period for a qualified plan loan offset (QPLO). Source: Asppa.org IRS Issues Guidance on SECURE Act Provisions Easing Safe Harbor Plan Burdens The IRS on Dec. 9 issued guidance that addresses certain provisions of the SECURE Act that increase the automatic enrollment cap percentage and affect safe harbor plans, including safe harbor 401k plans and certain 403b plans. The guidance is contained in Notice 2020-86. Source: Asppa.org »» Click here for more Compliance and Regulatory Material Marketplace News NAPA Unveils the 2021 Top Retirement Plan Advisors Under 40 401k Plan Provider NWPS Bought by Raymond James Vanguard Broadens Access to Its Institutional Target-Date Funds Vestwell Partners With Envestnet to Offer Retirement Plan Solutions to Advisors Paychex Will Offer PEP in January NTSA Names Luckinbill as New Executive Director
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 on any website. 401khelpcenter.com, LLC
|
