A Checklist for Retirement Plan Committees
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Fiduciary and Plan Governance A Checklist for Retirement Plan Committees Given that there are so many considerations to weigh when overseeing a retirement plan, it is important for plan sponsors to have a checklist for their committees -- whether the sponsor has a single retirement plan committee or dual investment and administrative committees -- to cover in quarterly meetings. Experts discuss what main facets of a retirement plan that a committee should cover in its quarterly meetings. Source: Plansponsor.com The Benefits of Enacting a Plan Sponsor Philosophy Overwhelmed by a lengthy to-do list, including the perpetual need to meet ERISA regulatory obligations, plan fiduciaries often lose sight of the foundation for sponsoring a retirement plan: its purpose. Enacting a Plan Sponsor Philosophy is an effective way for committee members to remind themselves of this basic goal. Unlike a Committee Charter, which sets the lines of authority, or an Investment Policy Statement, which outlines acceptable actions, a philosophy defines a retirement plan's purpose, making it a useful reference tool for committees during the decision-making process. Source: Porteval.com Evaluating Target-Date Funds Is a Fiduciary Responsibility Many fiduciaries responsible for selecting their 401k plan's target-date funds don't understand how these funds work. The risk of staying ignorant is increasing. Lawsuits challenging target-date fund selection are on the rise, and plan fiduciaries need to be able to defend their choices in response to these suits. New products, such as target-date funds that provide lifetime income options or make private equity investments are becoming available. For all of these reasons, if target-date funds are included in a plan's investment menu, fiduciaries need to develop a prudent process for evaluating the funds in partnership with their investment professionals. Source: Cohenbuckmann.com »» Click here for more Fiduciary and Plan Governance Material General Items How to Effectively Measure Retirement Plan Success According to Vestwell's "2020 Retirement Trends Report," plan advisers and sponsors use different metrics to determine the success of retirement plans. But it is important for plan sponsors to define plan goals and what they are going to measure, and the defined metrics should be things they can influence. Source: Plansponsor.com Insight: Studies, Research, and White Papers 401k Plan Asset Allocation, Account Balances, and Loan Activity in 2018 Since 1996, the Employee Benefit Research Institute and the Investment Company Institute have worked together on collecting and analyzing annual data on millions of 401k plan participants' accounts. This new 36-page report reflects the year-end 2018 update of these data and EBRI and ICI's ongoing research into 401k plan participants' activity. Source: Ebri.org Women Outperform Men in Managing DC Plans: Morningstar Women who are administrators of DC plans do a better job of managing than their male counterparts in key areas considered progressive practices by Morningstar. The research firm found that female administrators were more likely than their male counterparts to use auto-enrollment, offer default investments, and practice good governance according to ERISA guidelines. Source: Pionline.com »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers When Lightning Strikes, How to Create Great Content Ever have a great idea and just run with it? Whether it's a new blog article, lead generation email campaign, or a new prospect presentation deck. Those are magic moments when everything just clicks. Awesome, keep the ideas flowing. Then stop. Take a moment to look at what you've created. Then before you share with your clients, prospects, centers of influence, and compliance teams, ask yourself, how does this reflect my 401k advisor brand? Source: 401k-marketing.com Court and Legal Principal Life Insurance Named in Self-Dealing ERISA Suit A new ERISA lawsuit filed in the U.S. District Court for the Southern District of Iowa accuses the Principal Life Insurance Co. of committing various fiduciary breaches in the operation of two retirement plans open to its employees. Related self-dealing claims made against other national financial services providers by participants in their retirement plans have met varying degrees of success. Source: Planadviser.com Another Lawsuit Concerning 401k Theft Theft of 401k account balances by cyber criminals or other types of criminals is an actual thing and they will become more and more popular as long as third-party administrators fail in their role and don't use common sense. The latest lawsuit by Raymond J. Mandli and Mandli Communications, Inc. claims that the TPA, American Trust made an unauthorized distribution in the total amount of $124,105 from Mr. Mandli's plan. Source: Jdsupra.com Practice of Rebranding Investments Questioned in ERISA Lawsuit The American Red Cross is accused of allowing excessive investment and recordkeeping fees in its 401k plan. The defendants are also accused of failing to timely consider available collective investment trusts that were identical to the funds offered by the plan and lower in cost. The complaint explains that the plan has engaged in a rebranding process in which it contracts with providers of CITs to offer each provider's CIT bearing the Red Cross name with the only difference being an additional cost. Source: Planadviser.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC Freeze on 401k Contribution COLAs Removed From Stimulus Bill The American Retirement Association announced Thursday that, after a week of intense lobbying by the industry advocacy organization, the freeze on the annual cost-of-living adjustments (COLAs) for contributions to defined contribution plans contained in the stimulus bill supported by President Biden has been pulled. Source: 401kspecialistmag.com »» Click here for more on Legislative and Washington Actions State-Based Private-Sector Retirement Programs Oklahoma Latest State to Consider Employer-Mandated IRA Oklahoma lawmakers have begun the process of establishing a statewide program requiring most employers without a workplace retirement plan to offer one to employees, according to legislation posted on the Oklahoma State Legislature website. Source: Pionline.com Compliance and Regulatory The Consequences of Excessive Matching Contributions and the Truth About True-Ups Some employers match participants' deferrals after the end of the plan year, while others match those deferrals throughout the year. When matches are made on each payroll, over and under contributions can result. An excessive employer match is a compliance issue. It's important to have a conversation with your plan's TPA to help identify the possible actions and deadlines should excessive matches occur, as well as whether the plan allows for true-ups. Source: Alliant401k.com COVID-19 Deadline Extensions -- No More Time Outs but No Single Deadline Either The DOL has released Disaster Relief Notice 2021-01 that attempts to resolve a potential conflict with other statutory guidance under ERISA Section 518 and Code Section 7508A, which technically limits the allowable deadline extension period to a maximum of 1 year. Unfortunately, this Notice now results in new deadlines that can apply immediately and will differ based on individual events. Source: Benefitslawadvisor.com What Plan Sponsors Need to Know About Upcoming Changes to ERISA Plan Audits Employee benefit plan sponsors and their auditing firms need to begin preparing for the adoption of Statement on Auditing Standards No. 136. This auditing standard was enacted by the American Institute of Certified Public Accountants and was effective for years ending after December 15, 2020. While the AICPA delayed the effective date by one year due to the COVID-19 pandemic, auditing firms may choose to adopt the standard on the original effective date. Plan sponsors will need to take the time to understand SAS 136 and its effect on the audit process. Source: Bdo.com Increased Penalties for Late 5500 Filings As part of the release of the 2021 annual adjustment to the civil monetary penalties, the DOL has provided benefit plans with the ever-important reminder of the severity of the penalties that can be assessed for failing to file Form 5500. Effective for penalties assessed after January 15, 2021, the DOL per day penalty for failure to properly file an annual report has increased from $2,233 to $2,259, with no maximum. In addition to the DOL penalties, the IRS can also assess a penalty for late filers up to $250 a day, up to a maximum penalty of $150,000 per plan year. Source: Graydon.law »» Click here for more Compliance and Regulatory Material Marketplace News Ascensus Announces Completion of Truist Retirement Recordkeeping Acquisition Betterment Partners With Zenefits on 401k Deal Retirement Industry Specialists Create A Powerful New Partnership
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