DOL Begins Its Cybersecurity Audit Initiative and It's a Doozy
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Cyber and Plan Security DOL Begins Its Cybersecurity Audit Initiative and It's a Doozy The DOL has begun issuing information and document requests under their new cybersecurity practices initiative, and the requests are probing and indicate serious inquiry by the DOL. News of the DOL beginning this audit program should not come as a surprise. However, it is fair to say that both the pace with which the DOL has begun its audits and the depth and breadth of the initial round of requests is surprising. Source: Morganlewis.com »» Click here for more on Cybersecurity Issues Fiduciary and Plan Governance Retirement Plan Fiduciaries and the DOL Invest. Advice Rules The DOL's latest attempt to address these concerns is Prohibited Transaction Exemption 2020-02. This guidance offers important takeaways for employer-plan fiduciaries concerning hiring and monitoring: (1) those who advise you about the investment funds that should be included in the plan; and (2) those who provide advice to participants about their investment fund selection in the plan or on rollovers. Source: Wnj.com Collective Investment Trusts: An Important Fiduciary Consideration CITs are often less expensive to create/maintain and may be more flexible than their mutual fund counterparts given that they are subject to a different regulatory framework. While this may be a benefit to their fee structure, it can also be challenging because CITs often suffer misconceptions when compared to mutual funds. This article reviews some of the most common misconceptions and frequently asked questions by fiduciaries. Source: Manning-Napier.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers 2021 Retirement Confidence Survey: A Closer Look at Black and Hispanic Americans The Retirement Confidence Survey was conducted for its 31st year in 2021 to measure attitudes of American workers and retirees about issues surrounding retirement. The 2021 RCS included an oversample of Black and Hispanic Americans to allow for a closer analysis of the challenges that they face in saving and preparing for retirement. New questions were added this year to explore the impact of the COVID-19 pandemic, evaluate priorities regarding preparing for retirement, and understand experiences with the financial system that may affect Black and Hispanic Americans' retirement preparations. Source: Ebri.org »» Click here for More Studies, Research, and White Papers Court and Legal Eye on ERISA: A Chat With Groom Law's Litigation Chair Groom principal and head of its litigation practice, Lars Golumbic, recently discussed ERISA litigation trends and how benefits law has evolved over the years in an interview with Law360. In the article, Golumbic shared his thoughts on several topics ranging from what issues he's keeping a close eye on to offering advice to future ERISA litigators. Source: Groom.com Excessive Fee Lawsuits Expected to Continue to Rain Down on Plans There have been approximately 200 "cookie-cutter" ERISA class-action lawsuits filed against retirement plans since 2015, including more than 90 cases filed in 2020 alone. With more "cookie-cutter" cases being filed, especially when the qualified default investment alternative is a "big ticket" target-date fund, there is no sign of these suits slowing down. Source: Planadviser.com Wake Forest University Baptist Medical Center Sued Over 403b Plan Fees Wake Forest University Baptist Medical Center, its board of directors, and its retirement benefits committee have been sued for allegedly failing to ensure the plan and its participants paid reasonable fees for investments and administration. The complaint alleges that many of the mutual funds in the Wake Forest Baptist Medical Center 403b Retirement Savings Plan were more expensive than comparable funds found in similarly sized plans, those with more than $1 billion in assets. Source: Planadviser.com Court Limits Fiduciary Breach Lawsuit to Claims Against Plan Sponsor and Plan Committee It is not uncommon for fiduciary claims to be brought initially against every plausible party, including the plan sponsor's board and its members, and various individual employees. An interesting aspect of this case is the relative ease with which the court strips away the claims against individuals and the board in light of the plan sponsor's delegation of investment authority to the plan committee. Source: Thomsonreuters.com ERISA Excessive Fee Lawsuit Filed Against Generac Power Systems Generac Power Systems and its board of directors have joined the list of recent targets of an ERISA excessive fee lawsuit. The complaint includes allegations similar to those in many suits filed over the past few years. Source: Planadviser.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC Podcast: Five Intriguing Aspects of SECURE 2.0 Nevin Adams and Fred Reish take a look at five key provisions, their implications for retirement, and for the retirement security of millions of working Americans. Source: Asppa.org Kennedy Introduces Bills to Boost Retirement Savings Two bills have been introduced in the U.S. Senate designed to help Americans keep -- and have more control over -- their retirement savings. Sen. John Kennedy introduced the Keeping Your Retirement Act and the Increasing Retirement Amount Act on June 7. Source: Napa-net.org »» Click here for more on Legislative and Washington Actions State-Based Private-Sector Retirement Programs Empire State Poised to Enact Mandatory Auto-IRA Program The New York State legislature has taken another big step toward enacting a mandatory auto-IRA program. The State Senate voted 44-19 on June 7 to approve NY A03213-A, legislation that would convert the existing New York state secure choice auto-IRA saving program from being voluntary to mandatory for private-sector employers that do not offer a retirement plan and employ 10 or more employees. The legislation is now cleared for the signature of New York Gov. Andrew Cuomo. Source: Napa-net.org Compliance and Regulatory ERISA Expense Account Considerations Many 401k plans contain spending accounts funded by revenue-sharing generated by a plan's mutual fund holdings. These accounts are often referred to as ERISA expense accounts, revenue-sharing accounts, or plan expense reimbursement accounts, and can cause complications for plans if not administered properly. A misstep with the use of these funds could result in participant claims. Accordingly, before utilizing these funds, plan sponsors should use care and consider the questions reviewed here. Source: Haynesboone.com Here Are the Top 10 EBSA Enforcement Categories A new report from the Government Accountability Office sheds new light on enforcement activities of the DOL's Employee Benefits Security Administration. The 56-page report provides what amounts to a tutorial about EBSA's enforcement activities. It found that the 10 most frequent violation categories account for almost 97% of all violations. In the retirement space, the most common ERISA violation categories are summarized here. Source: Napa-net.org Primer on the Code's Required Minimum Distribution Rules: Post SECURE Act In discussing how monies are distributed from a qualified retirement plan, employees generally fall into one of three camps: those that want distributions as quickly as possible; those that want the distributions during and for the sole purpose of retirement; and those that wish to defer having any distributions paid to them, to continue the tax shelter for as long as possible. This article is directed to the employees within the last camp. In a nutshell, the minimum distribution rules have been devised as a tax penalty provision to prevent employees and their beneficiaries from totally deferring benefits under a qualified retirement plan, an IRA, a 403b plan, or a 457 eligible deferred compensation plan, and thereby transferring such monies income tax-free to the subsequent generations. Source: Wagnerlawgroup.com SAS 136: The New Audit Standard for Employee Benefit Plans and Its Impact on Plan Sponsors The American Institute of Certified Public Accountants issued a new audit standard for employee benefit plans in July 2019. The new standard is commonly referred to as SAS 136. Although SAS 136 imposes new duties on auditors, plan sponsors also have increased responsibilities under this new standard. So plan sponsors may want to become familiar with the new rules now to ensure they are prepared. Source: Ogletree.com »» Click here for more Compliance and Regulatory Material Marketplace News Betterment's 401k Business Partners With Benefits Platform Lumity ForUsAll Introduces the Alt 401k With Cryptocurrency and Alternative Investments
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