Is Your 401k Plan on Course? A Checklist
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Fiduciary and Plan Governance Is Your 401k Plan on Course? A Checklist Keeping your 401k plan on course requires vigilance, and a good plan sponsor navigates more than just the investment climate and daily maintenance of the plan. Tracking a 401k plan includes thorough reviews throughout the year focused on fees and performance, compliance, and participant communication. Here is a concise checklist to keep your 401k plan on course. Source: Findley.com How to Make Your Investment Committee More Effective Would you like your investment committee to utilize best practices and produce better outcomes? This is a rundown from a recent episode of a podcast from Fiducient Partners that should prove insightful. Ten Habits of Effective Investment Committees is based on what the author has gleaned over the years from observing many well-run investment committees. Source: Fiducientadvisors.com In this article, CAPTRUST's Alysa Cronin takes a deep dive into potential 3(38) pitfalls for plan sponsors. Armed with insights from a few industry leaders, this easy read outlines key takeaways on four common plan sponsor pitfalls when selecting a 3(38) investment manager and how to avoid them. Source: Captrust.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers Has the Tide Finally Turned for Annuities? Investors apparently are eager for financial protection, but financial professionals continue to underestimate how much their clients are looking for protected income in retirement, according to a new study. As a joint research effort with both investors and financial professionals, the inaugural Protected Retirement Income and Planning Study by annuity proponents the Alliance for Lifetime Income and CANNEX finds that a majority (71%) of all younger investors have some interest in purchasing annuities as part of their overall retirement income plan. Source: Napa-net.org What Are the Most Common Matching Formulas? Employer matches in 401k plans are often used as a recruiting tool as part of employee compensation packages, but there are wide variations in the design of matching formulas. For example, consider that in 2020, Vanguard administered more than 180 distinct match formulas for plans offering an employer match, according to the firm's annual How America Saves report. Source: Napa-net.org 401k Survey Shows Sharp Increase in Confidence and Demand for Financial Advice Workers' confidence about achieving retirement goals has risen sharply since last year according to a new survey from Schwab Retirement Plan Services, and so has their appetite for financial advice. The annual nationwide survey of 401k plan participants finds that more than half (53%) say they are very likely to achieve their retirement goals, compared to 37% in 2020. On average, plan participants in 2021 believe they need to save $1.9 million for retirement, the same amount as in 2020. Ninety-one percent say their financial health is very good or pretty good. Source: Businesswire.com »» Click here for More Studies, Research, and White Papers 403b Plans Duke Reinstates 403b Match and Takes It One Step Further Duke University, which recently announced that it will provide a lump-sum contribution to its 403b Faculty and Staff Retirement Plan participant accounts valued at the contributions they would have received from Jan. 1, 2021, through June 30, 2021, in addition to restoring employer contributions effective July 1, 2021. Source: 401kspecialistmag.com »» Click here for More 403b Material Cyber and Plan Security DOL Ups Game on Cybersecurity Program Oversight, Begins Audit Initiative In light of a new DOL audit initiative and increasing cybersecurity threats to ERISA benefit plans, ERISA plan sponsors and fiduciaries should be prepared to answer some important questions: Do the cybersecurity programs of you and your service providers comply with DOL guidance? Do your contracts with service providers include appropriate data protection provisions? Are you and your service providers doing enough to protect your employees and ERISA plan participants? Source: Pillsburylaw.com The DOL Commences Cybersecurity Audit Activity The Department of Labor is moving quickly to audit cybersecurity protocols. Businesses that have not yet addressed their cybersecurity practices and compliance plans must do so immediately. Example DOL audit questions provided. Source: Nixonpeabody.com Protecting Employee Retirement Savings From Cyber Criminals Companies that sponsor 401k plans have a fiduciary obligation to protect the individual retirement accounts of their employees from cyber theft. Currently, there are approximately 106 million defined contribution plans in the United States, which hold almost $6.3 trillion in employee retirement savings. Unfortunately, over the last couple of years, cyber theft has become an increasing risk for companies that sponsor 401k plans. Source: Masudafunai.com »» Click here for more on Cybersecurity Issues Compliance and Regulatory IRS Again Extends Temporary Relief From Physical Presence Requirement for Retirement Plan Consents The IRS issued Notice 2021-40, extending guidance released under Notice 2020-42 and previously extended by Notice 2021-03, which provided temporary relief from the physical presence requirements for certain elections that are made by participants and beneficiaries in qualified retirement plans and other tax-favored retirement arrangements. The additional extension provides relief through June 30, 2022. Source: Ascensus.com Loan Interrupted: What Happens to a Defaulted Plan Loan? Most DC plans allow participants to take a loan from their plan account. One reason for the popularity of the loan feature is that workers may be more likely to participate in the employer's plan if they know they can access their savings before retirement if a need arises. When a plan loan complies with the tax laws and the plan's loan policy, it is repaid on schedule and the participant restores their savings, with interest, to their plan account. When something goes awry, such as a missed payment that is not made up, the plan loan is in default. To keep the plan in compliance, plan sponsors that allow plan loans must understand the loan rules and what happens when a loan is in default. Source: Newportgroup.com IRS Releases Final Regs on Deadline Extensions for Federally Declared Disasters The IRS issued its Final Regulations on the subject of the mandatory, minimum 60-day postponement of certain tax-related deadlines due to "federally declared disasters" under the Taxpayer Certainty and Disaster Tax Relief Act of 2019, passed as part of the Further Consolidated Appropriations Act of 2020. The Final Regulations, which affect retirement plans (including 401k plans), are substantially unchanged from Proposed Regulations which were issued on January 13, 2021. Source: Compliancedashboard.net Plan Terminations: A Refresher A defined contribution plan can be terminated by a stand-alone resolution to terminate, by plan amendment, or by a combination of resolution and amendment. Kelsey Mayo, ASEA Director of Regulatory Policy and Partner at Poyner & Spruill LLP, suggested reviewing the plan to ensure that any specifically required action is taken and setting the termination date. In this article, Mayo discusses a variety of specific matters relevant to DC plan terminations. Source: Asppa.org Updated Issue Snapshot - Hardship Distributions from 401k Plans A 401k plan may permit the distribution of certain contributions (and attributable earnings) on account of an employee's hardship, but only if made following rules contained in the regulations under IRC Section 401(k). This Snapshot examines the criteria for current hardship distributions. Source: Irs.gov DOL to Act on Credit Rating Use in 401k Fiduciary Decisions As a result of confusion and manipulation by certain credit rating agencies during the financial crisis of 2008, the Dodd-Frank Wall Street Reform Act blocked the use of credit ratings for exemptions from prohibited transactions. Now the DOL announced it will reopen the comment period on proposed amendments to six class exemptions from prohibited transaction rules related to Dodd-Frank's credit rating prohibition. Source: 401kspecialistmag.com »» Click here for more Compliance and Regulatory Material Marketplace News TRA Completes Acquisition of Total Retirement Solutions American Trust to Acquire LT Trust Capitalize and Bankrate Partner to Help Users Find and Roll Over Legacy 401k Accounts FuturePlan by Ascensus Expands Sales Team
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