2021 Recordkeeping Survey
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 In This Issue
Insight: Studies, Research, and White Papers The annual PLANSPONSOR Recordkeeping Survey is compiled from self-reported data submitted by recordkeepers of defined contribution plans. This year's results represent nearly $9 trillion in DC assets and are estimated to account for over 90% of the total DC market, according to internal analysis based on the "2021 Investment Company [Institute] Fact Book." Source: Plansponsor.com The RIA Benchmarking Study by Schwab Advisor Services is a leading study of the RIA industry. The study features insights based on self-reported information on topics such as asset and revenue growth, sources of new clients, products and pricing, staffing, compensation, marketing, technology, and financial performance. Now in its fifteenth year, more than 1,300 independent advisor firms representing over $1.5 trillion in AUM participated in this year's study. Source: Schwab.com More Plan Sponsors Meeting Members' Retirement Goals in 2021: Survey A majority (72 percent) of plan sponsors believe their retirement savings plan is meeting its goals this year, up from roughly 66 percent in 2020, according to a new survey by Fidelity Investments Inc. While 68 percent said their employees are saving enough for retirement -- up from 59 percent in 2020 -- 86 percent believe at least some members are delaying retirement due to a savings shortfall and 60 percent believe the coronavirus pandemic has had an impact on employees' retirement decisions. Source: Benefitscanada.com »» Click here for More Studies, Research, and White Papers Fiduciary and Plan Governance Do You Understand Your Investment Policy Statement? Even the most thorough and detailed IPS will be of limited utility unless the plan fiduciaries who are adopting the IPS can understand the document. For that reason, an IPS should: (1) provide meaningful guidelines that committee members can apply in fulfilling their duties; and (2) be written a way that an intelligent and engaged committee member can understand and implement. Source: Verrill-law.com »» Click here for more Fiduciary and Plan Governance Material Items of Special Interest to Service Providers What Empower's Purchase of Pru's Retirement Business Means for Advisers Recordkeeper consolidation is happening even faster than predicted, in part because of the recent Empower buying spree, which continued recently with its purchase of Prudential's retirement business. But what does that mean for both specialist and generalist retirement plan advisers? Source: Rpaconvergence.com DOL Official Sheds Light on Rollover Recommendations Cautioning those looking to "game the system," a senior Labor Department official affirmed July 27 that suggesting investments that could occur after a rollover is tantamount to recommending the rollover, and if it meets the rest of the five-part test will constitute fiduciary advice regardless of how it's phrased. Source: Asppa.org Court and Legal A Ninth Circuit Ruling Reminds ERISA Plans of the Importance of Administrative Accuracy The Ninth Circuit's recent decision in Bafford v. Northrop Grumman affirmed the district court's dismissal of the plaintiffs' breach of fiduciary duty claims under ERISA but vacated the district court's holding that state-law professional and negligent misrepresentation claims were preempted. The plaintiffs alleged that Northrup, the Committee, and the recordkeeper breached their fiduciary duties and failed to provide benefits information required under ERISA. In addition, the plaintiffs alleged that the recordkeeper was liable for professional negligence and negligent misrepresentation. Source: Faegredrinker.com Plaintiff Lacks Standing to Challenge Retirement Plan Investment Options and Fees On July 16, 2021, the District Court for the Western District of Wisconsin dismissed without prejudice four ERISA claims brought by a former employee alleging mismanagement of Infinity's DC 401k plan. Plaintiff alleged that plan fiduciaries violated their fiduciary duties by offering allegedly imprudent, actively managed investment options, and by paying excessive administrative and recordkeeping fees. The court found that the plaintiff lacked standing to assert her ERISA claims for two main reasons. Source: Erisalitigationadvisor.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC Senate Democrats Introduce Bill Providing 401k, IRA Match Ron Wyden, the ranking member of the Senate Finance Committee, and six other Democratic senators have introduced legislation that would enhance the incentives to save for retirement. The existing nonrefundable saver's credit would become a $1,000-a-year matching contribution from the government. Source: Investmentnews.com (registration may be required) President Biden has nominated Lisa M. Gomez for Assistant Secretary of Labor for the Employee Benefits Security Administration. Ms. Gomez is a partner at the law firm of Cohen, Weiss and Simon and chair of the firm's management committee. Source: Ascensus.com »» Click here for more on Legislative and Washington Actions Cyber and Plan Security Cybersecurity: Another Responsibility for Retirement Plan Sponsors and Fiduciaries The focus on cybersecurity implies that the DOL will start to hold plans and their fiduciaries accountable for cybersecurity. Besides the specter of a DOL enforcement action, this guidance should remind plan sponsors that if a cybersecurity breach ever impacts their plan, they need to be prepared. Class action lawsuits that argue that they chose the wrong service provider or that PII was misused or not protected are possible. Source: Enterpriseiron.com The DOL updated its audit inquiries to include probing questions for plan fiduciaries about their compliance with agency cybersecurity guidelines. So, what do those inquiries look like? In short, the DOL is asking plan sponsors to produce: "all documents relating to any cybersecurity or information security programs that apply to the data of the Plan, whether those programs are applied by the sponsor of the Plan or by any service provider of the Plan." Source: Benefitslawadvisor.com DOL Cyber Scrutiny Higher for "Those Running the Systems" The DOL wants everyone to be attentive to cybersecurity protocols as a fiduciary responsibility, but there's a higher expectation for those "running the systems" according to Tim Hauser, Deputy Assistant Secretary for National Office Operations at the Department of Labor's Employee Benefits Security Administration. Source: Napa-net.org »» Click here for more on Cybersecurity Issues Compliance and Regulatory DOL Clarifies Lifetime Income Disclosure Requirement Section 203 of the SECURE Act amended ERISA to require 401k and other DC plans to include an LII annually as part of participant benefit statements. On July 26, 2021, the DOL issued a brief set of Frequently Asked Questions clarifying certain issues related to the interim final rule implementing the lifetime income illustration. Source: Groom.com The AICPA postponed the mandatory effective date of the new audit standard, SAS 136, until next year, but the DOL had already updated Form 5500 to incorporate the new reporting rules. So now what? Source: Belfint.com Khawar: Cryptocurrency Guidance on the Horizon Speaking July 27 at the 2021 NAPA D.C. Fly-In Forum, the Acting Assistant Secretary for the DOL's Employee Benefits Security Administration outlined the key areas the department is working on, including both cryptocurrency and cybersecurity issues. Source: Asppa.org »» Click here for more Compliance and Regulatory Material Marketplace News Empower Sues Holder of Empower.com Domain Aon-Willis Towers Watson Merger Proposal Called Off
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