Plan Committee Checklist to Reduce Your Risk of an Excessive Fee Lawsuit
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Fiduciary and Plan Governance Plan Committee Checklist to Reduce Your Risk of an Excessive Fee Lawsuit Your plan committee can have the most diligent process for choosing and monitoring plan administration and investments, but that will not prevent an excessive fee lawsuit. Even plans with the best consultants and quality 3(21) and 3(38) fiduciary investment advisors still get sued. Here is a checklist to help de-risk your plan. Source: Euclidspecialty.com Tips for Plan Committee Best Performance Plan committees serve an important role, helping plan sponsors provide benefits, as well as protecting the plan and plan sponsor. A recent blog entry offers tips on how a plan committee can best perform its duties. Source: Ntsa-net.org Who is Responsible for Plan Mistakes? Benefits of Outsourcing Plan Administration Who is responsible when a plan fails to apply the correct definition of compensation in determining benefits, fails to calculate vesting service correctly, or doesn't make distributions to participants who need to get required minimum distributions? Plan sponsors are often surprised to learn that they are. This article reviews why your recordkeeper is not responsible. Source: Cohenbuckmann.com Changing DC Plan Recordkeepers Can Be Complex Although DC plan services have become more standardized over the years, the process of moving from one recordkeeper to another is complex. Risks associated with a conversion include the potential for unexpected disruption to participant accounts, lengthy blackout periods, lost data, costly reconciliations, and misunderstood communications. This paper covers steps for successful implementation and management of risks, three critical components of painless recordkeeper transition, and common transition challenges. Source: Segalco.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers Data on Retirement Contributions to Defined Contribution Plans Individuals can save for retirement in two types of tax-advantaged accounts: defined contribution and individual retirement accounts. This Congressional Research Service report provides Internal Revenue Service data on contributions to DC accounts in 2018. Source: Crsreports.congress.gov »» Click here for More Studies, Research, and White Papers 403b Plans IRS Updates Universal Availability Requirement Information for 403b Plans The IRS has updated the information it provides concerning the universal availability requirement for 403b plans. The information is contained on the IRS website, with hyperlinks to additional resources. Source: Ntsa-net.org »» Click here for More 403b Material Court and Legal District Court Partially Dismisses ERISA 401k Fee and Performance Claims for Lack of Standing A federal district court in New York recently granted Omnicom Group Inc.'s motion to dismiss, for lack of Article III standing, claims challenging the offering of investment options in Omnicom's 401k plan in which the plaintiff participants did not invest. The court denied Omnicom's motion to dismiss, however, with respect to the remainder of the claims, which alleged that Omnicom's administrative committee breached its fiduciary duties under ERISA by including allegedly costly and underperforming funds in its 401k plan, causing the plan to pay excessive recordkeeping fees and offering an investment lineup that was overly expensive. Source: Erisapracticecenter.com Embezzler's 401k Tapped for Restitution Can a 401k account be accessed as restitution for embezzlement from the company that sponsors the 401k? In the case at hand (United States v. Frank), Jon Lawrence Frank embezzled over $19 million from his former employer, NCI Information Systems. This appeal arises out of the government's effort to garnish Frank's 401k retirement account under the Mandatory Victims Restitution Act of 1996 to "further satisfy the criminal restitution order against him." Source: Asppa.org Law Group Argues That Court Misapplied "Thole" Ruling in ERISA Case An amicus brief filed in a case involving Universal Health Services says a district court erred when it found the plaintiffs have standing to sue over 401k plan investments in which they did not invest. Source: Planadviser.com Plaintiffs Make a Splash in SeaWorld 401k Lawsuit SeaWorld this week was sued by several participants in its $310 million 401k plan, allegedly for letting fees for investments and service providers run out of control. Part of the case involves adviser compensation. Source: Investmentnews.com (registration may be required) 6th Circ Rejects Bankruptcy Shield for 401k Contributions, in Certain Cases Individuals who have filed for Chapter 13 bankruptcy may not protect 401k contributions from creditors if they were not already making those contributions in the months leading up to the bankruptcy, an appeals court ruled. Source: Reuters.com 401k Suit Claims Higher Revenue-Sharing Funds Should Have Been Used Had Juniper Networks' plan used higher-revenue-sharing share classes, net costs conceivably could have been lower, if those fees were rebated back to participants, according to the complaint. Source: Investmentnews.com (registration may be required) »» Click here for more Court and Other Legal Issues Compliance and Regulatory Who is Considered an Employee for Retirement Purposes? Who is considered an employee for retirement purposes? Why is it important? The answer to this question can be very complex and cause issues when not done correctly. Source: Consultrms.com How Important are Beneficiary Forms? When hiring a new employee, one of the initial tasks given to that employee is completing various beneficiary forms for the company's benefit plans. Most people will fill it out and not think about that initial election ever again. Some employees may not fill one out at all. So, why is it a big deal? Source: Consultrms.com Form 5500 Clarification: Better Late Than Never One of the highly useful provisions from the SECURE Act is the ability to adopt a new plan after the end of the plan year, as late as the filing deadline for the employer's tax return. This provision created a significant question concerning Form 5500 filing: does a plan that was adopted after the end of 2020 but effective for 2020 (and for which there were no plan assets as of December 31, 2020) need to file a Form 5500 for the 2020 year? Source: Ferenczylaw.com DOL "Encourages" Retirement Plan Fiduciaries to Recoup Uncashed Checks From Prior Recordkeepers Taking the form of a letter-based initiative, the DOL is now urging retirement plan fiduciaries to recoup amounts held by former recordkeepers or paying agents that might have been overlooked during the transition of the service provider relationship to a new vendor. These letters notify retirement plan fiduciaries of the existence of small uncashed check balances, and direct plan fiduciaries to coordinate with former recordkeepers to restore these amounts to the participants and beneficiaries who failed to cash distribution checks. Source: Morganlewis.com »» Click here for more Compliance and Regulatory Material Marketplace News 'American 401k PEP' Debuts from Pentegra, Leafhouse Financial New 401k 'FORT' Resource Available to Protect Plan Sponsors Principal Completes Integration of Wells Fargo Institutional Retirement Business
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