A Volatile Stock Market is a Menace for Fiduciaries
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Newsletter Sponsor Fall is Upon Us.... What a great time to benchmark your 401k plans The 21st Edition of the 401k Averages Book is a great resource for fee benchmarking data. Use the 401k Averages Book to better understand investment, recordkeeping and revenue sharing expenses for 401k plans. Still the most recognized resource book for comparative, non-biased 401k average cost information. Click here to order your copy. In This Issue
Fiduciary and Plan Governance A Volatile Stock Market is a Menace for Fiduciaries Plan sponsors face peculiar challenges when securities markets swing wildly. The novel COVID-19 pandemic ushered in a period of severe volatility in the stock and bond markets. Combine that with employees riddled with anxiety about the safekeeping of their retirement plan assets, and the scope of a fiduciary's burden seems unmanageable. On any regular day, the legal duty imposed on the members of investment and benefit plan committees is already formidable. The antidote for such challenging conditions is a precise and disciplined management process built on a foundation of principled standards. This 5-page article discusses ways duty-bound executives can cut their legal risks and sustain peace of mind despite our chaotic times. Source: Rolandcriss.com Dust Off Your ERISA Fiduciary Liability Insurance Policy Now is a great time to dust off your company's ERISA fiduciary liability policy to ensure your plan fiduciaries have robust, comprehensive coverage. Fiduciary liability policies provide coverage for claims related to the administration and operation of retirement and health and welfare plans. Unlike D&O coverage, fiduciary liability policies rarely get much attention but can similarly provide significant protection to a company's Board or other plan fiduciaries. Source: Benefitslawadvisor.com Reports are plentiful of employers trapped in legal proceedings for violating their trusted role as the overseer of their employees' retirement plans. Until recently, we only heard rumors of suspected lethargy among the overseers. But the frequency and number of failed leadership allegations among them on social media, in the 24-hour broadcast news cycle, and print media tends to taint the reputations of all employers in the public eye. Wisdom calls for a change in fiduciary behavior. Source: Rolandcriss.com Keeping Retirement Plan Committees "In-Shape" With Fiduciary Training The expertise and overall fitness of your organization's retirement plan committee are dependent upon their level of training: in this case, fiduciary training. Find out who should be included in this training, what it should cover and why, and how often fiduciary training should take place. Source: Francisinvco.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers 401k Plan Sponsors See Value in Using a Single Recordkeeper Plan sponsors using a single recordkeeper to manage multiple retirement plans see better overall time savings and fewer administrative drawbacks when compared to sponsors using multiple providers. That's a key finding from a survey released today by Principal Financial Group, which also revealed that respondents with one provider also reported higher rates of employee satisfaction and engagement with retirement benefits. Source: 401kspecialistmag.com Since 1996, the EBRI and the ICI have worked together on collecting and analyzing annual data on millions of 401k plan participants' accounts. This 21-page report analyzes 401k plan participant's use of target-date funds using year-end 2018 data from the EBRI/ICI 401k database. Key findings are summarized. Source: Ebri.org Most Retirement Plan Savers Aren't Tapping Their Accounts Despite Pandemic Americans continued to save for retirement through DC plans during the first half of this year despite ongoing economic stresses brought about by the COVID-19 pandemic, according to ICI's "Defined Contribution Plan Participants' Activities, First Half 2021." The study tracks contributions, withdrawals, and other activity in 401k and other DC retirement plans, based on DC plan recordkeeper data covering more than 30 million participant accounts in employer-based DC plans at the end of June 2021. Source: Ici.org »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers DOL Fiduciary Rule 3.0: The Sprint to December 20 In the absence of further direction from DOL, it now has become incumbent on firms to accelerate their Rule 3.0 compliance project if the December 20 date is to be met, and in particular to implement PTE 2020-02 or an alternative solution if they are or may be serving as a fiduciary in rollover interactions. Source: Eversheds-Sutherland.com Fight Over DC Participants Tests Advisers' Partnerships With Providers Providers cannot hope to create a sales force that competes with the 25,000 RPA specialists and hundreds of thousands of RIAs that dabble. But once the plan is sold, who has the right and ability to monetize the participants? Source: Investmentnews.com (registration may be required) 403b Plans IRS Announces Opening of the Second 403b Pre-Approved Plan Cycle Like the pre-approved plan document program for 401k plans, the 403b pre-approved plan document program is intended to be on a regular 6-year cycle. Many 403b plan providers and eligible employers, particularly QCCOs and Non-QCCOs, have been wondering when the second cycle would begin and what changes it might include. The IRS has now issued guidance on Cycle 2. Source: Groom.com »» Click here for More 403b Material Court and Legal Oshkosh ERISA Challenge Squashed by District Court Following oral testimony and arguments in December, the U.S. District Court for the Eastern District of Wisconsin has ruled against the plaintiffs in an ERISA fiduciary breach lawsuit filed against Oshkosh Corp., its board of directors, its retirement plan administration committee, and some 30 individuals alleged to be fiduciaries. The lawsuit has been dismissed under Federal Rule of Civil Procedure 12(b)(6), with prejudice, based on the court's conclusion that the amended complaint fails to state a claim upon which relief can be granted. Source: Planadviser.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC Ways and Means Greenlights Automatic Retirement Arrangements The House Ways and Means Committee has approved the retirement subtitle of the Build Back Better Act as a way to help close the coverage gap and boost the existing retirement savings system. Among other things, the legislation would require employers without employer-sponsored retirement plans to automatically enroll their employees in IRAs or 401k-type plans. Source: Napa-net.org »» Click here for more on Legislative and Washington Actions Cyber and Plan Security Plan Cybersecurity Guidance: DOL Enforcement Warrants Plan Sponsor Action Benefit plan sponsors and plan fiduciaries should take note and act quickly. The Department of Labor has issued a new cybersecurity guidance package with far-reaching effects and has already begun including this in its enforcement efforts. Source: Poynerspruill.com »» Click here for more on Cybersecurity Issues Compliance and Regulatory Essential Form 5500 Filing Guidance for 401k Plan Sponsors It's important to understand that the signer of Form 5500 is considered a plan fiduciary who has potential personal liability for the compliant administration of the 401k plan. This includes being responsible for the accuracy of the information contained on Form 5500. Accuracy is important not only because it's part of operating compliantly but because errors on Form 5500 can raise a red flag for the IRS or the DOL and could trigger an audit. Source: Alliant401k.com DOL Watchdog Recommends Additional Action to Inform 401k Participants About Fees The DOL could take steps to help 401k participants better understand the fees they pay as part of their retirement plans, according to the results of a July study by the U.S. Government Accountability Office. The GAO said it found that nearly 40% of 401k plan participants did not fully understand and have difficulties using the fee information DOL requires their plans to provide, while 41% incorrectly believed that they did not pay 401k plan fees. The agency offered five recommendations to the DOL. Source: Hrdive.com Need a Do-Over? IRS Expands and Updates Qualified Plans Correction Guidance The IRS recently issued Revenue Procedure 2021-30, which provides an updated version of the EPCRS. EPCRS is the IRS's comprehensive program for plan sponsors to correct tax-qualified plan errors. This EPCRS update expands plan sponsors' ability and methods to correct overpayments and to self-correct certain plan failures without filing a VCP application, which can be costly and time-consuming. Source: Mwe.com »» Click here for more Compliance and Regulatory Material Marketplace News Broadridge Fi360 Offers Enhanced Solution Ahead of DOL IRA Rollover Requirements NAPA Opens Nominations for the 2021 Top Women Advisors Award J.P. Morgan, AIG to Offer Annuity Tool for 401k Plans Ubiquity Introduces Streamlined Recordkeeping Solo 401k Hightower Makes Strategic Investment in Alexandria Capital Hub International Acquires $428m Virginia RIA
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