The Rules of 401k Plan Provider Engagement
|
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 The Rules of 401k Plan Provider Engagement Hiring a 401k plan provider isn't an easy process and there are so many mistakes that plan sponsors like you have been made. It's not like making any other decision of your own in life, because it's a fiduciary decision. As a plan fiduciary, you are responsible for the retirement assets of your employees. This article is about the rules of engagement in hiring 401k plan providers. Source: Jdsupra.com How Often Should Plan Sponsors Review Their Plan Fees? Without taking the proper measures of disclosing your fees or ensuring they're competitive and reasonable, your plan offerings probably won't seem as effective for your employees. As a sponsor, you should know that the higher your plan's fees, the less your employees will have to contribute to their plans. This is why you want to review your fees to make sure your employees can trust and depend on you to help them save for retirement. But how often should you review your plan fees? Source: Planpilot.com Protecting Participant Data: How to Monitor and Mitigate Recordkeeper Conflicts of Interest There are six areas where recordkeeping vendors have tried to monetize their relationship with retirement plans. This plan sponsor guide focuses on the fourth way of generating excess revenue, cross-selling retail financial products. For plan sponsors, it is important to understand how recordkeepers cross-sell retail financial products and what the plan sponsor's obligation is to reduce or eliminate such cross-selling. Source: Multnomahgroup.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers Considering the Arguments for and Against Actively Managed Funds in DC Plans The argument for whether actively managed funds are appropriate in DC plans has been going on for decades, and numerous excessive fee lawsuits against retirement plan sponsors have been pushing the needle toward the use of passive funds on DC plan investment menus. The debate continues following a recent publication from the CFA Institute Research Foundation which asks, "Is active management worth it?" Source: Plansponsor.com What Participants Want From Employers' Retirement Plan Websites More employers have been using retirement plan participant websites as a means of communication and education than they did in the past. A recent study found 81% of participants have logged into their accounts, with most signing in to check account balances or review investment options. Research finds that using certain strategies can make websites even more appealing to participants. Source: Plansponsor.com »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers CIT's Role in the Retirement Space The expanding retirement industry means plan sponsors will want to diversify their investment options and look to their asset managers to meet the need. Asset managers should take note of plan sponsors' need for more efficient and affordable ways to diversify their investment options. Part of that involves looking to the products that can help. Collective investment trusts are a natural choice for multiple reasons. Source: Northerntrust.com The retirement industry got two new plan types via the SECURE Act, pooled employer plans (PEPs) and "groups of plans" (GoPs). But proposed regulations issued on Sept. 14 might effectively kill the GoP provision as a useful product tool. This piece reflects the author's first look at the proposed rule, not a detailed analysis. Source: Asppa.org Court and Legal Analyzing the BrightScope DC Plan Data in the Context of Excessive Fee Lawsuits The annual report provides insights into plan design and trends and represents the most comprehensive data available to understand defined contribution plan fees. BrightScope has an express disclaimer that its report is for general information on fees and is not intended for benchmarking the costs of specific plans. But plaintiff lawyers often ignore this disclaimer and cite the report to support their excessive fee claims, and thus it is important to analyze the BrightScope data to evaluate how your plan compares. This article documents the significant trends and statistics in the BrightScope report. Source: Euclidspecialty.com Second Circuit Revives Share-Class Claim in NYU Retirement Plan Class Action The Second Circuit recently vacated the district court's dismissal of Plaintiffs' share-class claim. Sacerdote v. New York Univ. To begin, the Court observed that the notion that "prudent fiduciaries may very well choose to offer retail class shares over institutional class shares' because retail shares offer greater liquidity provides no basis to dismiss pleadings that otherwise generate plausible inferences of the claimed misconduct." Source: Erisalitigationadvisor.com CommonSpirit ERISA Suit Dismissed An ERISA lawsuit challenging CommonSpirit Health's use of the Fidelity Freedom Funds target-date fund series and its recordkeeping fees has been dropped. The U.S. District Court for the Eastern District of Kentucky granted the defendant's motion to dismiss the complaint after agreeing that the plaintiff did not allege facts that proved imprudent conduct on the part of the defendants. Source: Planadviser.com Complex Ruling Sees Nvidia ERISA Lawsuit Dismissed The dismissal order in the case includes several points of success for the plaintiffs, and while the suit has been tossed out due to a lack of standing, the court has left room for them to file an amended complaint. Source: Planadviser.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC House Panel Votes to Rein in Large Retirement Account Balances Mega-Roth, backdoor IRAs and large retirement account balances would be limited under legislation approved Sept. 15 by the House Ways and Means Committee. In a near party-line vote of 24-19, the changes were approved as part of the $3.5 trillion Build Back Better Act reconciliation. Source: Asppa.org »» Click here for more on Legislative and Washington Actions Compliance and Regulatory Perfection is aspirational, especially when it comes to retirement plan administration. That is why 30 years ago, in 1991, the IRS created the Employee Plan Compliance Resolution System, a mechanism for plan sponsors to fix mistakes. Compliance with pre-approved correction methods grants plan sponsors forgiveness without punishment. But sometimes, even the approved correction methods need fixing. Source: Belfint.com IRS Priority Guidance Plan Includes Retirement Items The IRS has issued its initial 2021-2022 Priority Guidance Plan, in which it describes guidance projects in the current fiscal year. Many items in the plan have appeared in prior years' Priority Guidance Plans. A number of the guidance items deal with retirement savings arrangements, including those noted here. Source: Ascensus.com Regulators Unveil Proposed Changes to Group Form 5500 Reporting The proposal unveiled Tuesday would establish a new type of direct filing entity called a Defined Contribution Group Reporting Arrangement and add a new Schedule DCG -- detailing individual plan information -- that such reporting groups must file. Source: Pionline.com Best Practices for Missing Plan Participants Best practices for plan sponsors include creating a document to outline the lost participant search procedure. Following a written policy, which provides for several methods of attempted contact, can show the DOL that the plan is making its best good-faith effort to track missing participants. An essential step in creating a plan procedure is to document the implementation of the process. Then, documenting each attempt at locating missing participants is important. Source: Watkinsross.com »» Click here for more Compliance and Regulatory Material Marketplace News Ascensus Unveils Retirement Website and Mobile Enhancements Morgan Stanley, Empower to Expand Joint Plan Solutions CAPTRUST Launches Alternative to PEPs and MEPs for Small Companies 401k Provider Human Interest Valued at $1B
This eNewsletter is a digest of information published by a variety of web-based sources on 401k and related issues and is published as a service to our users. 401khelpcenter.com, LLC is not the author of the material unless specifically noted. Articles are copyrighted to their publishers. If you believe that your work has been copied in a way that constitutes copyright infringement, please contact the source site immediately. Hyperlinks in this document are provided as a convenience and we disclaim any responsibility for information, services, or products found on websites linked hereto. All links were tested before this eNewsletter was e-mailed to you to ensure that they are still functional, but publishers do move or delete articles. Therefore, we can't guarantee that the links provided will remain operational. 401khelpcenter.com does not endorse, approve, certify, or control this material and does not guarantee or assume responsibility for the accuracy, completeness, efficacy, or timeliness of the material. Use of any information obtained from this material is voluntary, and reliance on it should only be undertaken after an independent review of its accuracy, completeness, efficacy, and timeliness. Reference to any specific commercial product, process, or service by trade name, trademark, service mark, manufacturer, or otherwise does not constitute or imply endorsement, recommendation, or favoring by 401khelpcenter.com. Opinions expressed are those of the author of the article and do not necessarily reflect the positions of 401khelpcenter.com. THIS NEWSLETTER IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE INVESTMENT, TAX, ACCOUNTING, OR LEGAL ADVICE. Copyright © 2021 by 401khelpcenter.com, LLC. All rights reserved. No reproductions without prior authorization, but you are free to email this copy (in its entirety) along to colleagues or clients. This newsletter may not be posted on any website. 401khelpcenter.com, LLC
|
