Resources to Help Identify, Manage, and Avoid Retirement Plan Vendor Conflicts
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Fiduciary and Plan Governance Resources to Help Identify, Manage, and Avoid Retirement Plan Vendor Conflicts Fiduciaries are required by ERISA to monitor service providers to the plan. That includes monitoring for any conflicts of interest. This 7-page paper identifies five areas where recordkeeping vendors have tried to monetize their relationship with retirement plans: Proprietary investment management, managed accounts, IRA rollovers, annuitization, and cross-selling retail financial products. These don't constitute a conflict of interest, but whenever a recordkeeper stands to be compensated by choices made by the plan fiduciaries or plan participants, extra care should be taken. Source: Multnomahgroup.com Revenue Sharing Declines Among DC Plan Sponsors The percentage of DC plans using revenue sharing -- or a combination of revenue sharing and other forms of plan payments -- has been declining over the years. The strategy has been a casualty of trends in lower fees, more transparency, government regulation, litigation risk, and fiduciary liability insurance requirements. Source: Pionline.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers Study Reveals That Americans Are Shifting Retirement Due to Pandemic New research from Northwestern Mutual shows that Covid-19 has changed many Americans' retirement plans, with over one-third (35%) saying it has either moved up or pushed back their target retirement age. Almost a quarter (24%) plan to retire later than previously expected while 11% plan to retire earlier. Source: Prnewswire.com »» Click here for More Studies, Research, and White Papers Court and Legal Murder Victim's Son Can Get Money From 401k Linked to Killers The son of a man murdered by a Colombian guerrilla group can obtain money from a 401k account connected to the perpetrators, a Massachusetts federal judge ruled, deciding a novel legal question involving federal benefits and anti-terrorism laws. Fidelity Investments can turn over 401k assets to the victim’s son under the Terrorism Risk Insurance Act of 2002 without violating the federal law protecting retirement plan assets from being used for other purposes. Source: Investmentnews.com (registration may be required) Six Excessive Fee Suits Paused for SCOTUS Ruling A federal judge has put a half dozen excessive fee suits on hold pending a decision by the U.S. Supreme Court in a case that "will likely clarify the pleading requirements for ERISA breach of fiduciary claims in cases such as this...." That was the determination of Judge William C. Griesbach regarding six cases pending in the U.S. District Court for the Eastern District of Wisconsin. Source: Ntsa-net.org Exposing Excessive Fee Litigation Against America's DC Plans This 24-page whitepaper is designed to highlight the problem of excessive fee lawsuits and present a sensible framework to restore sanity and fairness to the defined contribution landscape. Source: Euclidspecialty.com Seventh Circuit Weighs in on Arbitration and Class Waiver Provisions in DC Plans The Seventh Circuit decided Smith v. Board of Directors of Triad Manufacturing Inc. holding that benefit plans may require claimants to arbitrate claims under the Employee Retirement Income Security Act of 1974, 29 U.S.C. Section 1001, et seq., but may not preclude claimants from obtaining relief that ERISA provides. Source: Faegredrinker.com AT&T saw a big win in a five-year-old lawsuit over its 401k plan, with a federal judge on Sept. 28 granting summary judgment in the company's favor. In 2017, the telecommunications giant was sued in U.S. District Court in Central California for alleged fiduciary breaches in the plan, including claims over administrative fees paid to the plan provider, Fidelity, as well as to indirect compensation that Financial Engines paid to that firm. Source: Investmentnews.com (registration may be required) »» Click here for more Court and Other Legal Issues Legislative and Washington DC Congress Considers Mandatory Auto-Enrollment IRAs All eyes are on Congress as it wrestles with a $1 trillion infrastructure bill and a $3.5 trillion budget reconciliation bill. The House Ways and Means Committee markup of the reconciliation bill would require certain employers with five or more employees to automatically enroll employees in a payroll deduction IRA. This requirement would take effect on January 1, 2023. Source: Wagnerlawgroup.com EBSA Nominee Addresses Fiduciary Rulemaking, Women's Protection Lisa Gomez, who was nominated to serve as Assistant Secretary of Labor for the Employee Benefits Security Administration, tackled a wide range of issues during her Oct. 7 Senate confirmation hearing. Source: Napa-net.org Budget Bill Seeks Retirement Plan Mandate, Roth Conversion Ban Nearly all employers would have to offer retirement plans with automatic enrollment, and the saver's credit would turn into a government matching plan contribution under the current House version of a roughly $3.5 trillion budget package. Other retirement-related proposals would ban Roth conversions in employer plans and cap retirement benefits for high earners. Although the retirement provisions may change as the Senate weighs in, they stand a good chance of surviving in any final package. Source: Mercer.com »» Click here for more on Legislative and Washington Actions Cyber and Plan Security Specialist Advisers Say Cybersecurity Practices a Top Factor in Recordkeeper Selection Nearly one-third (31%) of retirement plan recordkeepers expect to increase their cybersecurity staff, according to a Cerulli report. Industry stakeholders suggest the threat of retirement account fraud has increased in recent years, particularly during the remote work environment, Cerulli Associates says. And, even though the majority of recordkeepers act in a non-fiduciary capacity, Cerulli points out that courts have suggested that cybersecurity is a shared responsibility. Source: Planadviser.com Small U.S. Retirement Plans Lagging in Cybersecurity Oversight Fiduciaries at large, sophisticated plans tend to understand their responsibility and have resources and staff to regularly assess contractors' fraud and data controls. But smaller firms can be left in the dark. As recordkeepers continue to make cyber improvements, they may play an outsized role in helping their smaller clients keep up. One of the things they need to be doing is helping raise awareness to plan fiduciaries that they have this responsibility. Source: Groom.com »» Click here for more on Cybersecurity Issues Compliance and Regulatory Audit Communications to Plan Sponsors More Robust Under SAS 136 The AICPA's Statement on Accounting Standards No. 136 will meaningfully change the audit process for defined contribution plan sponsors. The AICPA issued SAS 136 intending to give readers of the audit report a better understanding of the scope of the audit, as well as clarifying the responsibilities of the plan sponsor and auditor. SAS 136 requires a greater level of written communication to those charged with governance. Source: Orba.com 2021 Retirement Plan Regulatory Update While businesses and the people they employ continued to navigate the ever-changing landscape of COVID-19, 2021 has brought new and refurbished legislature top of mind for plan sponsors. Despite the SECURE Act's debut nearly two years ago, many plan sponsors are just now contemplating whether to adopt some of the provisions. Meanwhile, plan sponsors are gearing up for the House of Representative's proposed SECURE 2.0 bill. This 15-page paper covers this development, the IRS' EPCRS changes, updates from the DOL, a review of notable updates in retirement plan fee litigation cases, plus much more. Source: Multnomahgroup.com 2021 Plan Amendment Deadlines and Other Looming Fourth Quarter Considerations As the year draws to a close, it is helpful for employers to pause to evaluate employee benefit plan amendment deadlines and other crucial fourth-quarter considerations. Ten are reviewed here. Source: Jacksonlewis.com »» Click here for more Compliance and Regulatory Material Marketplace News BlackRock Bakes a Lifetime Income Option Into TDF Prudential Announces the Creation of Prudential Retirement Strategies Ameritas Acquires BlueStar Retirement Services 2022 NAPA Top Young Retirement Plan Advisor Nominees Announced
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