Compliance and Regulatory

Year-End Reminders for Retirement Plans - 2021 Edition

As the end of 2021 approaches, employers and plan sponsors of retirement plans need to be aware of their year-end responsibilities and some of the issues they will need to consider going into 2022. Here is a brief overview.

Source: Wagnerlawgroup.com

Proposed Revisions to Form 5500

On September 14, 2021, the DOL, the IRS, and the PBGC jointly announced a tri-agency notice of proposed forms revisions to the Form 5500 Annual Return/Report forms filed for employee pension and welfare benefit plans. The DOL simultaneously published a proposed rulemaking to implement the proposed forms changes under ERISA. The proposals are intended to implement changes to the Form 5500 annual reporting under the SECURE Act, in addition to other changes.

Source: Belfint.com

Why You Should Encourage "Mini" Retirement Plan Audits

From the annual hassle of engaging an accountant to review retirement plan financials to the ever-present threat of a DOL investigation, "audit" is practically a four-letter word for plan sponsors, financial professionals, and administrators. But they don't have to be a bad thing. Regularly conducting "mini" plan audits allows compliance to be broken down into more manageable, bite-sized pieces. These voluntary reviews require minimal time and resources and can pay big dividends.

Source: Voya.com

Retirement Plan Amendment Deadlines

As we approach the end of 2021, it is a good time to review upcoming year-end plan amendment deadlines applicable to retirement plans. Employers should review their plans with their providers and advisers to determine if any plan amendments need to be adopted by the end of 2021.

Source: Bsk.com

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Fiduciary and Plan Governance

Expect More Difficulty Obtaining Fiduciary Insurance

The insurance carriers that provide fiduciary liability insurance to retirement plan sponsors and their fiduciary service providers are growing cautious -- even a bit cagey -- when it comes to issuing their coverage policies. The basic reason for their reticence is the glut of retirement plan-focused litigation that has emerged in recent years, and especially the intensity of suits filed over the past year or two.

Source: Plansponsor.com

Protecting Confidential Participant Data and Cross-Selling

In light of the DOL's increased focus on cybersecurity and participant data, plan sponsors should review their service agreements to ensure they do not give implicit approval to use participant data to cross-sell.

Source: Asppa.org

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Insight: Studies, Research, and White Papers

CITs Continue Taking Over in 401ks, but the Change Isn't Always Easy

Investment providers launched just one target-date mutual fund series in the U.S. in 2020, while six pulled the plug on them, marking the second year in a row that the number of products on the market went down. Behind that trend, according to data from Cerulli Associates, is the rise of collective investment trusts, or CITs. The products, which are sponsored by banks or trust companies, function similarly to their mutual fund corollaries but don't have the same reporting requirements.

Source: Investmentnews.com (registration may be required)

Worker Participation in Employer-Sponsored Pensions: Data in Brief

This 7-page report provides data on the percentage of U.S. workers who have access to and who participate in employer-sponsored pension plans. The data are from the National Compensation Survey, conducted by the Bureau of Labor Statistics.

Source: Congress.gov

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Items of Special Interest to Service Providers

The 2022 Retirement Landscape Takes Shape

The widening retirement savings gap, improving financial wellness, and adjusting to lower return expectations are three themes shaping the U.S. retirement landscape going into 2022. A new study shows the events of the past two years have either accelerated these themes or shined a spotlight on them, and the response of individual savers, employers, and those that advise them are evolving as well.

Source: Planadviser.com

Court and Legal

Federal Court Enforces DOL Subpoena

Shortly after the DOL's Employee Benefits Security Administration issued its cybersecurity guidance for employee retirement plans and updated its audit inquiries to include compliance with these guidelines, a federal court in Chicago ruled an employee benefit services provider must comply with a subpoena requesting, among other things, documents and communications relating to the provider's information security and cybersecurity plans and controls.

Source: Erisalitigationadvisor.com

Plaintiffs File ERISA Excessive Fee Lawsuit Against VCA

Plaintiffs have filed a new ERISA lawsuit in the U.S. District Court for the Central District of California, naming as defendants veterinary hospital network VCA Inc. and several retirement plan administration and compensation committees appointed by the company's leadership. The lawsuit claims the veterinary hospital network's retirement plan, which has more than $500 million in assets, should have paid lower fees for recordkeeping and administrative services.

Source: Planadviser.com

Which Plan Documents Must You Surrender if You Are Sued?

When participants believe they have been mistreated by your company's retirement plan and take their complaints to court, be prepared for requests for plan documents. Although under ERISA you are obligated to produce relevant materials, you are not required to indulge in a document fishing expedition. A recent court case, Theriot v. Building Trades United Pension Trust Fund, offers insights on just how far you need to go and where to draw the line.

Source: Orba.com

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Legislative and Washington DC

DOL's EBSA Investigations, Recoveries Down From Record in FY 2020

The Labor Department's Employee Benefits Security Administration recovered about $2.4 billion in fiscal 2021, down from $3.1 billion a year prior.

Source: Investmentnews.com (registration may be required)

House Passes Build Back Better Act

On November 19, 2021, the U.S. House of Representatives voted to approve the Build Back Better Act (H.R. 5376), the budget reconciliation bill that includes much of President Biden's economic and social policy agenda, by a vote of 220 to 212, with all but one House Democrat voting for the bill and all House Republicans voting against it. The BBB Act also includes several health and welfare, retirement, and executive compensation provisions.

Source: Groom.com

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State-Based Private-Sector Retirement Programs

MarylandSaves Targets Summer 2022 Launch

According to a Nov. 22 announcement by the program's board, MarylandSaves will begin offering its new automatic workplace retirement and emergency savings program starting next summer.

Source: Napa-net.org

State-Sponsored Retirement Programs Striking a Chord

Americans give state-facilitated retirement programs an enthusiastic nod, a recent study has found. The National Institute on Retirement Security study on state-facilitated retirement programs found strong support for state-sponsored retirement saving programs, and it cuts across party identification and generational lines.

Source: Asppa.org

Marketplace News

Itzoe Launches Getre(k)ruited.com Industry Networking Platform

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.