Fiduciary Risk: Five Ways to Control and Reduce It
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Newsletter Sponsor Benchmark Your 401k Plans Before Year-End 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 Fiduciary Risk: Five Ways to Control and Reduce It This article will help employee benefit plan fiduciaries better understand their responsibilities and manage the risks of non-compliance with ERISA requirements. The general approach to handling risk is a cycle of identifying, assessing, controlling, and reviewing controls over risks. Based on the assessment of a given risk, there are four ways to manage it: you can avoid, reduce, transfer, or accept the risk. Source: Berrydunn.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers Our Demographic Destiny and Why Retirement as We Know It Is Dead The future of retirement security may depend on whether we understand our demographic future. We need to pay attention because we are approaching the "Super Age" and failing to adapt today's system to be able to meet the needs of tomorrow. Source: Georgetown.edu Would 401k Participants Use a Social Security "Bridge" Option? Although annuities would ensure higher levels of lifetime income, reduce the likelihood that people will outlive their resources, and alleviate some of the anxiety associated with post-retirement investing, the market for annuity products is minuscule. To address this, employers could increase the availability of lifetime income by adopting a Social Security "bridge" strategy within their 401k plans. The bridge option would use 401k assets to pay retirees an amount equivalent to their Social Security benefits so they can postpone claiming benefits, thereby increasing their monthly payment when they do eventually claim. This paper gauges workers' potential interest in a bridge option. Source: Bc.edu Measuring DC Plan Success Requires Going Beyond Common Metrics Greater engagement and education from plan sponsors and recordkeepers are key, but better insights into employees' retirement readiness require being able to access a greater range of participant data points, including information about personal savings and assets outside of participants' DC plans, according to retirement planning professionals. Source: Plansponsor.com »» Click here for More Studies, Research, and White Papers 403b Plans School District 403b Plans and Recordkeeper Selection This article discusses the California law on the selection, by public school districts and charter schools, of third-party administrators or recordkeepers for their 403b plans. As with school district 403bs and investment selection, there isn't a lot of "law" on the books concerning California school 403bs and recordkeeper selection. But here is what the California Education Code does say. Source: Focusonpublicbenefits.com »» Click here for More 403b Material Court and Legal Retirement Plan Participant Claims Harm From Transamerica Data Breach In a lawsuit, he alleges the retirement plan service provider did not take steps to protect the personal information of participants in plans it serves. Source: Planadviser.com Energy Firm Exelon Sued Over 401k Law firms representing the plaintiffs cite fiduciary failures in moving to in-house funds and high fees for record keeping and managed accounts. Source: Investmentnews.com (registration may be required) Takeaways From the Hughes v. Northwestern Supreme Court Oral Argument Anyone hoping for a clear indication as to how the Supreme Court will rule in the Hughes v. Northwestern case will be disappointed. The arguments were scattered and convoluted. Thus, there is no way to predict how they will rule. Most disappointing was the failure to conduct an in-depth analysis of the proper context and standard to judge excessive fee complaints. The Justices spent most of their time asking factual questions specific to the Northwestern plan, which misses the larger context of the meritless claims being filed against defined contribution plans when courts apply a low pleading standard. Source: Euclidspecialty.com Voya Sued for Using Own Investments in 401k Plan A group of former Voya Financial Inc. employees sued the company this week, claiming the firm should not have included its investment products in its 401k plan. In the Dec. 14 complaint filed in federal court in Connecticut, the plaintiffs allege the company benefited at the expense of its participants by selecting certain Voya investment options, rather than lower-cost alternatives with stronger performance records from other companies for the $2.2 billion 401k. Source: Investmentnews.com (registration may be required) Nokia's $8.5B 401k Held Down By High Fees, Lawsuit Claims Nokia of America is among the latest employers hit with a class-action lawsuit over the fees in its 401k plan. The complaint levels claims that are similar to those in numerous other cases brought by litigator Capozzi Adler. The phone maker allegedly did a disservice to its workers by filling its investment menu with funds that had higher fees than other options available on the market, and the plan's revenue-sharing arrangement led to administrative costs that are well above average, according to the complaint. Source: Investmentnews.com (registration may be required) »» Click here for more Court and Other Legal Issues Legislative and Washington DC New Bill Would Allow Faster Access to Retirement Accounts After Disasters Members of the House Ways and Means Committee have introduced bipartisan legislation that would allow survivors of natural disasters to withdraw funds from their retirement accounts for emergency expenses without fees or penalties. Source: Planadviser.com »» Click here for more on Legislative and Washington Actions Compliance and Regulatory 2021 ERISA/Employee Benefits Legal Compliance Checklist A handy checklist that covers plan documents, plan operations, plan investments, and fiduciary concerns for end-of-year 2021. Source: Wagnerlawgroup.com 401k and Health Plan Considerations for End-of-Year As we move towards the end of the calendar year, now is the time to consider the impact of the New Year on your 401k and Group Health Plans. Here are five important items to consider as we usher in 2022. Source: Barran.com Retirement Plans Required Year-End Amendments for 2021 As 2021 winds down, retirement plan sponsors should confirm that their plan documents are amended by December 31, 2021, to comply with certain plan changes which are outlined here. Source: Faegredrinker.com Fast-Approaching Deadlines for Employee Benefit Plans The end of 2021 brings important deadlines for employers that sponsor 401k plans, 403b plans, cafeteria plans, and group health plans. Under the Bipartisan Budget Act of 2018 and related IRS regulations, for 401k and 403b plans using the hardship distribution safe harbor there are several changes, some required and others optional. Source: Venable.com 2022 ERISA Plan Compliance Calendar Being a retirement plan sponsor involves juggling many tasks, one of the more important is to make sure your plan complies with all pertinent federal legislation and regulations. This compliance calendar will help you keep track of your company's required filings, their due dates, and related details so you can avoid incurring any fines or other penalties for late filings or missing information. Source: Plansponsor.com »» Click here for more Compliance and Regulatory Material Marketplace News PenChecks, ASPPA Announce Expanded Scholarship Program and 2021 Recipients
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