What to Keep on Your Radar and a Wish List for 2022
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In This Issue
Fiduciary and Plan Governance What to Keep on Your Radar and a Wish List for 2022 2022 promises to be a significant year for employee benefits. 2021 set the stage for some major developments in the year ahead. Here are some things to watch out for and to hope for in 2022. Source: Cohenbuckmann.com What to Expect for Retirement Savings Plans in 2022 With a new year often comes new rules. Here's what the federal government has planned for retirement savings plans in 2022. Source: Smartspublishing.com Avoiding the Rule That Will Cause You Trouble as a 401k Plan Sponsor There are so many pitfalls that a plan sponsor needs to avoid. And certain rules plan sponsors need to avoid if they want to avoid potential liability as a fiduciary. This article lets 401k plan sponsors know which paths and rules they need to avoid if they want to stay out of trouble. Source: Jdsupra.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers Most Common 401k Default Deferral Rate No Longer 3% Perhaps the most interesting finding in the recently released 64th Annual Survey from the Plan Sponsor Council of America is that 3% is no longer the most common default deferral rate for automatically enrolled 401k plan participants. For the first time, 6% is now the most common deferral rate. Source: 401kspecialistmag.com A Visual Depiction of the Shift From DB to DC Plans in the Private Sector This 3-page report from the Congressional Research Service illustrates the shift from defined benefit plans to defined contribution plans that has taken place in the last 40 years. Source: Congress.gov White Paper: Top Considerations for DC Plans in 2022 The memories of the last two years serve as motivation to focus efforts on the continued improvement of the financial stability and retirement preparedness of DC plan participants. Mercer believes that an approach with flexibility and participants at the center is key for plan sponsors who wish to have a resilient retirement strategy for 2022 and beyond. Here are five themes to consider as you plan for 2022. Source: Mercer.us More Employers Put 401k Savings on Autopilot Employers are increasingly putting retirement savings on autopilot for their workers. About 62% of businesses with a 401k plan used automatic enrollment in 2020, up from 60% the year prior and 46% a decade ago, according to the Plan Sponsor Council of America, a trade group. Auto-enrollment leverages worker behavior (inertia, in this case) to their advantage. Workers receive a paper or digital notification ahead of time and can opt out, but most do not. Source: Cnbc.com Employers Adding Roth 401k Option at a Fast Clip The share of employers allowing Roth 401k savings has surged, giving more workers access to the financial benefits that accompany such contributions. But there are some roadblocks to employee use, such as automatic enrollment and the structure of 401k matching contributions. Source: Cnbc.com »» Click here for More Studies, Research, and White Papers 403b Plans This post includes basic information about tax-deferred investing, RMDs, and IRS tax regulations concerning RMD tax payments and tax penalties. It also describes research findings on how many investors make RMD withdrawals and new life expectancy tables that debut in 2022. It concludes with six take-away action steps. Source: 403bwise.org »» Click here for More 403b Material Court and Legal Process Prevails in ERISA Excessive Fee Victories These cases provide a useful guide for the type of evidence needed in ERISA breach of fiduciary claims and likely variants. First, plan sponsors should establish the right processes and operational compliance practices providing evidence of a thorough investigation and independent validation of procedural and substantive process standards to demonstrate that plan fiduciaries have acted prudently. Next, plan sponsors should document discussions, advice, and reasons for decisions, in detail. Source: Gtlaw.com Cyber and Plan Security Court Enforces DOL Subpoena Seeking ERISA Plan's Cybersecurity Information A district court has enforced an administrative subpoena issued by the DOL seeking an ERISA plan service provider's cybersecurity records. The subpoena is part of an investigation into the service provider after it allegedly processed unauthorized distributions as a result of cybersecurity breaches relating to its ERISA plan clients. Source: Hodgsonruss.com Compliance and Regulatory IRS Adds FAQs on In-Service Distributions, Rehiring Retirees The IRS added answers to some frequently asked questions on whether rehiring a retiree causes the employee to lose bona fide retirement status. It also issued some FAQs on in-service distributions to individuals who continue to work. Source: Hallbenefitslaw.com 2021 Form 5500 Series Informational Copies Released The DOL, IRS, and the Pension Benefit Guaranty Corporation jointly released the 2021 Form 5500, Annual Return/Report of Employee Benefit Plan, 2021 Form 5500-SF, Annual Return/Report of Small Employee Benefit Plan, and their respective instructions. The IRS likewise released the 2021 Form 5500-EZ, Annual Return of a One-Participant Retirement Plan or Foreign Plan, and instructions. Source: Ascensus.com DOL Releases Form 5500 Revisions for Multiple-Employer Plans These final revisions are a follow-up to the proposed revisions released on September 15, 2021. Additional changes from the proposed revisions will be addressed in separate notices issued by EBSA at a later undetermined date. Source: Ascensus.com IRS Determination Letter Program: Then and Now The IRS determination letter program has changed over the years, but it remains an invaluable benefit to plan sponsors that offer custom-designed tax-favored plans. Groom principals Elizabeth Dold and David Levine look back over the years at the importance of the IRS determination letter program, review the current program, and highlight the areas where plan sponsors most benefit from a favorable determination letter. Source: Groom.com »» Click here for more Compliance and Regulatory Material Marketplace News The Cerrado Group Announces Dunbar Bender and Zapf as Newest Member Firm ARA Files Suit to Protect QKA Trademark
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