Ten Steps for DC Plan Fiduciaries to Consider in 2022
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Fiduciary and Plan Governance Ten Steps for DC Plan Fiduciaries to Consider in 2022 This 7-page paper first reviews strategies to navigate the onerous legal and regulatory issues faced by DC plan fiduciaries today. The paper then shifts to examining tactics to better fund future "liabilities," including increasing savings and creating more efficient investment strategies for both active participants and retirees, with an overall objective of increasing the likelihood that employees will have successful retirement outcomes. Source: Russellinvestments.com CPAs Shift Audit Risk to Plan Fiduciaries SAS 136 transfers a significant amount of liability for an audit's accuracy from an auditor to a plan's fiduciaries. SAS 136 intends to enhance the quality of audits of ERISA plans by adding new procedures to CPAs' audits beginning December 15, 2021. The burden for producing the added plan-related documentation required will likely fall to employers' human resources departments. Source: Rolandcriss.com Practical Implications of DOL's Latest Private Equity Statement The DOL's supplemental statement is a tonal shift rather than a substantive change that reflects the continuing courtship for defined contribution plans and private equity investments. For plan sponsors, the clarifying statement's practical implications were to reaffirm that the duties of plan fiduciaries must be executed prudently and that they must always act in the best interest of participants and beneficiaries. Source: Plansponsor.com DOL Waves Caution Flag for 401k Private Equity Investing The DOL delivered a surprise holiday gift on December 21, 2021, to fiduciaries of participant-directed 401k plans subject to ERISA, issuing a supplemental statement to a June 2020 Information Letter regarding the use of private equity investments in investment options. The thrust of the Supplement is that fiduciaries should not read the Letter as endorsing or recommending private equity investments in such plans and should proceed with caution in the use of such investments in a participant-directed 401k plan. Source: Morganlewis.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers 401ks Substantially More Costly Than Pensions 401k retirement accounts are substantially more costly than pension plans, according to a new analysis from the national institute on retirement security. Economic efficiencies unique to pensions enable plans to deliver retirement benefits at half the cost of 401k accounts, with four-fifths of the cost differential occurring post-retirement. Source: Nirsonline.org 401k and IRA leakages May Be More Severe Than Previously Believed Researchers from the Treasury and Congress' Joint Committee on Taxation have provided new estimates of how much money "leaks" out of 401ks and IRAs based on restricted tax data. The author states that "It's a welcome addition to the literature because the existing range of estimates is enormous." Source: Marketwatch.com Retirement Assets Held Steady in Third Quarter Despite a number of challenges, total U.S. retirement assets were down only slightly at the end of the third quarter of 2021, according to new data from the Investment Company Institute. Source: Asppa.org »» Click here for More Studies, Research, and White Papers Court and Legal How the ERISA Litigation Landscape May Shift in 2022 2021 was another busy year for litigation under ERISA, with more than 125 new ERISA class actions filed, more than were filed in 2018 or 2019, but down from the all-time high in 2020, which saw more than 200 class actions filed for the first time in the 45-year history of the statute. As 2022 begins, several key issues working their way through the courts are likely to reshape the landscape of ERISA litigation. Source: Groom.com Plaintiffs Refile ERISA Lawsuit, Adding Adviser to Defendant List The plaintiffs in an ERISA fiduciary breach lawsuit known as Fleming v. Rollins Inc. have refiled their complaint in federal court, this time also proposing claims against multiple financial advisory firms that serve their retirement plan. Source: Planadviser.com 401k Lawsuit Names LPL, Alliant A new 401k lawsuit against a nationwide pest-control company stands out from most others by questioning the investment guidance of an adviser to the plan. It also names LPL Financial and Alliant as defendants, in addition to the plan sponsor -- Rollins Inc. -- and the plan committee. Source: Investmentnews.com (registration may be required) »» Click here for more Court and Other Legal Issues Legislative and Washington DC Biden's EBSA Nominee Back on the Docket While it appeared the nomination of Lisa Gomez to serve as Assistant Secretary for EBSA at the DOL was in jeopardy after having been included in a list of nominees that would not carry over to the new year, the Senate Health, Education, Labor, and Pensions Committee has now scheduled a January 12 nomination hearing for her, along with several other nominees. Source: Napa-net.org »» Click here for more on Legislative and Washington Actions State-Based Private-Sector Retirement Programs Auto-Enrollment Retirement Plans in OregonSaves This new study looks at the impact of the first state-sponsored auto-IRA program on those who previously lacked access to a plan. It analyzes participation choices, inflow and outflow data between August 2018 and April 2020, and the evolution of account balances. Source: Umich.edu Compliance and Regulatory 2022 DC Retirement Plan Compliance Calendar For defined contribution plan years starting Jan. 1, this retirement plan compliance calendar lists key IRS and DOL reporting and disclosure deadlines. Source: Mercer.com IRS Updates Procedures for Determination Letter Requests The new procedures are outlined in Revenue Procedure 2022-04. Rev. Proc. 2022-04 is a general update of Rev. Proc. 2021-4, published in Internal Revenue Bulletin 2021-01. Source: Asppa.org Finalized Form 5500 Changes Add to Plan Sponsors' Responsibilities Some updates to the Form 5500 implement changes called for by the SECURE Act, and others will require more review from plan sponsors to ensure completeness and accuracy. Source: Plansponsor.com Participants Must Follow a Plan's Beneficiary Designation Procedures When it comes to a beneficiary designation, the only thing that matters is what the participant wrote down. If the participant was clear and followed the plan's procedures for naming a beneficiary, the fiduciaries of the plan are bound by ERISA to follow that result. Of course, the fiduciaries must first determine what the plan's procedures are. The plan language may have requirements or exceptions. Any specific rules or exceptions found in the plan language must be followed scrupulously by the fiduciaries. Source: Employeebenefitslawblog.com
»» Click here for more Compliance and Regulatory Material Marketplace News Lincoln Financial Revamps Participant Website Hub International Acquires Another Top 100 Advisory Shop PEP Entrant Smart to Buy Stadion SageView Buys $3.1 billion RPA Channel Financial 2022 M&A Action Picks Up Steam With Latest NFP Acquisition
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