Understanding 408(b)(2) Disclosures
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Fiduciary and Plan Governance Understanding 408(b)(2) Disclosures A Covered Service Provider must provide a 408(b)(2) disclosure to the retirement plan fiduciaries. This article describes what is in a 408(b)(2) disclosure, why is this disclosure necessary, and some 408(b)(2) best practices. Source: Multnomahgroup.com CAPTRUST's February Fiduciary Update CAPTRUST's Drew McCorkle enlightens readers on the attention cybersecurity is receiving at the DOL, the ways new cases, decisions, and settlements are impacting the fiduciary insurance market, and what changes to look out for regarding annual financial statement audits required for all plans with more than 100 participants. Source: Captrust.com Alternative Investments in DC Plans This comprehensive overview, in slide-deck format, covers the investment case for private real estate, hedge funds, and private equity, with a focus on what's new in terms of the offerings available for each type of alternative and how can each type of alternative add value as an investment in a DC plan? It also examines related opportunities, considerations, and challenges. The final pages cover potential next steps for fiduciaries interested in implementing alternatives. Source: Dciia.org »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers Survey Finds Pandemic Is Impacting Canadians' Ability to Save for Retirement Almost half (44%) of Canadians agreed the coronavirus pandemic has negatively impacted their ability to save for retirement and, as a result, 31% have changed their financial priorities, according to a new survey by Edward D. Jones & Co. The survey, which polled more than 1,500 adult Canadians, also found 33% of respondents said they're planning to contribute to their registered retirement savings plan, while 52% said they plan to forego their RRSP contribution and another 15% are undecided. Source: Benefitscanada.com More than two-thirds of defined contribution plan sponsors are concerned about the impact of market volatility on retirees (70%) and plan participants within 10 years of retirement (67%), according to MetLife's 2022 Stable Value Study. More than half (52%) are concerned about those more than 10 years away from retirement. Source: Businesswire.com American Views on Defined Contribution Plan Saving, 2021 The survey polled respondents about their views on defined contribution retirement account saving and their confidence in 401k and other DC plan accounts. Survey responses indicated that Americans value the discipline and investment opportunity that 401k plans represent and that individuals were largely opposed to changing the tax preferences or investment control in those accounts. A majority of respondents also affirmed a preference for control of their retirement accounts and opposed proposals to require a portion of retirement accounts to be converted into a fair contract promising them income for life from either the government or an insurance company. Source: Ici.org »» Click here for More Studies, Research, and White Papers Target-Date Funds Understanding Default Investments: A Focus on Target-Date Funds The DOL doesn't mandate which types of plans should use which types of QDIA solutions. However, there are some best practice considerations to make when determining which QDIA structure may work best for your plan. Target-date funds have become the default of defaults, meaning the most frequently used solution for plan sponsors. It falls in a sweet spot of complexity/customization/cost. This article walks plan sponsors through all QDIA solutions with a special focus on target-date funds. Source: Multnomahgroup.com Friend or Foe? The Role of Duration in Target-Date Funds Within target-date funds, duration can be an investor's friend, particularly during dramatic equity market drawdowns. But, left unchecked, duration can become a source of unwarranted interest-rate risk as an investor nears and enters retirement and the portfolio becomes less equity and more fixed-income oriented. Source: Jhinvestments.com »» Click here for more on Target-Date Funds Court and Legal The district court ordered the communications to be produced and differentiated between attorney review based on pending or anticipated litigation, which is privileged, and review based on "a general fear of liability," which is not privileged. The court was "not persuaded that the prevalence of other 401k litigation during the relevant period is a specific enough litigation risk" to trigger the protection of attorney-client privilege. Source: Erisalitigationadvisor.com Long-Anticipated Supreme Court Decision on Excessive Fees -- Hughes v. Northwestern University Essentially, this Supreme Court decision confirms that plan fiduciaries cannot rely on the availability of a variety of options or plan participants' choice in investment options to avoid liability for offering imprudent funds or having high recordkeeping expenses. This has been the law of the land since Tibble, and litigants in excessive fee litigation have already been following this rule. Therefore, the reach of this decision may be quite limited. Source: Truckerhuss.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC Build Back Better Declared Dead; SECURE 2.0 Awaited The nearly $2 trillion broad-based legislative package that includes mega Roth and other retirement-based revenue raisers does not appear to be moving anytime soon, but there is hope for bipartisan retirement legislation. Source: Asppa.org »» Click here for more on Legislative and Washington Actions Compliance and Regulatory This year, start your company's 401k planning off right by familiarizing yourself with relevant deadlines and expectations before they creep up on you. Though many of the deadlines for various forms and reports are the same as last year, there are a couple of dates that have changed to reflect this year's calendar. As always, the year starts with relatively few things due, but requirements begin picking up in March. Source: Forusall.com Annual Plan Deadlines for the Plan Year Ending December 31, 2022 There are many important requirements for Internal Revenue Code Section 401(a) and 401k defined contribution plans that occur either during the calendar year or during the plan year. This chart explains key plan events and deadlines for defined contribution plans with a plan year ending December 31, 2022. Source: Voya.com IRS Updates Safe Harbor Methods for "Substantially Equal Periodic Payment" Exception Recent IRS Notice 2022-6 updates longstanding guidance on when a series of payments from an individual account under a tax-favored retirement plan is considered a series of "substantially equal periodic payments." This article summarizes the new guidance, which also applies to nonqualified annuities under section 72(q). Source: Groom.com Oops, Was That Plan Compensation? Using an inaccurate definition of compensation can be a small mistake that ends up being a big mistake. Such a failure directly affects contributions and can affect a few participants, all participants, or something in between. And even though the amounts involved may be small from payroll-to-payroll, they can go undetected (and therefore uncorrected) for many years, adding up to significant amounts required for correction. Source: Erisadc.com A Reminder to Avoid Fraudulent Hardship Withdrawals An individual in Ohio was recently indicted by a grand jury on charges that he fraudulently claimed the assets he withdrew from his retirement account would be used to purchase a primary residence and to pay medical expenses. Source: Planadviser.com »» Click here for more Compliance and Regulatory Material
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