Here's How Much 401k Plan Fees Have Dropped
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Insight: Studies, Research, and White Papers Here's How Much 401k Plan Fees Have Dropped For both small and large retirement plans, average total plan costs for 401ks continued to decline in 2021, with plan investment fees leading the way, according to the latest edition of the 401k Averages Book. The 22nd edition of the book shows that all scenarios saw a year-over-year decrease in total investment costs ranging between 0.01%-0.06% from the previous year, with the average representing a decrease of 0.03%. Source: Napa-net.org DC Plan Investment Menu Evolution Continues One telling stat identified in new NEPC research is that managed account adoption has remained stagnant for several years now, while index-based target-date funds have grown in popularity. Source: Planadviser.com Research Finds Americans Remain Committed to Saving for Retirement Defined contribution plan participants' contribution activity remained strong through the first three quarters of 2021 according to ICI's "Defined Contribution Plan Participants' Activities, First Three Quarters of 2021." This ongoing study tracks contributions, withdrawals, and other activity in 401k and other DC retirement plans, based on DC plan recordkeeper data covering more than 30 million participant accounts in employer-based DC plans at the end of September 2021. Source: Ici.org Despite the "Great Resignation," Saving for Retirement Is Still a Priority According to Fidelity Record 401k account balances at $130,700. Record total IRA accounts (driven by young investors) at 12.3 million. Nearly 40% of individuals increased their 401k contributions in 2021, a record. What do all of these records have in common? They all happened amid the "Great Resignation," according to Fidelity Investments' Q4/year-end analysis of more than 35 million IRA, 401k, and 403b retirement accounts, further reinforcing the critical role employers are playing to help keep workers' retirement savings on track. Source: Businesswire.com 39% of Canadians Are Confident in Their Retirement Plan: Survey Almost two in five (39 percent) Canadians are confident in their retirement plan, according to a survey conducted by Pollara Strategic Insights for the Bank of Montreal Financial Group. The survey, which polled 1,500 adult Canadians, found while respondents said they need $1.6 million to retire securely, just under half (44 percent) were confident they'll have enough money saved to retire as planned. Source: Benefitscanada.com DC Plans Use Pension Features to Improve Retirement Outcomes DC plans are taking on more and more features that primarily used to be associated with defined benefit plans, to some success, but more work lies ahead in building lifetime income options for participants. Source: Plansponsor.com »» Click here for More Studies, Research, and White Papers 403b Plans Individual and Pre-Approved 403b Plan Documents: Evaluating What to Do in 2022 The IRS has announced in recent Rev. Proc. 2021-37 that it will start accepting filings in the second cycle for pre-approved 403b plans on May 2, 2022. In connection with that, the IRS has also indicated that it is considering opening a determination letter process for individually designed 403b plans after all, and has been soliciting comments on doing so. These developments raise several considerations for 403b plan providers and employers regarding their plan documents that are worth considering. This article reviews some key considerations. Source: Groom.com »» Click here for More 403b Material Court and Legal Workers' Attorneys Receive $1Million Share of $4M Koch ERISA Settlement A putative class of roughly 101,000 participants in multiple retirement plans for Koch employees, reached a $4 million settlement with Koch Industries Inc., Koch Business Solutions LP, and the Koch Benefits Administrative Committee, in July 2021. Almost six months later, in December 2021, a federal judge in Georgia approved a $1 million award of attorney's fees to lawyers from the law firms of Nichols Kaster PLLP and the Sanford Law Firm in Kinder et al. v. Koch Industries Inc. Source: Hallbenefitslaw.com Taylor Corp. Facing ERISA Recordkeeping Fee Suit The lawsuit represents yet another case of a sub-$1 billion retirement plan finding itself the subject of excessive recordkeeping fee litigation. Source: Planadviser.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC Bipartisan Bill Would Allow Annuities as Default Option Key members of the House of Representatives have reintroduced legislation to allow retirement plan sponsors to provide annuities as a default option in their DC plans. Source: Asppa.org ERISA Advisory Body Suggests Reviewing Plan Leakage Penalties "The retirement system in the United States reflects the imperfections of its labor markets with regards to people of color and women," the report states. "The voluntary approach embedded in ERISA has not moved the needle to encourage the employers of half of the American workforce to sponsor a retirement plan for their employees. Our recommendations attempt to find ways within the existing voluntary system to expand retirement plan coverage and participation." Source: Planadviser.com DOL Digs Deeper Into Climate Change Impact on Retirement Plans The DOL has issued a wide-ranging request for information about the impact of climate-related financial risk on ERISA-covered retirement plans and individual retirement accounts. The RFI comes in response to President Joe Biden's May 2021 Executive Order 14030 directing DOL to identify actions it could take under existing laws to protect the savings of US workers and families. Comments are due by May 16. Source: Mercer.com »» Click here for more on Legislative and Washington Actions Compliance and Regulatory Avoid Trouble By Depositing Employee Contributions on Time This article looks at another critical issue for employers, the need to deposit participant 401k contributions in the plan's trust or custodial account in a timely manner, and what to do when they aren't. Source: Foley.com New Mortality Table May Lead to Lower RMDs Under 401k Plans A new IRS mortality table effective on and after January 1, 2022, may lower the amount of required minimum distributions under 401k retirement plans for many participants required to receive such distributions in 2022 and beyond. This comes about due to a directive from the Trump Administration requiring the IRS to update the outdated 2012 mortality table. The new table is based on more recent data reflecting the general trend toward longer life expectancies. Source: Compliancedashboard.net »» Click here for more Compliance and Regulatory Material Marketplace News Lower 401k Plan Fee Trend Continues Retirement Plan Advisors Announces Participant Advice Solutions Morningstar, Hueler Income Solutions Team up on Lifetime Income Service
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