Participant Sues for Right to Defer More
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Court and Legal Participant Sues for Right to Defer More A new 401k suit has been filed with a participant-plaintiff charging an employer with failing to let him save as much as he wants to. That's right, one Lance Baird has accused his employer Hyatt Corporation of failing to properly honor his repeated requests to increase the amount of his salary that would go to his 401k account. Source: Napa-net.org Defensive Plan Provisions Designed to Prevent ERISA Lawsuits Plan sponsors may consider adding three different types of defensive provisions to their retirement plans to help cut down on the number of participants filing claims alleging violations of ERISA. These defensive provisions can include claims procedure requirements, plan limitation periods, mandatory arbitration clauses, and class action waiver and venue provisions. All these provisions can help plan sponsors control any litigation that ultimately occurs. Source: Hallbenefitslaw.com Costco Agrees to $5.1M ERISA Case Settlement The parties in an ERISA lawsuit filed against Costco have reached a settlement that will see the company pay $5.1 million to resolve allegations that it committed fiduciary breaches in the provision of retirement benefits to employees. The lawsuit arose in June 2020, when a participant in the Costco 401k Retirement Plan filed a suit against his employer, its board of directors, and the members of a benefits committee. Source: Planadviser.com Addressing Excessive Fee Litigation Risk in the Wake of Hughes v. Northwestern The Supreme Court's January 24, 2022 decision in Hughes v. Northwestern University, has caused alarm in some corners, with panicked predictions of a proliferation of ERISA suits alleging that defined contribution plans provided imprudent investment options. However, Hughes should be more properly understood as rejecting an attempt by the U.S. Court of Appeals for the Seventh Circuit to impose a novel limit on excessive fee suits. The Supreme Court instead emphasized the application of its existing precedent in Tibble v. Edison International. Source: Workforcebulletin.com »» Click here for more Court and Other Legal Issues Fiduciary and Plan Governance Should Private Equity Be in 401k Plans? In 2021, the Department of Labor issued an information letter that some interpreted as green lighting private equity investments through 401k plans. The DOL has issued new guidance for fiduciaries clarifying that it hasn't endorsed these investments and discussing the risks and issues. This article analyzes the DOL's clarification of its position. Source: Investmentnews.com (registration may be required) Cryptocurrency and 401k Plans: DOL Implores Fiduciaries to Exercise Extreme Care According to CAR 2022-01, the DOL's concerns about the prudence of a fiduciary's decision to expose a 401k plan's participants to direct investments in cryptocurrencies or other products whose value is tied to cryptocurrencies stem from the significant risks of fraud, theft, and loss that have been endemic to these asset classes at least as of this early stage in their evolution. CAR 2022-01 elaborates on several aspects of cryptocurrencies that are at the heart of the DOL's apprehensions. Source: Ropesgray.com Bitcoin in Your 401k? DOL Cautions Fiduciaries About Cryptocurrency Risks Participants are pressing plan sponsors to make cryptocurrency investments available in their 401k plans. While Bitcoin may immediately come to mind when cryptocurrency is mentioned, there are at least 100 types of cryptocurrency now available to investors. Less or nothing is said about the legal liability and potential risks. Both President Biden and the Department of Labor have now taken steps that should alert fiduciaries about their legal exposure if they make these investments available through their plans. Source: Cohenbuckmann.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers Three Barriers to ESG Adoption for U.S. DC Plans DCIIA's Retirement Research Center interviewed 12 defined contribution practice leaders at leading U.S. consulting firms on barriers to incorporating environmental, social and governance considerations and investments in U.S. DC plans. According to these consultants, while interest in and demand for ESG continues to grow, implementation remains challenging. This report describes the three barriers to implementation identified by U.S. consultants. Source: Dciia.org Plan Design Features to Drive Higher Savings Rates Plan sponsors must find the right balance between adopting plan features that will help their employees prepare for a financially secure retirement and staying on budget with plan expenses. Different combinations of plan features are going to be right for different types of employers, depending on their employee demographics. A few recent studies may help plan sponsors and their advisors evaluate how combining various plan features could drive the strongest participant savings outcomes. Source: Newportgroup.com The Biggest Retirement Plan Leakage Triggers and Costs for Participants The biggest triggers for retirement plan leakage are participants taking pre-retirement distributions, loan defaults, and hardship withdrawals, according to an industry expert. Asset leakage is an important issue for plan sponsors because larger retirement plans are better positioned to negotiate with recordkeepers and investment providers to secure institutionally priced investment products and lower fees by trading on their size and bargaining power. Source: Planadviser.com ESG and Participant Communications Many plan sponsors are at various stages of considering how to incorporate ESG into their retirement plan design and fund offerings. Plan sponsors that have incorporated ESG in their retirement plans are looking for best practices when communicating with participants about ESG. This piece is intended to provide such plan sponsors and their service providers with a framework for engaging participants on the topic of ESG and how it may be integrated into their retirement plan communications. Source: Dciia.org »» Click here for More Studies, Research, and White Papers 403b Plans 403b Plan Design Continues to Evolve 403b plans have undergone many changes since IRS regulations were finalized in 2007. A report from BrightScope and the Investment Company Institute notes that it is difficult to get a full picture of the 403b plan market as some plans are not governed by ERISA. However, the report offers a profile of the 403b plan market and how it has evolved over the years. Source: Plansponsor.com »» Click here for More 403b Material Compliance and Regulatory 401k Deadlines for Plan Sponsor's in 2022 Every month holds important deadlines for employers offering small business 401ks. The following checklist will help you prepare for the road ahead and stay on top of deadlines. Source: Myubiquity.com Plan Document Foul-ups Can Cost You as a 401k Plan Sponsor As a plan sponsor, there are many things you don't know about your plan document and you really should because the plan documents could be a major culprit in what ails your 401k plan. Source: Jdsupra.com IRS Proposes New Rules for Required Minimum Distributions On February 24, 2022, the IRS issued proposed regulations for determining the required minimum distribution payable to retirement plan participants and their beneficiaries. This article addresses the proposed regulations in the context of the SECURE Act provisions specific to employer-sponsored defined contribution plans. It concludes with action items for employers pending the issuance of final regulations. Source: Caplindrysdale.com Safe Harbor Plan Rules for 2022 It's helpful to know which IRS rules and limits apply from year to year, whether you currently offer a Safe Harbor 401k or you are exploring options to open a small business 401k plan in 2022. See what rule changes are in place for small business Safe Harbor 401k plans for 2022. Source: Myubiquity.com »» Click here for more Compliance and Regulatory Material Marketplace News Penelope Raises $2.1M to Accelerate Small-Business Adoption of 401k Plans Pensionmark Acquired by World Insurance Associates Carbon Collective Launches Climate-focused Employer 401k
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