Virtual 401k Education Is on the Rise, Reaching More Workers More Efficiently Than Ever
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NAPA 401k Summit, April 3-5, 2022 The NAPA 401k Summit is the nation's largest and most prestigious conference for retirement plan advisors, and the only industry convention that delivers actionable, unbiased content designed by advisors, for advisors. Whether you need high-level insight into what's happening on Capitol Hill or practical knowledge that helps you manage and grow your business, the 401k Summit has something for you. Click here for more information. In This Issue
Plan Education and Communications Virtual 401k Education Is on the Rise, Reaching More Workers More Efficiently Than Ever Workers attended more virtual education sessions last year than ever before to learn about their 401k plans and other financial topics, according to new data from Schwab Retirement Plan Services. Participant viewership for virtual live and on-demand sessions was up 33% year-over-year in 2021 as the number of onsite in-person meetings dropped to near zero because of the pandemic. Source: Businesswire.com »» Click here for more on Plan Education and Communications Fiduciary and Plan Governance DOL Warns 401k Plans Against Allowing Crypto Investments The DOL is warning 401k plan fiduciaries to "exercise extreme care" before considering whether to include a cryptocurrency option in a plan investment menu. The sternly worded guidance, in Compliance Assistance Release No. 2022-01, published March 10, reveals heightened skepticism of 401k cryptocurrency investments and predicts new DOL enforcement activity for fiduciaries who permit participants to invest in cryptocurrencies. Source: Shrm.org 401k Plan Fiduciary Should Focus on What the Government Is Focused On As a 401k plan fiduciary, you're concerned with a lot of things. The Internal Revenue Service and Department of Labor also have quite a few topics they are focused on. Like with the old E.F.Hutton commercials, treat the IRS and DOL like an E.F. Hutton broker, listen when they talk. Source: Jdsupra.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers The Impact of 401k Cash-Outs on Retirement Income Due to the power of compound interest, seemingly small amounts that leak from 401k accounts when people change jobs can cause major erosion to retirement nest eggs down the line. This paper seeks to examine what people do with their 401k balances when they leave an employer and look at the demographics of people who roll in balances to their new employers. Source: Alight.com Retirement Plan Asset Flows Can Influence Plan Decisions Retirement plan sponsors are navigating several coalesced challenges that are related and might impact their plans: spiking inflation, market volatility, the potential for large portions of assets leaving the plan due to the so-called "Great Resignation," as well as the growing number of Baby Boomers entering retirement. Source: Planadviser.com Record Growth of CITs Spurs Rebound of Contributions to Target-Date Strategies On the heels of releasing its inaugural Retirement Plan Landscape Report earlier this month, Morningstar today published its annual Target-Date Strategy Landscape Report, which found that total assets in target-date strategies grew to a record $3.27 trillion at the end of 2021, nearly a 20% increase over the previous year. The 2022 report also examines the growing trend of collective investment trusts as plan sponsors' preferred target-date vehicle, how fees continue to be a key driver in target-date selection, and primary differences between "to" versus "through" glide paths. Source: 401kspecialistmag.com Using Retirement Account Features for Short-Term Savings Workers can often use retirement savings for unexpected expenses. However, policymakers have expressed an interest in helping workers save for emergencies in ways that do not draw down their retirement assets. Some proposals to increase short-term savings envision new add-on accounts. Other proposals would use existing features of employer-sponsored DC plans that allow funds to be used for unexpected expenses. This 3-page report discusses two of such existing features: deemed Roth Individual Retirement Accounts and after-tax accounts within qualified retirement plans. Source: Congress.gov »» Click here for More Studies, Research, and White Papers 403b Plans Is Restricting 403b Vendors Legal in California? The author says, "A strange thing is occurring in K-12 403b plans in California. Many employers are not allowing new vendors on their 'approved vendor list' or have erected significant barriers to entry. The irony is that these barriers were not in place for the worst vendors this state has ever witnessed and those bad vendors continue to be allowed to hawk their wares with little restriction. New vendors that have something real and different to offer are being denied access. What is going on with vendor lists and what is actually legal according to California law?" Source: 403b.substack.com »» Click here for More 403b Material Court and Legal Another Suit Targets "Untested" TDFs The $741 million, 15,686 participant plan is accused primarily of causing the plan to invest in flexPATH's "untested target-date funds, which replaced established and well-performing target-date funds used by participants to meet their retirement needs." The plan fiduciaries are also alleged to have "failed to use the Plan's bargaining power to obtain reasonable investment management fees, which caused unreasonable expenses to be charged to the Plan." Source: Napa-net.org Investment and Recordkeeping Fees Questioned in ERISA Lawsuit Against DaVita Retirement plan participants have filed a class-action complaint against health care provider DaVita Inc., its board of directors, and the retirement plan administrative committee alleging ERISA breaches of fiduciary duty. Plaintiffs claim the plan charged excessive fees for investments and recordkeeping services for a plan of DaVita's size. Source: Planadviser.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC Enhancing Emergency and Retirement Savings Act Introduced in House Representative Brad Wenstrup has introduced the Enhancing Emergency and Retirement Savings Act of 2022 to provide flexibility and access for those who experience unexpected emergencies. The bill is the House companion to S. 1870, introduced by Senator James Lankford and Senator Michael Bennet last year. The legislation would provide a penalty-free "emergency personal expense distribution" option from employer-sponsored retirement plans and IRAs. Source: Ascensus.com Letter to the GAO on Stronger Spousal Protections in DC Plans Letter from Senator Patty Murray and Senator Richard Burr to the U.S. Government Accountability Office asking them to examine the need for stronger spousal protections in defined contribution retirement plans. They state that people plan their futures around their retirement accounts, so no one should have these critical resources undermined by a spouse's decisions without their knowledge or consent. Source: Senate.gov A late-Friday afternoon news dump in the form of a memo from House Majority Leader Steny Hoyer said the House would vote on popular and largely bipartisan retirement security legislation. Source: 401kspecialistmag.com »» Click here for more on Legislative and Washington Actions State-Based Private-Sector Retirement Programs Connecticut Launches There Private-Sector Retirement Savings Program Connecticut Comptroller Natalie Braswell announced on March 24 the launch of MyCTSavings, the state-run retirement savings program intended to provide coverage for private-sector employees whose employers do not offer them a plan. A pilot was started in September 2021. Source: Prnewswire.com Compliance and Regulatory Chart: IRS DC Document Restatement Cycles This chart reflects actual or expected timeline dates (January 2022 for the DC plans). The IRS may modify certain Cycle 3 timeline dates in the future. Source: Asc-net.com The IRS has released a new proposed rule providing for an exception, if certain requirements are met, to the application of the "unified plan rule" for multiple employer plans when there is a failure by one or more participating employers to take actions necessary to satisfy requirements of the Internal Revenue Code. The unified plan rule specifies that the failure by one participating employer to satisfy an applicable qualification requirement would result in the disqualification of the MEP for all employers maintaining the plan. Source: Ascensus.com »» Click here for more Compliance and Regulatory Material Marketplace News Transamerica, Ascensus, Natixis and Leafhouse Team on Group Plan Program Voya Announces Enhancements to Its Mobile App for Plan Participants NTSA Names Glassey as New Executive Director
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