SEC Cautions Advisers Against "Extraneous" Use of Term "Fiduciary"
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Items of Special Interest to Service Providers SEC Cautions Advisers Against "Extraneous" Use of Term "Fiduciary" Informal guidance issued by the SEC cautions investment advisers about their use of the term "fiduciary" on Form CRS, but an industry group argues the guidance goes too far. Source: Napa-net.org Fiduciary and Plan Governance Considerations for DC Plan Sponsors Integrating ESG Investments Challenges for plan sponsors with participants showing greater interest in sustainable investment and ESG funds are myriad, according to industry experts. Plan sponsors must determine the plan's ESG philosophy and goals for sustainable investing and communicate these to plan participants. But plan sponsors' communication with and education of participants must account for fiduciary obligations, and not constitute invest. advice under the ERISA. Source: Plansponsor.com Putting a Little PEP in a 401k Retirement Plan Set against the backdrop of the continuing wave of ERISA litigation that is being brought against employers who sponsor retirement plans, Pooled Employer Plans ("PEPs") are emerging in the marketplace as an alternative that may limit employers' risk of retirement plan-related litigation. There have been over 220 ERISA class action suits filed in connection with retirement plans since 2018, and the top ten ERISA settlements for 2021 alone totaled $840 million in the aggregate. Since ERISA litigation is a serious and relevant concern, many plan sponsors, including private equity sponsors and their portfolio companies, would benefit from evaluating whether a PEP is a viable retirement plan solution for them. Source: Ropesgray.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers Millennials have an evolving vision of retirement, different from previous generations, according to Schwab's new Retirement Reimagined Study that uses advanced predictive modeling techniques to forecast key differences in how Millennials, Gen X, and Boomers will approach saving for and living in retirement. The first of its kind study also projects four distinct retirement personas that Millennials could fall into as many of them transition to retirement around 2050. Source: Schwab.com 401ks Still Seen as Gateway for Black Investors, but New Risks Emerging While 401k plans have been the gateway to investing for many black Americans over the last several decades, that finding does not appear to be as prominent, as risky investments grow in popularity, a new survey finds. Source: Napa-net.org Research Finds Americans Overwhelmingly Preserved Retirement Nest Eggs in 2021 The majority of DC plan retirement savers continued saving for retirement in 2021 through their DC plans such as 401ks, according to ICI's "Defined Contribution Plan Participants' Activities, 2021." The study tracks contributions, withdrawals, and other activity in 401k and other DC retirement plans, based on DC plan recordkeeper data covering more than 35 million participant accounts in employer-based DC plans at the end of December 2021. Source: Ici.org »» Click here for More Studies, Research, and White Papers 403b Plans Additional 403b Plan Document Guidance Released The IRS has released a revised Section 403b Pre-Approved Plans Listing of Required Modifications and Information Package, which includes sample plan provisions to assist drafters of 403b pre-approved plan documents in satisfying the requirements of Internal Revenue Code Section 403b and associated regulations. Source: Ascensus.com »» Click here for More 403b Material Court and Legal Plaintiffs in "excessive fee" lawsuits commonly allege that plan fiduciaries selected and retained investment options that were overly priced and underperformed against their benchmarks, and that plan recordkeeping fees were unreasonably high. While fiduciary defendants have obtained recent early wins in this litigation by challenging the plausibility of the plaintiffs' allegations, these Ninth Circuit decisions bucked those trends and gave significant deference to the plaintiffs' claims. Both opinions took a strict approach in accepting all of the plaintiffs' allegations as true for purposes of ruling on the defendants' motions to dismiss; and, if they stand, they could make it easier for plaintiffs to proceed past the early pleading stage and attempt to develop their cases through discovery. Source: Truckerhuss.com New York Federal District Court Dismisses 401k Fee Class Action A New York district court recently dismissed, without prejudice, a 401k plan participant's putative class action complaint alleging breaches of fiduciary duty. The plaintiff alleged that the plan fiduciary defendants breached their duties of prudence and loyalty by failing to properly monitor the plan's costs. This decision may provide a roadmap on how district courts can address complaints alleging breaches of fiduciary duty which fail to explicitly provide the formula used to calculate the alleged imprudent recordkeeping fees. Source: Erisalitigationadvisor.com Washington University ERISA Lawsuit Reaches Settlement A settlement agreement has been struck in the ERISA lawsuit filed against Washington University in St. Louis in the U.S. District Court for the Eastern District of Missouri. Though the defendants admit no wrongdoing in the settlement agreement, they have agreed to pay $7.5 million into a gross settlement account from which the funds will be distributed to class members and used to pay the plaintiffs' sizable attorneys' fees. Source: Planadviser.com Kroger Demands Dismissal of Proposed ERISA Class Action Over Recordkeeping Fees Kroger asked an Ohio federal court to dismiss a proposed class-action lawsuit in which workers claim that they paid excessive, unreasonable, and undisclosed annual recordkeeping fees to participate in the employer's retirement savings plan. According to Kroger, employees paid reasonable yearly fees in line with federal law and received annual fee disclosures stating the yearly expense ratios. Source: Hallbenefitslaw.com Excessive Fee Lawsuit Will Proceed Against Xerox The breach of fiduciary duty lawsuit against Xerox Corporation's 401k retirement plan fiduciaries will proceed after a District Court denied the defendants' motion to dismiss the complaint. The complaint alleged a breach of fiduciary duty obligations and excessive fees for recordkeeping services. Source: Planadviser.com »» Click here for more Court and Other Legal Issues State-Based Private-Sector Retirement Programs Employers and CalSavers, How Are They Responding? CalSavers, the program in the Golden State that provides retirement plan coverage for those whose employers do not, has been in operation for three years now. Employers have a key role in how the program works; how are they responding? Source: Napa-net.org OregonSaves Has "Meaningfully Increased Employee Savings," Study Says OregonSaves, the state-run program which provides employees in the Beaver State with retirement benefits if their employers do not, was the first such program to begin operating in the United States. A recent study assessed how well it is doing, and researchers have some good news for its advocates. Source: Asppa.org Cyber and Plan Security Cybersecurity Risks: Where We Are and Steps to Take Cyber criminals are as innovative as those who develop and refine the technology they manipulate, and now their targets include the retirement industry. Experts in a recent panel, and also in a report, weighed in on the tricks those criminals use and strategies that can help thwart them. Source: Asppa.org 401k Cybersecurity Risk Increases With Remote Workforce 401k cybersecurity risk exists for all retirement plans. However, having a remote workforce exponentially increases 401k cybersecurity risk. Remote employees present employers with multi-point networking exposure that has grown to be one of the bigger concerns about cybersecurity. The proliferation of remote workers can be traced back to the early stages of the Covid-19 pandemic. A new study shows that employers have work to do when it comes to mitigating 401k cybersecurity risk. Source: 401ktv.com »» Click here for more on Cybersecurity Issues Compliance and Regulatory 401k Compliance Check: Required Participant Notices This piece focuses on the variety of typical notices that are required for 401k retirement plans. Failing to provide required notices can subject the plan, and its fiduciaries, to liability. Notice failures can result in penalties imposed by the IRS or DOL, or lawsuits from participants who were not informed about important information that affected their decision-making. Source: Foley.com Oops! We're in a Controlled Group of Companies. What Happens to Our 401k Plan Now? Whether you made the mistake of thinking that you were or were not in either a controlled group of companies or an affiliated service group, your plan will have fundamental tax qualification issues that must be corrected before you wind up in an IRS audit. Here is what to be on the lookout for. Source: Employeebenefitslawgroup.com »» Click here for more Compliance and Regulatory Material Marketplace News SageView Closes $900 Million Capital One Investing Acquisition
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