Are Brokerage Windows an Effective Way of Limiting Fiduciary Risk
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Fiduciary and Plan Governance Are Brokerage Windows an Effective Way of Limiting Fiduciary Risk After Hughes v. Northwestern? The high standard of fiduciary responsibility embraced by the Court in Hughes may discourage fiduciaries from designating numerous investment alternatives on participant investment menus. Fiduciaries considering less robust plan investment menus, however, may also be concerned that reduced investment options could discourage participation or could trigger challenges from participants that investment options are too restrictive. Could adding brokerage window options expand investment options while reducing fiduciary responsibility for reviewing investment menus? Source: Wagnerlawgroup.com Lessons From the 2022 Qualified Plan Fiduciary Summit The 2022 Qualified Plan Fiduciary Summit connected plan sponsors with retirement industry thought leaders, advisors, recordkeepers, ERISA attorneys, money managers, and other service providers. This article recaps the key themes from the event and items for plan fiduciaries to consider as they navigate a challenging labor market, an active litigation and regulatory environment, and increased employee needs and expectations. Source: Qualifiedplanadvisors.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers Younger 401k Participants Really Like TDFs, New Study Finds Target-date fund investing continues to be prevalent in 401k plans, particularly among younger participants, according to an updated joint study released today by the Investment Company Institute and the Employee Benefit Research Institute. Source: 401kspecialistmag.com 401k Plan Asset Allocation, Account Balances, and Loan Activity in 2019 In an ongoing collaborative effort, the Employee Benefit Research Institute and the Investment Company Institute collect annual data on millions of 401k plan participants as a means to examine how these participants manage their 401k plan accounts. This 2022 report is an update of EBRI and ICI's ongoing research into 401k plan participants' activity through year-end 2019. The report is divided into four sections: the first describes the EBRI/ICI 401k database; the second presents a snapshot of participant account balances at year-end 2019; the third looks at participants' asset allocations, including an analysis of 401k participants' use of target-date, or lifecycle, funds; and the fourth focuses on participants' 401k loan activity. Source: Ebri.org PEPs Pique Small Businesses' Interest, But Hurdles Remain A new survey finds that small employers are interested in learning more about pooled employer plans, although there is still some hesitancy on the road to implementation. More than half of smaller employers surveyed by the Secure Retirement Institute that are considering a DC plan are interested in learning more about PEPs, regardless of whether they have a retirement plan currently in place. Source: Napa-net.org »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers Recent Changes That Plan Providers May Not Like As far as things in the retirement plan business, there are some trends out there that the author is not too crazy about. He believes retirement plan providers might want to ponder these. Source: Jdsupra.com 403b Plans 403b plans are generally subject to fewer technical requirements and less administrative burdens than 401k plans. This chart compares these two plan types. Source: Consultrms.com IRS Issues Updated Language for Section 403b Plans The IRS recently issued its List of Required Modifications for pre-approved plan documents that are commonly used by employers that offer and/or contribute to Internal Revenue Code section 403b plans. Insurance companies, recordkeepers, and other providers of such pre-approved documents must now update their documents to incorporate changes reflected in the LRMs and must submit the updated documents to the Internal Revenue Service for approval during the one-year period that begins on May 2, 2022. Source: Bsk.com »» Click here for More 403b Material Court and Legal Sixth Circuit Rejects Arbitration for Proposed Fiduciary Breach Class Action The Sixth Circuit, in a matter of first impression for that Circuit, held an arbitration clause contained in an individual employment agreement did not apply to ERISA fiduciary breach claims brought on behalf of a defined contribution plan. The case is Hawkins et al. v. Cintas Corp. Source: Erisapracticecenter.com Capital One Seeks to Dismiss Proposed Class Challenging 401k Plan Administration Capital One Financial Corp. has filed a motion to dismiss an ERISA suit, arguing that there is insufficient evidence that it mismanaged its 401k plan. In Morales v. Capital One Financial Corp. et al., U.S. District Court for the Eastern District of Virginia, the proposed class of Capital One 401k plan participants claims that Capital One violated ERISA by violating its fiduciary duty to make prudent decisions on behalf of plan participants and monitor the committee that oversaw the 401k plan. Source: Hallbenefitslaw.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC Retirement Plan Legislative Update: Act 2 - Scene 1: The SECURE Act The SECURE Act was signed into law on December 20, 2019, and as you may have known, or as you will soon see, this was significant retirement plan legislation and provides the main portion of our play. The SECURE Act includes provisions that help employers and provisions that help participants. The Act is broken out into four titles, which we'll cover in two articles. The first title covers provisions that will expand and preserve retirement savings. Source: Belfint.com »» Click here for more on Legislative and Washington Actions State-Based Private-Sector Retirement Programs State of State-Run Private-Sector Retirement Programs If your business doesn't sponsor a retirement plan, you may be covered by state or city mandatory auto-IRA programs. These are being established by a growing number of states to help close the retirement savings gap. Carol Buckmann's new article for LEXIS Practical Guidance describes how these programs work and explains other options for businesses that would otherwise be covered by these programs. Source: Squarespace.com Hawaii May Say Aloha to Unique Auto-IRA Plan The Aloha state is poised to set in motion a state retirement plan that would be unique among its counterparts. Employees would have to opt-in, and a retiree would be among the members of the board administering the program. Source: Asppa.org Compliance and Regulatory Required Participant Notices: A Refresher Providing information and notice to plan participants is not a suggestion, it's a requirement. A recent blog entry provides some reminders as to why it matters and what notices need to be sent. Source: Asppa.org Benefit Plan Beneficiary Designation Issues Navigating the appropriate handling of a deceased participant's plan benefit is an all too common concern for retirement administrators. What's the big deal? Seems like it should be simple enough -- just pay the beneficiary -- but in practice, it can be a major headache. How do plan administrators ultimately decide who the proper beneficiary is, and who will receive the plan benefit? This podcast discusses the issues. Source: Seyfarth.com Targeting Small, Uncashed 401k Distribution Checks Can Generate Big Savings Harnessing auto portability to mitigate, and eventually eliminate, automatic cash-outs of sub-$1,000 terminated accounts, and the uncashed checks for those distributions, can help ensure participants receive all of the retirement savings to which they are entitled -- and improve their retirement outcomes -- while reducing fiduciary liability for sponsors. Source: Benefitnews.com »» Click here for more Compliance and Regulatory Material Marketplace News Broadridge Forms Consortium to Tackle Retirement Security Challenges Ascensus Launches New Brand Visual Identity
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