401ks With Bitcoin Should Expect Lawsuits
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In This Issue
Fiduciary and Plan Governance 401ks With Bitcoin Should Expect Lawsuits Bitcoin in 401ks would test the prudence standard of the Employee Retirement Income Security Act, a lawyer said. Plan sponsors that allow cryptocurrency in their 401ks could be exposing themselves to a "very serious risk of a fiduciary breach." Source: Wagnerlawgroup.com Canadian Plan Sponsors Uncertain About Balancing ESG Factors, Fiduciary Responsibilities Defined benefit pension plans and defined contribution pension plans are uncertain about how to incorporate environmental, social, and governance issues into their investment processes in a way that's consistent with fiduciary duties, according to a new white paper from the Association of Canadian Pension Management. Source: Benefitscanada.com A Wait-and-See Approach for 401k Plan Fiduciaries Interested in Cryptocurrency Options Many plan fiduciaries may not anticipate including cryptocurrency options in their participant-directed account plans now or in the future. For those fiduciaries who might consider them, the Department of Labor's Compliance Release combined with initiatives supported by the Executive Order strongly counsels a wait-and-see approach today. Source: Verrill-law.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers How Retirement Is Changing as We Live Longer A new study by Edward Jones and Age Wave, "Longevity and the New Journey of Retirement," examines what it means to experience well-being and thrive in retirement, a journey that is not one-size-fits-all, and instead has many possible paths and variations. The study of more than 11,000 U.S. adults found that despite Americans' worries about health care and long-term care costs in retirement, they still desire to live longer, and nearly seven in 10 Americans (69%) want to live to age 100. Source: Planadviser.com How Plan Sponsors Feel About Financial Advisers In its new survey, "The Value of a Financial Advisor," Morgan Stanley examines how plan sponsors feel about financial advisers and how advisers affect employee outcomes. For plan sponsors, having dedicated financial advisers to help with investment oversight brings added peace of mind, a survey says. Source: Planadviser.com Self-Directed 401k Balances Down in Q1: Schwab Report Reflecting recent market volatility, average self-directed brokerage account balances at Charles Schwab dropped in the first three months of 2022, down 6.25% from the end of 2021 and down 0.51% year over year. Source: 401kspecialistmag.com »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers 2021 Defined Contribution Consultant Research Study This study shares insight on retirement trends from our latest survey of the nation's 32 leading consulting and advisory firms that provide services to more than 33,000 plan sponsor clients and report nearly $7.2T of assets under advisement. The study was conducted at the end of 2021 during the continued coronavirus pandemic. Recent years have presented unprecedented challenges, and the study finds the consulting and advisory community evolving their businesses to address both obstacles and new opportunities. Source: Troweprice.com How to Handle the DOL's New IRA Rollover Rule The rule requires written disclosures to your prospects and clients that outline the reason the rollover recommendation is in their best interest. The author poled the advisor community and received 25 detailed responses. He says that "at first it was bewildering because none of the disclosure forms or checklists looked like any of the others. But when I looked closer, there were some commonalities that I fit into a composite disclosure document that the profession can rally around. At the very least, it shows you the thinking of people who have put a lot of thought into this issue. I can offer an even dozen of observations from the responses." Source: Advisorperspectives.com 403b Plans 403b Universal Availability Rules The 403b plan regulations realized the benefits of inclusion a long time ago, providing that if any employee can elect to make elective deferrals, then all the plan sponsor's employees must be allowed to defer, with very limited exceptions. For this universal availability requirement of the Internal Revenue Code to be satisfied, ensuring that employees have an effective opportunity to make elective deferrals at least once a year is imperative. Having a plan and not telling anyone or telling only the "cool kids" is not enough. Source: Belfint.com »» Click here for More 403b Material Court and Legal Arbitration of ERISA Claims Under the Microscope. Where are the Courts and Congress Headed? Due to the lack of Supreme Court guidance on these issues, it is still not clear the extent to which particular arbitration provisions may apply to ERISA fiduciary breach claims. However, several Circuit Courts of Appeal have now weighed in and a bill called the Employee and Retiree Access to Justice Act has been introduced in the House and Senate (H.R. 7740 and S. 4219) with the express purpose of making predispute and nonconsensual post-dispute arbitration clauses unenforceable. What is a plan sponsor favoring arbitration to do? Source: Cohenbuckmann.com Wells Fargo Settles ERISA Breach of Fiduciary Duty Suit for $32.5M After a Minnesota federal district court judge denied its motion to dismiss a proposed ERISA class-action suit in May, Wells Fargo & Co. has agreed to settle the case by paying $32.5 million. The employees claimed that Wells Fargo had violated ERISA by mismanaging their 401k plan. More specifically, the workers alleged that Wells Fargo had breached its fiduciary duty by offering expensive proprietary investment options despite better performing and lower-cost options. Source: Hallbenefitslaw.com Retirement Plan Provider Sues DOL in 401k Cryptocurrency Row A retirement plan provider that championed cryptocurrency for 401k plans has brought a lawsuit against the Department of Labor for dismissing cryptocurrency as a reasonable investment for retirement plans. Source: Plansponsor.com Missing 401k Contributions Must Be Restored, Court Rules A federal court in Maryland has entered a consent judgment that requires a Baltimore logistics, engineering, and management support company and its owner to restore more than $150,000 in missing contributions and interest to the firm's 401k plan. The consent judgment is the result of an investigation by the DOL which found that Bicallis LLC and its owner Bryan Hill did not forward employees' pay deductions for plan contributions and failed to collect matching and safe harbor contributions the company owed the plan from October 2017 through December 2019. Source: Plansponsor.com Suit: DOL Overstepped Its Authority in Warning Against Cryptocurrency in 401ks Retirement plan provider ForUsAll alleged in a lawsuit Thursday that the federal government overstepped its authority in cautioning employers against offering cryptocurrency investment options. The suit asserts that the DOL's warning was an "arbitrary and capricious attempt to restrict the use of cryptocurrency in defined contribution retirement plans, in excess of its authority under the Employee Retirement Income Security Act." Source: Hrdive.com »» Click here for more Court and Other Legal Issues State-Based Private-Sector Retirement Programs Yet Another State IRA Program Set to Debut Mid-2023 Virginia's new state-facilitated private retirement program, called RetirePath Virginia, will open by July 1, 2023, according to a June 2 statement from Virginia529, charged with establishing and overseeing the program by state legislation. The program has selected Vestwell as the program administrator and BlackRock as the investment manager. Source: 401kspecialistmag.com Compliance and Regulatory IRS Provides Guidance for Late Pre-Approved Plan Restatements This IRS clarification allowing correction of these late adoptions without requiring a corresponding VCP filing is very helpful. While the IRS did not specifically address pre-approved defined contribution plans, for which the deadline to adopt a restatement for the current cycle is July 31, 2022, it is reasonable to conclude that this guidance will apply to those plans as well. Source: Groom.com »» Click here for more Compliance and Regulatory Material Marketplace News PenChecks, ASPPA Renew Partnership and Expand QKA Scholarship Program Envestnet Makes Acquisition of the 401kplans.com Marketplace
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