The Role of the 401k in Today's Tight Labor Market
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In This Issue
Insight: Studies, Research, and White Papers The Role of the 401k in Today's Tight Labor Market In his role as managing director and head of retirement plan services at Schwab Retirement Plan Services, Brian Bender spends a lot of time thinking about the interplay of retirement benefits, compensation structures, and employee retention. According to Bender, ongoing cultural shifts have influenced both employees' expectations concerning workplace benefits and the evolving role of the 401k plan in talent management. Source: Planadviser.com Employers can offer 401k plan participants the opportunity to make Roth 401k contributions. If you're lucky enough to work for an employer that offers this option, Roth contributions could play an important role in maximizing your retirement income. Source: Captrust.com »» Click here for More Studies, Research, and White Papers 403b Plans State Bill Would Require Multiple 403b Providers A bill in the New Jersey Legislature would require that certain boards of education have multiple providers for 403b plans. The legislation provides that certain school districts -- those with at least 1,000 students that offer a 403b retirement plan to school district employees -- select at minimum three providers or vendors for the plan. Source: Plansponsor.com »» Click here for More 403b Material Court and Legal Which Retirement Plan Participants Can Sue? Several recent lawsuits brought under ERISA have addressed the issue of which retirement plan participants have "standing" to bring an ERISA action against their plan's fiduciaries. These cases generally focus on the issue of whether the participant-plaintiffs who brought the suit have a "concrete stake" in the dispute, as in two recent cases involving participant-plaintiffs in 401k-type defined contribution plans who did not invest in all the funds for which they are suing. Fiduciaries should consider who would have a stake in litigation. Source: Shrm.org Sixth Circuit Backs Defense in Fidelity Freedom Funds ERISA Suit One expert who works on the fiduciary insurance side of the retirement plan industry calls the appellate ruling 'the best decision ever written in an excessive fee case,' and one which could dissuade other plaintiffs in similar cases. Source: Planadviser.com The U.S. Court of Appeals for the Sixth Circuit this week decided Smith v. CommonSpirit Health, becoming the first court of appeals to issue a published opinion applying Hughes v. Northwestern University. The court made clear that whether an ERISA fee-and-expense claim is plausible "depends on a host of considerations, including common sense and the strength of competing explanations for the defendant's conduct." Source: Sidley.com MITRE Corp. Faces Familiar ERISA Fiduciary Breach Allegations Another group of plaintiffs represented by the law firm Capozzi Adler has filed a proposed class-action lawsuit -- in this case, against their employer, the MITRE Corp., and various related defendants, such as the company's board of directors -- for alleged fiduciary breaches in the provision of retirement plan benefits. Source: Planadviser.com More Excessive Fee Cases Revived After High Court's Northwestern Decision The 9th US Circuit Court of Appeals recently revived two ERISA lawsuits by participants and beneficiaries in separate 401k plans challenging plan fiduciaries' decisions to offer retail share class mutual funds instead of cheaper -- but otherwise identical -- institutional share classes. In both cases, district courts dismissed the claims after finding the plaintiffs needed to allege more than the mere availability of similar lower-fee funds. However, two different three-judge panels of the 9th Circuit disagreed with the lower courts, finding the plaintiffs' barebones allegations sufficed to survive a motion to dismiss. Source: Mercer.com Olin Corp. Soundly Defeats ERISA Lawsuit The U.S. District Court for the Eastern District of Missouri has ruled in favor of the defendants in an ERISA lawsuit filed against the Olin Corp. The plaintiffs in the case put forward substantially similar allegations to numerous other lawsuits filed against employers for alleged fiduciary breaches in the operation of their defined contribution retirement plans. The judge's opinion sides firmly against the arguments made by the plaintiffs in the case, who are among the many litigants currently represented by the law firm Capozzi Adler. Source: Planadviser.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC SECURE 2.0 Momentum Surges With EARN Act's Unanimous Committee Approval Today Comprehensive retirement reform legislation taking shape on Capitol Hill with strong bipartisan support making it likely a final bill will reach President Biden's desk by the end of the year. Source: 401kspecialistmag.com »» Click here for more on Legislative and Washington Actions Cyber and Plan Security DOL, Recordkeeper Square Off in Confidentiality Disputes The DOL's cybersecurity investigation into Alight Solutions, a retirement plan recordkeeper, has queued up court rulings on the reach of the DOL's subpoena power that may have important implications for ERISA plan sponsors and their respective recordkeepers and service providers moving forward. Source: Erisalitigationadvisor.com »» Click here for more on Cybersecurity Issues Compliance and Regulatory Form 5500 and Other Retirement/Benefit Plan Reminders and Developments It is that time of year again. The IRS Form 5500 for calendar year retirement and welfare plans is due to be filed by July 31. Here are some reminders and related developments you might need to know. Source: Hawleytroxell.com The IRS's New Pre-Examination Pilot Program: Key Features and Questions Earlier this month, the IRS announced a new pilot program under which retirement plan sponsors will be given a 90-day notice that their plan has been selected for an examination which they may be able to largely avoid by taking certain steps. This article discusses the key features of the pilot program, along with some questions and considerations. Source: Groom.com Homework and Deadlines Matter: New IRS Pre-Audit Compliance Program for Retirement Plans As part of a new program, the IRS will send a letter notifying a plan sponsor that its retirement plan has been selected for an upcoming examination and give the plan sponsor 90-days to identify and voluntarily correct any compliance issues that may be self-corrected. Failure to respond by the 90-day deadline will result in an examination. Retirement plan sponsors who receive a pre-examination notice should immediately begin working with their lawyers and other advisors to determine the best way to respond to the IRS notice. Source: Employeebenefitsblog.com Agencies Release Final Form 5500 Revisions for MEP Reporting On May 23, 2022, the IRS, DOL, and the PBGC released final regulations that make revisions to Forms 5500 and 5500-SF applicable to annual reports for retirement plans (including 401k plans) filed for plan years beginning on or after January 1, 2022. Source: Compliancedashboard.net Due Dates for DC Plan Lifetime Illustrations Approaching All ERISA-covered DC plans with participant direction of investments need to provide benefit statements with benefit illustrations to all participants with account balances by August 14, 2022. DC plans without participant direction have various due dates depending on the plan's plan year. Source: Segalco.com »» Click here for more Compliance and Regulatory Material Marketplace News Ubiquity, Paycor Team Up on Turnkey Small Biz 401k Solution
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