Five New Year's Resolutions for 401k Plan Fiduciaries
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General Items Five New Year's Resolutions for 401k Plan Fiduciaries This is the time of year when resolutions for the cessation of bad behaviors and the beginning of better ones are in vogue. Here are three for plan fiduciaries for 2023. Source: Napa-net.org Fiduciary and Plan Governance The 2022 final rule removes the emphasis on the pecuniary factors in selecting ESG investments and is intended to provide clarity on how ERISA's fiduciary duties of prudence and loyalty apply to selecting investments and investment courses of action and exercising shareholder rights such as proxy voting. This is a summary of the key changes in the 2022 final rule. Source: Huntonlaborblog.com »» Click here for more Fiduciary and Plan Governance Material 403b Plans After Committee Change, SECURE 2.0 Does Not Allow CITs in 403bs Disregard any coverage to the contrary: SECURE 2.0, as passed, does not permit 403b plans to invest in collective investment trusts. House Financial Services had "consumer protections" concerns. The required amendments to securities laws did not make it into the final SECURE 2.0 Act. Source: Planadviser.com »» Click here for More 403b Material Items of Special Interest to Service Providers Expanding the Reach of Your Practice With 403b Plans If you currently work with 401k and profit-sharing plans, expanding the reach of your practice to serve 403b plans can uncover a whole new world of potential opportunities. The expertise and experience you have gained serving 401k plans can be fully leveraged to serve 403b plan sponsors and their employees. Source: 401kspecialistmag.com Court and Legal 401k Excessive Fee Settlement Hits a Snag So, what's the snag? Well, as you might suspect, it has to do with the party that was NOT involved in the partial settlement, FirstGroup and its plan fiduciaries. Their concern, according to Bloomberg Law, is that the proposed settlement includes a bar order, one that blocks FirstGroup from asserting counterclaims against Aon Hewitt. In an objection filed last week, FirstGroup says the "overly broad" order prejudices FirstGroup and curtails its legal rights beyond the extent necessary to effectuate the settlement. Source: Napa-net.org Court Dismisses 403b ERISA Claim Against Employer, but Not the Plan's Adviser The U.S. District Court for the Northern District of Texas filed a partial order on December 29, 2022, ruling on summary judgment motions from both defendants. District Judge Brantley Starr ruled that the plaintiffs have standing to bring the suit, but Legacy Counseling Center is exempt from the ERISA requirements in this case. Peveto Financial Group, on the other hand, cannot be held liable for IRS corrective damages, yet can still be held liable for not permitting wider plan participation if they are found to be a fiduciary. Source: Planadviser.com ERISA Lawsuit Filed Against Ventura Foods An ERISA class action suit was brought against Ventura Foods LLC, a Brea, California-based food production and processing firm, in the U.S. District Court for the Central District of California by a current Ventura employee. The lawsuit, filed on December 21, 2022, alleges that Ventura overpaid its recordkeeper by allowing variable indirect fees to grow unreasonably high. Source: Planadviser.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC SECURE 2.0: Over-Hyped or Game-Changer? Within the 4,155 pages flown to St. Croix to receive the vacationing President's signature was the much-expected SECURE 2.0 Act. Almost immediately, you saw the usual lobbyists either lauding what it promises or lamenting what it lacks. But what about everyday rank-and-file financial professionals? What do they think? Author asked retirement advisors from across the country whether they felt SECURE 2.0 has been over-hyped or represented a game changer. Here's what they said on a few key issues. Source: Fiduciarynews.com Secure Act 2.0 Brings a Litany of Retirement Changes While plan amendments generally need not be made until the end of the first plan year beginning on or after January 1, 2025, plans must be operated under the effective date of each new provision. Here are highlights of key provisions, organized by the same headings used in the Act. Source: Wagnerlawgroup.com SECURE 2.0 Introduces Sweeping Changes to Retirement Rules Federal lawmakers recently passed the SECURE 2.0 Act of 2022, a retirement security package that will introduce some of the most comprehensive changes to retirement policy in recent years. Tucked in the omnibus appropriations package, SECURE 2.0 will expand access to and provide incentives for employer-sponsored retirement plans. This article covers some of the key provisions in SECURE 2.0. Source: Bsk.com Secure 2.0: Congress Enacts Wide-Ranging Changes to 401k and 403b Plans As part of its mammoth 2022 year-end spending bill, Congress passed Secure 2.0, which makes dozens of modifications to the laws governing retirement savings. These revisions, almost all of which were driven by concerns that Americans are failing to accumulate sufficient resources to fund their retirement, build on changes Congress made in 2019 in the SECURE Act. This is a list of key provisions in Secure 2.0 that employers with existing 401k and 403b plans need to pay attention to. Source: Blankrome.com »» Click here for more on Legislative and Washington Actions Compliance and Regulatory Defined Contribution Retirement Plan: 2023 Compliance Calendar Retirement plan sponsors are responsible for compliance with many ongoing reporting, disclosure, and notice requirements. This Retirement Plan Compliance Calendar summarizes the major requirements that apply to defined contribution plans for 2023. Due dates are based on a calendar plan year and apply to plans subject to ERISA. Source: Usicg.com What to Keep on Your Radar and Some Predictions for 2023 The end of one year and the beginning of the next is traditionally a time to take stock of new developments and compliance issues. Though nobody has a crystal ball, it's also a good time to assess trends and changes likely to occur in the future. Here is a list of items for compliance calendars and some subjective predictions of what to watch for in 2023. Source: Cohenbuckmann.com Vanguard Expert Offers Tips on Hardship Withdrawals Hardship withdrawals from retirement accounts are on the rise, and advisors, investors, and plan administrators need to know the options. Spiking inflation coupled with a sinking stock market has forced more investors to tap their retirement savings for cash. Fiona Greig, a leading expert in household finance, has a front-row seat to the unfolding crisis in her position as the global head of investor research and policy in Vanguard's investment strategy group. Source: Investmentnews.com IRS Proposes Alternative to In-Person Witnessing of Spousal Consents The IRS has issued proposed regulations on the use of electronic media to make participant elections and spousal consents. The proposed regulation generally affects sponsors and administrators of, and individuals entitled to benefits under, certain qualified retirement plans. Source: Napa-net.org SECURE 2.0 Delivers New Rules for Correcting Retirement Plan Errors This article discusses three significant changes to corrections of common retirement plan errors: New rules for correcting overpayments, expansion of the Self-Correction Program under the IRS's Employee Plans Compliance Resolution System to cover most inadvertent errors, and making permanent the current EPCRS safe harbor correction method for elective deferral failures related to automatic contribution arrangements. Source: Erisapracticecenter.com »» Click here for more Compliance and Regulatory Material
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