Pocket Guide to SECURE 2.0
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Legislative and Washington DC The SECURE 2.0 Act of 2022 was signed into law on December 29, 2022, as part of the Consolidated Appropriations Act, of 2023. This Pocket Guide provides a summary of the retirement-related provisions in SECURE 2.0. Parts I through XIII of the Pocket Guide are organized chronologically by effective date, and the final part summarizes provisions with varying effective dates after SECURE 2.0 enactment. Source: Erisapracticecenter.com SECURE 2.0 Legislation: Impact on Qualified Plans The chart here briefly summarizes elements of SECURE 2.0 that are most likely to impact employers' tax-qualified plans and provides some observations about the changes for those affected by the new law to consider. Source: Lowenstein.com The SECURE Act 2.0: The Most Impactful Provisions - Automatic Plans The SECURE Act 2.0 has over 90 provisions, some major and some minor. One of the most impactful provisions is the new requirement to automatically enroll and automatically increase deferrals to new 401k and 403b plans. Source: Fredreish.com SECURE 2.0 Represents an Even Larger Collection of 401k Plan Reforms Enjoying widespread bipartisan support, many of the provisions included in SECURE 2.0 have been around for a while, some having been proposed as part of previous, failed legislation. Overall, the goal behind most of the changes is to help make retirement savings available to a wider range of employees through a wide variety of distinct approaches favored by experts and retirement plan professionals. Source: Compliancedashboard.net How SECURE 2.0 Looks to Increase Plan Participation The SECURE 2.0 has the potential to affect workplace retirement savings in a big way. This article addresses how the new law can increase workplace retirement plan participation and savings rates. Plan sponsors and administrators should take note to keep up with this evolving area. Source: Cohenbuckmann.com SECURE 2.0 Changes: Catching Up on Catch-Ups This article addresses SECURE 2.0 and focuses on upcoming changes to 401k, 403b, and governmental 457b plans with eligible deferral features that allow certain older participants to make additional elective or catch-up deferrals. Source: Shermanhoward.com SECURE 2.0 Act and Its Impact on Defined Contribution Plans This article provides an in-depth summary of provisions of the SECURE 2.0 Act applicable only to defined contribution plans. Source: Reinhartlaw.com »» Click here for more on Legislative and Washington Actions Insight: Studies, Research, and White Papers Companies Face Pressure to Offer ESG Options in Retirement Plans Most corporate retirement plans are awash in fossil-fuel investments. But that could start to change this year as a new U.S. rule comes online and employee pressure builds for more climate-friendly options. But, it may take more than that to get large employers to change their offerings. Source: Investmentnews.com »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers Among Advisers' Top Concerns Is Another 401k Drop in 2023 A "state of the industry" report from recordkeeper Ubiquity finds financial advisers fear another year of poor investment returns that would hit client 401ks as well as asset-based management fees. Source: Planadviser.com 403b Plans Secure 2.0's Unresolved 403b CIT Securities Law Issue One of the more curious circumstances under SECURE 2.0 arises from the Acts Section 128, which purports to permit 403b plan custodial accounts to invest in interests in Collective Investment Trusts, referred to as "81-100" group trusts in the Act. But, as the Senate Finance Committee noted in its own Committee Report to the EARN Act, "In order to permit 403b plans to participate in a group trust, certain revisions to the securities laws will be required." Those necessary revisions, however, never made it into SECURE 2.0. Source: Businessofbenefits.com »» Click here for More 403b Material Court and Legal $10 Billion 401k Smacked With Excessive Fee Suit Yet another multi-billion-dollar plan has been sued for recordkeeping and managed account services that the plaintiffs' claim was twice what could have been paid for those services. The target this time is the U.S. Bank 401k Savings Plan. Source: Napa-net.org Another TDF Suite Draws Excessive Fee Suit Plan fiduciaries' decision to retain an actively managed target-date fund suite has drawn another excessive fee suit. The suit, filed against the $5.6 billion 401k plan of Quest Diagnostics Inc., claims that the "defendant's failure to disclose the options for the lowest-cost share class available caused plan participants to pay excessive fees when they chose the higher-cost share class for the same funds." Source: Napa-net.org »» Click here for more Court and Other Legal Issues State-Based Private-Sector Retirement Programs Mississippi Lawmaker Introduces Legislation to Create State-Run Plan Almost immediately after the New Year's champagne stopped pouring, legislation arrived in the Mississippi House of Representatives that would establish a state-run plan that would provide retirement plan coverage for private-sector employees whose employers do not offer one. Source: Ntsa-net.org Missouri House Considers State-Run Multiple-Employer Retirement Savings Plan HB 155 would establish the Show-Me MyRetirement Savings Administrative Fund, a multiple-employer retirement saving plan that would be treated as a single plan. Multiple employers would be able to voluntarily choose to participate regardless of whether any relationship exists between and among the employers other than their participation in the plan. Source: Ntsa-net.org Compliance and Regulatory Retirement Plan Outlook: What You Should Know for 2023 Kick off the new year by marking your calendars with important compliance requirements. To set your retirement plan up for success, the author has summarized some key 2023 action items and deadlines for single-employer tax-qualified plans. Source: Usicg.com IRS Proposes Making Remote Notarization Permanent for Retirement Plan Elections & Consents The proposed amendments would provide an alternative to in-person witnessing of spousal consents required to be witnessed by a notary public or a plan representative, and clarifies that certain special rules for the use of an electronic medium for participant elections also apply to spousal consents. This article provides background and commentary. Source: Groom.com »» Click here for more Compliance and Regulatory Material Marketplace News BlackRock Invests in SMB-Focused 401k Provider Human Interest Vestwell Teaming up With Carson Group to Expand Retirement Offering Charles Schwab Updates Target-Date Solutions for 2023 Alera Group Acquires The Ascent Group
This eNewsletter is a digest of information published by a variety of web-based sources on 401k and related issues and is published as a service to our users. 401khelpcenter.com, LLC is not the author of the material unless specifically noted. Articles are copyrighted to their publishers. If you believe that your work has been copied in a way that constitutes copyright infringement, please contact the source site immediately. Hyperlinks in this document are provided as a convenience and we disclaim any responsibility for information, services, or products found on websites linked hereto. All links were tested before this eNewsletter was e-mailed to you to ensure that they are still functional, but publishers do move or delete articles. Therefore, we can't guarantee that the links provided will remain operational. 401khelpcenter.com does not endorse, approve, certify, or control this material and does not guarantee or assume responsibility for the accuracy, completeness, efficacy, or timeliness of the material. Use of any information obtained from this material is voluntary, and reliance on it should only be undertaken after an independent review of its accuracy, completeness, efficacy, and timeliness. Reference to any specific commercial product, process, or service by trade name, trademark, service mark, manufacturer, or otherwise does not constitute or imply endorsement, recommendation, or favoring by 401khelpcenter.com. Opinions expressed are those of the author of the article and do not necessarily reflect the positions of 401khelpcenter.com. THIS NEWSLETTER IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE INVESTMENT, TAX, ACCOUNTING, OR LEGAL ADVICE. Copyright © 2023 by 401khelpcenter.com, LLC. All rights reserved. No reproductions without prior authorization, but you are free to email this copy (in its entirety) along to colleagues or clients. This newsletter may not be posted on any website. 401khelpcenter.com, LLC
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Newsletter Sponsor Still Need 401k Data for Your IRA Rollover Recommendation Disclosures? The 401k Averages Book offers low-cost licensing for you to incorporate our fee data into your best interest or 401k to IRA rollover recommendation disclosures. The 401k Averages Book is still the most recognized resource book for comparative, non-biased 401k average cost information. Click here for more information. In This Issue
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
This eNewsletter is a digest of information published by a variety of web-based sources on 401k and related issues and is published as a service to our users. 401khelpcenter.com, LLC is not the author of the material unless specifically noted. Articles are copyrighted to their publishers. If you believe that your work has been copied in a way that constitutes copyright infringement, please contact the source site immediately. Hyperlinks in this document are provided as a convenience and we disclaim any responsibility for information, services, or products found on websites linked hereto. All links were tested before this eNewsletter was e-mailed to you to ensure that they are still functional, but publishers do move or delete articles. Therefore, we can't guarantee that the links provided will remain operational. 401khelpcenter.com does not endorse, approve, certify, or control this material and does not guarantee or assume responsibility for the accuracy, completeness, efficacy, or timeliness of the material. Use of any information obtained from this material is voluntary, and reliance on it should only be undertaken after an independent review of its accuracy, completeness, efficacy, and timeliness. Reference to any specific commercial product, process, or service by trade name, trademark, service mark, manufacturer, or otherwise does not constitute or imply endorsement, recommendation, or favoring by 401khelpcenter.com. Opinions expressed are those of the author of the article and do not necessarily reflect the positions of 401khelpcenter.com. THIS NEWSLETTER IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE INVESTMENT, TAX, ACCOUNTING, OR LEGAL ADVICE. Copyright © 2023 by 401khelpcenter.com, LLC. All rights reserved. No reproductions without prior authorization, but you are free to email this copy (in its entirety) along to colleagues or clients. This newsletter may not be posted on any website. 401khelpcenter.com, LLC
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