District Court Vacates DOL's Fiduciary Rollover Advice Policy
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Items of Special Interest to Service Providers District Court Vacates DOL's Fiduciary Rollover Advice Policy The US District Court for the Middle District of Florida held that a critical feature of DOL's interpretation of the ERISA's fiduciary advice rule concerning rollover advice was arbitrary and capricious, declaring DOL's position unlawful, and vacating its guidance in DOL's 2020 fiduciary advice Prohibited Transaction Exemption and its 2021 FAQs on the 2020 PTE. This article reviews this key element of the court's decision, beginning with some background. Source: Octoberthree.com A Second Court Rejects DOL's Interpretation of ERISA's Fiduciary Rule Two recent federal courts have rejected a key interpretation by the DOL of its own fiduciary rules under ERISA. These cases, and particularly the ASA case, which was decided earlier this week, could potentially act as a major impediment to the DOL's pursuit of a critical policy initiative relating to the regulation of rollover solicitations. Source: Wagnerlawgroup.com Florida Court Strikes Down DOL Rollover Guidance A federal court in Tampa, Fl, handed down a verdict in a case brought by the American Securities Association last February challenging the DOL's attempt to change existing retirement rules without going through a notice-and-comment rulemaking as is required under the Administrative Procedure Act. The Middle District of Florida court ruled that DOL's interpretation of the five-part test determining who qualifies as a fiduciary under ERISA was "arbitrary and capricious." Source: 401kspecialistmag.com Insight: Studies, Research, and White Papers CITs to Overtake Mutual Funds in Battle for Target-Date Assets Lower-cost collective investment trusts continue to eat away at mutual funds' hold on target-date funds and are expected to be the primary target-date vehicle in 2023, a new report suggests. Source: Napa-net.org »» Click here for More Studies, Research, and White Papers 403b Plans How SECURE 2.0 Impacts 403b Plans, MEPs and ESOPs The reach of SECURE 2.0 is extensive. Its general provisions affect all types of retirement plans, but SECURE 2.0 also has some provisions targeted at plans subject to their own set of statutory and regulatory requirements. Sponsors of 403b plans, ESOPs, and employers participating in or considering joining multiple employer plans should keep these changes on their radar. Source: Cohenbuckmann.com »» Click here for More 403b Material Court and Legal ERISA Fiduciary Breach Action Narrowly Hurdles Motion to Dismiss in Minnesota An ERISA action alleging breaches of fiduciary duty recently cleared the pleadings stage in Minnesota district court, narrowly avoiding a complete dismissal. In Schave, a CentraCare employee challenged the healthcare provider's handling of its 401k and 403b retirement plans. Source: Erisalitigationadvisor.com DOL Backs Plaintiffs in Fiduciary Breach Appeal The Labor Department has weighed in on an excessive fee case on behalf of the participant plaintiffs asserting that the district court made a bad call on the burden of proof. The case under appeal involves Home Depot. Source: Napa-net.org »» Click here for more Court and Other Legal Issues Legislative and Washington DC Senator Pushes for Crypto Option in 401k Plans Senator Tommy Tuberville has returned with a bill pushing back on DOL guidance warning off the inclusion of cryptocurrency in defined contribution retirement plans. Source: Planadviser.com 401k: What Do I Need to Know About Secure 2.0? Overview of Significant Provisions SECURE 2.0 contains even more retirement-related provisions than did its predecessor, and arguably represents a more significant package of reforms, which are generally intended to help make retirement savings available to a wider range of employees and to streamline plan administration. This article is intended only as a very broad overview of the most significant provisions contained in SECURE 2.0 applicable to most 401k plans. Source: Compliancedashboard.net »» Click here for more on Legislative and Washington Actions Compliance and Regulatory DOL Continues Active ERISA Enforcement and Focus on Cybersecurity The DOL has continued to be active in civil and criminal enforcement investigations of ERISA's fiduciary duties. This article details two recent updates concerning the DOL's ERISA enforcement program. Source: Morganlewis.com SECURE 2.0 Opens the Door on Retirement Match Based on Student Loan Payments The grab bag of retirement provisions in the SECURE 2.0 legislation that was enacted at the end of 2022 included an expansion of the ability for a section 401k or 403b plan, or a governmental section 457b plan, to provide matching contributions on participants' student loan payments. Effective for plan years starting after December 31, 2023, the change can help employees who might otherwise forgo matching contributions to pay off student debt. Source: Erisapracticecenter.com Retirement Plan Disasters and How to Learn From Them When a disaster happens, there is always a need for an investigation to see what went wrong and what can be done to avoid similar disasters in the future. Here are some of the epic retirement plan disasters the author has seen and what you can learn from them. Source: Jdsupra.com Correcting "De minimis" 401k Plan Errors Concerning a qualified retirement plan, de minimis errors are small amounts that are either erroneously deposited to a participant's account or that are erroneously distributed to a participant. While EPCRS provides a roadmap for correcting de minimis errors, it can be confusing to plan sponsors and practitioners. In other words, the directions are clear as mud. Source: Newfront.com SECURE 2.0 to Increase Catch-Up Contributions, Raise RMD Age Among a host of other changes, SECURE 2.0 will increase the limits for catch-up contributions and raise the required minimum distribution age, allowing older adults to save more and for longer, experts say. The changes are just a few of more than 90 provisions in the bipartisan retirement security package, which Congress passed in December as part of a year-end spending bill. Source: Pionline.com DOL: More Time to Comment on Fiduciary Correction Program The DOL has extended the public comment period for a program that would allow fiduciaries to self-correct for retirement plan contributions that are not invested, rather than going to the DOL first. Source: Planadviser.com Road-Testing SECURE 2.0's Auto-enrollment Mandate for New DC Plans Some defined contribution plans will have to gear up for mandatory automatic enrollment under the SECURE 2.0 Act of 2022. This article examines SECURE 2.0's auto-enrollment mandate and its numerous exceptions and provides a road map of implementation questions ripe for agency guidance. Source: Mercer.com »» Click here for more Compliance and Regulatory Material
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