Plan Committee Turnover Creates Risks
|
Newsletter Sponsor Now Available -- The 401k Averages Book 23rd Edition The 23rd Edition of the 401k Averages Book is a great resource for fee benchmarking data. Use the 401k Averages Book to better understand investment, recordkeeping and revenue sharing expenses for 401k plans. Still the most recognized resource book for comparative, non-biased 401k average cost information. Click here to order your copy. In This Issue
Fiduciary and Plan Governance Plan Committee Turnover Creates Risks The Great Resignation is increasing plan committee turnover. Members of plan committees also change due to retirements, death, and corporate mergers and acquisitions. The increase in ERISA litigation can additionally deter members from wanting to continue to serve on committees. Committee turnover can make inadvertent errors and less than optimal decision-making more likely. Source: Pionline.com Five Things You Need to Know When Switching Recordkeepers There are few things more disruptive to the peace or clarity of a 401k plan than a switch in recordkeepers. But a change in recordkeepers is one of those "choices" that plan fiduciaries are expected under ERISA to evaluate as a prudent expert. And so, regardless of whether the change appears to be good, bad, or inconsequential on its face, you should know five key points. Source: Penchecks.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers Retirement Distribution Decisions Among DC Participants After years -- often decades -- of saving in a DC retirement plan, what does a typical retiree do with the money they've accumulated? This 12-page paper examines the decisions made by participants ages 60 and older who have separated from service with their employer. Source: Vanguard.com Participant Retirement Assets Remaining in Plan Have Increased Defined contribution retirement plan participants are increasingly remaining in the plan, after terminating employment, new data shows. The Vanguard research analyzed proprietary recordkeeper data on the account distribution decisions made by participants from January 1, 2011, through December 31, 2021. Source: Plansponsor.com »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers The DOL's New Fiduciary Rule: What We Can Expect The DOL's regulatory agenda indicates that shortly, the DOL will be proposing a new fiduciary definition and proposing amendments to existing prohibited transaction exemptions to align with the proposed regulation. The new regulation will likely include the DOL's expanded interpretation of fiduciary advice for rollovers (and might go beyond that). It is also anticipated that many of the conditions in PTE 2020-02 will be included in the proposals for other exemptions. Source: Brokerdealerlawblog.com Court Defeat is Guide for Labor Agency Retirement Adviser Rule The DOL's federal court defeat in a case challenging its expanded definition of retirement plan rollover advice is likely to influence its strategy in writing a new regulation. They need only find a more moderate pathway that undoes a "regular basis" provision without triggering the legal trouble it did under the prior administration, agency observers said. Source: Bloomberglaw.com Court and Legal Plan Fiduciaries Strike Quick Settlement in 403b Excessive Fee Suit The parties in an excessive fee suit have struck a deal mere months after the suit was filed. The plan fiduciaries here are Springfield, Massachusetts-based Baystate Health Inc. They were sued last Nov. 17 by participant-plaintiffs Michael Chechile and Sonia Lopez. They claimed that the $910 million, 15,000 participant plan paid, on average, $70/participant for recordkeeping fees, compared to those in similarly sized plans that allegedly paid $31/participant for what were said to be comparable services. Source: Napa-net.org Conservative Nonprofit Sues Biden Administration Over ESG Rule The Wisconsin Institute for Law and Liberty is the latest to file a lawsuit against the Biden Administration for permitting the use of environmental, social, and governance factors in 401k accounts under the DOL's final rule. Source: 401kspecialistmag.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC Democrats Push for ESG in Retirement Plans With New Bill Sen. Tina Smith reintroduced last week new legislation that would protect employers offering environmental, social, and governance factors in workplace 401k plans, providing legal certainty to those who offer sustainable options to participants. Source: 401kspecialistmag.com How the SECURE 2.0 Act Will Impact Your Retirement Plan in 2024 As the SECURE 2.0 Act makes its way through the headlines, plan sponsors may start to feel overwhelmed by the many provisions contained within this Act. Although this new legislation includes over 90 provisions, this article provides a high-level summary of selected provisions that are effective in 2024. Source: Tri-ad.com »» Click here for more on Legislative and Washington Actions Compliance and Regulatory On December 29, 2022, President Biden signed into law the "Consolidated Appropriations Act, of 2023," which included a major package of retirement savings provisions known as the SECURE 2.0 Act. As expected, the final package contained many of the same provisions included in the U.S. House and Senate bills that were previously considered. This is a 6-page summary with the effective dates of key provisions applicable to workplace plans. Source: Troweprice.com Finding Balance With Form 5500 It's rare that updates to the Form 5500 warrant little more than a yawn, if anyone other than those who prepare the forms even notice. That is not the case with changes issued by the DOL today. In nearly 250 pages of new regulations, revised instructions and sample forms, the DOL announced some changes for the 2023 plan year that many will find to be a big deal. Source: Dwc401k.com Highlights of DOL's Enforcement Statistics for Fiscal Year 2022 The Employee Benefits Security Administration is tasked with ensuring the integrity of employer-sponsored pension and welfare plans governed by ERISA and enforcement of participants' rights under those plans. It recently released a Fact Sheet highlighting its work for the fiscal year ending September 30, 2022. Source: Compliancedashboard.net SECURE 2.0 Act: Provisions Related to Catch-Up Contributions Section 603 of the Secure 2.0 Act increases the maximum catch-up contribution limit for eligible participants who will attain ages 60, 61, 62, or 63 (but not age 64) during the year. The increased limit is the greater of $10,000 or 150% of the age 50 catch-up limit in effect for the year as adjusted for cost-of-living increases. While this change intends to improve retirement readiness for employees who are closest to attaining retirement age, it adds a new layer of administrative complexity for plans. Source: Consultrms.com SECURE 2.0 Gives Long-Term Part-Time Employees Faster Access to 401k and 403b Plans Among other things, SECURE 2.0 strengthens and expands the special 401k plan eligibility requirements for long-term part-time workers by shortening the eligibility service period for such workers and extending the application of the special rules to most 403b plans. Although these changes are effective for plan years beginning after December 31, 2024, plan sponsors must start tracking the service of long-term part-time workers much sooner than that to support compliance with the new rules. Source: Verrill-law.com Startup Tax Credits Under SECURE 2.0: Easy Reading Version With FAQs The enhanced startup credit is possibly the single highest impact provision of SECURE 2.0. The actual language of the provisions on startup tax credits is printed here but merged with the old law, cross-referenced, and formatted for easy reading. It is followed by answers to some frequently asked questions and a diagram for helping determine whether an employer is eligible for the credit. Source: Groupplansystems.com »» Click here for more Compliance and Regulatory Material Marketplace News Willis Towers Watson Rolls Out Pooled Employer Plan 401k Averages Book 23rd Edition Released
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
|
