Plan Sponsors Spending Half Their 401k Time on Admin Work That Could Be Outsourced
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Insight: Studies, Research, and White Papers Plan Sponsors Spending Half Their 401k Time on Admin Work That Could Be Outsourced Nearly 89% of advisors in a new survey said that plan sponsor clients are spending up to 50% of their time on retirement plan administrative work that could be outsourced. That's a key finding from a new study on "Advisor Attitudes Toward 3(16) Fiduciary Outsourcing" released this week by Pentegra. Source: 401kspecialistmag.com Canadian Women Are 16% Less Confident About Retiring Than Men: Survey Just over half (52 percent) of Canadian women say they feel financially confident about retiring at their target age, compared to 68 percent of men, according to a new survey by the Bank of Montreal. Source: Benefitscanada.com Webinar Recording: DC Plan Trends and Fee Survey Overview NEPC's DC Practice Group unveils the full results of their 17th Annual DC Plan Trends & Fee Survey. The team highlights current DC plan investment trends, plan features, and how increasing market pressure is transforming DC plan strategies. From the challenges that come with retirement income solutions to the increasing adoption of passive tier options and the growth of the DC plan OCIO market, NEPC's DC consultants break down how they are advising plans to address emerging opportunities. Source: Nepc.com Labor Tightness Drives More Immediate Eligibility for Retirement Deferrals New Vanguard data shows that 72% of employers allowed for immediate eligibility of retirement saving deferrals in 2021, an increase over the past decade from 58% in 2012, according to its research paper, "The Changing Workforce." Source: Planadviser.com »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers State Anti-ESG Coalition Clarifies Policy Goals A coalition of 19 states, led by Florida's Republican Governor Ron DeSantis, signed an open letter declaring their opposition to the use of environmental, social, and governance factors in government investing and outlined legislative priorities to that effect. The alliance highlighted the prohibition of ESG factors in government investing decisions and the use of "social credit scores." Source: Plansponsor.com Court and Legal Social Network Settles 401k Excessive Fee Suit The terms in an excessive fee suit settlement announced last fall have finally been revealed. The plaintiffs here are two former and one current participant of the LinkedIn Corporation 401k Profit Sharing Plan and Trust. They have filed a notice of a settlement for the court's approval. Source: Napa-net.org Grocery Chain's Excessive Fee Suit Sacked An excessive fee suit targeting a $5.9 billion 401k plan has been dismissed, with prejudice. Fending off this particular lawsuit were Kroger and the fiduciaries of the Kroger 401k Retirement Savings Account Plan. Source: Napa-net.org LinkedIn Will Pay Out $6.75 Million for 401k Participant Complaint LinkedIn Corp. settled for $6.75 million in a 401k excessive fee complaint made in August 2020, according to court filings. The social media company settled over allegations made by participants of its 401k profit-sharing plan and trust that it did not try to reduce plan expenses or scrutinize investment options closely enough within the plan, according to a settlement agreement filed on March 3 in the U.S. District Court for the Northern District of California. Source: Planadviser.com $5 Million Settlement Struck in 401k Excessive Fee Suit Another excessive fee suit involving proprietary funds has settled a little more than a year after the suit was filed. In this one, plaintiffs filed suit against the Bessemer Trust Company and the Profit-Sharing Plan Committee of Bessemer Trust Company alleging, among other things, that they caused the plan and its participants to invest in expensive and underperforming proprietary Old Westbury mutual funds. Source: Napa-net.org District Courts Reach Opposite Conclusions on 401k Excessive Fee Claims A district court in the Southern District of Ohio and one in the Western District of Wisconsin reached opposite conclusions on motions to dismiss claims for fiduciary breach based on allegations that recordkeeping fees were unreasonably high. Dismissal was granted in Sigetich v. The Kroger Co., but the dismissal was denied in Lucero v. Credit Union Retirement Plan Association. Although the disparate results can arguably be rationalized by the underlying facts in each case, the opinions show that district courts continue to apply inconsistent principles in adjudicating these claims at the motion to dismiss stage. Source: Erisapracticecenter.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC The Act strives to increase retirement savings, improve retirement plan operation and correction rules, and decrease the cost of setting up a retirement plan. This is a summary of some of the significant provisions that are most likely to affect plans. Source: Belfint.com »» Click here for more on Legislative and Washington Actions Compliance and Regulatory IRS Proposed Rule: Forfeitures in Retirement Plans The IRS released a proposed rule on the use and timing of forfeitures in retirement plans. It was published in the Federal Register on February 27, 2023. The proposed regulation provides clarification of the use of forfeitures for retirement plans subject to the minimum funding requirements as well as the deadline for the use of forfeitures in DC plans. Source: Pkfod.com Hardships Becoming Even Less Hard to Take SECURE 2.0 has provided several opportunities for plan administrators to assist participants in tackling emergency expenses. Two of these provisions updated the administration of hardship withdrawals to plan participants. Source: Graydon.law Proposed Regulations on How to Use Forfeiture Accounts On February 27, 2023, the IRS published proposed regulations on the use of forfeitures in qualified retirement plans. For DC plans, the regulations provide welcome clarity on what forfeitures can be used for and the date by which forfeitures must be used. In addition, they provide a helpful transition rule and, most importantly, serve as a reminder that forfeiture accounts must be used promptly to avoid an operational failure that will place the plan's tax-qualified status at risk. Source: Verrill-law.com IRS Issues Proposed Regulations Regarding Use of Forfeitures in Tax-Qualified Plans Some of the IRS regulations dealing with tax-qualified plans predate ERISA and subsequent federal tax legislation and have become outdated. However, sometimes it takes IRS a long time to update its regulations to reflect current laws. On February 24, 2023, the IRS issued proposed regulations addressing one such outdated regulation. Source: Wagnerlawgroup.com Secure 2.0: Treating Student Loans as Elective Deferrals SECURE 2.0 was signed into law in December 2022 as part of the Consolidated Appropriations Act of 2023. Effective for plan years beginning after 2023, certain types of plans containing elective deferral features may choose to treat student loan payments as elective deferrals and make matching contributions on those amounts. These optional provisions are available to 401k plans, 403b plans, SIMPLE IRAs, and governmental 457b plans. Source: Boutwellfay.com »» Click here for more Compliance and Regulatory Material Marketplace News Announcing the 2022 NAPA Top DC Advisor Teams OneDigital Acquires Renee and Chris Scherzer's 401k, Benefits Firms
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