Adviser Group Forecasts Federal, Private Plan "Battle" Over US Retirement System
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In This Issue
General Items Adviser Group Forecasts Federal, Private Plan "Battle" Over US Retirement System A bipartisan effort to create a federally sponsored retirement plan is teeing up a multi-year battle with the private defined contribution retirement plan industry, the head of a national adviser association said at its annual conference on Sunday. Separately, a think tank leading the effort countered that the program is not in conflict with private industry, but is aimed at workers left out of the current system. Source: Planadviser.com Improving Financial Wellness Starts With Understanding Participants Plan sponsors are exploring the mix of benefits offered to workers like ingredients in a recipe -- tasting the mixture, adding spices here and there -- hoping to bake the best benefits package possible. Recently, the most popular new ingredients -- one can hardly call them a secret -- are financial wellness programs to affect the day-to-day financial behavior of employees and drive greater long-term participant retirement readiness. Key to bolstering participants' engagement with employee benefits programs intended to bolster worker wellness is understanding what their needs are and remaining flexible. Source: Plansponsor.com How the SECURE 2.0 Act Will Impact Your Retirement Plan in 2025 and Beyond It is no surprise that the SECURE 2.0 Act continues to dominate the headlines. While most provisions will take effect within the next two years, plan sponsors and service providers need to become familiar with the 2025 and later provisions so potential operational roadblocks can be addressed and changes can be quickly implemented when the deadline approaches. Source: Tri-ad.com Insight: Studies, Research, and White Papers How to "Opt In" to Retirement Savings A behavioral finance researcher, James Choi, professor of finance at the Yale School of Management, explains how small changes in choice architecture can create better investment decisions for retirement. Source: Morningstar.com Morningstar: Pandemic Caused Plan Closures, Creation Slowdown The pandemic caused defined contribution plan closings to spike and new plan creation to slow down, a fact that may have implications for future economic disruptions, according to a new report by Morningstar. Source: Planadviser.com DC Plan Sponsors Increased Focus on Cutting Fees, Protecting Against Litigation in 2022 A survey conducted by Callan LLC found that defined contribution plan sponsors were particularly concerned about their governance, DEI efforts, cutting plan fees, and upgrading their plan design over the past year. The survey, conducted at the end of 2022, did not show any dramatic changes to the DC plan landscape, according to Jana Steele, a Callan senior vice president, but here are some of the most notable trends to come out of the survey. Source: Plansponsor.com »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers Why 401k Advising Alone Isn't Enough Retirement plan advisers should approach plan sponsors with a holistic conversation around employee benefits and retention methods to be effective in today's market, a group of panelists told an adviser group audience. Source: Planadviser.com What Do Plan Sponsors Really Want? Several chief financial officers and human resource directors showed out for the "'Want' Adds: What Do Plan Sponsors Really Want," panel at the NAPA 401k Summit, where they discussed their workplace plans and what they look for from plan advisors. Source: 401kspecialistmag.com 403b Plans The Key Role of the Quirky 403b "Master Custodial Agreement" Many practitioners will point to the 2007 403b regs as being a real seminal moment in the market. However, an even more fundamental development occurred some 7 or 8 years earlier, which still has deep reverberations in the way these plans operate: the quirky 403b master custodial arrangement. Source: Businessofbenefits.com »» Click here for More 403b Material Court and Legal Has the Litigation Pendulum Swung Back to Plan Sponsors? While a flood of lawsuits from the plaintiff's bar continues at an unprecedented rate, top ERISA attorneys at an April 3 workshop session at the NAPA 401k Summit debated whether recent successes from plan sponsors may help finally stem the tide. Source: Napa-net.org On remand from the U.S. Supreme Court, the Seventh Circuit issued its opinion in Hughes v. Northwestern University, concluding that participants in two Northwestern 403b plans plausibly pled fiduciary-breach claims based on allegations of excessive recordkeeping and investment management fees, but dismissed their claim that too many investment options caused them "decision paralysis." Source: Erisapracticecenter.com Coca-Cola Bottlers' Association Agrees to Settle ERISA Case for $3.3 Million The multiple employer plan sponsored by the association is composed of 65 independent bottlers for Coca-Cola. As of 2021, it had approximately $973 million in assets under management. The initial complaint, brought in February 2021, alleged that the association had paid overpriced management and recordkeeping fees and had kept an undiversified Coca-Cola Common Stock Fund in its investment menu. Source: Plansponsor.com »» Click here for more Court and Other Legal Issues Compliance and Regulatory Secure Act 2.0: Small Employer Pension Plan Start-Up Credits The SECURE Act 2.0 increased incentives to encourage small business owners to establish retirement plans, making changes to the start-up credit and adding the contribution credit. By taking advantage of the tax credits, employers who currently do not maintain a retirement plan would be able to provide a low- or no-cost employer-sponsored employee benefit. Source: Pkfod.com Guidance Issued on the End of the COVID-19 Emergency Periods and Impact on Benefits Plans The Biden Administration recently announced that it intends to end the COVID-19 emergency declarations that have been in effect since 2020, effective at the end of the day on May 11, 2023. The termination of emergency declarations has several implications for health and retirement plans. In light of this new guidance and the anticipated termination of the emergency declarations, plan sponsors should review their plan documents and prior employee communications to determine what changes and notifications may be required in connection with the end of the emergency declarations next month. Source: Icemiller.com What is Your Required Minimum Distribution Age Is it, or will it be age 70 1/2, 72, 73, or 75? Required minimum distributions from qualified retirement accounts started with the passage of The Tax Reform Act of 1986. That law established the date when RMDs were required to begin as the year in which an individual reached age 70 1/2. This remained the compulsory age for RMDs for more than thirty years; however, the compulsory age has now changed twice in the space of three years. Source: Orba.com IRS Proposes One-Year Limit on Use of Forfeitures in Defined Contribution Plans The IRS recently issued proposed regulations that would require forfeitures in defined contribution plans to be used to offset employer contributions or pay reasonable plan administrative expenses, or otherwise be allocated to participants, by the end of the year following the year of forfeiture. Source: Morganlewis.com »» Click here for more Compliance and Regulatory Material Marketplace News Voya Establishes Advisory Services Solution for Retirement Plan Participants Principal Rolls Out Hybrid QDIA to Meet Rising Market Demand FuturePlan by Ascensus and Voya Roll Out New Retirement Offering
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