DCIIA Publishes Guide to Fiduciary Models
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Fiduciary and Plan Governance DCIIA Publishes Guide to Fiduciary Models The Defined Contribution Institutional Investment Association published this month a governance model guide for plan sponsors, "Defined Contribution Plan Governance Models: A Guide for Plan Sponsors." The guide outlines governance and fiduciary structures that plan sponsors can elect to fit their plan's needs. Source: Planadviser.com Are BlackRock's Target-Date Funds the New Fiduciary Battlefield? A new wave of lawsuits focuses on the alleged underperformance of certain TDFs that many plan sponsors use as their plan's default investment option. In these most recent cases, each of the defendants offered the Blackrock TDFs as the default investments in their DC retirement plans. These new lawsuits allege that investment returns were sacrificed in favor of plan sponsors chasing low fees. The claims are largely that the BlackRock TDFs are inappropriate for institutional plans and that fiduciaries were not prudent in selecting these lower-cost investment options. Source: Icemiller.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers Automatic Enrollment Adoption Grew to 85% in 2022: T. Rowe Price Automatic solutions adoption continued to rise in 2022, finds a new report by T. Rowe Price. The firm's annual Reference Point, a benchmarking report analyzing data on 401k plan design and participant behavior, found that plan adoption of automatic enrollment rose to 85% in 2022. Source: 401kspecialistmag.com Auto-Solutions Continued to Positively Influence 401k Savings Behavior: T. Rowe Price T. Rowe Price released Reference Point, its annual benchmarking report featuring data and analysis related to 401k plan design and participant behavior. The new report is based on the firm's full-service recordkeeping client data for 2022. Auto-solutions, including auto-enrollment and auto-increase, continue to encourage participation and savings rates and drive better outcomes for savers. Source: Prnewswire.com Voya Financial is releasing new research detailing how comprehensive diversity, equity, and inclusion initiatives can help close benefits and savings gaps to improve financial outcomes for Black/African American and Hispanic/Latino workers. Source: Voya.com Improving DC Plans to Serve Participant Behavior Participants don't all think and behave the same way, but new frameworks can help DC plans better understand the needs of savers and inform solutions that will benefit the individual styles of more and more people. Source: Blackrock.com »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers Why Advisors Need to Consider Value Equities in DC Plan Investment Menus Now: Invesco's Kevin Holt After underperforming growth for years, value equities finally had their time in the sun in 2022. While both value and growth stocks declined last year, growth stocks fell much further than value thanks in large part to rising interest rates. Source: 401kspecialistmag.com 403b Plans Study Shows ERISA 403b Plan Sponsors Design Plans to Promote Retirement Saving The report found that the wide array of nonprofits that sponsor 403b plans design their plans to engage participants and promote retirement savings. Many large 403b plans subject to ERISA automatically enrolled employees into the plan. Four-fifths of large ERISA 403b plans had employer contributions and three-quarters of large ERISA 403b plan participants were in plans that offered employer contributions in 2019. And a majority of large ERISA 403b plans offered the flexibility of plan loans. Source: Ici.org A 403b CIT "Fix" Gets Closer to Happening A bill that would allow 403bs to invest in collective investment trusts could be headed for Congressional markup in the next few weeks. Source: Napa-net.org »» Click here for More 403b Material Court and Legal The Right to a Jury Trial in ERISA Excess Fee Cases It sounds crazy, but the first jury trial in an ERISA excessive fee case is scheduled for next month. That's right, barring a last-minute settlement and inevitable scheduling delays, a jury of ordinary citizens from Hartford, Connecticut is going to decide if the Yale University plan fiduciaries committed fiduciary malpractice in choosing the investments and monitoring the fees of its retirement plan. Source: Euclidspecialty.com Quick Settlement Struck in 401k Excessive Fee Suit The fiduciaries of the 99 Cents Only Stores have come to terms with an excessive fee suit involving their 401k plan for considerably more than 99 cents. Source: Napa-net.org »» Click here for more Court and Other Legal Issues Legislative and Washington DC SECURE Act 2.0 and Its Effects on Employee Benefit Plans The SECURE Act contains sweeping changes designed to make benefit plans more attractive to employers and employees. While some provisions took effect January 1, 2023, many will continue to roll out over the next few years and plan amendments will generally not need to be made until 2025. This is a summary of some of the effects of the act on employee benefit plans. Source: Mossadams.com »» Click here for more on Legislative and Washington Actions Compliance and Regulatory Details of the SECURE 2.0 Act: Student Loan Matching Secure 2.0 added a new provision allowing any employer to amend their plan to allow a match based on student debt repayments for higher education expenses. This is big news since before the SECURE 2.0 Act, companies were limited to only offering a match based on their employee's deferral contributions. Source: Consultrms.com SECURE 2.0: New, Penalty-Free Distributions Life is a balancing act. Regulators strive to fight leakage by imposing penalties on early distributions, but they also don't want to add to legitimate unforeseen and extreme emergencies by imposing penalties when participants are in trouble. At the same time, regulators don't want to impose administrative burdens that would be a deterrent from offering a plan, so most of the new distribution options are optional. Source: Belfint.com How to Conduct a Successful Retirement Plan Audit In the retirement plan industry, conducting regular audits is essential to ensuring compliance and optimizing plan performance. But how can you conduct a successful retirement plan audit and ensure you get the most value from the exercise? By following the tips outlined in this guide, you can plan your audit effectively. Source: Multnomahgroup.com 2023 Highly Compensated Employees: What You Need to Know to Pass Your Non-Discrimination Tests That's because one of the primary duties of employers offering a 401k is to ensure that it's designed to benefit all employees, not just owners and highly paid employees. In 401k language, a plan with widespread benefits is non-discriminatory. A series of annual tests are used to decide whether or not a plan discriminates. If the plan fails a test, the company must take corrective action until the plan is no longer discriminatory. Source: Forusall.com »» Click here for more Compliance and Regulatory Material Marketplace News OneDigital Partners With Pontera to Help Participants With Their 401ks
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