Use of RFPs Versus RFIs Contrast for Plan Sponsors
|
Newsletter Sponsor The Wait is Over! 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 Use of RFPs Versus RFIs Contrast for Plan Sponsors When employers execute vendor searches for benefit providers, they must decide whether to RFP or to RFI, as plan sponsors use nuanced, different approaches to issuing a request for a proposal or one for information. Source: Plansponsor.com ERISA Bond: What Is It and Do I Need One? Almost every sponsor of every tax-qualified retirement plan must obtain a fidelity bond under section 412 of ERISA. Despite the broad application of this requirement, a surprising number of plan sponsors are unaware of this requirement and do not have a bond at all or do not have a bond in the proper amount. This article helps explain the requirement to ensure that those who are subject to this requirement satisfy it. Source: Legacyrsllc.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers How Well Do People Perceive Their Retirement Preparedness? This article examines whether households have a good sense of their retirement preparedness, do their expectations match the reality they face? Understanding households' self-assessed retirement preparedness is important because misperceptions can distort saving behaviors. Households that are not worried enough about their retirement income may not save enough even if they have the opportunity; households that are too worried may unnecessarily sacrifice their pre-retirement standard of living. Source: Bc.edu Auto-enrollment is Highly Effective But Often More Costly For years, auto-enrollment has been considered the gold standard by employers and retirement experts, and its popularity has grown since federal legislation in 2006 removed some of the legal barriers that kept employers from trying it. Given how effective auto-enrollment is, however, a study on Army personnel provided new information that may explain why more companies have not adopted it: cost. Source: Bc.edu »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers Small Business Retirement Plan Options - 2023 This chart compares the four common types of plan designs often utilized by small employers. Source: Consultrms.com How Financial Advisors Can Prepare for Those 401k Potential Client Meetings When meeting potential plan sponsor clients, advisors can't always be "closing." Because getting hired is fully dependent on the potential client. This article is about arranging a meeting with potential clients and what you need to do. Source: Jdsupra.com 403b Plans Two Seemingly Oblique, But Valuable, SECURE 2.0 403b Gems Because the Tax Code did not make any provision for the 403b MEP, each of the employers participating in these arrangements is treated (for tax code compliance purposes) as each sponsoring their own 403b plans. This has worked quite well for several years, except for a couple of issues. This is where SECURE 2.0 obliquely provided significant relief in a couple of nice "gems." Source: Businessofbenefits.com Will the Long-Term Part-Time Rules Eliminate the Permitted Exclusions for 403b Plans? SECURE 2.0 enhanced the Long-Term Part-Time rules of Secure 1.0 by making them applicable to 403b plans. Since employees are more likely to contribute to an employer-sponsored retirement arrangement than an Individual Retirement Account, and more Americans are working part-time since the pandemic, SECURE 2.0 requires that employees who work between 500 and 999 hours for two consecutive years be permitted to defer into their 403b plans effective plan years beginning in 2025. Source: Belfint.com »» Click here for More 403b Material Court and Legal American Airlines Pilot Sues Company 401k Over "Woke" ESG Investing In a case sure to be closely watched by the retirement industry, a senior American Airlines pilot is suing his employer. Proposed class action claims airline's retirement plan is filled with investments that pursue "leftist political agendas" through environmental, social, and corporate governance strategies. Source: 401kspecialistmag.com Interpreting the DOL's Amicus Brief and its Potential Impact on the Future of 401k Litigation The need for plans to address these fiduciary prudence and cost-inefficiency issues has become even more important in light of a recent amicus brief filed by the DOL addressing the issue of which party has the burden of proof concerning the issue of causation of damages in 401k/403b litigation. While there is a split within the federal courts on this issue, the DOL's brief provides a persuasive argument that the burden of proof belongs to plan sponsors, not plan participants. Source: Fiduciaryinvestsense.com Participants Prevail at Pleading Stage on Excessive Fee Claim Against Mega 401k Plan Participants in a "mega" 401k plan brought this lawsuit claiming that their employer and plan benefits committee breached their fiduciary duty of prudence by allowing the plan to pay excessive bundled recordkeeping and administrative fees, and that the employer and its board of directors breached their duty to monitor those fees. The court denied the employer's motion to dismiss the case under the Seventh Circuit's "newly formulated pleading standard" for this type of fiduciary breach claim. Source: Thomsonreuters.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC ERIC Highlights Key Areas of Confusion on SECURE 2.0 The ERISA Industry Committee sent an open letter to the Department of the Treasury and Internal Revenue Service asking for clarification on various provisions in the SECURE 2.0 Act of 2022, including the student loan match, Roth catch-up contributions, and Roth matching contributions. Source: Planadviser.com »» Click here for more on Legislative and Washington Actions State-Based Private-Sector Retirement Programs Three More States Advance Auto-IRA Programs Three more states -- Pennsylvania, Vermont and Nevada -- are entering the final stages of passing legislation to enact state-run automatic IRA programs, joining a growing list of states that are turning to such programs to increase access to retirement savings for workers lacking a workplace retirement plan. Source: 401kspecialistmag.com Compliance and Regulatory New Optional In-Service Withdrawal Right for Domestic Abuse Victims SECURE 2.0 allows plan sponsors of defined contribution plans to amend their plans to allow plan participants who are victims of domestic abuse to make penalty-free early withdrawals from their retirement plans, beginning on or after January 1, 2024. The inclusion of such a provision is intended to give plan participants sufficient funds to escape an abusive situation and is exempt from the 10% early distribution penalty. Source: Graydon.law The ABCs of IRS FAQs on EPCRS Under SECURE 2 Retirement plan sponsors eager to start self-correcting inadvertent errors using the relaxed rules under the SECURE 2.0 Act of 2022 will welcome new interim IRS guidance. Notice 2023-43 explains how sponsors may proceed with error corrections under SECURE 2.0's expansion of the Employee Plans Compliance Resolution System, pending official updates to Rev. Proc. 2021-30, the current version of the EPCRS. Source: Mercer.com The Setting Every Community Up for Retirement Enhancement Act of 2019 added mandatory coverage in 401k plans for workers who are considered long-term part-time employees. LTPT employee coverage in 401k plans begins January 1, 2024. Now is the time to start planning for LTPT employees' inclusion. Source: Newfront.com »» Click here for more Compliance and Regulatory Material Marketplace News SoFi at Work Launches Student Loan Debt Repayment Service Cetera Buys $1.4 Billion RIA Firm Introducing the 2023 Top 100 D.C. Wholesalers
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
|
