Statutory, Regulatory, and Litigation Developments Keeping ERISA Attorneys Busy
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Fiduciary and Plan Governance Statutory, Regulatory, and Litigation Developments Keeping ERISA Attorneys Busy Fiduciaries will need to be on their toes over the next few months. As we continue to await additional SECURE 2.0 guidance from the IRS, the wheels of change remain in motion. Plan sponsors face several decisions, options, and requirements over the next several months. Source: Qualifiedplanadvisors.com Qualified Retirement Plan Considerations in Corporate Transactions Notwithstanding the current economic uncertainty, corporate transaction activity has remained steady, meaning buyers continue to address issues relating to a target company's qualified retirement plans, such as a 401k plan. Treatment of a target company's 401k plan affects both employers and employees, so, ideally, parties in a transaction will consider preferred strategies well in advance of closing. This article discusses two approaches: terminating the plan or maintaining it after the transaction. Source: Ogletree.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers Employees More Likely to Stay if Offered a Retirement Plan According to a new study, 71% of employed Americans say they're more likely to stay with their current employer if they're offered an employer-sponsored retirement savings plan. The number, from Voya Financial's second-quarter retirement report, is up significantly from October 2022, when just 60% of employees said the same. Source: 401kspecialistmag.com Auto-Portability Solutions Show Signs of Growth Retirement savings leakage and lost 401k accounts have become a major loss for employees when moving from one job to the next, and as a result, new auto-portability solutions are gaining steam. Principal Financial Group announced it has joined the Portability Services Network, and Millennium Trust has begun testing its open portability network.Retirement savings leakage and lost 401k accounts have become a major loss for employees when moving from one job to the next, and as a result, new auto-portability solutions are gaining steam. Principal Financial Group announced it has joined the Portability Services Network, and Millennium Trust has begun testing its open portability network. Source: Plansponsor.com Gen X on Shaky Ground for Retirement, With 40% Having Saved Nothing Gen Xers, who were the first generation strongly affected by the shift from traditional pensions to DC plans, have far too little saved on average in 401ks and individual retirement accounts, according to a report from the National Institute on Retirement Security. In many cases, those workers were thrown into the new system well before advances such as automatic enrollment, diversified default investment options, and annual contribution escalations made 401ks more user-friendly. Source: Investmentnews.com Saving for College Hurts Retirement for Nearly 60%, Survey Says Among people aged 25 to 80 who are saving for both of those causes, 58% say they are delaying retirement "significantly or moderately due to these dual financial goals," according to results of a survey published Wednesday by the Society of Actuaries. And it's not just that people are putting less into their 401ks and individual retirement accounts IRAs, 41% of the 1,000 respondents said they've taken early withdrawals from those accounts to help pay for college for relatives. Source: Investmentnews.com »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers Rollovers, Regulation, Litigation: Where Are We and What's Next? The recent decisions on the DOL's interpretation of fiduciary status are significant but limited in scope. Fiduciary status for plan-to-IRA rollover recommendations, standing alone, has been vacated. But other important transactions, such as IRA transfers, have not. In this article, Fred Reish discusses what is going on with the DOL's fiduciary rule. Source: Fredreish.com Cogent: Advisers Should Lean Into 401k Cost-Cutting Conversations Plan advisers should be ready for, if not prompting, conversations with plan sponsors who are scrutinizing their defined contribution retirement plans, including pricing transparency, according to the lead researcher of a recent Cogent Syndicated retirement report from Escalent. Source: Planadviser.com Asset Diversification in DC Plans: Opportunity for Tremendous Growth, Study Finds A lack of diversification in defined contribution plans has been a significant missed opportunity for plan sponsors, according to a new report produced by Georgetown University's Center for Retirement Initiatives, in conjunction with CEM Benchmarking, which argued that adding illiquid assets to target-date funds is a strategy that plan sponsors should explore. Source: Plansponsor.com 403b Plans The Long-Term Part-Time Rule and 403b Plans: Unintended Consequences or Intentional Transformation One of the stated objectives of the SECURE 2.0 Act of 2022 is to expand the coverage of retirement plans and to increase retirement savings. Among the many provisions passed to achieve that goal is section 125 of the Act, "Improving Coverage for Part-Time Worker." Source: Boutwellfay.com »» Click here for More 403b Material Court and Legal DOL Targets New Jersey 401k Plan for Concrete Companies Concrete producer Di Ferraro Inc. failed to remit employee withholdings and loan repayments to the plan over six years, the Department of Labor alleges. Source: Plansponsor.com Wake Forest Baptist Health Settles 403b Suit for $3.8M The plaintiffs in a lawsuit against the 403b managers for Atrium Health Wake Forest Baptist, previously known as the Wake Forest University Baptist Medical Center, have reached a tentative settlement for $3.8 million, according to a U.S. District Court filing. Source: Planadviser.com Settlement Struck in 401k Deferral Suit The parties involved in a suit challenging the ability to defer more to a 401k have come to terms, with a settlement of roughly $1.5 million. The suit alleged that Hyatt had a mandatory policy of requiring tipped employees to be paid all charged tips in cash rather than through payroll, "interfering with Plaintiff's and Class members' ability to defer income under the terms of the Plan." Source: Napa-net.org Verizon 401k Lawsuit Settles for $30 Million Verizon will pay $30 million to settle a 2016 lawsuit over an underperforming hedge fund the plaintiffs alleged the company dragged its feet in removing from its retirement plan. The settlement sends an uncomfortable message to retirement plan advisors and other fiduciaries, an observer says. Source: Investmentnews.com »» Click here for more Court and Other Legal Issues Cyber and Plan Security Multiple Cyber Incidents Impact Employee Benefit Plans and Participants If a retirement plan has a business relationship with any service provider that uses, used, or may have used the MOVEit software application or RCH services, the plan should determine what fields or categories of personal information were shared with the service provider(s), and by extension MOVEit or RCH, to determine the impact on the plan and its participants. Any service agreements with the applicable vendors should also be reviewed concerning data breach notification, information reporting, and follow-up obligations of the service provider(s). Source: Beneficiallyyours.com »» Click here for more on Cybersecurity Issues Compliance and Regulatory SECURE 2.0 Technical Corrections are on the Way, Eventually In an open letter to Secretary of the Treasury Janet Yellen and IRS Commissioner Daniel Werfel, congressional leaders identified several technical errors in the SECURE 2.0 Act that they intend to correct. Although the letter indicates that Congress intends to correct these technical errors and ambiguities in the legislation -- rather than relying on the US Department of the Treasury to issue conforming regulations -- the letter does not address the timetable for doing so. Source: Mwe.com »» Click here for more Compliance and Regulatory Material
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