DOL Fiduciary Rule Update With Fred Reish
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In This Issue
Items of Special Interest to Service Providers DOL Fiduciary Rule Update With Fred Reish In this edition of the 401k Specialist Pod(k)ast, Fred Reish provides an overview of the PTE 2020-02 issue, what approach he thinks the DOL may take, provides a timeline for the regulation and some key thoughts on what this all means for retirement plan advisors. Source: 401kspecialistmag.com Fiduciary and Plan Governance Factors in Hiring a 401k Plan Provider That Might Be Overrated When it comes to retirement plan providers, there are certain factors in picking them that are way overrated. This article is all about factors fiduciaries should think about in picking retirement plan providers, that might be overrated. Source: Jdsupra.com Political Uncertainty Steering 401ks Away From ESG With Congress seeking to tamp down on ESG and the first 401k lawsuit over ESG having been filed, some employers are scared about the idea of including sustainable investment options in their retirement plans. More than 70% of retirement plan consultants and aggregators say that political uncertainty is a leading reason why their clients avoid funds that consider ESG factors, according to results of a survey this week from Pimco. Source: Investmentnews.com Planning for Retirement Plan Expenses Offering an employee retirement plan has real upsides for the employer. On the other side of the equation is the cost. What does a plan sponsor need to know when choosing the various service providers who help administer the plan, choose investments, and provide custodial/recordkeeping services? While expenses are unavoidable, an employer who understands the range of available services, and the corresponding fees, will be better able to find value for money when choosing services. Here are key points to keep in mind in the cost-benefit analysis. Source: Klblawgroup.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers 2023 BlackRock Read on Retirement Report If the pandemic taught us anything, it's that burnout is real. Three years on, it turns out it's not just a workplace side effect. BlackRock's Read on Retirement™ survey reveals that financial burnout is on the rise, and one to watch. Source: Blackrock.com Retirement Confidence Shows Steady Decline: BlackRock Retirement confidence has been on a steady decline since 2021, as only 56% of workplace savers this year said they feel "on track" with their savings to retire with the lifestyle they want, compared to 63% in 2022 and 68% in 2021, according to a new BlackRock study. Source: Planadviser.com 1 in 5 Fear Never Being Able to Retire One in five Americans believe they will never be able to retire, according to new Axios/Ipsos polling on retirement. Not surprisingly, financial worries are the main reason for this. Among the 20% who don't think they'll ever retire, a decisive majority (70%) say it's because they can't or won't be able to afford to retire, while only 19% of people said they just don't want to retire. Source: 401kspecialistmag.com A Third of Workplace Savers Plan to Delay Retirement New research from BlackRock shows that burnout doesn't only extend to the workplace. The BlackRock Read on Retirement survey finds that more individuals are experiencing "financial burnout," as 30% plan to delay retirement while 56% feel "on track," a 12% dip compared to 2021 and a 7% drop from last year. Source: 401kspecialistmag.com 401ks a Better Recruiting Tool Than Cash, Study Says Employers competing to fill empty positions with the most talented candidates at a time of historically low unemployment are turning to a once overlooked benefit: the 401k match. New research found workers are willing to give up some income for access to a 401k and employer contributions. Source: Investmentnews.com »» Click here for More Studies, Research, and White Papers 403b Plans Government Watchdog Calls Out DOL on 403b Guidance The U.S. Government Accountability Office called out the Department of Labor Monday for a lack of 403b guidance. 403b plans allow for participants to make investment decisions, GAO said. Because DOL oversees such plans, which are common among teachers and non-profit workers, the GAO encouraged the Labor Department to improve its educational offerings. Source: Hrdive.com »» Click here for More 403b Material Court and Legal Fourth Circuit Affirms Aon's Trial Victory in Investment Suit The Fourth Circuit affirmed Aon Hewitt Investment Consulting's trial victory in a 250,000-member class action suit alleging that Aon breached ERISA's fiduciary duties. Aon was initially Lowe's 401k plan's investment advisor and later was engaged as the plan's 3(38) delegated fiduciary. The plaintiffs' fiduciary breach claims alleged that, after being retained as a delegated fiduciary, Aon transferred plan assets to an Aon fund with an unproven track record that underperformed. Source: Erisalitigationadvisor.com Mitsubishi Chemical Group Sued by Former Worker Mitsubishi Chemical America's retirement plan fiduciaries are facing a class action complaint filed against the company on July 19 that alleged they caused plan participants to pay excessive fees for administrative services and failed to negotiate lower per-participant fees. The complaint was filed in U.S. District Court for the Southern District of New York. Source: Plansponsor.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC "Auto-Reenroll Act of 2023" Introduced in Senate A new bill introduced in the Senate Wednesday would permit 401k plan sponsors to automatically reenroll non-participants at least once every three years unless the individual affirmatively opts out again. Source: 401kspecialistmag.com »» Click here for more on Legislative and Washington Actions Compliance and Regulatory DOL Changes to the 2023 Form 5500 The Department of Labor released the final changes to Form 5500 relating to the September 2021 notice of proposed form revisions to amend the Form 5500. The changes fall into seven major categories. These changes are effective for plan years beginning on or after January 1, 2023, and will be incorporated into the 2023 Form 5500. Source: Berrydunn.com The deadline for your Form 5500 is seven months after the close of your plan year, so it's dependent on the structure of your plan. Since most 401k plans operate on a calendar year, this means the deadline is July 31. Here is an overview and a chart that will help. Source: Benefit-resources.com Mandatory Roth Catch-Up Contributions: Another Secure Act 2.0 Provision Plan Sponsors will need to make decisions on how to implement the Roth catch-up contributions in the plan document. The plan must allow for Roth contributions or amend the plan to allow for Roth contributions. If the plan does not allow for Roth contributions, highly compensated participants cannot make catch-up contributions. In addition, the plan must allow all eligible participants to make Roth catch-up deferrals. Source: Watkinsross.com »» Click here for more Compliance and Regulatory Material Marketplace News Vestwell Acquires Student Loan Benefits Provider First 403b Pooled Employer Plan Launches Post SECURE 2.0
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