2023 Defined Contribution Consultant Research Study
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Items of Special Interest to Service Providers 2023 Defined Contribution Consultant Research Study T. Rowe Price conducted its third annual 2023 Defined Contribution Consultant Research Study to capture retirement views from the defined contribution consulting and advisory community. This executive summary features key findings related to target-date solutions, retirement income, investment trends, and financial wellness programs. Data are informed by 32 of the nation's leading consulting and advisory firms with a collective $6.7 trillion in assets under advisement. Source: Troweprice.com DOL Sends New Fiduciary Rule to OMB The DOL has sent a new, proposed fiduciary rule to the Office and Management and Budget for review. The text of the proposal is not yet public. OMB must first conduct an interagency review process. The proposal will then be returned to DOL and published in the Federal Register. The entire process can be completed in a matter of weeks, but it typically takes several months. Source: Groom.com 401k Business Growth: Understanding Generational Shifts Effective communication is key for growing your 401k business. However, not everyone has the same communication preferences. Each generation likes to receive and consume information differently. As you think about your business and who your ideal clients are, it's essential to consider which of the four main generations they belong to baby boomers, Gen X, millennials, and Gen Z. Source: 401k-marketing.com Fiduciary and Plan Governance Why Smart Fiduciaries Avoid Annuities In the current campaign by annuity advocates to increase the use of annuities within 401k and 403b plans, the advocates argue that plan participants desire guaranteed income for life. But do plan sponsors and plan participants understand how such annuities work and the associated costs involved? As the late fee-only insurance adviser Peter Katt used to caution, "But at what cost?" Source: Fiduciaryinvestsense.com May Climate Funds Be Used in DC Plan Menus? Yes, as long as they don't come at the cost of participants' investment outcomes, according to Wagner Law Group. The Wagner Law Group published a legal opinion letter outlining how and when fiduciaries for defined contribution plans can consider "climate-aligned" funds in investment menus. The letter was written on behalf of Impact Experience, a nonprofit and advocate for sustainable investing. Source: Planadviser.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers How Plan Sponsors Are Working to Close the Gender Savings Gap With women still lagging in retirement savings, plan sponsors are making changes across retirement, health care, and financial wellness to ensure access is as equitable as possible. Source: Plansponsor.com Why Almost Half the "Sandwich Generation" is Delaying Retirement Almost half (47%) of respondents from what is known as the "Sandwich Generation" indicated that they are delaying their retirement plans to provide financial assistance to their elderly extended family members or grown-up children, with a similar 46% using their retirement savings to cover these costs, according to a new survey from Athene. Source: Planadviser.com Saver's Match: Opportunity to Help Close Retirement Savings Access Gap When looking for wider access to retirement savings, as well as more equitable benefits, the Saver's Match will offer an opportunity to amass meaningful amounts of money in the retirement accounts of workers with low incomes, according to experts who spoke at the seventh annual Aspen Leadership Forum on Retirement Savings. Source: Plansponsor.com »» Click here for More Studies, Research, and White Papers Court and Legal Staying Ahead of the Risk Curve: Lessons From Litigation ERISA's fiduciary responsibilities are inherently procedural. One might say that they don't require that fiduciaries arrive at the right answer, but they do require that fiduciaries deploy a prudent process aimed toward the right answer. This begs an interesting question: Should your organization's fiduciaries care more about the process or the outcome? Current litigation trends suggest the answer is: both. But if fiduciary responsibilities are procedural, how can that be? Consider this perspective. Source: Qualifiedplanadvisors.com Another 401k Plan Fiduciary Defeats Breach of Fiduciary Duty Claims at Trials The court opinions serve as a good reminder that offense is the best defense, and ERISA plan fiduciaries best protect themselves against ERISA breach of duty of prudence claims by proactively implementing strong fiduciary governance practices, such as keeping thorough committee meeting minutes. Consistently creating and maintaining detailed records regarding the initial selection and ongoing monitoring of vendors and investment options will help the committee defend those decisions later. Source: Spotlightonbenefits.com Federated Hermes Sued Over Using Own Funds in Its 401k A former Federated Hermes employee this week sued the company because it included its funds in the company's 401k plan. The asset management firm is the latest to be targeted by a plaintiff's law firm over the issue of using in-house products rather than comparable funds from outside providers that might have better performance records and lower fees. Source: Investmentnews.com One Step Forward, One Step Back for Use of Crypto in Retirement Accounts It was one step forward, one step back this week toward a world in which cryptocurrency investments start popping up widely in retirement accounts. ForUsAll, a firm that helps retirement plans offer cryptocurrency investments to their participants, suffered a setback when the U.S. Court of Appeals for the District of Columbia dismissed the firm's lawsuit against the DOL over its March 2022 crypto guidance. Source: Investmentnews.com »» Click here for more Court and Other Legal Issues Compliance and Regulatory DOL Seeks Input on SECURE 2.0 Changes On August 11, 2023, the DOL issued a Request for Information asking for stakeholder input on several regulatory issues related to the SECURE 2.0 Act. The wide-ranging RFI seeks feedback on issues primarily related to the reporting and disclosure requirements under ERISA. The issues are summarized here and comments are due by October 10, 2023. Source: Groom.com Prepare to Keep Vital Records Safe in a Disaster, IRS Reminds Taking action in advance to protect vital documents can be helpful when a disaster strikes, a principle that applies to retirement plans and administration as well as other records and functions. The IRS issued a reminder in Tax Tip 2023-107 about the importance of such steps on the heels of Hurricane Idalia's travels through Florida and other parts of the southeast. Source: Ntsa-net.org IRS Delays Roth Catch-Up Contribution Change to DC Plans One of the changes made by the SECURE 2.0 Act requires that catch-up contributions made by employees with FICA compensation from an employer sponsoring a defined contribution plan of at least $145,000 in the prior calendar year, as indexed, be made as after-tax Roth catch-up contributions. This provision, which was supposed to become effective January 1, 2024, is problematic because the IRS has issued no guidance, and many service providers have stated they will be unable to update their systems by the end of the year. Source: Wagnerlawgroup.com DOL Trying to Make It Easier to Terminate Abandoned Plans The DOL has filed a rule proposal with the OMB that will make it easier to wind down retirement plans abandoned by employers and give plan participants access to their benefits. Source: Jdsupra.com »» Click here for more Compliance and Regulatory Material Marketplace News Human Interest Streamlines Retirement Planning Process With Fast Track 401k DOL Seeks Nominees for Five Vacancies on 2024 ERISA Advisory Council
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