Judge Upholds DOL ESG Rule
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In This Issue
Fiduciary and Plan Governance A U.S. District Court ruled on Thursday against 26 states and other plaintiffs in their lawsuit challenging the legality of the DOL's final rule permitting retirement plan fiduciaries to use environmental, social, and governance considerations in their decision-making about investments. The judge ruled that the DOL does not violate ERISA by permitting ESG in ERISA-governed plans. Source: Planadviser.com Retirement Plan Fees Worsen Enterprise Risk: A Management Briefing A crisis among retirement plan-sponsoring enterprises is unfolding. The challenge facing their leaders is to ensure that operations managers are equipped with the training, guidelines, controls, and tools that elevate fiduciary risk management to its proper priority. Underestimating the economic and reputational risks related to deficiencies in the prudent management of ERISA plans threatens an entire enterprise. Source: Rolandcriss.com Retirement Plan Investment Menu: Taking a look Into the Industry Average Plan Sponsors want to know how their menu looks compared to peers. There are two primary reasons for this. First, a retirement plan is used as a retention tool and sponsors want to make sure they are competitive with their offering. Second, sponsors have a fiduciary responsibility and want to be in line with industry standards. This article highlights a few aspects of the menu that are not only interesting but important considerations for a fiduciary. Source: Conradsiegel.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers 2023 Alight International Workforce and Wellbeing Mindset Study The 2023 International Workforce and Wellbeing Mindset Study is Alight's 13th annual U.S. report, examining employee wellbeing, culture, total rewards, and workplace technology. The study's goal is to understand employee perceptions to help employers optimize their employees' well-being and experiences to improve engagement, productivity, and performance. Source: Alight.com Quarterly Retirement Market Data Total US retirement assets were $36.7 trillion as of June 30, 2023, up 3.1 percent from March 31, 2023. Retirement assets accounted for 31 percent of all household financial assets in the United States at the end of June 2023. Americans held $10.2 trillion in all employer-based DC retirement plans on June 30, 2023, of which $7.2 trillion was held in 401k plans. Details and charts are laid out here. Source: Ici.org U.S. Retirement Assets and Participation: The State of Things Where do things stand regarding retirement assets and plan participation in the United States? Two agencies give us a look. Source: Asppa.org »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers Political Clock Ticks as Labor Readies Next Version of Fiduciary Rule The DOL's fiduciary rule is likely to make a rollover recommendation a fiduciary act. But if the DOL doesn't complete the measure soon, it's vulnerable to being overturned by the next Congress and White House. Source: Investmentnews.com 403b Plans How SECURE 2.0 Impacts 403b Plans While many provisions of SECURE 2.0 apply to various types of retirement plans, including 403b plans, this article focuses on those provisions of the Act that apply only to 403b plans. Source: Graydon.law Expanded IRS Determination Letter Program for 403b Plans The IRS has begun accepting determination letter applications for individually designed 403b plans. This marks an expansion of the IRS program, which allows plan sponsors to request that the IRS review their plan and provide confirmation in the form of a determination letter that their plan document meets the Tax Code's formal plan document requirements. Source: Kelleydrye.com »» Click here for More 403b Material Court and Legal Latest ERISA Standard Ruling Could Lead to More Dismissals A recent Tenth Circuit decision upholding Barrick Gold of North America Inc.'s defeat of a proposed class action alleging it saddled retirees with excessive 401k plan fees and subpar investments added to a growing body of circuit precedent applying a defense-friendly standard to dismissal bids in retirement plan mismanagement cases. Source: Wagnerlawgroup.com New Strategy in 401k Litigation: Ask for Settlement Before Suit Is Filed A new entrant to the world of 401k lawsuits is trying what appears to be a novel tactic: Contacting plan sponsors out of the blue and implying that they should settle. That's before the hint of any lawsuit or request for information about the plan that would lead to a lawsuit, said Daniel Aronowitz, managing principal of 401k insurer Euclid Fiduciary, who has had at least seven clients contacted by law firm Lieff Cabraser Heimann & Bernstein. Source: Investmentnews.com When Attorney-Client Privilege Applies Under ERISA When a plan fiduciary communicates with an attorney, those communications are not always protected by attorney-client privilege. If a fiduciary is getting advice from an attorney on a matter related to plan assets, that advice would be rendered for the benefit of the plan and could therefore be discoverable in court. Fiduciaries are not often aware of this fact. Source: Planadviser.com Suit Finds 401k Fiduciary Fault in Bed, Bath & Beyond Bankruptcy Just days after The New York Times reported on the impact of a corporate bankruptcy on 401k accounts, litigation has been filed against the plan fiduciaries. Plaintiffs claim defendants "failed to monitor the prudence of the Plan's investment in the MassMutual Guaranteed Interest Account, certified false and misleading statements concerning the risk of loss to Plan participants invested in the GIA and failed to take action to avoid the multi-million-dollar losses that followed." Source: Napa-net.org Plaintiffs Get Past Motion to Dismiss in BlackRock TDF Suit The plaintiffs in one of the dozen or so cases (Trauernicht et al. v. Genworth Financial Inc. et al.) involving the BlackRock Lifepath target-date funds have made it past the motion to dismiss stage. Source: Napa-net.org $6.1 Million Settlement Struck in 401k Excessive Fee Suit A four-year-old case (Ferguson v. BBVA Compass) in which participants accused plan fiduciaries of "stuffing cash into a mattress" while at the same time forcing participants "to play the fool's game" by offering only "high-cost actively managed funds" has come to terms. Source: Napa-net.org »» Click here for more Court and Other Legal Issues Compliance and Regulatory Could I Fail my First 401k/403b Plan Financial Statement Audit? Death by a thousand cuts. That's what initial 401k and 403b audit clients fear their first financial statement audit will feel like. Fear of the unknown leads the human mind to worst-case scenarios. Could I fail the audit? Sure, anything is possible. Will I fail my first audit? Not likely. Here is a summary of the most typical audit findings encountered. Source: Belfint.com »» Click here for more Compliance and Regulatory Material Marketplace News A "Slam Dunk": 401k Auto-Portability Network Nears Live Date Announcing the Nominees for the NAPA 2023 Top Women Advisors NFP Broadens Reach in the West with Pickup of Utah RIA Fidelity, Empower, TIAA, Top Performers in Digital Capabilities HUB Launches Pooled Employer Plan
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