The Future Is Now for ERISA Fiduciary Duties Around Plan Data
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Fiduciary and Plan Governance The Future Is Now for ERISA Fiduciary Duties Around Plan Data ERISA needs to catch up with the information age by identifying plan data as a plan asset, resolving the current ambiguity on that point that has led courts to decide otherwise, and developing the related fiduciary duties, argues Michael Schloss of The Wagner Law Group. Source: Wagnerlawgroup.com Target-Date Funds: Low Fee Doesn't Equal Low Risk Passive target-date funds remain a popular choice for many defined-contribution plans, often driven by the generally lower fees associated with these funds. While intuitively it may feel as if "lower cost" naturally translates into a more prudent option for plan participants, the reality is this may not always be the case. Here are three reasons why passive TDFs aren't automatically the safer choice for DC plan fiduciaries. Source: Investmentnews.com ERISA Section 3(21)(A) and Discretion In this 13-page article, the author explains that fiduciary status under ERISA does not hinge on the exercise of discretion in some cases because, under ERISA Section 3(21)(A), an entity that exercises any authority or control over the disposition of plan assets becomes a fiduciary. Source: Wagnerlawgroup.com The Ins and Outs of Fiduciary Liability Insurance An explanation and history of fiduciary liability insurance occurred at the ERISA 403b Conference in Washington, D.C. While fiduciary liability insurance initially covered individuals, no one thought it was for a plan or company. It changed in the 1990s and today, fiduciary liability insurance is malpractice insurance for fiduciaries and it generally covers four areas. Source: Napa-net.org 10 Things to Look for in Retirement Plan Administration 401k's and other retirement plans are extremely technical. But by working with a highly skilled Third Party Administrator, employers can be supported in these tasks, assured their plan is running smoothly and in compliance with ERISA and IRS regulations. Choosing the right TPA for your retirement plan is a critical decision that can significantly impact your plan's success. Here are key factors to take into consideration when choosing a TPA. Source: Kushnerco.com Managed Accounts' Default Use Limited by Litigation Fears, Fees New research shows that managed accounts are facing a stumbling block beyond fees and general acceptance in retirement plans: litigation fears. Defaulting retirement participants into a managed account either immediately or after they reach a threshold of either age or assets, can offer a more personalized investment experience and potentially better outcomes. But retirement benefit consultants considering the option are often turned off not just by higher fees, but by litigation concerns, according to Sway Research's most recent defined contribution investment-only report. Source: Planadviser.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers New Retirement Outlook Report: A National Perspective on Retirement Readiness The retirement readiness outlook is mixed for Americans, according to the inaugural Vanguard Retirement Outlook report. This comprehensive analysis evaluates retirement readiness for a nationally representative sample of American workers. The report is 31 pages. Source: Vanguard.com Mobile Apps Emerge as a Critical Tool for Retirement Plan Providers Amid ongoing market volatility, it's little wonder that plan participants are keeping a close eye on their retirement account balances, and they increasingly are doing so via mobile apps. As a result, mobile apps have taken center stage as critical tools for retirement investors, according to J.D. Power's 2023 U.S. Retirement Plan Digital Experience Study released Sept. 13. Source: Ntsa-net.org »» Click here for More Studies, Research, and White Papers Court and Legal Judge Dismisses Another 401k Suit Involving BlackRock TDF Funds Another in the series of suits alleging that plan fiduciaries "chased low fees" and ignored investment performance has been dismissed, though there was a unique twist here. Source: Napa-net.org Plaintiffs Target Use of 401k Plan Forfeitures In the past month, plaintiffs have filed two separate lawsuits -- Dimou v. Thermo Fisher Scientific, Inc. and Rodriguez v. Intuit, Inc. -- accusing plan fiduciaries of violating ERISA, by using plan forfeitures to offset future employer contributions. This use of forfeitures is widespread, so sponsors and providers will want to monitor the cases closely. For plan sponsors and service providers, these new claims are disconcerting and offer another example where a long-common practice is now being challenged in the context of a class action complaint. Source: Groom.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC Legislation Opens Door for Cannabis Companies to Sponsor Retirement Plans Legally operated cannabis companies could soon be allowed to sponsor retirement plans under legislation recently approved by the Senate Banking, Housing, and Urban Affairs Committee. By a vote of 14-9 on Sept. 27, the committee approved the Secure and Fair Enforcement Regulation Banking Act (the SAFER Banking Act, S. 2860) to provide protections for federally regulated financial institutions that serve state-sanctioned marijuana businesses. Source: Napa-net.org In a September 29, 2023, Advisory Opinion issued to Citigroup Inc., the DOL addressed several key ERISA implications arising in connection with a Citi Racial Equity Program. The Program involves a commitment by Citi, as the plan sponsor, to pay all or some portion of the investment management fees for diverse managers retained by Citi-sponsored defined benefit and defined contribution retirement plans and welfare benefit plans that hold investment assets. Source: Groom.com "Groundbreaking" DOL Advisory Opinion for Citibank Provides ERISA Guidance Citibank has received a "groundbreaking Advisory Opinion" from the Department of Labor confirming that Citibank's conduct in connection with its Diverse Asset Manager Program and the ERISA plans it sponsors is settlor in nature and not subject to ERISA's fiduciary duties. Source: 401kspecialistmag.com »» Click here for more on Legislative and Washington Actions Cyber and Plan Security What's at Risk in a Cyberattack on a DC Plan? Every organization working with a defined contribution plan shares the responsibility for protecting from cyberattack the data, reputation, trust, and $10.2 trillion of accumulated assets in retirement plans. Safeguarding DC plans from digital security issues does not end with ensuring criminals do not steal workers' nest eggs, explains Gregg Levinson, senior director for retirement at WTW. Source: Plansponsor.com »» Click here for more on Cybersecurity Issues Compliance and Regulatory The IRS recently released an Issue Snapshot, Deductibility of employer contributions to a 401k plan made after the end of the tax year, to review the timing rules for employer contribution deductions under Code section 404(a)(6) and the limits on "annual additions" under Code section 415. The SECURE Act may have heightened the interest of IRS agents in auditing employer deductions of retroactive contributions to 401k plans. Source: Groom.com IRS Priority Guidance Plan Includes Retirement Items The IRS has issued its 2023-2024 Priority Guidance Plan, in which it describes guidance projects in the current fiscal year. Many items in the plan have appeared in prior years' Priority Guidance Plans. A number of the guidance items deal with retirement savings arrangements that are outlined here. Source: Ascensus.com »» Click here for more Compliance and Regulatory Material Marketplace News Savant Wealth Joins Pontera's 401k Management Platform Ascensus, Capital Group Team Up for Pooled Employer Plan Former DOL Investigator Starts Firm Targeting 401k Fraud Guideline Launches Starter 401k Retirement Plan for Small Businesses
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