Key Issues to Know for the Proposed Fiduciary Rule
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Items of Special Interest to Service Providers Key Issues to Know for the Proposed Fiduciary Rule On October 31, the DOL released the highly anticipated proposed "fiduciary rule." The Biden administration continued its theme of eliminating "junk fees" in this instance addressing the cost of superfluous fees on Americans' retirement savings. The hundreds of pages that address the rule and related material are quite complex, but essentially they address several key issues reviewed here. Source: Callan.com The New Fiduciary Rule: An Overview The DOL has released its package of proposed changes to the regulation defining fiduciary advice and to the exemptions for conflicts and compensation for invest. advice to plans, participants (including rollovers), and IRAs. This Fred Reish blog post is an overview of the new proposals. His follow-up posts will go into detail on each of the proposals. Source: Fredreish.com Halloween 2023: DOL Fiduciary Rule Returns From the Dead In this latest sequel, the DOL has promulgated another proposed amendment to the rules determining when a person who makes a recommendation to someone responsible for the investment of the assets of an employee benefit plan or individual retirement account is deemed to be a fiduciary. This proposed rule would, if adopted, substantially expand the occasions upon which such a recommendation will make a person a fiduciary. The rule would affect broker-dealers, banks, and insurance companies, and could affect any other financial services business that markets investment products to U.S.-based retirement plans and IRAs. Source: Debevoise.com DOL Tries Once Again to Define What Constitutes Invest. Advice Under ERISA On Friday, November 3, the DOL issued its latest attempt to redefine who is an invest. advice fiduciary under ERISA. In conjunction with the regulatory proposal, the DOL also published amendments to several existing prohibited transaction exemptions. The proposal has generated a strong adverse reaction from a broad coalition of industry trade groups. This is a review of the DOL's regulatory proposal and amendments. Source: Carltonfields.com A Preview of Lifetime Income Issues Under the Proposed Fiduciary Regime There is much to be considered under the new set of fiduciary rules recently proposed by the DOL, especially as we sort through the details of this new regulatory regime. However, regardless of what your position may be about the efficacy or appropriateness of these changes, there are a few striking characteristics regarding these new proposals that will "inform" many of the discussions (pro and con) that we are going to see. Source: Businessofbenefits.com Building a Strong 401k Pipeline As the demand for retirement plan services grows, it becomes increasingly important for advisors to build a strong pipeline of potential clients. This article explores effective strategies and key steps that retirement plan advisors can take to build a robust 401k pipeline. Source: 401k-marketing.com Insight: Studies, Research, and White Papers Employee Attitudes Towards Their Retirement Benefits Contain Contradictions While employees expect their defined contribution plan to be a key vehicle for funding their retirement, most are worried their retirement savings will not be enough to cover their expenses, according to new research from Buck. Source: Napa-net.org Small Businesses See Many Obstacles to Plan Creation, Lack Awareness of SECURE 2.0 A survey from Capital Group found that the primary obstacles to small businesses creating retirement plans were costs, complexity, and concerns about the size and stability of their business. The report also found that larger employers were much more informed about the SECURE 2.0 Act of 2022 and the law's impact on federal retirement policy. Source: Planadviser.com CIT Providers Target Mid-Sized to Large DC Plans in 2024 Collective investment trusts have surpassed mutual funds as the top investment vehicle by defined contribution investment-only assets. CIT assets totaled $4.63 trillion as of year-end 2022, as improved capital market conditions coupled with continued robust demand within the defined contribution retirement plan space have contributed to ongoing growth, according to Cerulli's latest report. Source: Cerulli.com »» Click here for More Studies, Research, and White Papers Court and Legal Whole Foods 401k Targeted With Excessive Fee Suit Another multi-billion-dollar 401k plan finds itself in the crosshairs of an excessive fee suit. This time it was participant-plaintiffs bringing suit against the Whole Foods Market Growing Your Future 401k Plan. The claims put forth are nearly identical to those filed in any number of these excessive fee suits. Source: Napa-net.org Schlichter Sanction Swept Aside by Appellate Court A federal appellate court has determined that a lower court "abused its discretion" in assessing a $1.5 million sanction against the Schlichter Bogard law firm. Source: Napa-net.org »» Click here for more Court and Other Legal Issues Legislative and Washington DC Increased Retirement Plan Startup Credit Proposed for Micro Businesses Representative Claudia Tenney has introduced the Retirement Investment in Small Employers (RISE) Act to encourage small businesses with no more than 10 employees who received at least $5,000 of compensation in the prior year to adopt retirement plans. The RISE Act would replace $500 with $2,500 for a "Qualified Microemployer." Source: Ascensus.com »» Click here for more on Legislative and Washington Actions Compliance and Regulatory IRS Announces Increases on Benefits and Contributions Dollar Limitations for 2024 The IRS has announced cost-of-living adjustments that should be noted for retirement planning purposes. This is a chart that outlines employee benefit plan limits for 2024. Source: Belfint.com The Who, the When and the "Oh, No" of 401k Plan Notices It's that time of year when calendar year 401k plans must send annual retirement plan notices. As you work with your service providers to make sure all notices are sent, now may be a good time to reacquaint yourself with the more common notices and related 401k plan documents that must be provided to employees. Mistakes can happen especially with the "Who and the When," so here is a chart of the common notices with timing and recipients. Source: Graydon.law Prepare for Upcoming Changes to DC Plans Long-Term, Part-Time Employees The SECURE Act of 2019 and the SECURE 2.0 Act of 2022 made many significant changes to retirement plans and how they operate. Some changes that become effective for plan years beginning in 2024 and later will be implemented automatically by service providers. However, some sponsors will need to start planning now for an important change that will apply to many plans effective as of January 1, 2024. One of these requires 401k plans to allow long-term, part-time employees to make salary deferral contributions. Source: Wagnerlawgroup.com IRS Grants Much-Needed Two-Year Grace Period to Get Roth Catch-Ups All Caught Up On January 1, 2024, Section 603 of SECURE 2.0 becomes effective, which mandates that plan sponsors provide Roth catch-ups for DC plans that offer catch-ups and have at least one participant who earned $145,000 of FICA wages in the prior year. This new mandate had plan sponsors and recordkeepers alike scrambling to understand the new rule and how to implement this new plan qualification requirement by yearend. This new rule raises several open questions. In this article, Groom principals Elizabeth Dold and David Levine explore IRS Notice 2023-63, which provides guidance for Section 603 of SECURE 2.0. Source: Groom.com »» Click here for more Compliance and Regulatory Material Marketplace News Portability Services Network Launches Solution to Reduce Plan Leakage HUB Further Strengthens Retirement and Wealth Management Services
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