A Comprehensive Guide to the 401k RFP Process
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Fiduciary and Plan Governance A Comprehensive Guide to the 401k RFP Process As a plan fiduciary, you need to choose the right 401k providers to ensure the financial well-being of your employees. You must undertake a thorough Request for Proposal process to do so. The RFP will help you evaluate and compare providers based on their track record, services, fees, and other critical factors. By following a well-crafted 401k RFP process, you can establish a successful and beneficial retirement savings program that meets the diverse needs of your employees. Here is a guide to the RFP process. Source: Cuiwealth.com Bitcoin and Brokerage Windows: A Risk for Fiduciaries? Now that the ETFs have been approved by the SEC, what does this mean for plan sponsors? Michael Kreps, a principal in Groom Law Group, says that guidance issued by the DOL in March 2022 cautioning sponsors against using cryptocurrency in plans governed by ERISA is "still good agency guidance." The guidance says that "the Department has serious concerns about the prudence of a fiduciary’s decision to expose a 401k plan's participants to direct investments in cryptocurrencies." It refers to them as "speculative and volatile" and notes valuation and regulatory concerns. Source: Planadviser.com Plan Sponsors Should Be Intentional When Adding Managed Accounts Despite the uptake in adoption, there are still many questions that have to be answered to implement a managed account offering effectively and to be able to measure it over time. Benchmarking can be challenging because by their nature managed accounts are designed to be highly tailored to an individual's needs, making an apples-to-apples comparison across product offerings may not always be feasible. Sources say that plan sponsors have the best chance at success if they identify from the beginning and work with service providers to deliver on those outcomes and provide adequate documentation. Source: Wagnerlawgroup.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, Analysis, and Papers How Firms Are Closing the Gender Gap in Retirement Savings The battle to close the economic gender gap extends beyond workplace wages to retirement savings. According to T. Rowe Price, women are making lower contributions to their retirement accounts and have lower balances overall, with the median 401k balance for women being a whopping 65% less than their male counterparts. While some factors demand systematic change beyond the financial services industry, firms can take steps to better support female participants by working to improve financial literacy among women, providing inclusive inputs for retirement readiness tools, and offering a balanced suite of education content and practical tools within the participant site. Source: Corporateinsight.com »» Click here for More Studies, Research, and White Papers Items of Special Interest to Advisers and Other Service Providers Fiduciary Rule: The Timeline for the Final Regulation and Exemptions The DOL published its proposed fiduciary regulation and prohibited transaction exemptions in the Federal Register on November 3, 2023. That was the beginning of a process that will end with the final rules and their effective and applicability dates. This article is Fred Reish's best guess about the timing of the process to complete the DOL's work. Source: Fredreish.com Loaded With Teeth and Better Crafted, the Latest 'DOL Rule' Attracts 19,000 Comments ERISA lawyers are saying that we have the new DOL rule that does much the same as the old, but there's a big difference. The DOL learned its lessons about how to present its case and the language this time is tighter and more threatening to vested interests. That begins to explain how it generated 19,000 comments, including 134 pages from SIFMA, the chief force holding together a wildly huge if fading, coalition of banks, insurers, and brokerages that are determined to make 'suitability' a good enough standard. But it's running out of intellectual and even practical firepower and the battle over the DOL's rule shows that it's even losing ground to slow-footed government bureaucracies. Source: Riabiz.com Big Names Back Latest Proposed Fiduciary Rule While many financial services firms and related trade groups have expressed their opposition, several high-profile firms have come out in support of the latest iteration of the DOL's proposed fiduciary rule. Aggregation firm HUB mirrored certain arguments made by the American Retirement Association in its comment letter supporting the rule (with suggested changes), specifically mentioning the current regulatory gap concerning one-time recommendations to plan sponsors that are not considered fiduciary advice. Source: Asppa.org Court and Legal Summary of 2023 401k Excess Fee and Performance Litigation In all, 2023 was a year of significant activity in pending cases, with a record forty-two settlements, a record number of motions to dismiss, summary judgment, and appellate rulings, and at least five cases being tried, including one before a jury. With new plaintiff firms entering the fray, all signs point to a continued high volume of excess fee cases and heightened risk exposure for sponsors of America's large retirement plans, especially jumbo-sized plans. Here is a summary of the 2023 case filings, trends, and reported settlements in ERISA excess fee and performance litigation. Source: Euclidspecialty.com DOL Sues Defunct Maryland Biz for Unremitted 401k Contributions The DOL announced this week that it has filed a lawsuit against now-defunct Elkridge, Md.-based computer forensic company Jones Dykstra and Associates Inc. and its co-owners for failing to remit nearly $44,000 in participant and employer contributions to the company's 401k profit-sharing plan for five years. Source: 401kspecialistmag.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC Congress Voicing Concerns With DOL Fiduciary Rule Proposal Many in Congress are joining thousands of the more than 19,000 commenters in voicing concerns with the DOL's controversial proposed "Retirement Security Rule: Definition of an Invest. Advice Fiduciary." Fifty bipartisan reps sent a letter urging that the controversial rule be withdrawn, and the House Capital Markets Subcommittee will hold a hearing Wednesday to explore its necessity. Source: 401kspecialistmag.com 1st House Hearing on Fiduciary Proposal Falls Along Partisan Lines The U.S. House Committee on Financial Services Subcommittee on Capital Markets hosted a hearing on Wednesday about the DOL's retirement security proposal, sometimes called the fiduciary proposal. The hearing proceeded largely along partisan lines, with Republicans pointing out flaws and Democrats noting merits. Source: Planadviser.com »» Click here for more on Legislative and Washington Actions Compliance and Regulatory This article summarizes eight tests that are required annually for a qualified defined contribution plan. It's not uncommon for a plan to be subject to a half dozen or more of these tests. The descriptions have been simplified. In addition to the tests described here, if an employer sponsors more than one plan, some of the tests have to be passed on a combined plan basis. Source: Consultrms.com Employee benefits limits for 2024 have been promulgated by the government. Here is a one-page 2023-2024 comparison chart of important employee benefits limits. Source: Clarkhill.com Mandatory Auto-Enrollment is Coming for Some Plans: What to Know Studies show that auto-enrollment increases plan participation, and soon it will not be optional for some plans. Among the many changes enacted in SECURE 2.0 is a requirement that new 401k and 403b plans have auto-enrollment and auto-escalation beginning in 2025. As with most of the SECURE 2.0 changes, there were many questions about how the rules would work in practice. Part of the "grab bag" guidance issued in recent Notice 2024-02 fills in some of the blanks but also leaves important questions unanswered. Source: Cohenbuckmann.com Retirement Plan Correction Solution: Life After Late Deposits Late deposit of elective deferrals is considered a breach of fiduciary duty because the moment the elective deferrals are withheld from employee pay, they become plan assets. Keeping plan assets commingled with employer assets is considered by the DOL to be a loan of those assets to the employer, which is a prohibited transaction under ERISA. This is a review of the correction process. Source: Ferenczylaw.com SECURE 2.0 in 2024: One Change Lowers Plan Costs, Offsetting Potential Costs of Other Changes One key change -- the increased force-out threshold -- can help lower plan costs and improve operational efficiency. This is good news, because other SECURE 2.0 provisions, both required and discretionary, may result in increased plan costs and additional burdens on plan administration. Knowing what changes are in store and how they may impact costs as well as plan design or benefits allows you to implement an effective plan strategy and coordinate participant communications. Source: Penchecks.com »» Click here for more Compliance and Regulatory Material Marketplace News Strive Announces New 401k PEP Retirement Plan for Small-to-Mid-Sized Businesses T. Rowe Price Launches Global Retirement Strategy Team Carson Adds Another Advisory Firm to Its Network 3M to Freeze U.S. Pension Plan in 2028 in Favor of 401ks Corporate Roundup: SageView Acquisition, RIA Co-Op Launches
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