Five Retirement Industry Trends to Follow This Year
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In This Issue
Items of Special Interest to Advisers and Other Service Providers Five Retirement Industry Trends to Follow This Year Retirement plan advisers would do well to watch for developments in five key areas during 2024, according to Kate Blake, a senior consultant at Pentegra Retirement Services. During a Pentegra webinar, Blake urged advisers to pay attention to trends relating to interest rates, legislation, plan documentation, the younger workforce, and existing technology. Source: Planadviser.com Fiduciary Rule May Curtail Wealth Managers Pursuing Retirement Planning A new study by Cerulli Associates looks at how wealth managers must navigate the looming DOL fiduciary rule when recommending individual retirement account rollovers to defined contribution participants. As wealth management firms move into the retirement planning space, more will have to comply with ERISA, and thereby, the pending fiduciary rule proposed by the DOL in October. Source: 401kspecialistmag.com DOL Fiduciary Hearings and Comment Letters, Podcast Take a quick dive into the exciting world of ERISA with Faegre Drinker benefits and executive compensation attorneys Fred Reish and Brad Campbell. In this podcast, Fred and Brad offer a high-level view of current trends and recent ERISA developments primarily around the DOL fiduciary hearings and comment letters. Source: Spotlightonbenefits.com Safe-Harbor Leveraging for Small Business, Top-Heavy Retirement Plans - 2024 Many employers are debating how to most efficiently take advantage of the defined contribution limit increase to $69,000. However, few owners of small businesses are aware of the extent to which certain types of "leveraging" are now permitted in qualified retirement plans. The purpose of this article is to illustrate the provisions that allow owners of small businesses to get the most in return for what they are willing to contribute on behalf of their non-owner employees. Source: Consultrms.com Fiduciary and Plan Governance Benchmark Survey on Recordkeeping Fees for Large DC Plans Debuts Encore Fiduciary has developed the first publicly available national database that provides reliable evidence of what large plans pay for recordkeeping services. Why is this important? Encore Fiduciary claims that given the lack of a reliable benchmark for what large plans pay for recordkeeping services, plaintiff law firms have filled the void with misleading comparators to support a recent wave of fiduciary malpractice claims. Source: 401kspecialistmag.com The nation's highest court heard arguments involving the National Marine Fisheries Service. It seems they don't appreciate the government requiring fishing companies to pay certain regulatory costs. This concept is allowed under a 1984 Supreme Court decision involving Chevron. Overturning Chevron will not only impact the fishing business but all regulated activities, including the retirement plan industry. There are some immediate ramifications for plan sponsors and they will need to pay close attention to events as they unfold. Source: Fiduciarynews.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, Analysis, and Papers 45% of U.S. DC Plan Sponsors Considering Adding Emergency Savings Options in 2024: Survey More than two-fifths (45 percent) of U.S.-defined contribution plan sponsors say they're considering implementing emergency savings features, according to a survey from MFS Investment Management. The survey, which polled 1,000 DC plan members and more than 140 plan sponsors, found nearly a quarter (23 percent) of plan sponsors said they'd take advantage of new rules under the Secure 2.0 Act that allow plan members to take out $1,000 from their retirement accounts once every three years with no distribution tax charge. Source: Benefitscanada.com »» Click here for More Studies, Research, and White Papers 403b Plans The SECURE 2.0 Act of 2022 is a sprawling bill, affecting 403b plans with many provisions that have come into force since passage. Retirement experts at PLANSPONSOR's recent webinar, SECURE 2.0 for 403b Plans, examined the provisions of the law that took effect this year and before. Source: Plansponsor.com »» Click here for More 403b Material Court and Legal ERISA Litigation Faces New Frontiers in 2024 In 2023, just over 100 new class actions were filed under ERISA. This is the lowest number filed since 2018, largely driven by fewer new cases alleging excessive fees in retirement plans. This article explores what 2024 could bring for ERISA litigation regarding excessive fee cases, prohibited transaction cases, health plan fee cases, and more. Source: Groom.com »» Click here for more Court and Other Legal Issues Compliance and Regulatory Student Loan 401k Matching: A Case Study SECURE 2.0 was instrumental in focusing employers' attention on the issue and provided a guidepost as to how they might provide more financial support to address those payments. As a case in point, engineering consultancy Kimley-Horn and Associates Inc., which employs about 8,000 people, is now offering a 401k match based on student loan payments through a program run by SoFi at Work. Source: Planadviser.com Detailing the DOL's Auto-Portability Proposal Service providers would be permitted to charge a reasonable fee to transfer the assets of individual retirement account holders to a new employer-sponsored plan under a proposal published by the Department of Labor. This article delves into the details of the proposed rule, which will be up for a 60-day public comment period once filed in the Federal Register. Source: Planadviser.com Although there are several options available for emergency savings accounts, this is the first one that provides both a way to encourage retirement savings and at the same time a tax-advantaged way to meet immediate financial needs that arise in one's day-to-day activities. This article examines the features of the Pension-Linked Emergency Savings Accounts under Section 127 of SECURE 2.0. Source: Groom.com IRS Highlights Changes to Pre-Approved DC Plan Program There have been significant changes to the IRS Pre-Approved Defined Contribution Plan Program, and two of the IRS officials involved in the thick of it recently provided a refresher on the program rules and recent developments. Central to recent developments is Revenue Procedure 2023-37, which the IRS issued in November 2023. It provided fresh guidance on qualified pre-approved plans and 403b pre-approved plans, and combined, conformed, clarified, and updated rules for those plans outlined in prior revenue procedures. Source: Asppa.org DOL Finalizes New PTE Filing and Processing Procedures Employer plan sponsors and fiduciaries that are subject to the prohibited transaction rules as outlined in ERISA and the Internal Revenue Code will want to take note of new procedures for granting administrative transaction exemptions. Source: Napa-net.org Impractical SECURE 2.0 "Sidecar" Emergency Savings Accounts Should Be Avoided The DOL has issued guidance clarifying several components of the emergency savings provision of SECURE 2.0. The guidance highlights the complexity of creating and maintaining these accounts and should be enough to make most plan sponsors look for a better option. Here are some of the rules a plan sponsor must follow if considering this option. Source: Multnomahgroup.com New IRS Guidance on Roth Employer Contributions The IRS gave plan sponsors an early Christmas gift with the release of new guidance late last year addressing several key provisions contained in SECURE 2.0. A welcome portion of the notice was further guidance on the new option allowing for participants in 401k and 403b plans to elect to receive employer matching and nonelective contributions on a Roth basis. While this guidance is welcome, Plan Sponsors who wish to adopt this provision should first have an in-depth conversation with their recordkeeper to ensure that their recordkeeping system has been updated to support this new option. Source: Brickergraydon.com »» Click here for more Compliance and Regulatory Material Marketplace News Fidelity Rolls Out Immediate Income Annuity for Retirement Plan Participants Betterment Unveils Small Biz Student Loan 401k Matching Solution
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