Three Themes Shaping the U.S. Retirement Landscape
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Insight: Studies, Research, Analysis, and Papers Three Themes Shaping the U.S. Retirement Landscape Looking into 2024, retirement income, personalization, and diversification will be the key themes for DC plan sponsors and their consultants and advisors. This 2024 U.S. Retirement Market Outlook explores why it is expected that these topics will shape the retirement landscape in the coming years and outlines the underlying factors that are creating both challenges and opportunities for the retirement industry. The paper also provides action items or next steps for plan sponsors, consultants, and advisors. Source: Troweprice.com »» Click here for More Studies, Research, and White Papers Fiduciary and Plan Governance Tips to Keep Your Retirement Plan in Compliance A recent survey indicates that 45% of retirement plan sponsors do not realize they serve as fiduciaries to their organization's retirement plan. All fiduciaries need to follow best practices for ensuring their plans are operating according to the rules, regulations, and governing plan documents. This process can be accomplished by creating a compliance checklist for 2024. Source: Usicg.com Group Health Plan Fiduciaries May Now Be a Target of Lawsuits for Excessive Fees Once the DOL's participant fee disclosure rules for retirement plans became effective in 2012, the plaintiffs' bar latched onto recordkeeping and investment fees paid by 401k plans, and the number of lawsuits claiming excessive fees exploded. Now, a recent lawsuit against the fiduciaries of a group health plan highlights what might be the next wave of fee litigation related to employee benefit plans. Source: Sgrlaw.com »» Click here for more Fiduciary and Plan Governance Material Items of Special Interest to Advisers and Other Service Providers Exploring the Benefits and Challenges of ChatGPT and Other AI-Generated Content AI-generated content is becoming an increasingly popular talking point among financial advisors as a means of creating engaging, targeted content with greater speed and efficiency. On the surface, it may appear to be an ideal solution; however, there are both pros and cons to leveraging artificial intelligence when producing content that should not be overlooked. This article explores the potential benefits and drawbacks of using AI technology to create content for financial advisors. Source: 401k-marketing.com Pooled Employer Plans vs. SIMPLE IRA There are now many different retirement plan options for employers. It is becoming more common to see Pooled Employer Plans and SIMPLE IRAs evaluated against one another. Both types of plans can be good options for the right situation. This chart takes a look at the differences between the two plans. Source: Conradsiegel.com Comparing Seven Defined Contribution Plan Designs - 2024 Employers and their advisors should recognize that there is much more room for design enhancement than there was 10 to 20 years ago. Don't assume that the simplest design is always the best. The best design for any given situation will vary depending on employee ages and salaries, as well as company objectives. Here is a chart showing the results of comparing seven plans for a small business. Source: Consultrms.com The New Fiduciary Rule: Requirement to Correct Failures With PTE Conditions When a person makes a "covered" recommendation to a "retirement investor" and the recommendation, when implemented, results in the person (or his or her firm or an affiliate) receiving additional compensation, a prohibited transaction will occur. One of the conditions in the PTEs is that any compliance failures must be corrected and, if need be, the retirement investor must be made whole. This article is the first in a series that will discuss the correction requirements in the proposed amendments to PTEs 2020-02 and 84-24. This article focuses on the requirement to report failures and corrections to the DOL. Source: Fredreish.com 401k World: Retirement Plan and Wealth Advisement According to surveying done by T. Rowe Price, 100% of large retirement plan advisories are now providing wealth management strategies to plan participants. According to some in the industry, that trend is likely to continue in coming years as participant wealth management needs grow. Offering both plan advisory and wealth management services makes sense from several perspectives, including higher profit margins than plan advisory work, according to the T. Rowe report. Source: Planadviser.com Court and Legal DOL Gets Temporary Restraining Order Against TPA The DOL has gone to court to protect retirement plan assets in a case of alleged embezzlement by a TPA. According to the DOL, RiversEdge is a third-party administrator of at least 240 retirement plans that hold millions of dollars in plan assets and acts as an agent to manage and administer plan assets, at least 229 of these retirement plans are covered by ERISA. Source: Napa-net.org Impact on ERISA Regulation if Supreme Court Throws Chevron Deference Overboard Although Relentless and Loper Bright do not directly implicate ERISA, a repeal of Chevron deference would almost certainly affect how courts treat regulations under ERISA. Two current ERISA hot topics that come to mind are the proposed Retirement Security Rule and the Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights rule. If the Court abandons or curtails the Chevron deference, ERISA regulations adopted by the DOL may be more heavily scrutinized, modified, or vacated by federal courts. Source: Morganlewis.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC Senate HELP to Hold Hearing on Confronting the "Retirement Crisis" Amid the recent attacks on the 401k savings system, the key Senate committee with jurisdiction over ERISA plans to hold a hearing on Wednesday, Feb. 28 to examine what it describes as "confronting the retirement crisis facing working class Americans." Source: Ntsa-net.org »» Click here for more on Legislative and Washington Actions Compliance and Regulatory Calculating Earnings for 401k and 403b Plan Corrections: Do Your Best to Do Better Practitioners tend to use the DOL's online calculator for late deferral deposits since EPCRS permits estimates, but to the extent one is being practical and making participants whole, the cheaper result of the online calculator should not prevail over the participant's, the plan's, or the default investment alternative's actual rate of return. Some other alternatives are presented here. Source: Belfint.com A More Enlightened Approach to Uncashed Distribution Checks No retirement plan sponsor likes the idea of dealing with uncashed distribution checks, nor do they wish to draw unwanted regulatory attention or to become embroiled in costly litigation because of their uncashed check policies. Unfortunately, many plan sponsors place themselves in precisely that spot, becoming unnecessarily over-burdened with unresolved uncashed checks, while inviting unwanted regulatory scrutiny and/or legal challenges by embracing flawed uncashed check policies. Source: 401kspecialistmag.com The IRS's Pre-Examination Pilot Program Enters Phase Two The IRS announced earlier this month that it is extending its pilot program under which retirement plan sponsors are given 90 days' notice that their plan has been selected for examination, with the opportunity to avoid a full audit by correcting certain errors and demonstrating compliance with the applicable Internal Revenue Code rules by the end of the 90-day pre-examination period. The key features of the pre-examination pilot program remain the same. Source: Groom.com PR Treasury Announces Plan Contribution Limits for 2024 On January 30, 2024, the Puerto Rico Treasury Department issued Internal Revenue Circular Letter No. 24-01 notifying the retirement plan limits that will apply to retirement plans qualified for the year 2024, including the cost-of-living adjustments published by the IRS. Here are the retirement plan limits applicable for taxable years beginning on or after January 1, 2024. Source: Mcvpr.com »» Click here for more Compliance and Regulatory Material Marketplace News OneDigital Acquires Retirement Benefits Division From High-Profile Chicago Firm NAPA Launches Retirement Income Certificate Program for Advisors Hub Launches Retirement Select PEP
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