DOL Sends Final Fiduciary Rule to OMB
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Items of Special Interest to Advisers and Other Service Providers DOL Sends Final Fiduciary Rule to OMB On March 8, 2024, the DOL sent a final version of the Retirement Security Rule: Definition of an Invest. Advice Fiduciary to the Office of Management and Budget for review. OMB review is typically the final stage of the regulatory process before the publication of a final rule and can take anywhere from a few days to several months. Source: Groom.com Advice to Plans and Participants and Litigation Risks While plan sponsors are generally the focus of litigation, retirement plan advisors can also be a target of lawsuits for breach of fiduciary duties under ERISA. There has been a recent increase in ERISA claims filed against retirement plan advisors and this article discusses the allegations and the court's conclusions in selected cases. Source: Napa-net.org The New Fiduciary Rule: Can Wholesalers Become Fiduciaries? It is well known that the expansive definition of fiduciary in the DOL's proposed regulation will cause many more advisors and insurance agents to be fiduciaries for their recommendations to retirement investors. However, it is less known that the same rules can apply to wholesalers of securities and insurance products. Source: Fredreish.com Insight: Studies, Research, Analysis, and Papers NEPC's 2023 Defined Contribution Plan Trends and Fee Survey Results NEPC's Defined Contribution team released its 2023 Defined Contribution Plan Trends and Fee Survey results. This is the 18th annual version of the survey, which examines current plan investment trends, features, and innovations across major sectors, and how these plans have evolved over the years. Source: Nepc.com New Research Finds That 21.9 Million Americans Could Qualify for SECURE 2.0 Saver's Match A research report about the SECURE 2.0 Saver's Match provision published today by the Employee Benefit Research Institute found that 21.9 million Americans could qualify to receive a matching retirement plan contribution from the federal government starting in 2027. Source: Ebri.org Race, Retirement, and the Savings Gap Dramatic racial and ethnic disparities in retirement savings persist in the U.S., with no simple solution. This research shows that Black and Hispanic workers are lagging in plan participation and savings while also facing a greater range of competing financial priorities. The retirement industry can act now to help close the gap with thoughtful plan design, wellness and education programs, and improved data-sharing practices. Source: Troweprice.com Younger 401k Participants Seek Personalization Features Younger participants enrolled in employer-sponsored retirement plans share a greater desire for personalization, finds new research from Cerulli Associates. According to the findings, Generation Z was the most willing out of all other generations to share personal information, such as retirement savings/account balances (51%), nonretirement savings/account balances (37%), and expected retirement age (66%). Forty-five percent of Gen Z respondents added that they are "very comfortable" sharing their current and/or projected spending with 401k providers. Source: 401kspecialistmag.com »» Click here for More Studies, Research, and White Papers Court and Legal Another 401k Plan Sponsor Faces Novel Suit Regarding Its Use of Forfeiture Funds This latest suit alleges that the plan sponsor failed to use forfeiture funds to lessen plan administrative expenses, which would have reduced or eliminated the amounts charged to the accounts of plan participants for administrative expenses. In some of the prior lawsuits, plaintiffs have alleged that the governing plan documents explicitly provided that plan sponsors could use forfeitures to lower contributions owed to the plans. This complaint is devoid of such allegations and is a "novel theory." Source: Jonesday.com Multi-Billion Dollar 401k Settles Excessive Fee Suit The parties in yet another 401k excessive fee suit have come to terms after two years of litigation. In exchange for releasing their claims, the Settlement (Stengl et al. v. L3Harris Technologies) provides that the L3Harris defendants will pay $650,000 to Class Members. Source: Napa-net.org $61 Million Settlement Finalized in GE ERISA Case Final approval on the long-running GE ERISA case came with Judge Indira Talwani of the U.S. District Court for the District of Massachusetts granting a $61 million cash settlement in the case Haskins, et al. v. General Electric, et al. It marks the largest settlement ever in an ERISA case alleging a retirement plan improperly offered proprietary funds. Source: 401kspecialistmag.com Price Chopper, Tops Owner Sued Over 401k Northeast Grocery, the conglomerate that owns Price Chopper/Market 32 and the Tops supermarket chains, is being sued in federal court over its management of the 401k retirement accounts it offers to employees. The lawsuit alleges supermarket conglomerate didn't manage mutual fund fees, leading to lower overall returns for retirees. Source: Timesunion.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC CITs in 403bs Bill Headed to Senate A bill that would authorize the use of collective investment trusts in 403bs is headed to the Senate after the House of Representatives passed it. The Expanding Access to Capital Act (HR 2799), sponsored by House Financial Services Committee Chair Patrick McHenry, includes three measures that were approved as amendments, including the 403b plan measure. Source: 401kspecialistmag.com »» Click here for more on Legislative and Washington Actions State-Based Private-Sector Retirement Programs Washington State Poised to Adopt State Plan Add the Evergreen State to those that provide retirement plan coverage for private-sector employees whose employers do not. Well, soon. Sen. Mark Mullet introduced SB 6069, the measure creating Washington Saves, on Jan. 9, 2024. The Senate passed it on Feb. 12; the House initially passed it on March 1 in a 57-39 vote, and on March 6 passed a version that incorporated Senate views on the amendments it had made. The Senate passed the amended version in a 35-12 vote on March 7. The measure now awaits the signature of Gov. Jay Inslee. Source: Ntsa-net.org Cyber and Plan Security With a quick Google search, anyone can get a sense of the massive amount of money in workplace retirement plans and individual retirement accounts. What may be less known, but not too hard to figure out for hackers, is that retirement plans' unique business model creates multiple potential openings for breaches, according to experts. This article delves into cybersecurity threats to retirement plan assets and the industry's approach to combatting them. Source: Planadviser.com »» Click here for more on Cybersecurity Issues Compliance and Regulatory Do You Know Where Your "Missing" Retirement Plan Participants Are? In the laundry list of retirement plan administrative and operational requirements, plan sponsors may sometimes overlook their obligations concerning terminated vested employees. Even though these individuals have left the company, the plan sponsor still retains fiduciary obligations to them. To provide them with their benefits under the plan, you will need to maintain contact information for them. Here are some suggestions for minimizing missing participants in your plan. Source: Brickergraydon.com Employer Roth Contributions: Tips for Employers Under the SECURE 2.0 Act, it is now possible to offer plan participants in 401k, 403b, and 457b plans the option to treat employer contributions as Roth contributions. Industry experts at the American Retirement Association offer their insights on this new benefit option and employer benefits plan administrator Watkins Ross provides some tips. Source: Napa-net.org »» Click here for more Compliance and Regulatory Material Marketplace News Dawn Foods Boosts Employer 401k Matching Contribution Morgan Stanley Heads to Market With New Participant Education Program
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