Core Menus Need to Evolve
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Fiduciary and Plan Governance The role of the core investment menu in defined contribution plans has changed considerably over the last decade, as qualified default investment alternatives, particularly target-date funds, now capture more plan sponsor attention and participant assets than ever. This evolution requires plan sponsors and consultants to revisit key assumptions about optimal core menu design, especially as plan sponsors increasingly seek to retain participant assets during retirement, since older participants are more likely to use the core menu and invest conservatively. Source: Planadviser.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, Analysis, and Papers Plan sponsors focused on retirement income often limit discussions to product selection, overlooking the importance of a strategic philosophy informed by market insights and past experiences. This MFS white paper introduces a retirement income roadmap, guiding sponsors between Accumulation and Destination Plans, and underscores the necessity of revisiting and refining these strategies as circumstances evolve. Source: 401kspecialistmag.com Redefining 401k Data Collection for Racial and Gender Groups A new study released today is shifting the way participant data is collected across the retirement planning industry. The research highlights gender and race-focused defined contribution administrative data typically found in human resource systems, with the hopes of combining it with qualitative research to better assess wellness platforms and tools for employers and participants. According to the research, data on nonwhite households remains relatively small with limited information on contributions, loans, and withdrawal and asset allocation activity. Source: 401kspecialistmag.com How Men and Women Invest Differently, and What We Can Learn From Each Other Studies have shown that men and women have different approaches to investing money that can impact their long-term results. This 14-page paper looks at what those differences are, how they affect a portfolio, and what investors can do to gain balance in their investment style and strategy. Source: Arnerichmassena.com Realities of Retirement: Women vs. Men How are you tracking toward retirement? Your savings are dependent on several variables, from income and earnings potential to life expectancy and societal expectations, all of which differ based on gender. Advisors are acutely aware of the perfect storm women face in saving for a secure retirement. Not by their own doing, women are finding themselves on a lower rung of the wealth ladder. This article takes a look at the hurdles women are facing and explores opportunities to overcome them. Source: Manning-napier.com Inaugural Report From the Collaborative for Equitable Retirement Savings Morningstar Retirement, Defined Contribution Institutional Investment Association, and Aspen Institute Financial Security Program release the first report to address race and gender disparities in 401k plans. The new report reveals how retirement plan design can address the racial and gender retirement savings gap. Source: Dciia.org Millennials Redefine Retirement as "Financial Independence" Millennials are "redefining" what retirement means, according to a new survey conducted by IRALogix. More than half believe retirement is defined not by age 65 but by "financial independence." While some Millennials said ceasing all work by age 65 is a goal they are highly focused on working toward, many said they view retirement not necessarily as a complete exit from the workforce, but rather as a "time of greater flexibility in their lives." Source: Planadviser.com »» Click here for More Studies, Research, and White Papers Items of Special Interest to Advisers and Other Service Providers Managing Fiduciary Conflicts in the Age of Convergence In recent years, retirement plan advisers for Employee Retirement Security Act plans and advisers for wealth management clients have joined forces within the same firm. Among the many challenges involved with integrating these two practices is complying with the fiduciary and prohibited transactions of ERISA and section 4975 of the Internal Revenue Code when providing advisory services to clients. ERISA expert David Kaleda discusses what the DOL's proposed Retirement Security Rule may mean for retirement and wealth management firms. Source: Planadviser.com Plan Advisors: Help Plan Sponsors in Fiduciary Litigation While Protecting Yourself Instances of retirement plan litigation have skyrocketed in recent years and show no signs of stopping. Litigation against a plan sponsor inevitably draws in the plan's investment advisor and can cause significant costs and disruption. Here's what to do. Source: Napa-net.org The DOL Fiduciary Rule Requires a "Recommendation." What Is That? The DOL's proposed fiduciary regulation includes a new and expanded definition of when a representative of a broker-dealer, investment adviser, bank, or insurance company will become a fiduciary under ERISA and the Internal Revenue Code. The new definition starts with whether a "recommendation" has been made. This article discusses the definition of "recommendation." Source: Fredreish.com The Fiduciary Rule: Effective Date and Lawsuits In this podcast series of updates, Fred Reish and Brad Campbell offer a high-level view of current trends and recent ERISA developments. In this newest episode (about 23 minutes), they discuss The Fiduciary Rule: Effective Date and Lawsuits. Source: Spotlightonbenefits.com Court and Legal An Easy Read on the Past and Future of 401k Plan Litigation There is a story in Plan Adviser on the past and future of ERISA litigation over 401k plans. It's a fun and short read, neither of which is normally true of articles on this subject. That's a little tongue-in-cheek, but that phenomenon is nobody's fault. At its core, the article presents the question of whether the long and highly contentious history of this area of litigation has actually benefited participants. There are three points from the Plan Adviser article that the author touches on here. Source: Bostonerisalaw.com »» Click here for more Court and Other Legal Issues Target-Date Funds Fiduciaries Incite Revenge of the Baby Boomers The author suggests that "The next time target-date funds suffer large losses, Baby Boomers won't care that risk was rewarded until it wasn't. They'll be angry that academic theory was not followed because the theory would have protected them. After all, TDFs say they follow the theory, but they don't, they're much riskier. 78 million Boomers are currently in the 'Risk Zone.' Many are in TDFs." Source: 401kspecialistmag.com »» Click here for More Target-Date Funds Material State-Based Private-Sector Retirement Programs Hawaii Retirement Savings Program Auto-Enroll Getting Closer Automatic enrollment of eligible employees in the Hawaii Retirement Savings Program is closer to being put in place. Sen. Sharon Moriwaki introduced SB2553 on Jan. 19, 2024. Under the bill, employees would no longer be required to opt in to participate in the Hawaii Retirement Savings Program but rather would be automatically enrolled. When the program began, one of the features that distinguished it from other states' programs was that employees must actively opt-in if they want to participate. Source: Asppa.org Compliance and Regulatory 2024 Plan Limits for Puerto Rico On January 31, 2024, the Puerto Rico Department of the Treasury issued Internal Revenue Circular Letter No. 24-01 (CL IR 24-01) announcing the 2024 limits for Puerto Rico-qualified retirement plans according to Section 1081.01(h) of the Puerto Rico Internal Revenue Code of 2011. Here is a chart of the applicable 2024 limits for qualified defined contribution retirement plans in Puerto Rico. Source: Belfint.com SECURE 2.0 Expansion of the Employee Plans Compliance Resolution System (EPCRS) On May 25, 2023, the IRS provided new interim guidance with Notice 2023-43 for plan sponsors participating in self-correction through the Employee Plans Compliance Resolution System (EPCRS). This notice provides guidance and clarity in the form of questions and answers with respect to the expansion of EPCRS for plan failures under section 305 of the SECURE 2.0 Act. Here is a review. Source: Tri-ad.com »» Click here for more Compliance and Regulatory Material Marketplace News Empower Introduces Newest Suite of Retirement Income Partnerships Nationwide Partners with Morningstar to Offer Advisor Managed Accounts The 2024 NAPA Top DC Advisor Teams Revealed Penelope, Navia Partner on White-Label 401k Plans
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