Mutual Fund Trading Costs: The Most Important Fee You've Never Heard Of?

Help for 401k Plan Sponsors and Retirement Professionals

Newsletter for July 3, 2017

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In This Issue

Fiduciary and Plan Governance Material

Mutual Fund Trading Costs: The Most Important Fee You've Never Heard Of?

Abstract: What if I told you that there is a fee present in mutual funds that is not included in the fund's published expense ratios and is often not publicly disclosed by the fund companies, since the SEC does not require its disclosure? You might laugh, but it is true.


Should Looming Tax Reform Drive 401k Prefunding?

Abstract: If the corporate tax rate is lowered, funding more future liabilities before the change takes effect could net significant savings for plan sponsors.


Making Sure 401k and 403(b) Fees Are "Necessary" and "Reasonable" - Part One

Abstract: A plan sponsor is required to understand all the fees that are associated your organization's retirement plan benefit program. This is a challenge because plan fee structures are often opaque, complicated, and sometimes, downright misleading. You are also required to ensure the services for which the plan is paying are necessary and reasonable. The most effective way to meet this fiduciary requirement is a Request for Proposals (RFP) process.


»»  Click here for more Fiduciary and Plan Governance Material

Insight: Studies, Research, and White Papers

Survey: Potential Impact of Tax Reform on Employees' Retirement Savings

Abstract: The Plan Sponsor Council of America released the results of a new snapshot survey to gather insights on the impact of possible changes to tax preferences for retirement savings plans.


The State of Recordkeeping

Abstract: Recordkeeping is often described as a commodity, and that might be true for the pure administration of participant accounts, but the 55 providers responding to this survey showcase a wide range of investment, technology and service options.


2017 Recordkeeping Survey

Abstract: The survey profiles 55 leading providers of DC recordkeeping services. These firms account for more than $6 trillion in assets and are estimated to represent approximately 85% of the total DC market. Collectively, results from the survey demonstrate the market's evolution and point up some factors to consider when selecting a recordkeeping partner.


Small Businesses Are Boosting Benefits of Their 401k Plans

Abstract: Vanguard issued its fourth annual 'How America Saves: Small Business Edition,' an extension of its defined contribution publication. The report analyzes small business 401k plans and finds that small business plans, like their large corporation counterparts, are increasingly implementing best-in-class design features to improve the retirement readiness of their employees.


How America Saves: Small Business Edition

Abstract: In this 36-page report, Vanguard analyzes small business 401k plans and participant behavior based on 2016 recordkeeping data.


»»  Click here for More Studies, Research, and White Papers

Items of Special Interest to Service Providers

Market Forces Could Cause Fundamental Changes to Small and Midsize 401k Markets

Abstract: For years, experts have predicted the small-plan 401k market would have to change. Although prices have come down, they are still high when compared with larger plans, and the market is rife with inefficiencies. However, a series of dramatic industry changes this year could finally cause fundamental shifts and improvements in the small and perhaps even midsize 401k markets.

Source: (registration may be required)

Court and Other Legal Issues

Nationwide's 401k Recordkeeping Fees Are Excessive, Lawsuit Claims

Abstract: Nationwide has been sued for allegedly charging 401k plans excessive recordkeeping and administration fees in a lawsuit that also challenges the practice of assessing fees based on the amount of plan assets.

Source: (registration may be required)

Waddell & Reed Sued Over In-House Funds in Its 401k Plan

Abstract: Waddell & Reed Financial Inc. is the latest financial services company accused of filling its workers' 401k plan with high-fee, poorly performing in-house funds, when less expensive, better performing outside options were available.

Source: (registration may be required)

Washington University Sued Again Over Its $3.8B Retirement Plan

Abstract: Washington University in St. Louis was hit with a second lawsuit accusing it of filling its $3.8 billion retirement plan with duplicative, expensive, and underperforming investment options.

Source: (registration may be required)

Pioneer Natural Resources Sued Over 401k Fees

Abstract: Pioneer Natural Resources USA is accused of choosing inappropriate, high-cost mutual funds in its 401k plan and paying Vanguard unreasonable, excessive recordkeeping fees.

Source: (registration may be required)

»»  Click here for more Court and Other Legal Issues

Cybersecurity Issues

Cybersecurity: Are Public Defined Contribution Plans at Risk?

Abstract: Given the continuing need for plans to adopt ever-greater levels of technology for administrative efficiency, the risk of inadvertent disclosure of personal information is escalating. Regardless of the investment made in protecting systems and data transmissions, plans remain vulnerable to human error and malicious or criminal actions.


»»  Click here for more on Cybersecurity Issues

DOL's Fiduciary Rule

DOL Again Seeks Comments on New Fiduciary Rules and Exemptions

Abstract: The DOL requested another round of public comment on its fiduciary rule, this time in the form of a Request for Information. The RFI seeks input on (a) whether to extend the January 1, 2018, applicability date for parts of the rule that are not yet in effect, and (b) changes to make the rule more workable. The RFI expresses an openness to modifying existing exemptions and adopting new ones.


»»  Click here for more on the DOL's Fiduciary Rule

Compliance and Regulatory

ERISA Retirement Plans May Not Protect Fraudulent Transfers

Abstract: The federal protections of ERISA protect retirement assets from most creditors under the anti-alienation provision. However, not all retirement plan contributions are protected from all creditors of fraudulent transfers. For example, transfers to a retirement plan specifically to avoid creditors are generally not protected.


IRS Moves to Nudge Employers to Pre-Approved Plans

Abstract: The IRS has made some changes to how it deals with pre-approved plans, hoping to encourage employers to switch from individually designed plans to the pre-approved format.


Fewer DC Plans Offering Hardship Withdrawals and Plan Loans

Abstract: Fewer organizations are offering DC plan hardship withdrawals, plan loans and online retirement invest. advice compared with five years ago. However, one-on-one and group/classroom-style investment retirement advice remains unchanged over the same period, according to new survey results from the Society for Human Resource Management.


»»  Click here for more Compliance and Regulatory Material

Marketplace News

Plante Moran Adopt IRAFiduciaryOptimizer Tool

Manning & Napier Adds to Collective Investment Trust Lineup

Cafaro Greenleaf Launches Fiduciary Fit

PSCA 60th Annual Survey Open

Roland|Criss Expands Digital Fiduciary Risk Management Solution to Education Sector

»»  Click here for More Marketplace News

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