Five of the Biggest 401k Changes of This Decade

Help for 401k Plan Sponsors and Retirement Professionals

Newsletter for January 29, 2018

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In This Issue

General Items

Five of the Biggest 401k Changes of This Decade

Abstract: Over the past few years, the 401k industry has seen several sweeping changes take place, each of which has altered the core dynamics of how employees' retirement plans are managed. New government regulations have modified how the industry is monitored for betterment of employees. Here are five of the biggest changes that have affected the responsibility, litigation strategies, fees and overall practices for providers.


The Saver's Credit

Abstract: The saver's credit is an income tax credit of up to 50% of 401k employee contributions that is available for certain taxpayers with income that does not exceed $63,000.


Fiduciary and Plan Governance Material

The Plan Committee: Appointing and Removing Committee Members

Abstract: This is an aspect of committees where there is generally a woeful lack of understanding of the commitment that is being made. This article discusses making a committee position offer (what plan sponsors should be thinking about), formalizing appointments, removals, and resignations.


Avoid Sending Gifts to Plan Sponsors, It Just Doesn't Look Right

Abstract: Like Don Fanucci in Godfather Part II, there will always be plan sponsor representatives that would like their beak wet. This type of bribery is something that will always be available in the retirement plan marketplace, but it's up to the plan sponsor and its providers to make sure that any gifts are de minimis to avoid any prohibited transactions and under the board conduct that could put the plan sponsor in danger.


»»  Click here for more Fiduciary and Plan Governance Material

Items of Special Interest to Service Providers

Fidelity Pushes Vanguard to Compete on Brand in 401k Plans

Abstract: Fidelity Investments' move to impose an additional fee on Vanguard Group assets is going to test plan sponsors' loyalty to the index-fund giant, according to retirement plan advisers, as employers are forced to choose between sticking with a trusted low-cost brand and paying less money for a similar investment product from a different provider.

Source: (registration may be required)

Fidelity Charging New Fee on Vanguard Assets Held in 401k Plans

Abstract: Starting this year, Fidelity will charge all new 401k clients a 0.05% fee on participant assets invested with Vanguard, which has emerged over the past several years as an index-fund behemoth as investors have moved away from active investing.

Source: (registration may be required)

Mike Alfred Exits BrightScope and Into Cryptocurrency Sphere

Abstract: Mike Alfred is out at BrightScope Inc. in pursuit of a shinier future and a reunion with his brothers. he moves by both brothers -- who always boldly proclaimed that an IPO was BrightScope's destiny -- reflects a burning sense of unrealized success in their quest to build a truly large and dynamic organization.


403(b) Plans

2018 403b Compliance Calendar

Abstract: This 403b Retirement Plan Compliance Calendar highlights critical compliance deadlines for defined contribution retirement plans. While we have covered all of the major dates, some may only apply to particular plan types (and are noted accordingly) and there may be additional deadlines for specific plans that are not covered here.


»»  Click here for More 403(b) Material

Target-Date Funds

TDFs Have Improved Participant Diversification

Abstract: About a third of participants across Millennials, Generation X, and Baby Boomers who self-manage the investment of their plan accounts are more conservative than a typical target-date fund appropriate to their age.


»»  Click here for more on Target-Date Funds

Plan Automation

Auto Features May Hold the Key to Improving Plan Participation Rates

Abstract: The Director of Administration of a 50-employee law firm discusses some of the challenges associated with mobilizing the entire workforce around the tax-qualified retirement plan.


»»  Click here for more on Automatic 401k Plan Features

Court and Legal

New Excessive Fee Litigators Emerge

Abstract: A new excessive fee suit has been filed -- this time against a hospital's retirement plan -- and from a different direction. What is most interesting about this litigation is that the plaintiffs are represented by counsel that doesn't appear to have a track record in ERISA litigation.


Norton Healthcare Faces 403b Plan Excessive Fee Suit

Abstract: Plan fiduciaries have been charged with breaching their fiduciaries duties under ERISA by selecting more expensive share classes of investments than were available to the plan.


New Ground(s) Emerge in NYU Excessive Fee Suit

Abstract: An amended claim in an excessive fee litigation treads some new ground, including naming the plan's investment advisor as a defendant. New York University was one of the first of the university 403(b) excessive suits filed in August 2016, and representing the plaintiffs then (and now) was the law firm of Schlichter, Bogard & Denton.


Self-Dealing Lawsuit Targeting Capital Group Routed in District Court

Abstract: In a dense dismissal decision, the district court offers a reminder of the exacting pleading standards of ERISA and statues of limitations before roundly rejecting the plaintiff's allegations for failing to state an actionable claim.


»»  Click here for more Court and Other Legal Issues

Legislative and Washington DC

Pending Legislation Could Significantly Change the Retirement Plan Landscape

Abstract: A number of bills have been introduced in recent weeks that, in addition to simplifying some of the rules, could encourage employers to set up plans and help increase employees' retirement savings. Many of these changes have been proposed in the past and enjoy bipartisan support. This article is a brief summary of some of the recently introduced bills.


»»  Click here for more on Legislative Actions

Compliance and Regulatory

How New Leadership at DOL Could Address Retirement Rules

Abstract: By all accounts, the administration of Donald J. Trump is slashing regulations across government. However, there are some exceptions to the rule, and a less ambitious deregulatory regime seems likely under new leadership at the Department of Labor.

Source: (registration may be required)

»»  Click here for more Compliance and Regulatory Material

Marketplace News

Lockton Launches Retirement Practice in Omaha

Ascensus to Acquire Qualified Plans LLC

Envestnet Partners With Investopedia to Launch Impact Investing Hub

Empower Retirement Unveils PlanVisualizer

Lockton Retirement Expands Nationally With Three Key Hires

»»  Click here for More Marketplace News

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