The Importance of Educating Investment Committees

Help for 401k Plan Sponsors and Retirement Professionals

Newsletter for June 25, 2018

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In This Issue

Fiduciary and Plan Governance

The Importance of Educating Investment Committees

Abstract: Plansponsor's National Conference featured a session on investment committee education, the basics surrounding it, and the best resources available to plan sponsors. Two retirement industry professionals reviewed best practices for investment committee members.


Socially Responsible Investing: What Retirement Plan Sponsors Need to Know

Abstract: While investing in companies that are socially and environmentally conscious is not a consideration for all active and passive investment strategies, for those retirement plan sponsors that try to match the moral and ethical expectations of their plan participants, the way in which they approach ESG-focused investment strategies can be a point of confusion. This article looks at the key issue for retirement plan sponsors of how the consideration of ESG factors fits with their fiduciary obligation.


Tips for Establishing and Maintaining Plan Documents

Abstract: ERISA Section 402 says every employee benefit plan must be established and maintained by a written instrument. Plan sponsors have a fiduciary duty to operate in accordance with that plan document, but an ERISA attorney shares common cases when mistakes are made.


»»  Click here for more Fiduciary and Plan Governance Material

General Items

Just Say No to Retirement

Abstract: Dennis, who is 77, says she hopes that will be her story. "I am passionate about my work, and for me personally, as long as I have the physical and mental capability to continue, I am going to do it," she says. That's a common attitude among older workers. Some apply their energies to new careers, part-time jobs, or civic pursuits. Others, like Dennis, continue their life's work, full steam ahead. Here are four of their stories.


Why Small Business Owners Don't Offer a 401k, but Why They Should

Abstract: An American Express Survey in 2013 said 60% of small business owners were not saving the money they needed for retirement. This means many of their employees are likely not saving enough for retirement either. However, a small business 401k carries with it not only an incredible employee benefit, but also special tax incentives that SMB owners can get from offering retirement plans to their employees.


Five New Members Appointed to 2018 ERISA Advisory Council

Abstract: The DOL announced the appointments of five new members as well as chair and vice chair to the 2018 Advisory Council on Employee Welfare and Pension Benefit Plans, known as the ERISA Advisory Council.


Insight: Studies, Research, and White Papers

Retirement Plan Best Practices: Participant Education

Abstract: This 17-page white paper examines best practices for a plan sponsor in designing education and engagement programs to improve participants' financial wellness and long-term retirement outcomes. Whether plan sponsors are working alone or with an education provider, the paper offers guidance on how to build and implement a successful program that reaches their employees.


Mutual Fund Expense Ratios in 401k Plans Continued to Decline

Abstract: The cost of investing in mutual funds through 401k plans fell again in 2017, according to a research paper released by the Investment Company Institute. The report also shows that participants who invest in mutual funds in their 401k plans tend to hold lower-cost funds.


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

Items of Special Interest to Service Providers

Fifth Circuit Officially Vacates Fiduciary Rule

Abstract: The Fifth Circuit has issued a long-awaited mandate of its order vacating the Department of Labor's Fiduciary Rule in toto on June 21, 2018. In March, a panel majority of the Fifth Circuit Court of Appeals issued an opinion finding that the Fiduciary Rule exceeded the DOL's rulemaking authority.


Lessons 401k Advisers Learned From the DOL Fiduciary Rule Saga

Abstract: Retirement plan advisers, especially specialists, used to complain that their broker-dealers and the public ignored them, or, worse, didn't realize they existed. All that has changed now that retirement has become a key political issue and retirement advisers have a target on their backs.

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Target-Date Funds

The High Stakes of QDIA Selection

Abstract: For plan sponsors, the tremendous growth in assets, changing market conditions and balancing the needs of younger and older participants complicates selection and monitoring of target-date funds. Advisors can help by bringing plan demographics to the discussion and looking at the distribution of ages and account balances of a plan population.


»»  Click here for more on Target-Date Funds

Compliance and Regulatory

ARA Calls for Electronic Delivery Update to 401k Disclosure Default

Abstract: The American Retirement Association is calling for a change in retirement plan disclosures that could save American workers millions and enhance their retirement security.


Your Part-Time Employees May Be Eligible for Your Company's 401k Plan

Abstract: Although part-time employees are not likely eligible for a company's group health plan because they work fewer than the 25 or 30 hours per week required by most group health plans, these same part-time employees may be eligible to enroll in a company's 401k plan if they work at least 19 hours per week in a 12-month period which equals the 1,000 hours per year maximum service requirement.


Plan Sponsors Need to Give Special Tax Notice Update for 401ks

Abstract: One of the many fiduciary duties of plan sponsors is to provide disclosures to plan participants, including a summary of material modifications, annual reports, and notice of any applicable updates. The Tax Cuts and Job Act went into effect on January 1, 2018. Among the many changes made by the tax plan, the TCJA has changed the time period for making eligible rollover loan offsets for 401ks, which will require a notification for plan participants to understand the changes.


Groom Urges IRS to Expand Determination Letter Program

Abstract: As part of its commitment to annually review the scope of the determination letter program, IRS sought comments on the types of plans that should be allowed to request a determination letter as well as specific issues for those plans that would justify the need for review. The Groom Law Group submitted two letters recommending consideration of seven plans as applicants for updated determination letters.


401k Testing Corrections

Abstract: If the test fails there are two options, one of which is to distribute funds to the Highly Compensated Employees. To correct a failed test using the distribution option includes some extra steps that can be very confusing. This article discusses the process required for correcting an ADP test using the corrective distribution option.


»»  Click here for more Compliance and Regulatory Material

Marketplace News

Cetera Launches 401k Practice Development Program

Fi360 Acquires CFFM, Maker of FiRMPlus

Fintech Firm BidMoni Launches FiduciaryShield

Benefit Consultants Group Launches Newest Version of AdvisorEdge

»»  Click here for More Marketplace News

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