Newsletter for February 3, 2020
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In This Issue
Fiduciary and Plan Governance
Elements of Retirement Plan Committee Education
Training new retirement plan committee members, as well as providing ongoing training throughout the year for all members, is critical, industry experts say. "Because their responsibilities are so enormous, we need to do a better job of training these fiduciaries to make better decisions," says Joshua Itzoe, a partner and managing director with Greenspring Advisors. This article reviews some best practices.
2020 Action Items for Retirement Plan Sponsors
This is an article discussing developments that should be considered by retirement plan sponsors in 2020. It focuses on three items employers should review in the year ahead: retirement plan policies, procedures, and communications material for SECURE Act compliance, whether to include mandatory arbitration of dispute provisions in their retirement plans, and policies and procedures related to cyber and data security.
»» Click here for more Fiduciary and Plan Governance Material
Fewer Than Four in 10 Workers Are Aware of a Tax Credit for Retirement Savers
Fewer than four in ten U.S. workers (38 percent) know about a tax credit that may help them save for retirement, according to survey findings from nonprofit Transamerica Center for Retirement Studies. Also referred to as the Retirement Savings Contributions Credit by the IRS, the Saver's Credit, is available to eligible taxpayers who are saving for retirement. The article offers tips on how to claim the saver's credit.
The New Age of 401k Plan Portability
DC plans have lacked one vital feature: plan-to-plan portability, the missing ingredient required to accommodate America's highly mobile workforce and to stem the tide of cash out leakage. Fortunately, there are now clear indications that portability is almost here, and its arrival will streamline DC plans and dramatically improve participants' retirement security.
Insight: Studies, Research, and White Papers
The Beginning of the End for Asset-Based Retirement Plan Recordkeeping Fees?
There is a migration of retirement plans from traditional percentage of assets-based recordkeeping fees to per-participant fee structures. Does this shift indicate the beginning of the end for asset-based recordkeeping fees? This article discusses some factors on whether this type of recordkeeping pricing will become the universal standard.
Is the Adoption of Innovative Plan Features Finally Leveling Off?
New data from the Plan Sponsor Council of America shows that after years of increases, the adoption of certain provisions by employer-sponsored retirement plans may have leveled off.
A Strategic Take on Decumulation
Decumulation -- actually tapping into funds set aside for retirement -- garners less attention than accumulation. But a recent article takes a look at that lesser-explored aspect of retirement funding and argues for a strategic approach. David Morse, Editor-in-Chief of K&L Gates' Benefits Law Journal, argues that retirees should draw from their defined contribution plan accounts, IRAs or other accounts before claiming Social Security benefits.
»» Click here for More Studies, Research, and White Papers
2020 403b Retirement Plan Compliance Calendar
This plan compliance calendar for 2020 highlights critical compliance deadlines for 403b retirement plans. While all major dates are covered, 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. Plans with non-calendar plan years may be subject to different deadlines.
»» Click here for More 403b Material
Court and Legal
Shell Oil, Fidelity Sued for Fiduciary Breaches
Participants in a Shell Oil Co. 401k plan sued the company and plan fiduciaries alleging multiple violations of their fiduciary duties for selecting investment options, monitoring the plan, setting fees and dealing with the plan's recordkeeper. The participants also sued the recordkeeper, Fidelity Investments, plus its parent company, FMR LLC, and several other Fidelity units, claiming that Fidelity also violated guidelines outlined in ERISA.
Schlichter Finds a New Angle in Excessive Fee Suit
The firm that created the current generation of excessive fee suits, and that branched that focus into university 403b plans, has grafted concepts of both into a fresh cause of action and put recordkeepers and their use of participant data in their crosshairs.
»» Click here for more Court and Other Legal Issues
Compliance and Regulatory
2020 401k ERISA Retirement Plan Compliance Calendar
This 2020 401k ERISA retirement plan compliance calendar highlights the critical compliance deadlines for ERISA 401k defined contribution retirement plans. While all major dates are covered, 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. Plans with non-calendar plan years may be subject to different deadlines.
IRS Says Show Me the Signatures for Qualified Plan Documents
Tax laws have long required that qualified retirement plans timely adopt written plan documents and amendments. But what evidence must a plan sponsor provide to an IRS auditor to prove that they have timely adopted a written plan document and required amendments? The IRS recently addressed this question in Chief Counsel Memorandum 2019-002, which advises that absent extraordinary circumstances, ". . . it is appropriate for IRS exam agents and others to pursue plan disqualification if a signed plan document cannot be produced by the taxpayer."
SECURE Act Leaves Questions About Distributions for Birth, Adoption
The SECURE Act allows parents to take early withdrawals of up to $5,000 from their retirement accounts without penalty within a year of a child's birth or adoption. Although retirement plans can permit these distributions starting January 1, 2020, employers may want to wait for much-needed guidance on a number of practical and technical questions.
Getting SECURE Act's Lifetime Income Provisions Right
Industry sources agree pains must be taken to ensure mandatory lifetime income projections to participants are accurate and contextual education is provided.
»» Click here for more Compliance and Regulatory Material
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