For DC Plans, Pandemic Reinforces Value of Consultants and Advisors

Help for 401k Plan Sponsors and Retirement Professionals

Newsletter for October 5, 2020

We are a knowledge service that finds, reviews, selects, organizes, and shares the most appropriate, relevant, and fresh information for professionals involved with 401k and 403b plans.

This weekly newsletter is just one method we utilize to circulate a small part of the information we processed this past week. It is a free service made possible by this week's newsletter sponsor.

Please visit their site.

Click Here for Our Resource Page on Retirement Plans and the Coronavirus Pandemic

2020 SPARK Forum - Our Flagship Conference Has Gone Digital

We're offering complimentary registration, during these unprecedented times, for professionals throughout the retirement industry. Information and registration.

In This Issue

Fiduciary and Plan Governance

For DC Plans, Pandemic Reinforces Value of Consultants and Advisors

Guiding DC plans through economic cycles is challenging enough without harsh headwinds from a global health crisis. But more plan sponsors are getting invaluable expert help to navigate through current challenges while keeping a long-term perspective. Consultants help in diverse ways and sponsors value just about all of it, especially if it provides actionable intel.


401k Investments - Options for Selecting a "Prudent" Menu

Most 401k providers have little incentive to help business owners to pick prudent investments for their 401k. The opposite may be true. They can grow their profits by steering business owners towards "imprudent" investments with excessive fees and/or inferior returns. If you're a business owner and want to avoid this trap, the article has two recommendations: 1) model your investment menu after the Federal Thrift Savings Plan, or 2) hire a fiduciary-grade financial advisor for professional invest. advice.


Beware of Private Equity in Retirement Plans - 3(38) Fiduciary Advisors are Needed Instead

Over the summer, the private equity industry received a very favorable ruling from the Department of Labor, allowing 401k plans to invest in private equity funds. But the inclusion of private equity in retirement plans is not a positive development, and it will not ultimately be good for working people's retirement savings. Instead, what the retirement industry needs is more fiduciary advisors who can help companies leave behind the bundled, opaque, and expensive plans that are currently being offered for more promising, more transparent options.


»»  Click here for more Fiduciary and Plan Governance Material

General Items

The Working Woman's Retirement Plan Checklist

Here is a checklist on what women need to know about retirement benefits, what women need to ask their spouses, what women need to ask their employers, and what women need to ask if contemplating a divorce.


Insight: Studies, Research, and White Papers

Report: What Does Consistent Participation in 401k Plans Generate?

This paper provides an update of a longitudinal analysis of 401k plan participants drawn from the EBRI/ICI 401k database. A few key insights emerge from looking at the 1.9 million consistent participants in the EBRI/ICI 401k database over the eight years from year-end 2010 to year-end 2018.


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

Items of Special Interest to Service Providers

Why 401k Adviser RFPs Have Not Taken Off

If an organization has the right adviser, then it is more likely that the committee will be better educated and more functional. So why aren't more retail DC plans conducting a formal request for proposals, or even benchmarking their retirement plan advisers, as they regularly do with recordkeepers and money managers?

Source: (registration may be required)

DC Asset Managers Continue ESG Efforts Despite DOL Proposal

The new proposal from the Department of Labor is not slowing down marketing and distribution efforts promoting DC-focused ESG products, as 56% of DCIO asset managers expect to increase these efforts during the next 12 months, said the report titled "U.S. Defined Contribution Distribution 2020: Adapting to Changes in the Regulatory Environment."


403b Plans

403b Retirement Plan Fee Litigation Update

Despite the COVID-19 pandemic, there have been no signs of a slowdown in the litigation arena. Since the last comprehensive update on 403b retirement plan fee litigation in April, there have been some significant updates.


»»  Click here for More 403b Material

Court and Legal

Schlichter Attorneys Sanctioned for "Reckless" ERISA Suit

Attorneys from the law firm of Schlichter Bogard & Denton, which arguably could be said to have started the flood of ERISA excessive fee litigation against retirement plans that has been going on for more than a decade, has been sanctioned by a federal judge for a "reckless" lawsuit.


Judge Tosses Second Class Action Against Trader Joe's

A federal judge in Los Angeles dismissed another class action filed against Trader Joe's and other related parties that alleged a series of ERISA violations in managing the grocery store chain's $1.7 billion 401k plan.


»»  Click here for more Court and Other Legal Issues

Legislative and Washington DC

Biden's 401k Plan Is Vague, but Worth Paying Attention To

Policymakers have had little luck in reforming the tax structure for 401k defined contribution plans for decades. Biden is going to try if he wins the upcoming presidential election, and that has important implications for retirement savers.


House Bankruptcy Bill Would Impact Retirement Plans

H.R. 7370, the Protecting Employees and Retirees in Business Bankruptcies Act of 2020, has been introduced by Rep. Jerrold Nadler. This bill would modify provisions related to Chapter 11 bankruptcy, including expanding claims and priorities for payment of benefits for employees and retirees, and protections related to reduction or denial of benefits.


»»  Click here for more on Legislative and Washington Actions

Compliance and Regulatory

Default Withholding Rate for Periodic Retirement Plan Distributions

The IRS has issued a pre-publication version of final regulations on the default tax withholding rate to be applied to periodic and annuitized distributions from retirement plans. These final regulations are a response to Internal Revenue Code changes contained in the Tax Cuts and Jobs Act, legislation enacted in 2017, and provides guidance for 2021 and future calendar years.


DOL Lifetime Income Disclosure Regulation

The new regulation applies to defined contribution plans whether or not they provide annuities as a form of distribution. The regulation is not effective until September 18, 2021, one year after it is published in the Federal Register, at which time the next benefit statement that is issued after that date must contain the required disclosures. Although issued as an interim final regulation, the DOL is allowing a 60-day comment period, and it hopes to improve the regulation, before its effective date, based on the responses it receives to those comments.


IRS Provides SECURE Act Guidance

On September 2, 2020, the IRS issued IRS Notice 2020-68 to provide guidance relating to certain provisions of the SECURE Act and the Bipartisan American Miners Act of 2019. The guidance is not intended to provide comprehensive guidance on the specific provisions but provides guidance to assist with the implementation of these provisions.


After Layoffs, Employers Might Owe Unvested 401k Money

With mass layoffs commonplace during the COVID-19 pandemic, employers asked the IRS for advice on how to deal with the partial termination rule relating to employer contributions to their employees' 401k workplace retirement accounts. It's an obscure issue, but it's a big deal for the employees that it affects: It could mean thousands of dollars more credited to an employee's 401k account.


»»  Click here for more Compliance and Regulatory Material

Marketplace News

Ascensus to Launch a Customizable Retirement Digital Sales Experience

Capitalize Ready to Launch 401k Account Search and Rollover Solution

Voya Retirement Announces New Digital Platform

Empower to Buy Fifth Third's Recordkeeping Business

Got News?

Press releases can be submitted to by email. Click here for the proper email address.


Not getting your own issue of this eNewsletter? Click here to subscribe. It's free.

Email Change

Need to change your email address? Just drop us an email with both your old and new email addresses.


You can sponsor a eNewsletter. Email us for details. Click here for contact information.


Use the link at the bottom of this newsletter to unsubscribe.

This eNewsletter is a digest of information published by a variety of web-based sources on 401k and related issues and is published as a service to our users., LLC is not the author of the material unless specifically noted.

Articles are copyrighted to their publishers. If you believe that your work has been copied in a way that constitutes copyright infringement, please contact the source site immediately.

Hyperlinks in this document are provided as a convenience and we disclaim any responsibility for information, services, or products found on websites linked hereto. All links were tested before this eNewsletter was e-mailed to you to ensure that they are still functional, but publishers do move or delete articles. Therefore, we can't guarantee that the links provided will remain operational. does not endorse, approve, certify, or control this material and does not guarantee or assume responsibility for the accuracy, completeness, efficacy, or timeliness of the material. Use of any information obtained from this material is voluntary, and reliance on it should only be undertaken after an independent review of its accuracy, completeness, efficacy, and timeliness. Reference to any specific commercial product, process, or service by trade name, trademark, service mark, manufacturer, or otherwise does not constitute or imply endorsement, recommendation, or favoring by Opinions expressed are those of the author of the article and do not necessarily reflect the positions of


Copyright © 2020 by, LLC. All rights reserved. No reproductions without prior authorization, but you are free to email this copy (in its entirety) along to colleagues or clients. This newsletter may not be posted on any website., LLC
7032 SW 26th Avenue
Portland, Oregon 97219


Delivery powered by Savicom
Delivery powered by Savicom