Ten Questions to Ask Before Signing That New Service Agreement

Help for 401k Plan Sponsors and Retirement Professionals

Newsletter for March 1, 2021

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In This Issue

Fiduciary and Plan Governance

Ten Questions to Ask Before Signing That New Service Agreement

The author discusses 10 of the most common areas that should be scrutinized and negotiated (with the help of your legal advisor) before you sign that "standard" service agreement with your retirement plan vendor.

Source: Boutwellfay.com

Plan Sponsors Have Fiduciary Duties to Follow During Adviser M&As

Advisory firm merger and acquisition activity is on the rise without any sign of slowing down. But what are plan sponsors to do if their advisory firm is acquired, or if the firm they partner with keeps acquiring others? Plan sponsors should first find out whether and how the services their financial adviser provides will be impacted. They should know the right questions to ask.

Source: Plansponsor.com

»»  Click here for more Fiduciary and Plan Governance Material

Insight: Studies, Research, and White Papers

Survey Tracks How DC Plans Operated in 2020

Because our world has changed so dramatically, Callan's annual Defined Contribution Survey has evolved to fit the rapidly shifting landscape facing DC plan sponsors. Their 14th annual survey covers the SECURE and CARES Acts, and the impacts of the COVID-19 pandemic, along with the key tenets of DC plan management, financial wellness, and health savings accounts.

Source: Callan.com

Study Finds Misplaced Concerns About COVID and Retirement

While there has been a lot of discussion about how COVID-related economic shutdowns have affected retirement security, a new paper suggests that things could have been a lot worse. The shutdowns could have worsened the picture for 401k plans if financial markets had collapsed, the recession had led to widespread withdrawals, or more employers had suspended their match. But these things did not happen, according to the report by the Center for Retirement Research at Boston College.

Source: Napa-net.org

A Survey of Plan Participants and Plan Sponsors

This report presents the results of an online survey of 1,005 plan participants, between the ages of 25 to 70, employed full-time at a company that has at least 50 employees, and currently contributing to a 401k or 403b plan. It also includes 502 plan sponsors who are employed full-time at a company that has at least 50 employees and offers a 401k or 403b plan.

Source: Tiaa.org

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

Items of Special Interest to Service Providers

ERISA Fiduciaries Under a Biden Labor Department: What Is on the Horizon?

President Biden has been in office for 34 days and his nominee for Secretary of Labor, Marty Walsh, has not yet been confirmed. Nonetheless, several issues in the ERISA fiduciary space have already garnered the new administration's attention and there are certain clues about how this Department of Labor may impact the regulation and enforcement of ERISA's fiduciary standards.

Source: Morganlewis.com

The ERISA "Best Interest" Debate: Is There Anything Left to Argue About?

As the DOL's Fiduciary Rule 3.0 takes effect, the DOL has suggested that it might in the future "improve this exemption, the rule defining who is an investment advice fiduciary, and related exemptions to build on this approach." The Fifth Circuit Court of Appeals opinion that vacated Rule 2.0 leaves no room to expand the regulatory definition of fiduciary status, however. As to the exemption, when compared to the gold standard for proponents of more ERISA regulation -- the vacated Best Interest Contract Exemption -- there may be nothing left to argue about.

Source: Eversheds-Sutherland.com

403b Plans

403b Plans: The Trendsetters for ESG Investing

403b plans are rarely ahead of the curve on major retirement plan innovations. These plans were certainly not the early adopters of trends like per-head flat dollar pricing or zero revenue share funds. However, there is one area in which they are leading the charge: the adoption of Environmental, Social, and Governance investments.

Source: Cammackretirement.com

»»  Click here for More 403b Material

State-Based Private-Sector Retirement Programs

Taking Account of State-Run Retirement Plans

Several states have programs up and running to make retirement plan coverage available to those whose employers do not offer it. So where do they stand? A recent report provides a look. The Center for Retirement Initiatives at Georgetown University's McCourt School of Public Policy in a recent report provides information on the three state-run retirement programs that are now in operation: those in California, Illinois, and Oregon. The state program performance data it provides look at assets, account activity, registrations, and participation.

Source: Ntsa-net.org

Virginia State-Run IRA Bill Heads for Senate Vote

Five years after it was first introduced, the initiative to create a state-based retirement program for the private workforce in the Commonwealth of Virginia has taken a major leap forward, with a key change pushed by the American Retirement Association.

Source: Asppa.org

Legislation Would Create State-Run Plan in Oklahoma

The Oklahoma legislature is considering a measure that would make the Sooner State one of the next states to provide a state-run retirement plan for employees whose employers do not offer one. The Oklahoma Prosperity Act was introduced in both chambers on February 1 and would create an automatic enrollment payroll deduction IRA in which any private employer and its employees may participate.

Source: Asppa.org

Wisconsin Task Force Recommends State-Run Retirement Plan

If the recommendations of the Wisconsin Retirement Security Task Force are followed, the Dairy State could join others that have implemented a state-run plan to provide coverage for workers whose employers do not offer a retirement plan.

Source: Asppa.org

Compliance and Regulatory

Chart: Inflation-Adjusted ERISA Penalties Announced by the DOL

The Federal Civil Penalties Inflation Adjustment Act of 2015 directs the DOL to make annual inflation adjustments to specified ERISA violations. The increased penalties generally apply to reporting and disclosure failures if the penalty is assessed after January 15, 2021, and if the violation occurred after November 2, 2015.

Source: Mwe.com

Excess Deferrals: What Is Required of a Plan Sponsor?

Plan Sponsors should do everything in their power to ensure that the employees who are participating in their retirement plan do not exceed the annual 402(g) limit, including catch-up contributions. This article discusses how to avoid this pitfall and what to do if contributions accidentally do exceed the limits.

Source: Lindquistcpa.com

Can I Convert a Coronavirus-Related Distribution to a Roth IRA?

Can participants combine the three-year spread for taxes and the ability to repay a Coronavirus-Related Distribution to do a Roth IRA conversion without taking a tax hit all at once?

Source: Dwc401k.com

Big Little Plans

This article covers questions like: How big can a retirement plan be and still qualify for the small plan audit exemption? PEPs: How many small plans does a large plan make? How big can a plan be and still be considered small? And it contains a chart that summarizes the audit requirement determination.

Source: Belfint.com

»»  Click here for more Compliance and Regulatory Material

Marketplace News

Cammack Retirement Group Joins CAPTRUST

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