DOL Publishes New VFCP Model Participant Notice

On March 18, the DOL released a model notice for applicants to the Voluntary Fiduciary Correction Program to inform plan participants about their application to the program. This model notice is specifically for applicants and is not meant for those using self-correction to address errors. The DOL’s Employee Benefits Security Administration anticipates that completing the notice will take plan administrators about one hour on average.

Source: Napa-net.org, March 2025

State Republican Finance Officials Urge SEC and DOL to Adopt Regulations Prohibiting Use of ESG or DEI Factors

Republican state finance officials from 18 states have called on the acting leaders of the SEC and the DOL to establish regulations preventing asset managers and retirement plan sponsors from incorporating environmental, social, and governance or diversity, equity, and inclusion factors in their decision-making. They cited a recent legal setback for American Airlines as evidence that considering these factors may violate the fiduciary duty of loyalty mandated by ERISA.

Source: Hallbenefitslaw.com, March 2025

Walberg Calls for DOL to "Rescind or Withdraw" Fiduciary Rule

This week saw another request for the rescission of the Department of Labor's contentious final fiduciary rule. Chairman of the House Committee on Education and Workforce, Rep. Tim Walberg, sent a letter to newly confirmed DOL Secretary Lori Chavez-DeRemer on March 19, urging her to "rescind or withdraw" the fiduciary rule established by the Biden-Harris administration's prior DOL leadership.

Source: 401kspecialistmag.com, March 2025

To Reduce Retirement Plan Risk, Balance Stability & Security

Retirement programs, whether in the public or private sector, single-employer or multiemployer, and whether defined benefit or defined contribution, represent a long-term commitment by plan sponsors to serve the interests of both recipients and the sponsors themselves. Two key components of successful retirement programs are stability and security. This article explores the significance of stability and security in retirement plans and their role in meeting these objectives.

Source: Segalco.com, March 2025

Simple IRA Catch-Up Contribution Limits

If a SIMPLE IRA plan has the special small employer increased deferral/catch-up limit of 110% of the standard amounts, and someone is also age 60-63 catch-up eligible, does the participant get both the 110% and age 60-63 increases in catch-up contributions? This article highlights the discussion on Simple IRA catch-up contribution limits.

Source: Retirementlc.com, March 2025

Johns Hopkins Study: Private Equity, 401ks Do Not Mix

Recent research from Johns Hopkins Carey Business School raises concerns about the push for defined contribution plans to invest in private equity, particularly leveraged buyout funds. The study suggests that private equity may be riskier than the traditionally used publicly traded funds in 401k plans. Given that private equity funds involve pooling money from a limited number of investors to buy privately held companies with minimal public reporting, the report questions whether these investments align with the safety and transparency that workers typically expect from their retirement plans.

Source: Plansponsor.com, March 2025

Lawsuit Against Lockheed Martin Criticizes Firm for Using In-House TDFs

Lockheed Martin Corporation and its subsidiary investment management company are facing a lawsuit from current and former participants in their 401k plans. The plaintiffs allege that the company breached its fiduciary duties of prudence and loyalty by utilizing an in-house service provider and affiliated target-date funds. The lawsuit criticizes Lockheed Martin for adopting a "DIY" approach to investments, resulting in the creation of ineffective private funds that charged excessive fees. It claims that the company prioritized its own benefit by using underperforming target-date funds with high fees in the retirement plans.

Source: Plansponsor.com, March 2025

Is Investment Performance a Fiduciary Duty?

ERISA attorneys analyze the legal obligations of plan sponsors, particularly regarding their fiduciary duties. Marcia Wagner, founder of the Wagner Law Group, asserts that ERISA does not mandate plan sponsors to maximize investment returns for participants. Instead, Rick Pearl from the Faegre Drinker law firm notes that ERISA's general standard of fiduciary prudence is intentionally vague and not intended for micromanagement. Wagner emphasizes that fulfilling the duty of prudence involves a proper process for selecting and managing plan investments, but she points out that investment outcomes do not always correlate with the quality of the process followed.

Source: Plansponsor.com, March 2025

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