The article discusses a decision by the Sixth Circuit Court of Appeals to revive an excessive fee lawsuit against Kellogg's retirement plan. The court ruled that the arbitration clause in the plan documents was unenforceable because it could prevent plan participants from pursuing their claims effectively. The case centers on allegations that Kellogg's retirement plan charged excessive fees, and the ruling emphasizes the importance of access to legal recourse for employees in retirement plans. The decision is significant as it addresses the balance between arbitration agreements and participants' rights in employee benefit plans.
The article reflects on personal disappointments related to expectations not being met, particularly in contexts like schools, organizations, and jobs. It focuses on retirement plan providers, suggesting that they often do not fully disclose important information to plan sponsor clients. The piece highlights potential gaps in transparency that can affect clients' understanding and management of retirement plans.
The GAO report emphasizes the significance of employer-sponsored 401k plans for retirement savings, highlighting the role of mandatory fee disclosures by the Department of Labor. Since 2012, 401k plan fees have generally decreased, with various factors -- including fee disclosures -- contributing to this trend. The DOL implemented fee disclosure regulations in 2010 and 2012 to enhance awareness among plan sponsors and participants regarding fees and investment performance. Overall, while fee disclosures have positively influenced the management of 401k plans, enhancing financial literacy among participants may further improve their engagement and understanding.
The article discusses potential risks associated with a federal crackdown on data privacy that could impact 401k plans and student loan matching programs. As the government enhances scrutiny on how employers manage and share employee data, companies may face challenges in offering benefits connected to loan repayment. This increased regulation might lead to complications for programs designed to match student loan payments with 401k contributions, potentially affecting the financial well-being of employees reliant on these benefits.
The article discusses the ongoing interest in acquisitions within the retirement plan advisory sector. Despite economic challenges, such as market volatility and rising interest rates, firms remain eager to acquire other advisory businesses. Key reasons include the desire to expand client bases, acquire talent, and enhance service offerings. The trend reflects a strategic move to increase competitiveness and revenue in a growing market, as firms look to capitalize on the increasing importance of retirement planning for clients.
The ERISA Advisory Council has made recommendations to enhance qualified default investment alternatives for retirement plans. Key suggestions include improving communication with participants about QDIAs, considering environmental, social, and governance factors, and ensuring that QDIAs align with participants' needs and preferences.
The U.S. District Court for the Western District of Michigan dismissed a lawsuit against Pfizer Inc. regarding alleged "unreasonable" recordkeeping and administrative fees. Judge Paul Maloney ruled that plaintiff Matthew Miller, a former employee, did not adequately support his claims and used a flawed methodology. As part of a joint agreement, Miller waived his right to appeal the dismissal, and Pfizer agreed not to pursue legal fees or costs from him.
Research by Abernathy Daley 401k Consultants reveals that nearly 80% of corporate retirement plans with over 100 employees are overpaying on administrative fees for 401k and 403b plans. This issue stems from a lack of regular compliance-related benchmarking, leading to potential compliance risks. The study analyzed Form 5500 filings from 6,566 companies, finding that 5,241 of them reported administrative costs exceeding the efficient baseline available in the market.
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Collected Wisdom™
Our researchers look for what they think are some of the better resources available to assist you in administering your plan or helping your clients. We group these resources in our COLLECTED WISDOM™ topics to make it easy for you to locate the information you need. Each item in a category contains a summary and date of when it was placed in the group.
We also maintain some older material in these collections for perspective and context.