Goldman Sachs Asset Management's annual survey reveals that U.S. insurance carriers are increasingly focusing on retirement income solutions and innovative platforms due to economic uncertainty. A significant portion of insurers are integrating annuities into managed accounts (31%) and target-date funds (27%). Most respondents (53%) believe that automatic plan defaults will drive broader adoption of retirement income solutions, with improved engagement and product innovation also seen as key factors.
Wells Fargo has successfully defended itself against a fiduciary breach lawsuit concerning the use of forfeitures in retirement plans for the second time within a week. The plaintiff's argument, which has appeared in over 50 similar lawsuits, claims that using plan forfeitures to lower employer contributions -- though legally permitted -- resulted in diminished future contributions and depleted plan assets. The lawsuit contends that this decision shows fiduciaries prioritizing their interests over those of plan participants and beneficiaries.
The DOL's Voluntary Fiduciary Correction Program helps employers and plan officials rectify certain breaches of fiduciary duties under ERISA, enabling them to avoid civil enforcement actions and penalties. A key update effective March 17, 2025, allows for the self-correction of delinquent contributions and loan payments within 180 days of withholding or receipt, as long as lost earnings do not exceed $1,000. This change simplifies the process for plan sponsors to address common operational issues without a formal VFCP application.
The retirement plan landscape is rapidly evolving due to SECURE 2.0 changes, increasing ERISA litigation, and the interest of private equity and cryptocurrency in the 401k market. Plan fiduciaries need to reassess risk management as significant developments affect both plan sponsors and participants. As 2025 unfolds, it has already become a transformative and complex period for retirement planning. These converging factors and potential changes should act as strong signals for plan sponsors to revisit their risk management strategies.
The introduction of the Setting Every Community Up for Retirement Enhancement Act of 2019 followed by the SECURE 2.0 Act in 2022 has brought significant changes and complexities to the retirement plan landscape. This summary highlights the revised eligibility requirements for long-term part-time (LTPT) employees as outlined by SECURE 2.0, which took effect on January 1, 2024.
Cryptocurrency has transformed the financial arena, presenting itself as a high-risk, high-reward investment opportunity. As its popularity continues to rise, the prospect of integrating cryptocurrency into employer-sponsored retirement plans has ignited discussions among regulators, employers, and investors.
According to a new survey report by the Transamerica Center for Retirement Studies, 80% of U.S. workers believe their generation will face greater challenges in achieving financial security compared to their parents. Additionally, 68% of workers across various generations feel they might not save enough for retirement even if they work until that time. Despite these concerns, many workers may be missing opportunities that could enhance their financial outcomes.
A Vanguard report highlights that allowing 403b plans to invest in collective investment trusts could save workers an average of 0.08% in fees annually compared to mutual funds. For a median worker earning $74,000, this cost difference could lead to a loss of $23,000 to $28,000 in retirement savings by age 65, potentially covering six months of expenses. Unlike 401k plans used in the private sector, 403b plans for nonprofit employees generally lack access to these lower-cost CITs.
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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.
