For the first time since its inception in 2002, the DOL has updated its Voluntary Fiduciary Correction Program to include a Self-Correction Component. This new feature allows retirement plan sponsors to efficiently self-correct common compliance issues, such as late contributions and loan repayments. Additionally, an amendment to an existing prohibited transaction exemption has been finalized, offering excise tax relief for transactions that have been self-corrected. Both the SCC and excise tax relief will take effect on March 17, 2025.
The SECURE 2.0 Act of 2022 aims to boost participation in retirement plans, and on January 10, 2025, the IRS proposed regulations mandating automatic enrollment for new 401k and 403b plans. This follows the addition of Code Section 414A, which states that plans must meet specific automatic enrollment criteria to be considered qualified. The proposed regulations will take effect six months after the final regulations are issued. However, with potential changes in presidential administration and agency policies, there is uncertainty about whether these regulations will be finalized or altered. Plan sponsors are advised to continue complying with the proposed rules in good faith until they are finalized.
The DOL has issued Field Assistance Bulletin 2025-01, which outlines a temporary non-enforcement policy allowing plan fiduciaries to escheat small retirement benefit payments to state unclaimed property funds for missing participants. The bulletin offers insight into the DOL's perspective on the fiduciary decision to voluntarily escheat benefits. However, the relief provided is limited and the DOL indicates that this non-enforcement policy is temporary, as it plans to consider issuing more formal guidance on escheatment in the future.
The fiduciaries of the Allstate 401k plan have successfully defended against a lawsuit alleging a breach of fiduciary duty regarding their selection of target date funds and advisory services. The lawsuit, originally filed by plaintiff Cutrone with the help of Scott+Scott Attorneys and Michael M. Mulder, argued that the plan's fiduciaries failed to effectively leverage their large plan size to choose appropriate target date options, specifically criticizing the selection of Northern Trust Focus Funds, which the plaintiff claims have significantly underperformed compared to benchmarks and similar funds since their launch in 2010.
Legislation in two states aims to enhance retirement plan coverage by expanding automatic enrollment. This approach intends to increase participation in retirement savings plans by making enrollment automatic for employees, thereby broadening the impact and reach of these programs.
Labor groups, including the American Federation of Government Employees and the AFL-CIO, filed a lawsuit on February 5 challenging the Department of Government Efficiency and its authority over the Department of Labor. DOGE, created by an executive order from President Donald Trump and led by Elon Musk, has faced criticism for demanding access to sensitive government systems. The lawsuit claims that DOGE's authority over DOL violates the Privacy Act and the Administrative Procedures Act, and it was filed in the U.S. District Court for the District of Columbia.
The IRS has released a detailed chart outlining over 20 rates and thresholds for retirement plans applicable for the current year, alongside the rates from 1989 to 2024. This chart provides essential information on compensation and contribution limits, particularly influenced by annual cost-of-living adjustments. It includes key limits related to defined benefit and contribution plans per the Internal Revenue Code Section 415, as well as specifics on SEP, SIMPLE, and IRA limits. The chart highlights changes in rates over the current decade and offers insights into longer-term trends from 1989 to 2019.
Legislators have reintroduced two bills aimed at allowing the use of collective investment trusts in 403b plans. Named the Retirement Fairness for Charities and Education Institutions Act of 2025, the bills were presented in the House as H.R. 1013 and in the Senate as S. 424.
To subscribe to our free weekly newsletter, enter your email address below then click the "Join" button.
NOTE: WE DO NOT SELL YOUR DATA OR EMAIL ADDRESS TO ANY ORGANIZATION.
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.