This article outlines the reporting and disclosure requirements for calendar-year qualified plans in the United States. It includes a summary chart of the most common requirements and is intended solely for informational purposes, not as a replacement for professional legal, accounting, or actuarial advice.
Since 2015, universities have faced over 20 lawsuits related to DC plan fees, a shift from prior litigation focusing on for-profit 401k plans. The lawsuits typically accuse universities of offering excessive investment options, failing to replace costly underperforming investments, and imposing above-market fees for investment and recordkeeping services. Some claims also focus on issues like duplicative fees from multiple recordkeepers and misuse of forfeiture assets, as well as concerns regarding target-date fund selections. This article identifies four common claims in university lawsuits that higher education plan sponsors should pay close attention to. It then suggests actions that go beyond the basic fiduciary and governance best practices.
As 2025 approaches with significant political and regulatory uncertainty, defined contribution plan executives are urged to focus on proactive measures rather than reactive responses. Mikaylee O’Connor from NEPC highlights that uncertainty can lead to inaction, emphasizing the importance of implementing mandatory SECURE 2.0 requirements, evaluating appropriate retirement income products for employees, and reviewing plan documents to mitigate litigation risks. Michael Volo of CAPTRUST Financial Advisers notes the lack of clarity regarding retirement plan policies due to potential shifts in leadership and regulatory bodies in the coming year.
The IRS issued Notice 2024-73, guiding the application of non-discrimination rules for long-term, part-time employees in 403b plans under the Internal Revenue Code. This follows modifications made by the SECURE Act and SECURE 2.0 Act, which changed eligibility criteria for these employees, now allowing them to make elective deferrals once they meet specific service requirements. Specifically, ERISA LTPT employees aged 21 or older can begin deferring contributions either after completing a year of service with at least 1,000 hours or after 24 months with at least 500 hours each year, with this counting only for periods starting from January 1, 2023.
This article discusses key considerations for plan sponsors regarding hardship distributions from retirement plans. It presents five essential questions that sponsors should address. Overall, the article serves as a guide for plan sponsors to ensure their hardship distribution procedures are clear, compliant, and effectively communicated to participants.
The 401k retirement plan, established 46 years ago, remains the most prevalent savings vehicle for employees. However, many individuals fail to fully understand their plans or optimize their savings effectively. Each generation has made notable mistakes with their 401k accounts. For Baby Boomers, a common issue is the low utilization of Roth 401k accounts, which offer tax-free withdrawals in retirement. Gen Xers often carry outstanding 401k loans, impacting their savings. Millennials and Gen Zers are encouraged to increase their savings rates and assess their investment choices to enhance their financial growth. Fortunately, there are still opportunities for individuals from all generations to rectify these issues.
This article examines the implications of the Johnson v. Parker-Hannifin case, which involves allegations of the company's failure to adequately monitor investments, resulting in the use of high-cost share classes. This case has significant relevance for professional fiduciaries and 401k plan sponsors. Initially dismissed by a lower court, the plaintiffs appealed, and the U.S. Court of Appeals for the Sixth Circuit found merit in their claims, subsequently remanding the case for further proceedings. The article also notes a few steps 401k plan sponsors can take to better protect themselves.
Many 401k plan sponsors are feeling overwhelmed by recent legislative changes and the obligation to implement new options. Mercer recommends some degree of outsourcing to help manage these responsibilities. With the population aged 65 and older reaching a historical peak in the U.S., there is increasing pressure on plan sponsors to expand coverage and enhance financial flexibility, especially with SECURE 2.0 encouraging the inclusion of retirement income in plans. As SECURE 3.0 legislation is anticipated in 2025, Mercer suggests that plan sponsors focus on three key areas to optimize their limited resources in the upcoming year.
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.
