Daily Article Digest - Updated Regularly

This digest contains a wide variety of the freshest source material dealing with current trends, opinion, news, legislative action, investments, marketing, sales, consulting, and legal issues regarding 401k, 403b and other retirement plans. Each listing contains a headline (hyperlinked to the source document), description, source of the item, and the month and year posted to this digest.

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Employers With PEPs Have Higher Adviser and Plan Satisfaction

A study by The Standard found that 83% of employers are satisfied with their Pooled Employer Plan. Additionally, plan sponsors reported a 40% increase in satisfaction with their advisers after joining the PEP. Conducted through an online survey of 300 mid-sized U.S. companies from January 3 to January 26, the research indicated a 26% rise in satisfaction with retirement plans, attributed to easier management and reduced costs.

Source: Planadviser.com, April 2025

DOL Gets 60 More Days to Decide Next Steps in Fiduciary Rule Lawsuit

U.S. Circuit Judge Catharina Haynes of the 5th Circuit Court of Appeals has granted the Department of Labor an additional 60 days to consider its options regarding two court cases challenging the 2024 Retirement Security Rule. This extension, which moves the deadline to June 16, 2025, was approved as the DOL requested more time to adapt to changes in presidential administration and to allow new DOL leadership to understand the litigation issues. The motion for the extension was unopposed.

Source: Planadviser.com, April 2025

American Worker Retirement Plan Act Reintroduced in House

Representative Lloyd Smucker reintroduced the Retirement Savings for Americans Act on April 7. The proposed legislation aims to provide federally run retirement savings accounts for low- and middle-income workers who lack access to employer-sponsored plans. If enacted, the Department of the Treasury would manage the program, offering matching contributions of up to 5%, consisting of a 1% automatic contribution and a tax credit match of up to 4%, phased out at the national median income level. Eligible workers would be automatically enrolled at 3% of their income, with the option to opt out or increase contributions. The program is designed to function similarly to existing automatic individual retirement account programs in 20 states.

Source: Planadviser.com, April 2025

Case of the Week: Embezzlement -- Are Plan Assets Safe?

The ERISA consultants at the Retirement Learning Center responded to a financial advisor's inquiry regarding whether a business owner could use a terminated employee's 401k plan balance to compensate for losses caused by that employee's embezzlement. This scenario reflects a broader concern about 401k plan embezzlement and the legality of accessing a former employee's retirement funds to alleviate business losses. The question highlights the complexities surrounding 401k plan balances and the implications of employee theft on a business's finances.

Source: Napa-net.org, April 2025

Be Choosy When Picking Your 401k Plan's TPA

The author, an ERISA attorney since 1998, gained valuable insights by working as a staff attorney for a third-party administrator, which provided a unique perspective on the retirement industry. Over nine years, he observed various aspects of the business, enabling them to offer informed advice to plan sponsors and retirement plan providers. In the article, he shares experiences and cautionary tales, offering guidance on what plan sponsors should avoid when selecting a TPA.

Source: Jdsupra.com, April 2025

Building Effective Participant Communications

Effective plan communication serves as a key opportunity to address design gaps and reinforce the benefits of a diversified investment menu. By implementing a human-centered communications program, you can enhance participant engagement and promote positive behavior changes. This approach emphasizes a comprehensive communication journey, guiding participants through expectations and avoiding overwhelming them with isolated information. Ultimately, fostering trust through consistent and transparent communication encourages participants to take confident action toward their retirement goals.

Source: Blackrock.com, April 2025

Facing a Chaotic Market: Reminders and Recommendations for Retirement Plan Fiduciaries

In today's volatile markets, it's crucial to review your 401k fiduciary process to ensure that both you and your employees are making sound decisions in compliance with ERISA regulations. When the markets are performing well, participants often neglect underlying structural issues within the plan, focusing instead on growing their account balances. Conversely, during downturns, participants -- particularly those approaching retirement -- may seek to address potential shortcomings in the retirement plan to recover from market losses. Keeping this in mind, here are five strategies to safeguard yourself and your retirement plan.

Source: Barran.com, April 2025

401k Loan Size Ticks Up for 2024

According to a benchmarking report by T. Rowe Price, the average size of 401k loans increased to $10,250 in 2024, reflecting a 4% rise that slightly outpaced inflation. The report indicates that participants across all age groups, especially those nearing retirement, have increased their loan amounts. Specifically, 11% of respondents over 70 and 10% of those aged 65-69 reported larger loans, compared to 9% for those aged 20-29 and 4% for ages 30-39. Overall, retirement plan loan usage has risen by two percentage points since 2023 but remains lower than the peaks seen from 2015 to 2019.

Source: 401kspecialistmag.com, April 2025

Former Employees Can Lose Thousands to Hidden 401k Fees

A new analysis by PensionBee reveals that individuals who leave their jobs without managing their 401k accounts may incur significant hidden fees, potentially totaling up to $18,000 in account maintenance costs. When employees exit a company, their former employers may start charging fees previously covered by the organization. This situation is compared to COBRA insurance, which allows former employees to maintain their health insurance at a cost, but unlike COBRA, individuals are not informed about these fee changes upon leaving their jobs.

Source: 401kspecialistmag.com, April 2025

Report Finds TDFs are Popular, but Misunderstood

A report from the Public Research Retirement Lab found that target-date funds are more favored among younger retirement investors compared to other investment types. However, it also noted that TDFs may not be well understood by the general public. The PRRL, a collaboration between the Employee Benefits Research Institute and the National Association of Government Defined Contribution Administrators, analyzed a sample of 2.3 million participants with total assets of $148 billion, categorizing investments into 14 groups.

Source: Psca.org, April 2025

U.S. Chamber Pushes Back on 401k Excessive Fee Suit Appeal

The U.S. Chamber of Commerce and several retirement trade associations defended fiduciary defendants in a recent excessive fee lawsuit, claiming it is part of a larger trend of ERISA class-action complaints seeking costly settlements. Judge Rebecca Ebinger dismissed the lawsuit last November, stating the plaintiffs failed to provide proper benchmarks for comparing expenses, which hindered their claims of breached fiduciary duties. The plaintiffs have since appealed the dismissal.

Source: Napa-net.org, April 2025

DOL Must Issue ERISA Guidance on "Foreign Adversary" Investments

On February 21, a presidential memorandum instructed the DOL to update ERISA fiduciary standards regarding investments in public market securities from "foreign adversary companies." This directive is part of the Trump administration's America First Investment Policy, which seeks to promote foreign investment while safeguarding national security. The article discusses potential questions that sponsors and fiduciaries of defined benefit and defined contribution plans, as well as welfare plans like VEBAs, may have regarding the upcoming guidance, though it notes that no immediate action is required from them at this time.

Source: Mercer.com, April 2025

Report Raises Eyebrows About Claims of Rampant "Red Flags" in Retirement Plans

An expert criticized a recent analysis highlighting extensive ERISA noncompliance as "scaremongering." In January, the New York-based consulting firm Abernathy Daley released a report claiming that approximately 84% of U.S. retirement plans exhibited at least one "red flag" indicative of a potential violation of ERISA. However, some industry professionals have disputed the firm's assertions regarding the prevalence of compliance risks.

Source: Hrdive.com, April 2025

401k Plan Sponsor Questions Most Forget to Ask

Many questions about 401k plans often go unasked, even though the sponsors of these plans have important responsibilities to manage them properly. By asking these important questions ahead of time, sponsors can help improve the financial security of the people who participate in the plan and also protect themselves from any risks that come from not fulfilling their duties.

Source: Fiduciarynews.com, April 2025

Unlocking the Hidden Power of 401k Contributions: A Tax Bracket Advantage

While most people associate their 401k with retirement savings, employer matching, and tax deferral, there's a significant benefit for high earners and business owners: the opportunity to utilize marginal tax brackets through 401k contributions. This article highlights the importance of understanding the 401k salary deferral option, emphasizing that it's not just about future savings but also about maximizing current tax benefits to efficiently build wealth in line with today's tax code.

Source: Bluerockfg.com, April 2025

Will the Average Retirement Age Keep Rising?

After nearly a century of decline, work participation among older men stabilized in the 1980s, and since the early 1990s, the average retirement age has risen by approximately three years. The question now is whether the factors that contributed to this increase over the past three decades will continue to extend the retirement age, or if their impact has largely played out. The final section of this piece argues that the influences driving higher participation rates among older workers may be reaching their limits, indicating that further increases in the average retirement age are unlikely.

Source: Bc.edu, April 2025

Cybersecurity and 401k Plans: Top Priority for Plan Sponsors in 2025

Cybersecurity has become an essential fiduciary obligation for 401k plan sponsors, evolving beyond a mere IT issue. With the rise of sophisticated cyber threats targeting valuable retirement accounts, employers must proactively protect participant assets and sensitive information. Fiduciaries are now required to ensure the security of these assets with the same prudence, care, and diligence as other financial responsibilities.

Source: Savantwealth.com, April 2025

The Rising Popularity of Roth 401ks: What Plan Sponsors Need to Know

Offering a Roth 401k option is beneficial for plan sponsors and can aid employees in retirement preparation. However, education is crucial for employees to comprehend the differences between traditional and Roth contributions and how these choices fit their long-term goals and financial situations. Providing educational resources, calculators, and access to financial professionals can help participants make informed decisions.

Source: Savantwealth.com, April 2025*

Senators Introduce Bill to Protect Retirement Savings in Bankruptcy

Senators Josh Hawley and Dick Durbin have reintroduced the Protecting Employees and Retirees in Business Bankruptcies Act, aimed at enhancing protections for employee wages and retirement assets during employer bankruptcy filings. Hawley emphasized that the legislation would help employees retain more of their wages, benefits, and retirement savings in such situations. The bill has been referred to the Senate Committee on the Judiciary and is pending a vote.

Source: Psca.org, April 2025

The DOL's Lost and Found Database Is Live

The DOL has developed a database as part of SECURE 2.0 to assist in locating missing retirement plan participants and beneficiaries. This initiative aims to address the ongoing issue of missing participants, which is a key focus for both the DOL and the IRS. While participation in the database is voluntary for plan sponsors, it can serve as additional evidence that they are fulfilling their fiduciary duty to locate eligible participants for benefits.

Source: Brickergraydon.com, April 2025

Proposal for a Federal Retirement Plan for Private-Sector Workers Reintroduced

The Retirement Savings for Americans Act is a bicameral, bipartisan bill reintroduced by Rep. Lloyd Smucker on April 7. It aims to provide uncovered private-sector workers access to a federally run retirement plan, featuring matching contributions for low- and middle-income participants. While supporters believe the RSAA could enhance retirement outcomes, critics argue it may weaken the private retirement system by reducing employers' incentives to sponsor their own retirement plans.

Source: Asppa-net.org, April 2025

IRA Bankruptcy Exemption Increases

Effective April 1, 2025, the maximum bankruptcy exemption for IRAs will increase from $1,512,350 to $1,711,975. This amount will be adjusted for cost-of-living increases and reflects an increase from the original limit of $1,000,000 set by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

Source: Ascensus.com, April 2025

Best Practices to Find Missing Plan Participants

Employers face the ongoing challenge of locating missing retirement plan participants, a responsibility mandated by ERISA. Whether managing a defined contribution or defined benefit pension plan, employers have a fiduciary duty to find these individuals. The DOL has been actively addressing this issue, conducting audits of retirement plans and outlining necessary actions for employers to locate lost participants and ensure they receive their benefits. They have provided detailed guidance on steps that should be taken to effectively find missing participants.

Source: Usicg.com, April 2025

Court Finds American Airlines Liable for Breach of Fiduciary Duty of Loyalty to Its 401k Plans

In the case of Spence v. American Airlines, Inc., U.S. District Court Judge O'Connor concluded that American Airlines breached its fiduciary duty of loyalty under ERISA after a four-day bench trial. Unlike typical excessive fee cases related to 401k plans, this case centered on American Airlines' relationship with BlackRock and its ESG proxy voting policies, rather than high investment management fees. The court found that while American Airlines prudently selected and maintained BlackRock as its investment manager, it acted disloyally by letting its corporate interests interfere with its fiduciary responsibility to monitor BlackRock.

Source: Truckerhuss.com, April 2025

401k Investing During Volatile Markets: Updated

As new tariffs disrupt the market, investors may find themselves concerned about their retirement savings. Market fluctuations can lead to anxiety, even among seasoned investors, particularly regarding their 401k accounts. Abrupt declines and unforeseen market shifts can prompt you to reevaluate your investment strategy and consider more conservative options. Nevertheless, it's crucial to adopt a long-term perspective when investing in retirement plans.

Source: Sequoia.com, April 2025

Mid-Year Changes to Safe Harbor Plans

Safe harbor 401k plans can be a great solution for employers that have difficulty passing the annual nondiscrimination testing and wish to avoid making refunds of deferrals and/or matching contributions to Highly Compensated Employees. While there are many benefits to a safe harbor 401k plan design, there are certain restrictions that apply to discretionary plan amendments that plan sponsors should be aware of and are often overlooked when implementing this type of plan. This article focuses on the difference between permitted and prohibited mid-year changes to safe harbor 401k plans.

Source: Newfront.com, April 2025

AT&T Motion Calls Out Forfeiture Suit "Bandwagon"

Claiming that the "plaintiff is jumping on a bandwagon of cookie-cutter plan forfeiture challenges recently brought against dozens of large plans," AT&T has filed a motion to dismiss the suit. The lawsuit argues that this approach breaches ERISA's fiduciary duties, violates the anti-inurement provision, and constitutes prohibited transactions under ERISA. AT&T characterizes the suit as a generic challenge, akin to many others filed recently.

Source: Napa-net.org, April 2025

IRS Considers Guidance on SECURE 2.0 Auto-Enrollment Requirements

The IRS held hearings to gather public comments on two proposed regulations connected to SECURE 2.0, which was published in January. One regulation addresses Roth catch-up contributions, while the other focuses on required automatic 401k features. SECURE 2.0 mandates that plans established after December 29, 2022, implement auto-enrollment and auto-escalation starting this year, defaulting new participants to contribute between 3% and 10% of their pay, with annual increases until contributions reach between 10% and 15%. Additionally, the IRS proposed that plans not subject to auto-enrollment can maintain their "grandfathered" status even if they join a multiple-employer plan created after SECURE 2.0 or one that includes employers with auto-enrollment provisions.

Source: Napa-net.org, April 2025

User's Guide to SECURE 2.0

Navigating SECURE 2.0 is challenging due to its complexity and lack of a table of contents. To help employers and plan sponsors understand its implications, this guide provides a summary of SECURE 2.0 provisions organized thematically, including distinctions between changes for defined contribution and defined benefit plans. The six accompanying tables outline statutory changes, their effective dates, and whether changes are mandatory or optional for employers. The guide also includes observations from Mercer regarding potential implementation challenges and notes drafting errors that Congress plans to correct.

Source: Mercer.com, April 2025

DOL's New Retirement Security Rule Remains on Hold as Agency Pauses Appeals

The DOL has requested the U.S. Court of Appeals for the Fifth Circuit to pause its appeals regarding two federal court cases that challenge its new Retirement Security Rule. This follows two orders from July 2024 that stayed the rule's implementation, originally set for September 2024. The rule aims to broaden fiduciary responsibilities under ERISA to include annuity sales, mandating financial advisors to act in their client's best interests rather than being incentivized by perks from insurance and annuity companies. However, industry groups, such as the American Council of Life Insurers and the Federation of Americans for Consumer Choice, sued to block the rule. After the federal courts' stays, the DOL filed notices of appeal under the Biden administration.

Source: Hallbenefitslaw.com, April 2025

Navigating the Shifting Fiduciary Landscape: Podcast

Todd Solomon was a guest on the 401k Roundtable podcast, hosted by Rick Unser. In the episode, they discussed the evolving fiduciary landscape and trends in ERISA litigation, along with the impact of the Trump administration on the DOL. Todd emphasized the importance of balancing loyalty and prudence in fiduciary duties, considering participant demographics in plan decisions, and the challenges plan sponsors face when assessing cost versus value, especially regarding investments like target-date funds.

Source: Employeebenefitsblog.com, April 2025

What Documents Do I Need for a 401k Audit?

Preparing for a 401k audit can raise questions about required documentation. A sample checklist can help guide you, but note that your auditor will tailor requests based on your specific retirement plan. While the checklist might appear extensive, many items will likely be supplied by your plan's third-party administrator or recordkeeper. To facilitate the audit, it's recommended to provide your auditor with online view-only access to the plan. Here is a sample checklist.

Source: Belfint.com, April 2025

RIA M&A Sees Record-Breaking Activity in Q1 2025

Registered investment advisory firms achieved a record number of acquisitions in the first quarter of 2025, with 75 transactions reported by DeVoe & Company. This surpassed the previous Q1 record of 68 deals set in 2022 and follows a record 272 transactions in 2024. The fourth quarter of 2024 alone had 78 deals, indicating a strong trend in the industry. David DeVoe, CEO of DeVoe & Company, noted that growth is the primary motivation for sellers, as many firms are increasingly opting for acquisitions over organic growth strategies.

Source: 401kspecialistmag.com, April 2025

Controversial Retirement Bill Reaches Congress Again

Rep. Lloyd Smucker reintroduced the Retirement Savings for Americans Act, a bipartisan bill aimed at providing eligible private sector workers access to federally run retirement savings accounts. The RSAA, which offers matching contributions for low-to-middle-income Americans without access to employer-sponsored plans, was initially introduced by Sen. John Hickenlooper in December 2022 and later reintroduced by Hickenlooper and Sen. Thom Tillis in October 2023. While proponents argue that the bill could help those lacking retirement savings, critics express concerns about its potential negative effects on the private 401k market, individual savings, and Social Security's financial stability.

Source: 401kspecialistmag.com, April 2025

2024 MFS DC Plan Sponsor Survey: Building Better Outcomes

The 2024 MFS DC Plan Sponsor Survey reveals insights from 166 U.S. plan sponsors managing over $125 billion in assets and covering over 1.1 million participants. Key topics include plan sponsor confidence, retirement income, investment menus, and plan design. A new feature, the MFS Workplace Retirement Readiness Indicator, measures participant confidence through targeted responses. The report, which also includes views from over 4,000 global plan participants and retirees, highlights trends affecting the defined contribution landscape and identifies discrepancies between employer strategies and employee expectations.

Source: 401kspecialistmag.com, April 2025

Does Outsourcing Impact the Need for Fiduciary Education?

As plan sponsors increasingly rely on advisers and consultants to manage retirement plans and comply with regulations, the need for fiduciary training and education remains vital. It is a misconception that delegating responsibilities to a co-fiduciary, like a 3(21) or 3(38) adviser, absolves the retirement plan committee of its fiduciary duties. Instead, the committee's focus shifts to oversight and controls. Tina Siedlecki from Willis Towers Watson notes that companies are prioritizing their core operations and seeking to enhance their support systems to reduce compliance risks.

Source: Plansponsor.com, April 2025

Senate Bill Seeks to Reverse Retirement Plan Crypto Warning

Senator Tommy Tuberville of Alabama has reintroduced the Financial Freedom Act, which seeks to overturn a 2022 guidance from the DOL that discourages retirement plans from including cryptocurrency and other alternative investments. The legislation would prevent the Labor Secretary from limiting the types of investments available to individual retirement account participants who control their assets. The DOL's guidance highlighted the significant risks associated with crypto investments and warned that they may violate the fiduciary duties of plan administrators, stating that it would investigate any retirement plans that disregard this guidance.

Source: Planadviser.com, April 2025

Time Is Running Out to Utilize Forfeiture Relief (And How to Avoid Lawsuits)

Lawsuits regarding the misuse of forfeitures in retirement plans are ongoing, with outcomes varying. However, individuals and advisors can proactively implement strategies to avoid these lawsuits. Additionally, there is a limited opportunity to benefit from IRS relief related to built-up forfeitures that haven't been utilized in prior years, with a deadline set for the end of 2025. This article outlines ways to take advantage of this IRS forfeiture relief while also providing guidance on preventing potential lawsuits. By helping clients stay compliant and avoid legal issues, advisors can position themselves as valuable resources.

Source: Penchecks.com, April 2025

Talking Points: The Real Retirement Crisis

"The Real Retirement Crisis: Why (Almost) Everything You Know About the US Retirement System Is Wrong" by Andrew Biggs critiques prevalent misconceptions about the U.S. retirement system. Biggs, a senior fellow at the American Enterprise Institute, emphasizes the importance of relying on facts over misleading narratives. The book explores misunderstandings that hinder a clear assessment of the system's effectiveness, supported by tax data, actual retiree sentiment surveys, and various objective studies. It contains 31 pages of footnotes to substantiate its claims, revealing how distorted perceptions can obscure the realities of retirement in the U.S.

Source: Napa-net.org, April 2025

The Next-Gen 401k Report

The Next-Gen 401k Report aims to spark dialogue within the retirement plan industry by providing a detailed market map of the current landscape. It identifies innovators and trends transforming the workplace retirement ecosystem, highlighting 12 key trends and 60 top RetireTech companies. This 22-page report offers actionable insights to help industry professionals stay competitive in a dynamically changing market.

Source: Kwpworks.com, April 2025

How AI Will Impact Your Workplace Retirement Plan

Artificial intelligence is in its early stages but is poised to significantly impact retirement planning and savings. As AI technology continues to evolve, it is being integrated into workplace retirement plans. The MetLife 2025 Enduring Retirement Model Study indicates that plan sponsors recognize AI's potential to enhance employer-provided retirement benefits, potentially helping workers secure their financial futures more effectively.

Source: Kiplinger.com, April 2025

Nontraditional Workers and Retirement Saving: An Overview and Discussion of Policy Issues

This report aims to inform legislative discussions by highlighting the challenges nontraditional workers face regarding retirement savings. It begins by describing various work arrangements in the U.S. and reviewing the primary sources of retirement income for these workers. It provides estimates on their access to and participation in retirement plans before concluding with an overview of recent legislative initiatives aimed at enhancing retirement security for nontraditional workers.

Source: Congress.gov, April 2025

Canada's 2025 DC Plan Summit: President Trump's Pro-Business Agenda Could Boost Mergers, Acquisitions and Public Offerings

Charles Myers, chairman of Signum Global Advisors, stated that Donald Trump is likely to be the "most transformational" U.S. president due to his corporate tax rate strategy and a distinct deregulation plan for the financial and energy sectors. Speaking at Benefits Canada's 2025 Defined Contribution Plan Summit, Myers highlighted Trump's planned corporate tax cuts, which aim to attract foreign investment, boost business mergers and acquisitions, and reopen the initial public offering market. These actions could positively impact both public and private equity markets.

Source: Benefitscanada.com, April 2025

Time Is Running Out to Utilize Forfeiture Relief (And How to Avoid Lawsuits)

During this time of year, employers often question when they can make deductible contributions to a qualified plan. Generally, contributions are deductible for the tax year in which they are made if deposited by the employer's tax return due date, including extensions. Confusion arises when an employer files their return before the deadline, either after applying for an extension or before requesting one. However, filing the tax return does not prevent the employer from later making a contribution and claiming a deduction for that tax year. The explanation for this is explored further in this article.

Source: Asppa-net.org, April 2025

Creating the "Next-Gen 401k Report"

The "Next-Gen 401k Report" by KWP Growth Partners is set to launch on April 8, highlighting twelve key trends that are transforming retirement plans. The report showcases 60 innovative, digitally-focused companies that are leading changes in the workplace retirement plan sector. Will Prest and Lisa Kottler from KWP will discuss the report's insights and its significance for firms in the workplace retirement plan ecosystem in a podcast episode.

Source: 401kspecialistmag.com, April 2025

Fiduciary Basics for New Plan Sponsors

Private-sector retirement plans that do not adhere to the regulations established by the Employee Retirement Income Security Act of 1974 risk facing legal liabilities and financial penalties. If your organization is contemplating the introduction of a retirement plan, it is crucial to understand the fundamentals of fiduciary responsibility. This article provides an overview of these fiduciary essentials.

Source: Plansponsor.com, April 2025*

What to Know About Adding Income to a Plan Lineup

As more Americans approach retirement and seek regular payouts from their savings, plan sponsors are increasingly considering income solutions like annuities for their retirement plans. A TIAA survey of 500 C-suite leaders revealed that 20% believe guaranteed income for life is the best way for employers to enhance workers' retirements, trailing only behind increasing employer matching. However, given changing regulations and fiduciary responsibilities, these income solutions need to be thoroughly vetted before inclusion in retirement plans.

Source: Planadviser.com, April 2025

Cheats Sheets and Hacks for 401k Plan Sponsors

The author reflects on the significant impact of the Internet in their life, noting its ability to provide vast information and time-saving hacks, particularly in fixing things. They share some lesser-known tips and tricks for 401k plan sponsors to simplify their tasks and enhance efficiency.

Source: Jdsupra.com, April 2025

Mergers and Acquisitions Guide to 401k Plans: A Stock Sale

In the event of a merger or acquisition, it's crucial to assess the implications for retirement plans early in the negotiation process. Key steps include discussing the retirement plan's intent with legal counsel and the acquiring entity, as well as reviewing the plan documents to understand the treatment of related employers. Collaborating with a knowledgeable consultant and legal advisors can help identify the best solutions for both the business and its employees, ensuring a smooth transition. The article outlines general considerations and actions relevant to a stock acquisition where one company acquires another, both of which have 401k or other qualified retirement plans.

Source: Sequoia.com, April 2025

Tuberville, Donalds Renew Push for Crypto in 401k Plans

Sen. Tommy Tuberville and Rep. Byron Donalds have reintroduced the Financial Freedom Act, aimed at protecting investment options in self-directed 401k brokerage windows. The proposed legislation would prevent the Labor Secretary from limiting the types of investments available to participants in pension plans that allow individual control over assets. It also ensures that fiduciaries can select investment alternatives without interference from the Department of Labor, as long as participants have access to a diverse range of options and decisions are based solely on risk-return characteristics.

Source: Napa-net.org, April 2025

Are PEPs Reshaping the Retirement Plan Market?

In a Pooled Employer Plan, the Pooled Plan Provider takes on the role of plan sponsor and administrator, assuming most fiduciary responsibilities. PEPs offer a variety of structures and services, with a diverse range of PPPs including large consulting firms, recordkeepers, payroll providers, third-party administrators, and investment advisors. Following policy changes, the adoption of multiple or pooled employer offerings for defined contribution benefits has surged. Fred Reish, a partner at Faegre Drinker, suggests in a recent article for the National Association of Plan Advisors that the growth of PEPs is expected to continue, potentially matching the prevalence of single-employer plans within the next five to ten years.

Source: Georgetown.edu, April 2025

Employer Considerations as New 401k Lawsuit Includes Extensive Claims

A recent lawsuit involving Swiss Re's 401k plan features a wide range of allegations, underscoring the need for 401k plan fiduciaries to adhere to best practices. Regardless of the lawsuit's outcome, these practices are crucial for fiduciaries to defend against potential lawsuits and to minimize the risk of breaching their fiduciary duties. The article outlines several best practices for plan fiduciaries to implement.

Source: Employeebenefitslawblog.com, April 2025

Investments: What Does ERISA Say?

Over ten years into ongoing lawsuits claiming that retirement plan sponsors have breached ERISA fiduciary duties by providing subpar and high-cost investment options, new allegations are still emerging. What does ERISA actually stipulate regarding investment choices? How can plan sponsors shield themselves from potential liabilities? Read this article for valuable insights and guidance.

Source: Colonialsurety.com, April 2025

Adding Emergency Savings Solutions to Retirement Plans

In 2017, a Federal Reserve report revealed that 40% of Americans could not afford an unexpected $400 expense, highlighting a significant financial insecurity issue. The introduction of SECURE 2.0 has now added in-plan emergency savings solutions for plan sponsors, offering new methods to enhance financial security. The focus over the past five years has been on understanding how short-term savings relate to long-term financial stability, and how 401k plans can incorporate these insights to improve participants' financial wellbeing.

Source: Blackrock.com, April 2025

Do We Really Want Roth Retirement Plans to Be More Generous Than Traditional Plans? - Opinion

The author notes that she overlooked a significant detail: the SECURE 2.0 Act has removed required minimum distributions for Roth 401ks. At first, this change may appear to be innocuous; after all, account holders have already paid taxes on their contributions, so why require them to withdraw their funds? However, this reasoning fails to consider that the assets within a Roth account can continue to earn tax-free returns even after the account holder reaches the age of 73 when RMDs typically begin for traditional plans. This capacity to continue growing savings tax-free enhances the overall value of Roth 401ks significantly.

Source: Bc.edu, April 2025

Private Assets in 401ks Should be Expanded, BlackRock CEO Says

In his annual letter to investors, BlackRock CEO Larry Fink advocated for expanding access to retirement plans and increasing investments in private assets. The private asset investing sector is also pushing for greater access to defined contribution plans, with ERISA litigation reform viewed as crucial for facilitating the inclusion of private funds in these plans.

Source: Asppa-net.org, April 2025

Plan Sponsors Focus on Retirement With Lifetime Income

Amid concerns over inflation and market volatility, plan sponsors are dedicated to maintaining workers' financial well-being. According to MetLife's 2025 Enduring Retirement Model Study, 82% of plan sponsors are committed to not cutting retirement benefits, citing reasons such as attracting and retaining talent (69%), demonstrating a long-term commitment to employees (57%), and supporting workers in feeling financially prepared for retirement (52%). Additionally, 90% of employers acknowledge that some workers are delaying retirement due to financial constraints, with 64% attributing the delays to lack of affordability.

Source: 401kspecialistmag.com, April 2025

Retirement Plan Suits Show Value Of Cybersecurity Policies

Recent class action lawsuits regarding data breaches indicate heightened legal risks for retirement plan administrators and sponsors. In a Law 360 Expert Analysis article, Carol Buckmann explains that these entities face potential legal action from participants whose data has been compromised, with claims involving emotional distress, invasion of privacy, and ERISA violations. Buckmann provides practical recommendations for enhancing cybersecurity measures, such as collaborating with experts, adhering to DOL best practices, training employees to identify phishing attempts, implementing multifactor authentication, and requiring regular cybersecurity audits from third-party providers.

Source: Squarespace.com, April 2025

Roth Treatment of Employer Contributions

SECURE 2.0 includes an optional provision allowing Roth treatment for employer contributions in addition to participant deferrals. In a recent survey, nearly half of plan sponsors indicated they are open to adding this provision, a significant increase from the previous year. Currently, about 20% have already adopted it, while over 25% are considering doing so.

Source: Psca.org, April 2025

SECURE 2.0 in 2025: Here Comes a Big Plan Design Change

As we enter 2025, the implementation of new SECURE 2.0 provisions is imminent. Understanding how these provisions will impact plan design, administration, and costs is essential for effectively advising clients. This knowledge allows you to inform clients about upcoming changes, strategize any necessary administrative adjustments, and coordinate communications with participants.

Source: Penchecks.com, April 2025

401k Plan Providers' Road and Role in 2025

One of the author's favorite films is the 1978 classic "The Deer Hunter," directed by Michael Cimino. A notable quote from the film, delivered by Robert De Niro's character, underscores the importance of clarity: "This is this. This ain't somethin' else. This is this." The author reflects on the constantly evolving nature of the 401k plan industry, emphasizing the necessity of staying informed, which is the central theme of the article.

Source: Jdsupra.com, April 2025

Plan Sponsor and RIA Alert: Navigating the 78(3) Fiduciary Liability "Gotcha"

The duty of loyalty for fiduciaries includes a responsibility to disclose all material facts they know or should know. The author suggests that if a plan sponsor, RIA, or other investment fiduciary is not aware of this duty under ERISA (specifically section 78(3)), it raises concerns that proper investigation, evaluation, and disclosure of material facts were neglected. This is particularly problematic in the annuity industry, which is known for its lack of transparency, making it unlikely that annuity issuers provide essential information on costs, spreads, or risks associated with specific annuity products.

Source: Fiduciaryinvestsense.com, April 2025

What Plan Administrators Need to Know About the 2025 RMD Age Increase

Plan administrators are increasingly focusing on the accuracy of participant birthdates due to upcoming changes in Required Minimum Distributions (RMDs) effective April 1, 2025. Participants who turn 73 in 2024 will need to start taking RMDs from their employer-sponsored retirement plans by this date unless still employed and allowed to defer. Failure to meet this deadline can result in steep penalties: 25% of the missed distribution, or 10% if corrected within two years. Consequently, plan administrators are essential in ensuring compliance and helping participants avoid these penalties. This article reviews several steps towards RMD compliance.

Source: Berwyngroup.com, April 2025

Anxiety Drains Interest in Saving for Retirement: Study

A recent survey by the Employee Benefit Research Institute reveals that workers experiencing acute financial stress prioritize retirement savings less than average. The top financial stressors for participants were daily bills (60%), unexpected emergencies (46%), and job security (33%), while only 19% cited "saving enough for retirement." Notably, 64% of respondents had an income below $50,000. In contrast, a similar survey conducted by EBRI in 2024 indicated that saving for retirement (48%) was a primary concern among a broader sample, highlighting the impact of financial stress on retirement planning.

Source: Asppa-net.org, April 2025

The 401k Committee Is Changing and So Should Your Approach

Today's 401k committees often consist of members from four different generations, including a Baby Boomer CFO, a Gen X HR Director, a Millennial Head of People Ops, and a Gen Z Benefits Coordinator. Each generation interprets information differently, which can lead to misunderstandings if the presentation is not customized. Using a generic approach risks alienating participants, while tailoring messages to align with each generation's preferences can foster collaboration rather than a transactional atmosphere. The article suggests strategies for effectively engaging with each generation within the context of a company's 401k committee.

Source: 401k-Marketing.com, April 2025

This Is the Average 401k Balance for Ages 45 to 54

Curious about how your retirement savings measure up against your peers? Getting the answer is easier than you might think. Vanguard, a well-known mutual fund company and retirement plan administrator, frequently releases aggregated data on the accounts of participants in its employer-sponsored retirement plans. However, it's important to keep in mind that these averages come with a few key caveats.

Source: Nasdaq.com, March 2025*

Trends in the Expenses and Fees of Funds, 2024

This detailed 16-pape report from the Investment Company Institute reveals that investor demand for lower-cost funds has contributed to a significant decline in average expense ratios for mutual funds in 2024. Specifically, the average expense ratio for equity mutual funds decreased by 62% and for bond mutual funds by 55% from 1996 to 2024. This trend is largely driven by a growing preference for no-load funds, which accounted for 92% of all long-term mutual fund gross sales in 2024, up from 46% in 2000.

Source: Ici.org, March 2025

2024's Average 401k Contribution

How much are people utilizing their workplace's retirement savings plan? It's a question worth asking since the size of anyone's retirement nest egg ultimately depends on how much they contribute to it in the meantime. In 2024, participants in Fidelity's 401k plans contributed an average of $8,800 from their salaries, an increase from $8,530 in 2023. Additionally, employers contributed an average of $4,770 to employees' 401k accounts, resulting in a total average funding of $13,570 for the year.

Source: Fool.com, March 2025

Fiduciary Duties: Ask Why

Retirement plan sponsors often struggle with the complexities of ERISA requirements, which can be overwhelming given the significance of retirement accounts as major employee assets. However, understanding the fundamental purpose behind ERISA obligations can motivate fiduciaries to engage meaningfully in their roles. Inspired by Simon Sinek's emphasis on starting with 'why' in meaningful work, the article highlights that by focusing on the purpose of their duties, fiduciaries can build trust, enhance engagement, and improve retirement outcomes for employees. The article also provides practical examples of how to center the purpose of ERISA duties in their actions.

Source: Colonialsurety.com, March 2025

Decumulation Strategies: Creating Lifetime Income From Defined Contribution Plans

Employer-sponsored defined contribution plans are crucial to the American retirement system, providing participants with various strategies to spend their retirement assets. Before the SECURE 1.0 Act, insurance-based options within DC plans were limited, but the act, passed in late 2019, introduced fiduciary safe harbors that facilitate the selection of annuity providers. This regulatory change has led to a greater availability of insurance-based offerings in the market. However, the adoption of these strategies by plan sponsors has been slow as they become more familiar with annuities. This 20-page white paper outlines the current insured and non-insured options available for employer-sponsored retirement DC plans.

Source: Actuary.org, March 2025

Mandatory Catch-Up Contribution "Rothification" Is Coming to U.S. Savings Plans

The SECURE 2.0 Act mandates that participants aged 50 or older in 401k retirement plans, who are classified as highly compensated (earning at least $145,000, indexed), must make catch-up contributions as Roth contributions rather than pretax contributions. Roth contributions are taxable in the contribution year but allow for tax-free distributions, including earnings. Initially set to take effect in 2024, the implementation has been delayed to 2026 due to administrative readiness concerns. The IRS has introduced proposed regulations to provide guidance on the Roth catch-up contribution requirement for highly compensated participants.

Source: Sidley.com, March 2025

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