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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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Senate Committee Urges DOL to Implement Six Specific SECURE Provisions

The Senate Committee on Health, Education, Labor, and Pensions sent a letter to the Department of Labor on May 30 urging it to "effectively and expeditiously" implement SECURE 2.0. It also urged the DOL to prioritize six provisions related to the committee's mission.

Source: Asppa.org, June 2023*

Employer Contributions Reach Record-High Levels: Fidelity

With U.S. employers adding one million jobs to the economy in the first quarter of 2023, Americans appear to be refocusing on investing in their future, according to Fidelity's latest retirement trends analysis.

Source: Asppa.org, June 2023

IRS Interim Guidance on Self-Correction Under SECURE 2.0

The IRS has issued interim guidance on the expansion of the employee plan self-correction provisions of the SECURE 2.0 Act. The new guidance, which is in the form of questions and answers, covers conditions for self-correction, eligible inadvertent failures that may not be self-corrected at this time, and conditions that will not apply under the interim guidance.

Source: Segalco.com, June 2023

How Plan Sponsors Can Shift Focus to Decumulation

The Senate Committee on Health, Education, Labor, and Pensions sent a letter to the Department of Labor on May 30 urging it to "effectively and expeditiously" implement SECURE 2.0. It also urged the DOL to prioritize six provisions related to the committee's mission.

Source: Plansponsor.com, June 2023

The Good Old Days: Was the Pension Era Really as Good as Its Reputation?

Some in the retirement industry look back fondly on the days when company pensions guaranteed paychecks, but experts are not convinced the nostalgia is deserved. Experts point out the flaws in the often lauded 'pension past,' while discussing what the 401k present needs to be more impactful for more people.

Source: Planadviser.com, June 2023

Fraudster's 401k Can Be Used for Restitution

Evan Greebel, pharma bro Martin Shkreli's lawyer and co-conspirator, lost his bid to protect his 401k from garnishment to pay restitution to his victims. The Supreme Court declined to hear the case, effectively ending Greebel's quest to keep his retirement plan free from a $10.4 million judgment found by a lower court.

Source: Napa-net.org, June 2023

Six Reasons to Offer Automatic Enrollment in Your 401k Plan

Automatic enrollment is an effective method of encouraging employees to save. This is a strategy worth considering for a variety of reasons. Not only does it motivate employees to save for retirement, but it also is advantageous to your business. Here are six reasons why offering automatic enrollment is advantageous.

Source: Myubiquity.com, June 2023

SECURE 2.0 Guidance Process Begins: Self Correction for Eligible Inadvertent Failures Is First Up

The IRS has issued interim guidance to address the changes made by section 305 of SECURE 2.0 to the self-correction program under the IRS Employee Plans Compliance Resolution System. While the IRS will issue guidance completely restating the rules of EPCRS to reflect the new statutory changes within two years, Notice 2023-43 provides initial guidance, in question-and-answer format, regarding what qualification failures can be self-corrected now.

Source: Groom.com, June 2023

The DOL's Fiduciary Interpretation and the Florida Court Decision

The DOL's fiduciary interpretation and PTE conditions were opposed by some in the financial services industry. As a result, two lawsuits were filed in Federal Courts, one in Florida and one in Texas. The Florida court has reached its conclusion; the Texas lawsuit is still pending. Fred Reish discusses them.

Source: Fredreish.com, June 2023

2023 Expert Guide to Safe Harbor Match Options

This article dives into the range of Safe Harbor Match options, alternatives to the traditional Safe Harbor Match, and how to choose the Safe Harbor design that best fits your goals. It also discusses four key strategies you can use to decrease Safe Harbor costs and improve the chance your plan achieves strategic company goals.

Source: Forusall.com, June 2023

IRS Notice 2023-43: Self-Correction Changes From SECURE 2.0 Are Immediately Effective

On May 25, 2023, the IRS issued Notice 2023-43, which provides interim guidance on the interpretation and application of Section 305 while the updated EPCRS procedure is pending. And it contains good news.

Source: Ferenczylaw.com, June 2023

401k Safe Harbor Rules - 2023

A description of the 401k safe harbor rules, updated for 2023, as well as an explanation of the advantages and disadvantages of this plan design option.

Source: Consultrms.com, June 2023

The New Roth Catch-up Requirement Needs Clarification-What Are Plan Sponsors to Do?

Beginning in 2024, SECURE 2.0 significantly changes the rules for catch-up contributions. Although the majority of non-governmental plans already permit Roth contributions, there is no precedent for this new requirement and a great deal of confusion about plan sponsor options for compliance.

Source: Cohenbuckmann.com, June 2023

Achieving Fiduciary Excellence

In today's increasingly competitive environment, more advisory firms are seeking to differentiate themselves and grow AUM by formalizing their commitment to fiduciary excellence. 139 investment advisory firms from around the world have done just that, achieving certification by the Centre for Fiduciary Excellence. This report provides an inside look at how those advisory firms operate their practices.

Source: Broadridge.com, June 2023

Decoding IRS Notice 2023-43: Easier 401k Error Fixes

IRS Notice 2023-43 was released on May 25, 2023, and provides guidance on changes stemming from Section 305 of the SECURE 2.0 Act of 2022. This part of the law is about the Employee Plans Compliance Resolution System. The EPCRS helps Plan Sponsors fix mistakes in employee benefit plans, like mistakes identified during 401k plan audits. This article discusses the main differences that IRS Notice 2023-43 introduces compared to the existing rules before the SECURE 2.0 Act.

Source: 5500audit.com, June 2023

Mapping Out the Data and Outreach Stages of 401k Prospecting

Successful 401k prospecting is about recognizing opportunities and knowing how to advance each stage of the sales relationship. This article dissects the stages of data collection and outreach as part of the process. It also covers identifying ideal prospects by collecting data to optimize effective outreach opportunities.

Source: 401k-marketing.com, June 2023

Viewing SECURE 2.0 Through a 403b Lens

The SECURE 2.0 Act of 2022 continues the trend by making a handful of changes specifically for 403b plans. SECURE 2.0 also makes changes for defined contribution plans, in general, apply to 403b plans. This article gives a high-level overview of the SECURE 2.0 provisions affecting 403b plans and their sponsors.

Source: Mercer.com, May 2023

Small Things That 401k Plan Sponsors Shouldn't Neglect

When it comes to 401k plan sponsors, little things can cost employers a lot of grief on an Internal Revenue Service or Department of Labor audit. This article is about a few little things that plan sponsors should focus on.

Source: Jdsupra.com, May 2023

401k Plans: Can Interns be Excluded?

As summertime rolls around and employers prepare for a fresh crop of interns, the question may arise whether those interns can be excluded from participating in the 401k plan. The answer is generally yes, but different conditions must be satisfied depending on whether the intern job classification results in an indirect service requirement.

Source: Haynesboone.com, May 2023

IRS Issues SECURE 2.0 Guidance on Expanded Availability of Self-Correction

The SECURE 2.0 Act of 2022 greatly expands the availability of self-correction of compliance failures involving employer retirement plans and IRAs. On May 25, 2023, the IRS issued Notice 2023-43, which clarifies the scope of the expanded self-correction program before the IRS updates its correction program, the Employee Plans Compliance Resolution System, for the SECURE 2.0 changes.

Source: Kilpatricktownsend.com, May 2023*

Three Best Practices for Avoiding a Fiduciary Breach

Given the many lawsuits filed against retirement plan sponsors in recent years for breaching their fiduciary duties, here are the steps plan committees should be taking to mitigate risk.

Source: Investmentnews.com, May 2023

IRS Issues Guidance on Expansion of EPCRS

The IRS has issued guidance on the expansion of the Employee Plans Compliance Resolution System under Section 305 of SECURE 2.0. The guidance is contained in Notice 2023-43.

Source: Asppa.org, May 2023

The Who, When and Why of Independent Fiduciaries

Employee benefit plan sponsors may need to hire an independent fiduciary in certain situations to avoid conflicts of interest and prohibited transactions under ERISA. What is an independent fiduciary, and when might a plan need one?

Source: Wagnerlawgroup.com, May 2023

New Options for Retirement Plan Distributions Under SECURE 2.0

This article summarizes the new distribution options, including penalty-free withdrawals, applicable to defined contribution plans under the SECURE 2.0 Act and provides a timeline of their effective dates. The new options further evidence Congress's growing appetite for approving legislation that allows greater pre-retirement access to funds intended for retirement.

Source: Verrill-law.com, May 2023

Congress Says It Will Fix at Least Four Errors in SECURE 2.0

Congressional leaders wrote an open letter to Secretary of the Treasury Janet Yellen and IRS Commissioner Daniel Werfel clarifying what Congress intended with certain provisions of the SECURE 2.0 Act of 2022. In the letter, a bipartisan group of Senate and House members said they intend to correct those technical errors, but they did not spell out a timetable. The errors include the startup credit, RMD, SIMPLE IRA plans, and Roth catch-ups.

Source: Planadviser.com, May 2023

Another 403b Excessive Fee Settlement Announced

The parties in a two-year-old 403b excessive fee suit against a $2.3 billion plan have come to terms. The suit against the fiduciaries of the $2.3 billion Wake Forest Baptist Medical Center 403b Retirement Savings Plan -- the Medical Center, the Board of Directors of Wake Forest University Baptist Medical Center, and the Retirement Benefits Committee of Wake Forest University Baptist Medical Center -- for breaches of their fiduciary duties to the 19,000 participants of that plan.

Source: Ntsa-net.org, May 2023

Key Congressional Committee Approves Bill Allowing CITs in 403bs

Legislation that would allow 403b plans to invest in collective investment trusts has taken a significant step forward in the House of Representatives.

Source: Ntsa-net.org, May 2023

Advice On Setting Up Your First 401k as a Business Owner

Your business has grown, and now it's time to establish a 401k retirement plan. A 401k provides an efficient and easy way for you and your employees to save for retirement. And there are some great tax incentives, too. You can choose from a variety of retirement plans, each of which carries its own benefits. This article covers some things you should consider.

Source: Letsmakeaplan.org, May 2023

SIMPLE IRAs vs 401k Safe Harbor Plans - 2023

This outline compares a SIMPLE IRA with a safe-harbor 401k plan and is especially important for employers who must cover participants other than just the owners.

Source: Consultrms.com, May 2023

Fiduciaries Must Revisit ERISA Origins

ERISA was created with important protections for plan fiduciaries who are judged as prudent experts under ERISA's fiduciary standard of care. In this article published May 24, 2023, by Law360, ERISA attorney Jeff Mamorsky explores the history of ERISA and why the underpinnings of ERISA are more important than ever.

Source: Cohenbuckmann.com, May 2023

Changes to Hardship Withdrawal Administration From the SECURE 2.0 Act

Plan sponsors of retirement plans with hardship withdrawal provisions have come to realize that complying with hardship rules is sometimes a hardship. Luckily, the SECURE 2.0 Act in Section 312 has provided relief to those plan sponsors that administer hardship withdrawals by relying on written certification.

Source: Belfint.com, May 2023

PA House Passes Keystone Saves Bill

The Pennsylvania House of Representatives on May 24 passed HB 577, a bill that would create the Keystone Saves Program, which would be an automatic enrollment payroll deduction IRA retirement savings program.

Source: Asppa.org, May 2023

Retirement Account Balances Increase Across the Board

Despite a challenging market and high day-to-day costs, new research from Fidelity Investments finds account balances are up in 2023. Their latest findings show 401k account balances increased 4%, while IRA and 403b balances grew 5% and 6%, respectively.

Source: 401kspecialistmag.com, May 2023

Participant Data Breach Hits Retirement Clearinghouse

Retirement Clearinghouse LLC, an industry leader in driving forward the automatic portability of retirement plans, has alerted more than 10,500 individuals that their data, including individual retirement account numbers, may have been compromised. The organization alerted individuals with written notice, dated May 12, that their information may be at risk for fraud, according to public filings in the states where they are located.

Source: Plansponsor.com, May 2023

EBRI Study: Inflation, Weak Stock Market Slashed Retirement Confidence

The 2023 Retirement Confidence Survey published by the Employee Benefit Research Institute found that retirement confidence fell by a degree not seen since 2009. The decrease is driven primarily by inflation.

Source: Planadviser.com, May 2023

Bills in CT, ME Would Adjust State Coverage for Private Sector Employees

The ink is barely dry on the measures that created state-run retirement plans in Connecticut and Maine that provide coverage for private-sector employees whose employers do not, but already bills are advancing in the legislatures in those states to fine-tune those programs.

Source: Ntsa-net.org, May 2023

Congress Tells Treasury SECURE 2.0 Corrections Are Coming

Congress sent a letter to the Treasury Department informing Secretary Janet Yellen and Internal Revenue Service Commissioner Daniel Werfel that it will introduce legislation to fix several technical errors contained in SECURE 2.0. Signed by four prominent SECURE 2.0 figures, according to the letter, the fixes will better reflect congressional intent.

Source: Napa-net.org, May 2023

DOL Drops Appeal in ASA Case

The DOL has accepted a new setback to its longstanding initiative to subject IRA rollover recommendations to ERISA's fiduciary standard and its prohibited transaction rules. On May 15, 2023, the DOL dropped its appeal in American Securities Ass'n v United States Dep't of Labor and accepted a Florida district court's interpretation of the five-part test for fiduciary status.

Source: Groom.com, May 2023

New 401k Audit Rule for Form 5500 is Good News for Small Businesses

401k plans must be audited by an independent qualified plan auditor if they are considered a 'large plan' for Form 5500 reporting purposes. Recent DOL changes to Form 5500 will allow plans to count fewer participants when determining the need for an audit. The DOL expects the change to eliminate the audit requirement for 20,000 small business 401k plans, good news when you consider the cost, time, and effort of an audit for employers.

Source: Employeefiduciary.com, May 2023

Managed Accounts See Higher Adoption: Vanguard

Managed account usage has come a long way. While target-date funds have worked as a reliable investment option, usage of managed accounts has grown steadily over the past number of years. Recent Vanguard research found that 66% of its participants in defined contribution plans had a professionally managed allocation at year-end 2022, up from 40% at year-end 2013.

Source: 401kspecialistmag.com, May 2023

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