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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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IRS Extends Time to Amend Retirement Plans

The IRS has extended the deadlines by which retirement plans must be amended to comply with provisions in several laws passed in the last few years. No amendment for the covered provisions will be required before December 31, 2025. In addition, the IRS is extending anti-cutback relief for most, but not all, of these amendments.

Source: Segalco.com, October 2022

PSCA Releases 2022 403b Survey

As employers everywhere continue to recover from the long-term impacts of the COVID-19 pandemic and compete for talent, employer contribution rates to 403b plans rose almost 24% year-over-year from 4.6% in 2020 to 5.7% of gross annual pay in 2021, according to an annual 403b Plan Survey from the Plan Sponsor Council of America, part of the American Retirement Association.

Source: Psca.org, October 2022

Evolution of the QDIA. Is Your Plan Due for a Review?

A QDIA review can be looked at as a gateway for your plan committee to clarify plan objectives. This article encourages plan sponsors to lift their heads and consider (or reconsider as the case may be) if your committee is due for a deeper look at your QDIA given marketplace evolution and changing plan needs.

Source: Planpilot.com, October 2022

Retirement Experts Identify Possible Fixes to the Retirement Savings Gap

Professionals invited by the IAA discuss obstacles to retirement savings, and what can be -- and has been --done about them. Opt-out policies are the best way to increase retirement plan enrollment, according to the retirement experts.

Source: Planadviser.com, October 2022

IRS Extends More Retirement Plan Amendment Deadlines

Newly released IRS Notice 2022-45 extends the plan amendment deadline for provisions of the CARES Act that allowed retirement plan sponsors to offer special penalty-free distributions, set a higher plan loan cap, and suspend loan repayments for participants affected by the COVID-19 pandemic. The extension also applies to provisions of the Taxpayer Certainty and Disaster Tax Relief Act of 2020 that allowed penalty-free distributions to participants affected by certain disasters.

Source: Mercer.com, October 2022

Fiduciary Status for Rollovers Not a Given and New Developments in Uses of Plan-Related Data Under ERISA

A September 27, 2022, decision by the Southern District of New York addresses several key theories recently advanced by the plaintiffs' bar in ERISA-based lawsuits against plan service providers. The Court also rejected fiduciary liability claims concerning alleged uses of plan information available to the Provider in its plan service provider role. The decision includes a reasoned analysis of the DOL's "shifting perspective" on defining investment advice fiduciaries under ERISA.

Source: Groom.com, October 2022

Searching for Solutions to Participant Account Theft When the Recordkeeper Disclaims Liability

Most of us have heard that a plan participant in the Colgate-Palmolive 401k plan suffered a cyber theft of her entire account balance, and sued the plan fiduciaries, the recordkeeper, and the bank custodian, all three of which are disclaiming fiduciary liability. There has to be a better answer than saying "I’m sorry" to a plan participant who has lost his entire account balance. This article explores these issues after a summary of the case and the positions of each defendant in their respective motions to dismiss.

Source: Euclidspecialty.com, October 2022

Eighth Circuit Holds Principal Did Not Breach Its Fiduciary Duty to 401k Plan Participants

The U.S. Court of Appeals for the Eighth Circuit recently affirmed a District Court's finding that Principal Life Insurance Company did not breach its fiduciary duties regarding its stable value contract for 401k plans.

Source: Erisalitigationadvisor.com, October 2022

Safe-Harbor Leveraging for Small Business, Top-Heavy Retirement Plans - 2022

Many employers are debating how to most efficiently take advantage of the defined contribution limit increase to $61,000. However, few owners of small businesses are aware of the extent to which certain types of "leveraging" are now permitted in qualified retirement plans. The purpose of this article is to illustrate the provisions that allow owners of small businesses to get the most in return for what they are willing to contribute on behalf of their non-owner employees.

Source: Consultrms.com, October 2022

Financial Wellness: Is It the Right Prescription for Your DC Plan?

Employee benefits offerings are generally subject to inertia, change comes slowly and the effort to deploy new or revised benefits may be daunting to employers and confusing to participants. But the pandemic, the "Great Resignation," and significant legislative interventions have changed that dramatically. This combination of forces has made the topic of "financial wellness" and its deployment more timely and important. This article reviews the scope of financial wellness as an employee benefit, its utilization, its evolving capabilities, and the risks that these expanded services and tools could pose to employers and fiduciaries.

Source: Callan.com, October 2022

Retirement Plan Notice Delivery Requirements

Providing your employees and plan participants timely access to retirement plan documents is required by law. In May 2020, the DOL finally agreed the internet is here to stay and, at long last, has made it easier to fulfill that requirement electronically. With the rise in technology and the use of electronic devices, the DOL has learned to appreciate the benefits that come with recognizing electronic delivery as an acceptable medium for communicating these required documents to employees. Regardless of delivery method, Plan administrators must still take measures to reasonably ensure the confidentiality of personal information is protected, the documents are received and reviewed, and the process remains free of charge to the participant.

Source: Benefit-Resources.com, October 2022

CalSavers Program Expanding for Small Employers

CalSavers currently applies to eligible employers with five or more employees. As amended by S.B. 1126, CalSavers will expand to eligible employers with one or more eligible employees by December 31, 2025. Accordingly, California employers with less than five employees may need to carefully consider the questions outlined here.

Source: Swlaw.com, October 2022

Extended CARES and SECURE Act Plan Amendment Deadline

The IRS has now issued Notice 2022-45, which extends the plan amendment deadline for the optional CARES Act provisions that were not addressed by the previous extension. As a result, all changes under the CARES Act, Miners Act, and SECURE Act have the same plan amendment deadlines of December 31, 2025.

Source: Spencerfane.com, October 2022

Home Depot Victorious in ERISA Suit

A federal judge for the U.S. District Court for the Northern District of Georgia ruled in Home Depot's favor in an ERISA lawsuit last Friday. Plaintiffs Jaime Pizarro and Craig Smith brought the class action lawsuit in April 2018. They alleged that Home Depot offered imprudent investment options for their retirement plans and failed to monitor their performance in violation of ERISA over a class period beginning in April 2012.

Source: Planadviser.com, October 2022

TIAA Prevails in Rollover Recommendation Suit

A case involving allegations of a fiduciary breach related to a rollover recommendation provides some interesting perspectives on several operational issues. The variety of claims notwithstanding, Judge Katherine Polk Failla of the U.S. District Court for the Southern District of New York said it was "predicated in large measure on the Court finding that Defendants were not ERISA fiduciaries during the relevant timeframe."

Source: Napa-net.org, October 2022

Most Americans Financially Unable to Retire at 65

Yet another study has found the majority of retirees and pre-retirees are not financially prepared for retirement and lack sufficient savings to fully retire at age 65. Retirement solutions provider Finance of America Reverse today announced the release of "Disconnected: Perceptions vs. Reality in Retirement Planning," a new study from the Stanford Center on Longevity that examines the challenges and concerns facing retirees and pre-retirees as they plan for retirement.

Source: 401kspecialistmag.com, October 2022

Rash of Recent Lawsuits Focus on BlackRock Indexed Target-Date Options: Even Low-Cost Funds Are Being Attacked

Over the past several weeks, a single law firm, Miller Shah, LLP, has filed nearly a dozen lawsuits against fiduciaries of defined contribution plans that offer the BlackRock LifePath Index target date funds. The cases represent a shift in approach relative to earlier waves of ERISA litigation.

Source: Truckerhuss.com, October 2022*

Limited Plan Audits Are History: What 401k Plan Sponsors Should Know

Two types of 401k plan audits exist, limited and full-scope audits. In a limited scope audit, an independent auditor does not have to audit any plan asset information if a bank, an insurance company, or a regulated trust company holds the 401k plan's assets. Limited scope audits are changing and plan sponsors should understand how these changes impact their 401k plans.

Source: Sequoia.com, October 2022

ERISA Self-Dealing Lawsuit Targets Wells Fargo and Ex-CEO Sloan

Plaintiffs have brought an Employee Retirement Income Security Act lawsuit seeking class certification against Wells Fargo, former CEO Tim Sloan, GreatBanc Trust Company, and the employee benefits review committee for alleged breaches of fiduciary duty to participants saving for retirement in the Wells Fargo 401k and employee stock ownership plans. The lawsuit, filed in the U.S. District Court for the District of Minnesota, alleges that Wells Fargo 401k plan fiduciaries engaged in "corporate self-dealing at the expense of the retirement savings of company employees."

Source: Plansponsor.com, October 2022

Retirement Income Is Front and Center. Should Your Committee Consider the Pursuit?

Retirement income services and solutions have remained an overarching theme in the DC space for many years, yet to date, implementation and traction have remained limited. The need to help plan participants translate retirement savings into income is real and well understood. In equal form, the layers of complexity and variation in approaches have influenced the tepid pace of adoption thus far. This article offers a backdrop of complicating factors, summarizes key retirement service and solution concepts, and provides suggested activities for plan sponsor consideration.

Source: Planpilot.com, October 2022

Do's and Don'ts of Hardship Distributions

Given the current economic climate, a greater number of participants may be requesting hardship distributions from their retirement plans. To avoid jeopardizing the qualified status of the plan, employers and plan administrators must follow both the plan document and legal requirements before making hardship distributions. Some retirement plans, such as 401k and 403b plans, may allow participants to withdraw from their retirement accounts because of a financial hardship, but these withdrawals must follow IRS guidelines.

Source: Irs.gov, September 2022

New Wave of ERISA Class Actions Accuse Fiduciaries of 'Imprudently' Using Low-Fee, High-Rated Funds, Like Blackrock TDFs

Retirement plan sponsors are fake fiduciaries if they offer cheap, highly rated funds from premium brands in 401k plans without factoring in fund performance, according to a fresh wave of ERISA class action cases. Most of the 11 outstanding class actions allege that plan sponsors chose BlackRock LifePath target-date funds as their default 401k option simply because they had the superficial markings of a fiduciary process rather than engaging in an authentic one.

Source: Riabiz.com, September 2022

Plan Sponsors Can Self-Audit Before an IRS Examination

Voluntary compliance tools are an important part of the IRS's retirement plan enforcement strategy. If a plan is out of compliance, the primary IRS goal is for the plan sponsor to make the necessary changes to bring the plan into compliance, although it also has the authority to assess penalties, taxes, interest, and even disqualify a plan. Recently, the IRS announced a new enforcement initiative that involves plan sponsors auditing their plans.

Source: Newportgroup.com, September 2022

Seventh Circuit Helps Clarify New Pleading Standards for 401k Fee Cases

A recent US Court of Appeals for the Seventh Circuit case supplies answers to many questions left open in 401k fee litigation cases after the US Supreme Court's ruling earlier this year in Hughes v. Northwestern University. Specifically, to survive a motion to dismiss in the Seventh Circuit, the recent ruling in Albert v. Oshkosh Corp. reiterated that plaintiffs must allege both high fees and substandard services or performance in comparison to other similar 401k plans.

Source: Mwe.com, September 2022

The Headache of 401k Plan Notices

Being a 401k plan sponsor isn't easy and one of the biggest headaches is dealing with notices and required documents. One area that most plan sponsors fail to fulfill their duties is the dissemination of required notices and documents, especially to former employees who still have a participant account balance in their plan.

Source: Jdsupra.com, September 2022

Wells Fargo Facing Class Action Over 401k Stock Purchases

The San Francisco-based bank thought it was in the clear when it agreed to pay $145 million earlier this month to resolve charges that it overpaid for company stock in its employees' retirement plan. Unfortunately for Wells Fargo, three of those plan participants are launching a class-action suit against it, opening the door for even more cases.

Source: Investmentnews.com, September 2022

Is the Crypto Winter Finally Starting to Thaw?

Several weeks after the DOL released their informal guidance on cryptocurrency, Fidelity announced that it will begin allowing 401k participants to invest up to 20% of their savings into bitcoin by year-end. Fidelity's decision to plunge into these choppy waters reflects the bullish excitement and potential of many investors who are eager to participate in this emerging opportunity. These and other recent developments in the financial services industry may be a sign that the crypto winter is experiencing the first signs of a major thaw.

Source: Icemiller.com, September 2022

Year-End Amendments Extended: CARES and 2020 Relief Act

Following up on the SECURE Act and other recent plan amendment extensions in Notice 2022-33, the IRS has issued Notice 2022-45 (Sept. 27, 2022) to extend the amendment deadlines for the remaining provisions of the CARES Act, as well as for relief provided under the Taxpayer Certainty and Disaster Tax Relief Act of 2020, generally until December 31, 2025.

Source: Groom.com, September 2022

Who Are the Top 403b Providers in 2022?

As a small nonprofit, there are just some things that you struggle to find the time, resources, or staff to do. Looking for a 403b provider is one of those things. As a result, many nonprofits just default to one of the larger providers. Here is a comparison chart of the larger providers.

Source: Forusall.com, September 2022

Clarification on Extension of Amendment Deadlines for CARES Act Provisions

The IRS released IRS Notice 2022-45, which corrected a potential oversight in IRS Notice 2022-33. Notice 2022-33 had extended the deadline to adopt certain retirement and savings plan amendments required by the SECURE Act and the CARES Act from December 31, 2022, to December 31, 2025, but the extension did not apply to certain CARES Act provisions, including penalty-free coronavirus-related distributions, increasing the permissible loan amount, and delaying repayment of loan amounts.

Source: Erisapracticecenter.com, September 2022

So Far, Retirement Crisis is a "No-Show": Andrew Biggs

"For decades, Americans have been told we are terrible retirement savers. We aren't offered a 401k; if offered, we don't participate; if we do, we don't save enough. But these warnings of an imminent retirement crisis have now been around for so long that we can check whether their dire predictions have come true. So far, the retirement crisis has been a no-show."

Source: 401kspecialistmag.com, September 2022

New Bill Wants Alternative Investments in 401ks

On Thursday, Senators Pat Toomey, Tim Scott, and Rep. Peter Meijer introduced the Retirement Savings Modernization Act. The act purports to "bolster Americans' retirement savings by allowing workers in defined contribution plans, like 401ks, to better diversify their portfolios and invest in higher returning asset classes."

Source: 401kspecialistmag.com, September 2022

Retirement Plan Documentation Mitigates Operational Risk

Retirement plans face risk every day from many sources. One of the most overlooked is operational risk, often due to inconsistent employee performance and turnover. Employee turnover among a plan sponsor's benefits staff can lead to a loss of valuable knowledge and experience, as well as operational failures and possible litigation. Unfortunately, plan sponsors often learn this the hard way. The Great Resignation was a wake-up call to many employers. They realized that the knowledge employees took with them will take years to replace.

Source: Segalco.com, September 2022

What Plan Sponsors Should Expect From a Retirement Plan Adviser

Many plan sponsors are evaluating their relationships with plan advisers as they look for more guidance on managing their benefits, according to retirement industry veterans. As plan sponsors look to their advisers for help, many are beginning to see the difference, and it can become an issue when the adviser fails to deliver for their client.

Source: Planadviser.com, September 2022

Plan Design Solutions to Satisfy ADP/ACP Tests

Your 401k plan clients' mid-year test results will help you gauge which plans might be heading toward a failing grade on their year-end nondiscrimination testing. If a plan fails ADP, ACP, or top-heavy testing at year-end, the plan sponsor must take corrective actions such as returning deferrals to highly compensated employees or making additional employer contributions for non-HCEs. If you have plans that fail -- or barely squeak by -- each year, introduce them to the safe harbor plan design options that could guarantee them a pass on their next test.

Source: Newportgroup.com, September 2022

IRS Extends Plan Amendment Deadlines Under CARES, Disaster Relief Acts

The IRS on Sept. 26 in Notice 2022-45 announced that it is extending the deadline for amending eligible retirement plans concerning coronavirus-related distributions and the use of retirement funds for disaster-related assistance.The IRS on Sept. 26 in Notice 2022-45 announced that it is extending the deadline for amending eligible retirement plans concerning coronavirus-related distributions and the use of retirement funds for disaster-related assistance.

Source: Napa-net.org, September 2022

Costco ERISA Suit Ends in $5.1 Million Deal

A Wisconsin federal judge approved a $5.1 million settlement of a class action lawsuit against Costco concerning its 401k plan. Costco Wholesale Corp.'s retirement plan participants alleged that the company violated ERISA. An independent fiduciary, Fiduciary Counselors, approved the settlement, which represents an amount that is about 16% of the allegedly excessive fees that Costco charged plan participants.

Source: Hallbenefitslaw.com, September 2022

Investment Advisers: The Independent Duties of Care and Loyalty

Recent SEC guidance has clarified that the investment adviser's duties of care and loyalty are separate, independent duties. A reasonable interpretation of the SEC and Staff guidance is that the satisfaction of one will not satisfy the other, both must be individually satisfied. As a result, the SEC appears to be saying that, even if a conflict is disclosed, that does not, in and of itself, satisfy the duty of care. For example, if an adviser discloses that the adviser will receive compensation related to an investment decision or recommendation, e.g., revenue sharing, but the revenue sharing share class of a mutual fund is more expensive for the investor, the duty of care may be violated even though the duty of loyalty was satisfied.

Source: Fredreish.com, September 2022

Lender Beware: IRS Issue Snapshot on Third Party Loans

The IRS recently published an Issue Snapshot meant to guide examiners who encounter third-party loans among the investments of plans they are auditing. Third-party loans occur when a qualified plan trustee elects to loan plan funds to someone other than a plan participant, at a designated rate of return, in exchange for a promissory note, deed of trust, or other forms of security. This article summarizes some of the key points in the IRS Snapshot and provides some additional insights.

Source: Eforerisa.com, September 2022

How Employers Can Transition to a New 401k Service Provider

Moving your 401k plan between providers can seem daunting. This article breaks down the services you might be switching and explains how you can prepare for the transition of each one.

Source: Benefitnews.com, September 2022

Business Owners Owe $2M+ in DOL Fiduciary Breach Case

Investing your company's retirement plan funds heavily in another company you have significant ties to is a no-no for a plan fiduciary. The fiduciaries of an international design firm in Moorestown, N.J. must pay more than $2 million to restore mismanaged assets to the company's retirement plan and in penalties after the DOL agreed to a settlement last Friday following an investigation and litigation.

Source: 401kspecialistmag.com, September 2022

Debate: Is Defaulting 401k Participants Into Annuities in Their Best Interest?

One provision in the Setting Every Community Up for Retirement Enhancement Act provides extra assurance and protection to retirement plan sponsors that follow certain rules to select annuities as in-plan offerings. Two professors with opposing political viewpoints share their opinions about whether retirement plans should default 401k participants into annuity options.

Source: Thinkadvisor.com, September 2022*

Wake Forest University Retirement Plan Lawsuit Will Proceed

A federal judge has allowed an ERISA lawsuit to proceed. Defendants previously alleged that the 403b university plan was mismanaged by plan fiduciaries because it was filled with excessive-fee investments, that the plan fiduciaries misused revenue sharing to pay for administrative expenses, and that they failed to conduct periodic bids to the market to ensure that the recordkeeping and administrative costs remained competitive.

Source: Plansponsor.com, September 2022

Down Market Doesn't Stop DC Retirement Savers: ICI Report

Despite the volatile stock market, retirement saving continued to be a strong focus for defined contribution plan participants through the first half of 2022, according to new research from the Investment Company Institute.

Source: 401kspecialistmag.com, September 2022

Amending Your Retirement Plans This Year for SECURE Act and CARES Act Changes

While many commentators and employee benefits publications have cheered the three-year extension, the article authors are of the view that plan sponsors will be best served by amending their plans this year to incorporate provisions of the SECURE Act, the Miners Act, and the CARES Act that they have been applying in operation.

Source: Verrill-law.com, September 2022

Seventh Circuit Affirms Dismissal of Excessive Fee Claims

The Seventh Circuit has affirmed a trial court's dismissal of a participant's ERISA fiduciary claims against a 401k plan. The trial court dismissed the suit, observing that the participant had failed to allege that the fees were excessive in relation to the services provided or that a lower-cost alternative would have provided comparable services.

Source: Thomsonreuters.com, September 2022

DC Plans Slow to Adopt ESG Options

Many plan sponsors remain hesitant to implement environmental, social, and governance investing until the Department of Labor rules on the subject. Most of the ESG implementation so far has occurred in plans at organizations whose purpose naturally aligns with ESG factors.

Source: Plansponsor.com, September 2022

Three Defendants Move to Dismiss Cybersecurity ERISA Suit

The Colgate-Palmolive employee relations committee, plan recordkeeper Alight Solutions, and custodian Bank of New York Mellon Corporation have all filed to dismiss an ERISA lawsuit brought by Paula Disberry, an employee of Colgate-Palmolive from 1993 to 2004. The defendants are accused of ignoring several red flags, resulting in over $750,000 being stolen from a retirement account.

Source: Planadviser.com, September 2022

Retirement Plan Digital Experience Comes up Short for Many Participants

Concerned about their investments and deteriorating financial health, many retirement investors are turning to their plan's websites and apps for help, but they are not finding what they need. According to J.D. Power's 2022 U.S. Retirement Plan Digital Experience Study, overall satisfaction is down 12 points (on a 1,000-point scale) this year, as 53% of retirement plan investors are now classified as financially unhealthy and 63% say they have challenges managing their accounts digitally.

Source: Ntsa-net.org, September 2022

Cruise Line Docked with Excessive Fee Suit

The plan size is somewhat smaller, and the plaintiff's law firm is relatively unknown in these matters, but the claims are familiar. The suit claimed that based on reasonable inferences from the facts set forth in this complaint, during the Class Period Defendants failed to have a proper system of review in place to ensure that participants in the plan were being charged appropriate and reasonable fees for each of the plan's investment options.

Source: Napa-net.org, September 2022

Five Bad Fiduciary Assumptions, Podcast

You know that old saying that when you assume... well, that applies double (and then some) to ERISA plan fiduciaries. In this podcast, Nevin Adams and Fred Reish discuss five bad assumptions with reminders about how to avoid winding up in trouble.

Source: Napa-net.org, September 2022

What Qualifies as an "Immediate and Heavy Financial Need" Under Hardship Withdrawal Rules?

Do specialists have a list of the types of expenses for which distributions are deemed to be made on account of an immediate and heavy financial need from a 401k/ 403b plan under the hardship withdrawal rules? Experts from Groom Law Group and CAPTRUST answer the question.

Source: Plansponsor.com, September 2022

Three 401k Excessive Fee Suits Settle

The pace of excessive fee settlements seems to be accelerating, but the size of those same settlements seems to be declining. Last week three of them -- in different courts, filed at different times, but with similar allegations -- announced that the parties had come to terms.

Source: Napa-net.org, September 2022

Goldman Sachs Sacks 401k Excessive Fee Suit

Another excessive fee suit, this one involving proprietary funds, has been decided in favor of the plan fiduciaries. The suit alleged that the Goldman Sachs defendants "...retained these proprietary funds despite persistent underperformance and steep asset declines, adversely affecting participant balances while allowing Goldman Sachs to continue to draw fees and stem the consequences of losing one of the largest investors in the funds -- the Plan."

Source: Napa-net.org, September 2022

DOL Proposal May Disrupt Plan Sponsors' Investment Arrangement

The DOL recently proposed significant changes to a key ERISA prohibited transaction exemption widely used by asset managers for nearly four decades. The exemption allows qualified professional asset managers to engage in many routine transactions that ERISA would otherwise prohibit. A separate provision clarifying that the exemption applies only to investment decisions that are the QPAM's sole responsibility might limit the investment opportunities available to plans.

Source: Mercer.com, September 2022

Retirement Savers Continue Saving Despite Down Market in First Half of 2022

Retirement saving continued to be a strong focus for defined contribution plan participants through the first half of 2022, ICI research demonstrates. ICI's study tracks contributions, withdrawals, and other activity in 401k and other DC retirement plans, based on DC plan recordkeeper data covering more than 40 million employer-based DC retirement plan participant accounts at the end of June 2022.

Source: Ici.org, September 2022

ERISA Litigation: Seventh Circuit Confirms DOL's Broad Subpoena Power

In Walsh v. Alight Solutions, LLC, the Seventh Circuit affirmed a district court order requiring Alight Solutions to produce documents in response to a DOL subpoena, confirming that the DOL has broad authority to issue subpoenas to investigate possible ERISA violations, even against non-fiduciaries.

Source: Faegredrinker.com, September 2022

Retirement Plan Fiduciary Mistake: Focusing Solely on Past Investment Performance

Fiduciaries are not responsible for delivering the absolute best investment performance. They are responsible for following a prudent decision-making process that is reasonable and well-documented, and for making decisions with the best interest of participants in mind. Focusing primarily or solely on past investment returns could result in several fiduciary mistakes noted here.

Source: Conradsiegel.com, September 2022

Target-Date Funds and the Ever-Evolving Glidepath

In 2021 and the first half of 2022, multiple TDF providers announced changes to their strategic target-date fund glidepaths. The timing of these changes was unique, as capital markets adjusted to a post-pandemic world and a vastly different global outlook. To better understand the nature and extent of these changes, Callan leveraged the data that they gather for their proprietary TDF analytics, which allows them to track broad TDF asset allocation trends.

Source: Callan.com, September 2022

Is It a Breach of Fiduciary Duty to Include Target-Date Funds in 401k Plans?

One of the themes of many excessive fee suits is that the inclusion of particular products in plans is, in and of itself, evidence of a fiduciary breach, when the real question in such a suit, even if a product was overpriced, should be whether it was imprudent for the fiduciary to have included that product. As the cliche goes, you get what you pay for, and a plan fiduciary's job is to assemble a prudent collection of investment options, not just assemble the cheapest one possible.

Source: Bostonerisalaw.com, September 2022

Cerulli Sees Increased Recordkeeper, Advisor "Coopetition"

Will "coopetition" between recordkeepers and plan advisors increase in the coming year? Boston-based research and consulting firm Cerulli Associates says yes, and the two parties will work together to serve the plan but simultaneously compete for participant rollovers.

Source: 401kspecialistmag.com, September 2022

US Workers Fear Exhausting Savings in Retirement

U.S. workers are more afraid of running out of money in retirement and more intimidated by financial matters -- such as long-term financial planning -- than workers in Europe are, yet Americans rate their financial well-being higher than do their counterparts across the pond, according to Alight research.

Source: Plansponsor.com, September 2022*

Janus Henderson Sued for Allegedly Favoring Its Own Funds in Its Retirement Plan

Asset manager Janus Henderson is being sued by one of its retirement plan participants, who alleges that the company breached its fiduciary duty by loading its 401k plan with poorly performing proprietary funds burdened by high fees.

Source: Planadviser.com, September 2022

DOL Seeks Dismissal Of Cryptocurrency Guidance Lawsuit

A "meritless" lawsuit seeking to vacate the Department of Labor's cryptocurrency guidance for 401k plan fiduciaries should be dismissed, the agency said in a court filing. ForUsAll Inc., a 401k plan administrator that offers cryptocurrency to participants through a self-directed brokerage window, filed a lawsuit in June in U.S. District Court in Washington, alleging that the Labor Department's guidance is "arbitrary and capricious" and violated the Administrative Procedure Act.

Source: Pionline.com, September 2022

Final 2023 IRS Limits Forecast

This is an update to the Milliman 2023 IRS Limits Forecast using the U.S. Bureau of Labor Statistics report published September 13, 2022. It is their fifth and final edition for the year.

Source: Milliman.com, September 2022

Five Critical Components of a Cybersecurity Compliance Review

Cybersecurity should be top of mind for retirement plan fiduciaries, not only because the risks of a data breach or fraud are on the rise but also because the DOL has begun auditing retirement plans with a focus on cybersecurity. What's the best way for plan fiduciaries to mitigate risks while also demonstrating compliance with recent DOL guidance? Conduct a cybersecurity compliance review. This article outlines best practices for conducting such a review.

Source: Ifebp.org, September 2022

Lassoing Fee Changes: What a TPA Needs to Know About Raising Fees

Ted the TPA is watching his costs go up and up with inflation. After examining his financials and thinking it through, he finds he has to put aside his usual optimism and raise his fees. It's the first time he's done this in years, and he is not sure what to do and how it needs to be done. He calls his attorney, Rebecca, who scoffs at him for waiting so long to raise fees. Then, she gets down to business and lets him know what he needs to do.

Source: Ferenczylaw.com, September 2022

Maryland's State-Run IRA Is Different

Maryland just announced its retirement savings initiative, MarylandSaves. There are a few similarities, but some favorable differences and improvements when compared to predecessors like OregonSaves, CalSavers, and Illinois Secure Choice.

Source: 401kspecialistmag.com, September 2022

Report Features 401k Plan Sponsor and Participant Behavior in First Half 2022

T. Rowe Price has published a report detailing plan sponsors' and participants' reactions to increased inflation and market volatility in the first two quarters of 2022. The report examines retirement behavioral trends and correlations between the challenging economy and job tenure with rates of savings for retirement.

Source: Prnewswire.com, September 2022

DOL Pushes Back on Cryptocurrency Suit

Having been sued for issuing its Compliance Assistance Release on cryptocurrency by cryptocurrency recordkeeping platform provider ForUsAll, the Labor Department is pushing back. The DOL's motion to dismiss the suit -- filed in the U.S. District Court for the District of Columbia -- pushed back on the claims made by ForUsAll on several fronts.

Source: Napa-net.org, September 2022

In ERISA Excessive Fee Cases, the Pendulum May Be Swinging Back in Favor of Plan Sponsors

The Oshkosh decision appears to create a favorable precedent for plan sponsors in the 7th Circuit since it narrowly applies the holding in Hughes. From the 6th and 7th Circuit, it appears that allegations have to compare the fees being charged with the quality and/or type of services being provided. Plan sponsors should review their investment lineup, compare investments under this standard, and maintain minutes of the deliberation process. Having a process-driven policy should mitigate fiduciary risk. Plan sponsors should also review their service agreements with their recordkeepers to fully understand how recordkeepers are compensated.

Source: Foxrothschild.com, September 2022

What Broker-Dealers Need to Know About Correcting PTE 2020-02 Mistakes

The DOL expanded its interpretation of fiduciary advice in the Preamble to PTE 2020-02 and as a result, many more broker-dealers and their registered representatives are fiduciaries for their recommendations to retirement investors, including rollover recommendations. Broker-dealers should implement good processes and documentation to satisfy the PTE conditions and closely supervise their investment professionals to ensure that the processes are followed.

Source: Brokerdealerlawblog.com, September 2022

How Should Courts Analyze Arbitration Clauses in ERISA Plans?

The validity of arbitration clauses should be considered by comparing the legitimate rationales for their inclusion in plans against the harm to the private attorney general model they engender, rather than by simply considering whether such clauses are legal when analyzed under traditional doctrines developed in the private contracting model.

Source: Bostonerisalaw.com, September 2022

Massachusetts Secure Choice Moves Closer to Implementation

Legislation that would create Massachusetts Secure Choice, a state-run retirement program that would provide coverage for private-sector employees whose employers do not offer a retirement plan, is now before the Rules Committees of both chambers of the Bay State's legislature. The legislation was introduced in the state Senate and House of Representatives early in 2021.

Source: Ntsa-net.org, September 2022

Proprietary Funds Draw Another 401k Excessive Fee Suit

A new suit claims that the decision to retain proprietary funds in the 401k was "polluted by self-interest," driven by a "blind preference" and that "defendants' favoritism has led to the payment of excessive investment management fees." This time the plaintiff is bringing suit against the fiduciaries (and those that appointed them) of the Janus 401k and Employee Stock Ownership Plan.

Source: Napa-net.org, September 2022

IRS Makes Changes to Determination Letter Application Program

IRS Revenue Procedure 2022-4 made some notable changes to the determination letter application filing process. This article provides background on changes made under the Revenue Procedure to the determination letter filing process, including utilizing pay.gov, some "nuts and bolts" advice regarding navigating the website, filing an IRS Form 2848 electronically, and related considerations.

Source: Groom.com, September 2022

Guiding Through Uncertainty: Ways to Connect With Participants

When uncertainty hits, it's natural that 401k participants will have questions, especially those who don't have a lot of investment experience. Plan sponsors can do a lot to allay their concerns by proactively reaching out and addressing the benefits of staying invested, the impacts of taking early distributions, and even the strength of the plan design can help keep jitters in perspective.

Source: Blackrock.com, September 2022

DOL Recovers $131.8M for Wells Fargo 401k Participants

The DOL announced a settlement with Wells Fargo and GreatBanc Trust Company that "recovers more than $131.8 million for the retirement plan's participants after a department investigation." Wells Fargo allegedly used the dividends paid on the preferred shares to defray its obligation to make contributions to the 401k plan.

Source: 401kspecialistmag.com, September 2022

Are Your 401k Clients at Risk? Five Client Retention Strategies

Nearly 50% of plan sponsors are actively looking for a new advisor. It's been said that it costs seven times more to earn a new client than it does to retain a current one. As you implement your business plan, consider these five client retention strategies. These ideas could have a big impact on how your clients perceive the quality of your service, could increase loyalty, and even produce inbound referrals.

Source: 401k-marketing.com, September 2022

DOL (Somewhat) Unshackles Auditors From Stringent Independence Requirements

On September 6, 2022, the DOL published an Interpretive Bulletin entitled "Independence of Employee Benefit Plan Accountants" superseding previous guidance governing when the Department considers a qualified public accountant to be "independent." The DOL's preamble statements in Interpretive Bulletin explain that the new guidance "remove[s] certain outdated and unnecessarily restrictive provisions."

Source: Groom.com, September 2022*

Colorado Secure Savings Program Pilot About to Launch

The pilot of the Colorado SecureSavings, the Centennial State's state-sponsored retirement savings program for those whose employers do not offer a retirement plan, will launch in October. The pilot will not be broadly open; the Colorado Secure Savings Board is set to work with a select group of Colorado businesses to take part in an exclusive pilot of the program.

Source: Asppa.org, September 2022

Senate Finance Leaders Formally Introduce EARN Act

We now have legislative language for the Enhancing American Retirement Now (EARN) Act and a quick review finds a change from the concept draft regarding catch-up contributions. With legislative language now in hand, it appears the Finance Committee leaders have placed an income floor to the revenue-raising provision concerning catch-up contributions being treated as Roth contributions.

Source: Asppa.org, September 2022

Third Circuit Backs J&J in Stock-Drop Appeal

The Third U.S. Circuit Court of Appeals has issued a new ruling in an ERISA stock-drop lawsuit targeting Johnson & Johnson, affirming the dismissal of the lawsuit as ordered by a district court in May 2020. The new ruling emphasizes that a stock-drop plaintiff must do more than allege a general economic theory of why earlier disclosure of a financial issue would have been preferable.

Source: Planadviser.com, September 2022

Judge Rejects Chamber's Commentary in ERISA Suit

The U.S. District Court for the Eastern District of Michigan has issued a new ruling in an ERISA lawsuit targeting the automotive components and supply business GKN North American Services Inc. The court rejects the defense's motion to dismiss the case but denies the U.S. Chamber of Commerce's bid to submit an amicus brief in the proceedings.

Source: Planadviser.com, September 2022

Cryptocurrency and Retirement Plans

As advisors, TPAs, recordkeepers, and other service providers are dipping their toes into including cryptocurrency solutions for their clients, the regulators and legislators are wading in as well. It has been an active first half of 2022 in the world of crypto offerings with a general interest in regulating cryptocurrencies and digital assets coming from President Biden and a specific interest in cryptocurrencies in retirement plans from Congress and the DOL.

Source: Napa-net.org, September 2022

Big Change Is Coming for 401ks

While plan participants have been left largely to fend for themselves when it comes to investing for their retirements, market forces are now coalescing to revive the monthly retirement check in form of guaranteed lifetime income products. The 401k marketplace is in the midst of a tectonic shift that will transform retirement planning. Plan fiduciaries will need a new host of skills for evaluating and selecting this new potential onslaught of products.

Source: Investmentnews.com, September 2022

Top Issues (and Their Solutions) Plan Sponsors Have With Recordkeepers

Nobody's perfect. It's unfair to expect recordkeepers to be. Everyone makes mistakes. The problem is what happens when a mistake occurs. When exit barriers are high, vendors tend to get cocky. And cocky vendors tend to be sloppy when it comes to assistance.

Source: Fiduciarynews.com, September 2022

Making Sense of ERISA Pleading Law After the Seventh Circuit's Oshkosh Decision

The quest for a predictable and fair pleading standard to stop ERISA class action litigation abuse continues. The Supreme Court in Hughes v. Northwestern gave us a limited opinion that did not solve the problem, and even that opinion initially caused more confusion in the district courts. So the battle continues in the appellate courts.

Source: Euclidspecialty.com, September 2022

Seventh Circuit Provides Hope for Fiduciaries Defending Plan Fee Litigation

The Seventh Circuit recently provided a ray of sunshine in what has largely been a gloomy stretch for plan sponsors and fiduciaries defending ERISA breach of fiduciary duty claims based on allegedly excessive investment and administrative fees and investment underperformance. In this particular case, Oshkosh emerged victorious with the Seventh Circuit affirming the dismissal of claims that it mismanaged its 401k plan by paying excessive recordkeeping fees, failed to ensure investment options were prudent, and unreasonably maintained high-cost investment advisors.

Source: Erisapracticecenter.com, September 2022

Seventh Circuit Ruling Sheds Light Into the post-Hughes 401k Litigation Era

Since the Supreme Court's January ruling in Hughes v. Northwestern University, circuit courts throughout the country have issued varying rulings regarding 401k fee litigation cases. These include the Ninth Circuit in Trader Joe's Co. and Salesforce.com, Inc., and the Sixth Circuit in CommonSpirit Health, Inc. and TriHealth, Inc. Most recently, the Seventh Circuit has weighed in, affirming the dismissal of a 401k fee litigation in Albert v. Oshkosh Corporation.

Source: Erisalitigationadvisor.com, September 2022

Practical Tips for Plan Sponsors and ESG Investments

Regulatory and legislative developments continue to accelerate around investments incorporating ESG factors into retirement plans. Plan sponsors and fiduciaries should take note of the fast-changing landscape when selecting and monitoring investment options. Groom Law Group's Jacob Eigner outlines what asset managers need to know about incorporating ESG factors in their investment processes. This includes compliance steps and how firms can build processes to avoid lawsuits from stockholders and the government.

Source: Bloomberglaw.com, September 2022

Despite Recession Fears, Most 401k Investors Haven't Changed Their Portfolios

Only 5% of 401k and 403b investors shifted their asset allocations during the second quarter of 2022, according to a Fidelity Investments report. It's not surprising since many 401k investors use target date funds, a "set it and forget it" option that gradually shifts to more conservative assets as they approach retirement. However, there may be opportunities for adjustments in other accounts, experts say.

Source: Cnbc.com, September 2022

Two Losses for Pension Plan Participants Challenging Investment Fees

In two recent cases, 401k plan fiduciaries defeated claims by participants that they breached their duties under ERISA with respect to investment fees.

Source: Yourerisawatch.com, September 2022

Fiduciary Lessons From Recent Litigation

The Supreme Court's Hughes v. Northwestern University holding has already revealed its expected impacts: (1) retirement plan fee lawsuits are more likely to survive a motion to dismiss; and, as a result (2) retirement litigation continues to accelerate. A recent collection of litigation activity provides another opportunity for plan fiduciaries to identify helpful protective steps and best practices.

Source: Qualifiedplanadvisors.com, September 2022

DOL Extends Comment Period, Sets Hearing on QPAM Exemption Amendment

The DOL announced that it will hold an online public hearing on the proposed amendment to its Class Prohibited Transaction Exemption 84-14, commonly known as the qualified professional asset manager exemption. The DOL is also extending the public comment period for the proposed amendment for an additional 15 days, through October 11. This period will be supplemented by a subsequent comment period beginning after the hearing in mid-November.

Source: Planadviser.com, September 2022

Principal Prevails (Yet) Again in Fiduciary Suit

A case that hinged on the determination of fiduciary status based on control of plan assets has been decided -- again -- in favor of the defendants.

Source: Napa-net.org, September 2022

Behaviors You Should Avoid With 401k Plan Providers

Like Rodney Dangerfield, retirement plan providers don't think they get respect. They probably think that way with some of the 401k plan sponsors who use and abuse them. This article is all about the behaviors you should avoid as a 401k plan sponsor in dealing with plan providers, whether they work for you or not.

Source: Jdsupra.com, September 2022

DOL Updates Guidance on Audit Independence Rules

The DOL has issued new guidance for retirement plan fiduciaries, Interpretive Bulletin 2022-01, that addresses the rules about audit independence that apply to retirement plans governed by ERISA.

Source: Planadviser.com, September 2022*

Low-Cost Index Funds in the Crosshairs of New 401k Lawsuits

A series of new lawsuits demonstrate that plan fiduciaries' selection of any fund may be at risk for fiduciary breach claims, having a robust system of plan governance in place can make a company's 401k plan a less attractive target for plaintiffs' lawyers and provides necessary defenses should litigation arise. It is also very likely that compliance with ERISA Section 404(c) will be an important defense in these cases.

Source: Hklaw.com, September 2022

Top 401k Priorities on the DOL's Regulatory Agenda

On June 21, 2022, the DOL published its Spring 2022 Regulatory Agenda which lists all the regulations the DOL expects to have under active consideration, including 401k reform items. You should check them out to understand the DOL's 401k-related priorities for the next 12 months. Here are the three 401k-related priorities that the author is most excited about.

Source: Employeefiduciary.com, September 2022

BlackRock 401k Suits Pressure DOL to Act

At least 11 companies, including Booz Allen Hamilton Inc., Citigroup Inc., and Microsoft Corp., have been named in a spate of almost identical lawsuits going after a target-date index suite operated by BlackRock Inc. This surge in new lawsuits challenging workplace retirement plans over the set-it-and-forget-it funds they default investors into is renewing calls from industry critics who say the US Labor Department should be doing more to protect 401k savers.

Source: Bloomberglaw.com, September 2022

DOL Releases New Bulletin on Independence for Plan Accountants

How independent do accountants have to be when auditing plan documents? The DOL just got more specific. Interpretive Bulletin 2022-01 revises and restates the 1975 Interpretive Bulletin to remove certain outdated and unnecessarily restrictive provisions and reorganize other provisions for clarity.

Source: 401kspecialistmag.com, September 2022

Plaintiffs Say 401k Plan Omitted Target-Date Funds Among Problems

The plaintiffs claim that the defendants "flagrantly" breached fiduciary duties owed to the plan and plan participants by mismanaging the plan's recordkeeping fees and investment options. In addition, the plaintiffs claim in the complaint that the TTEC 401k plan was administered during the class period without "crucial" protocol, namely, an investment policy statement, and did not include target-date funds in the plan's investment menu until "late" 2019 when five Vanguard options were added.

Source: Planadviser.com, September 2022

District Court Rejects Cross-Selling Claims in Mixed ERISA Ruling

Much of the ruling sides with plaintiffs and permits the case to move to discovery, but the defendants successfully defeat claims related to cross-selling and data-sharing among providers.

Source: Planadviser.com, September 2022

M&A Could Be the Next Challenge for Plan Sponsors: Are You Ready?

Auto parts maker GKN North America Services Inc. managed to fend off some, but not all, claims in an excessive fee suit involving its use of Prudential's GoalMaker product.

Source: Orba.com, September 2022

Split Decision for 401k Excessive Fee Suit

Auto parts maker GKN North America Services Inc. managed to fend off some, but not all, claims in an excessive fee suit involving its use of Prudential's GoalMaker product.

Source: Napa-net.org, September 2022

Feds Poised to Implement Four Policy Changes Affecting ERISA Plans Before End of 2022

The Biden administration plans to introduce various rules before the end of 2022 that will impact ERISA-regulated benefits plans. Meanwhile, Congress is working to smooth out differences between the Senate and House on a broad retirement policy omnibus bill. Here is a review.

Source: Hallbenefitslaw.com, September 2022

Factors Contributing to Lower Retirement Confidence Among Women Who Are Not Married

Americans have near-record-high confidence in having enough money to live comfortably throughout retirement. However, unmarried women workers and retirees have lower retirement confidence than their married counterparts and are more likely to have lower incomes and assets. This 37-page report examines the attitudes, considerations, and behaviors surrounding the retirement of women workers and retirees of different marital statuses to provide greater insight into what can help improve women's retirement outcomes.

Source: Ebri.org, September 2022

Achieving Fiduciary Excellence

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, the gold standard for signifying adherence to fiduciary best practices. This report provides an inside look at how those advisory firms operate their practices.

Source: Broadridge.com, September 2022

401k Balances Reflect Volatile Period for Markets

According to Charles Schwab's SDBA Indicators Report, a benchmark on retirement plan participant investment activity within self-directed brokerage accounts, the average account balance across all participant accounts finished at $283,485 for the second quarter ending June 30, a 19% decrease year-over-year and a 15% decrease from the first quarter of 2022.

Source: Planadviser.com, August 2022

CalSavers to Cover Nearly all Employees in California

CalSavers, the state-run program that provides retirement plan coverage to private-sector employees whose employers do not, will cover nearly all such employees in the Golden State. Gov. Gavin Newsom on Aug. 26 signed legislation further expanding the program.

Source: Ntsa-net.org, August 2022

Guidance on Employee Benefit Plan Auditor Independence Clears Review

While there are no details yet, the federal government's regulatory dashboard suggests that the DOL may soon release guidance addressing the independence of employee benefit plan accountants. The Office of Information and Regulatory Affairs has concluded a review of an interpretive bulletin concerning the independence of employee benefit plan accountants and presumably their audit functions.

Source: Napa-net.org, August 2022

How Advisors Can Help Clients Invest Sustainably Outside of 401ks

This article is part of a series providing a framework for incorporating sustainable investing into your advisory practice. A previous article explored the limitations and opportunities of investing sustainably within employer-sponsored retirement plans such as 401ks. Advisors supporting clients in investing sustainably outside of these accounts may find more choice but also more complexity.

Source: Morningstar.com, August 2022

How Retirement Plan Advisors Can Lose Clients in a Flash

Building a book of retirement plan clients is tough work. Clients don't fall from trees and it can take months or years to land that potential client you have visited and called countless times. And it is easier to lose a client than it is to gain one. If you follow some of the steps outlined here, you can avoid losing your retirement plan clients.

Source: Jdsupra.com, August 2022

Comparing Seven Defined Contribution Plan Designs - 2022

In designing a retirement plan, you look at the employer's objectives, the need for flexibility, the ages of the key personnel, the salaries of everyone involved, total budgeted dollars, the advantages of adding 401k features, etc. This chart shows the results of an analysis prepared for one company that wanted a defined contribution plan. There were 10 people eligible for the retirement plan, including one owner.

Source: Consultrms.com, August 2022

Arbitration of ERISA Claims Under the Microscope: Where are the Courts and Congress Headed?

We still have no final word from the courts on the enforceability of ERISA mandatory arbitration provisions, but plan sponsors can increase the chances that their mandatory arbitration policies will be upheld by reviewing the reasoning in recent cases. That's assuming that Congress doesn't act.

Source: Cohenbuckmann.com, August 2022

How Gloomy Is the Retirement Outlook for Millennials?

Social, economic, demographic, and public policy shifts have made Millennial retirement security a pressing concern. Many recent trends threaten financial security for future generations of retirees. Male labor force participation pre-age 55 has slumped, men's median earnings have stagnated, marriage and homeownership rates are falling, debt levels remain high, and out-of-pocket spending on medical and long-term services and supports are rising. Other trends are more encouraging, such as women's higher earnings, the rise in labor force participation at older ages, and improvements in educational attainment.

Source: Upenn.edu, August 2022*

Dated Thinking May Be Holding Back Annuities

Annuities deserve a fresh look from plan sponsors, according to retirement industry veterans with years of experience in retirement income strategies. Despite product innovations and improvements, the perception of annuities among many plan sponsors is stuck in the past, says Rona Guymon, senior vice president of annuity distribution, at Nationwide Financial. The persistence of myths and misunderstandings about annuities are likely holding back greater adoption, she adds.

Source: Plansponsor.com, August 2022

Participant Data Claims Dismissed in Excessive Fee Suit

ADP got something of a split decision in an excessive fee case with a federal judge allowing claims regarding high record-keeping fees and expensive investments to proceed but culling claims about the use of participant data. The suit was filed in mid-May 2020 in the U.S. District Court of the District of New Jersey against the fiduciaries of the $4.4 billion ADP TotalSource Retirement Savings Plan (including third-party investment consultant NFP Retirement) on behalf of participants in the MEP.

Source: Napa-net.org, August 2022

DOL Cybersecurity Investigations: The Trap Door to Endless Document Requests?

Parties involved in a DOL investigation often ask a simple question: how much information am I obligated to provide the DOL in response to an administrative subpoena? A recent decision, in the United States Court of Appeals for the Seventh Circuit, Walsh v. Alight Solutions, LLC, provides some guidance.

Source: Groom.com, August 2022

Maintaining Records: Who Does What, and When?

Retaining and maintaining records is not a minor matter, ERISA and DOL regulations make that clear. And yet, says a plan administrator, policies concerning record retention and maintenance are not as common as one may expect.

Source: Asppa.org, August 2022

OregonSaves Has "Meaningfully Increased Employee Savings"

A new study finds that OregonSaves -- launched in 2017 as the first state-sponsored retirement plan -- has "meaningfully increased employee savings," and employees opting out of the program "are often doing so for rational reasons." The study, funded by the U.S. Social Security Administration and conducted by the Michigan Retirement and Disability Research Center, analyzes participation choices, account balances, and inflow/outflow data between August 2018 and April 2020 for OregonSaves.

Source: 401kspecialistmag.com, August 2022

Second Circuit: Participant's 401k Plan Accounts Were Subject to Garnishment

In a dispute involving garnishment of funds in 401k plan accounts, the Court of Appeals for the Second Circuit held that the participant's accounts were subject to garnishment to enforce a restitution order resulting from the participant's criminal convictions.

Source: Westlaw.com, August 2022

Second Circuit Holds Government Can Garnish ERISA-Protected 401k Accounts

The Second Circuit first determined that the MVRA permits garnishment of funds otherwise protected by ERISA's anti-alienation provision. The Government may enforce restitution orders from criminal convictions using the practices and procedures for enforcement of a civil judgment under federal or state law as set forth in the Federal Debt Collection Procedures Act. While ERISA broadly protects retirement benefits from dissipation through payment to third parties -- its anti-alienation provision -- the MVRA permits courts to consider ERISA-protected assets when imposing criminal fines.

Source: Robertsdisability.com, August 2022

CUNA's 401k Latest Targeted in BlackRock TDF Suit

The law firm of Miller Shah LLP has targeted another plan they claim "appear[s] to have chased the low fees charged by the BlackRock TDFs without any consideration of their ability to generate return." This time it's the fiduciaries of the $865 million CUNA Mutual 401k Plan for Non-Represented Employees.

Source: Napa-net.org, August 2022

What You Need to Know About Retirement Plan Committees

Being a retirement plan sponsor can be a bit overwhelming, but a retirement plan committee can be an effective method of managing a retirement plan. Like any tool, a plan committee must be used correctly. This article is about how a plan sponsor can delegate to their retirement plan committee and some of the things they should avoid.

Source: Jdsupra.com, August 2022

Appellate Court Backs DOL in Cybersecurity Subpoena

A federal appellate court says that the Labor Department is allowed to pursue its inquiry into the cybersecurity practices at a large recordkeeper.

Source: Asppa.org, August 2022

Schlichter Slammed (Again) in Empower's Win

"Having already limited Defendants' total recovery to fees and expenses after the start of trial and having further restricted that recovery to no more than $ 1.5 million, the Court finds no basis to further reduce the fee award." And with that, the United States District Court in Colorado affirmed the judgment against high-profile attorney Jerry Schlichter for $1.5 million for "reckless" fiduciary claims.

Source: 401kspecialistmag.com, August 2022

IRS Extends Amendment Deadlines for CARES and SECURE Acts

The IRS released Notice 2022-33, giving retirement plan sponsors a three-year extension to adopt formal plan amendments under the Coronavirus Aid, Relief, and Economic Security Act, the Setting Every Community Up for Retirement Enhancement Act of 2019, and the Bipartisan American Miners Act of 2019. The new deadline, December 31, 2025, applies to mandatory and optional plan amendments under these acts.

Source: Tri-ad.com, August 2022

Avoiding Improper Retirement Plan Distributions

One of the challenges of administering a retirement plan is the timely and proper payment of distributions to plan participants. This responsibility occurs in more than one context and can have several "facts and circumstances" variations.

Source: Penchecks.com, August 2022

Five Dangerous Fiduciary Assumptions

There's an old saying that when you assume... well, here are some assumptions that can create real headaches for retirement plan fiduciaries.

Source: Napa-net.org, August 2022

IRS Extends Deadlines for Amending a Retirement Plan or IRA for Certain Provisions of SECURE Act, Miners Act, and CARES Act

On August 3, 2022, the IRS issued Notice 2022-33 to extend the deadlines to amend certain retirement plans (such as qualified 401(a) plans, 403b plans, governmental 457b plans, and individual retirement arrangements) for certain provisions of the Setting Every Community Up for Retirement Enhancement Act of 2019 and section 104 (relating to reduced age for in-service distributions for qualified 401(a) plans and governmental 457b plans) of the Bipartisan American Miners Act of 2019.

Source: Icemiller.com, August 2022

When Should Sanctions Be Imposed in ERISA Class Actions?

Sanctions are a rarely utilized tool to combat abusive litigation. This is because most high-profile defense firms rarely seek sanctions, as well as the fact that modern courts tolerate most lawsuits. But if you apply the sanctions standard of the Great-West case to many of the skyrocketing numbers of ERISA class actions being filed today, it is clear, says the author of this article, "that sanctions should be imposed in many of the recently filed cases."

Source: Euclidspecialty.com, August 2022

Plan Sponsor Activity and Engagement Set to Heighten: Study

Fidelity Investments announced the results of the 13th edition of its Plan Sponsor Attitudes Study. The study characterizes 2022 as a year of change for the retirement plan industry with plan activity and competition amongst plan advisors hitting multiyear highs.

Source: Businesswire.com, August 2022

Emergency Savings = Better Retirement?

Of all the statistics about financial anxiety, one of the most alarming is that 36% of Americans in 2020 reported that they would be unable to meet an unexpected $400 expense without borrowing or selling a personal item. Alarming, yes but what does that have to do with retirement? A great deal. There are two ways a financial emergency can undermine retirement and why plan sponsors may want to consider taking action. The first is the direct damage that emergency withdrawals or loans can do to retirement savings. The second is more subtle.

Source: Blackrock.com, August 2022

Nearly Half of Plan Sponsors Considering Changing Advisors, Recordkeepers

Competition amongst plan advisors and recordkeepers is reaching an all-time high, with 47% of plan sponsors considering a new advisor and 48% considering a change of recordkeepers for their 401k plans. This is according to the 13th edition of Fidelity Investments' Plan Sponsor Attitudes Study, released today, which found that in 2022 plan sponsors are the most active in years in making big changes to their retirement plans.

Source: 401kspecialistmag.com, August 2022

The Connection Between Emergency Savings Accounts and Retirement

Plan sponsors can help drive higher retirement plan contributions from workers by offering robust emergency savings accounts that hew to their preferences, research from a pair of nonprofits shows. The research shows that for low- and moderate-income workers, access to emergency savings accounts is likely to bolster retirement contributions and provide greater financial security.

Source: Plansponsor.com, August 2022*

Seventh Circuit Issues Key Stock-Drop Decision in Boeing Max Case

The 7th U.S. Circuit Court of Appeals in Chicago on August 1 upheld a lower court's dismissal of a case brought against Boeing in 2019 over the drop in Boeing's stock price. One expert attorney says the decision has particular importance to plan sponsors and fiduciaries who have employer stock as an investment.

Source: Planadviser.com, August 2022

Modest Deferral Rate Increases Could Have a Big Impact on Retirement Readiness

A modest increase in participant elective deferral rates would enable most plan participants to attain a 75% replacement rate in retirement, according to new research by Vanguard. To assess whether Vanguard DC plan participants are saving optimally in their current workplace retirement plan, Vanguard researchers analyzed approximately 1.9 million eligible employees and 1.5 million actively contributing participants in approximately 880 plans for which the firm had completed compliance testing as of December 2020.

Source: Ntsa-net.org, August 2022

Division of Fiduciary Duties Proves Key to Success in Stock-Drop Lawsuit

On August 1, 2022, the United States Court of Appeals for the Seventh Circuit affirmed the lower court's dismissal of a "stock-drop" lawsuit against Boeing. The Seventh Circuit based its conclusion on the fact that an independent fiduciary, rather than the Boeing defendants, had exclusive fiduciary responsibility for the company stock fund and therefore had no duty to disclose corporate insider information to the participants or the independent fiduciary.

Source: Groom.com, August 2022

Morningstar's Active/Passive Barometer: Takeaways for 401k Fiduciaries

Morningstar's Active/Passive Barometer is a semiannual report that measures the performance of active funds against comparable passive funds. Over the years, the report has found that most active funds underperform their passive counterparts and that higher-cost funds are more likely to underperform. This article reviews what 401k fiduciaries can take from the report.

Source: Employeefiduciary.com, August 2022

Compliance Check: Amending Your 401k Plan Document on Time

This article looks at the deadlines for a plan sponsor of an individually-designed 401k plan to adopt legally-required and discretionary 401k plan amendments, as well as recent IRS Notice 2022-33, which extended the deadline for certain legally-required 401k plan amendments related to the SECURE Act and the CARES Act.

Source: Foley.com, August 2022

2022 Safe Harbor 401k Deadline Quickly Approaching

The IRS deadline to establish a new 2022 Safe Harbor 401k plan is October 1, meaning there is still time for small business owners to establish a new plan and take advantage of maximum contribution limits.

Source: 401kspecialistmag.com, August 2022

DOL Proposes Changes to the QPAM Exemption

The qualified investment professionals who rely on the QPAM Exemption are those who manage the assets of certain employee benefit plans subject ERISA, plans and accounts subject to section 4975 of the Internal Revenue Code, and plan asset vehicles. The DOL has given interested parties until September 26, 2022, to provide comments on the proposed changes to the exemption. Here is a summary of the proposed changes.

Source: Winston.com, August 2022

IRS Private Letter Ruling Addresses DB-to-DC Asset Transfer

While it applies only to the immediate case, the IRS' approval of a transfer of excess assets from a terminating pension plan to three ongoing defined contribution plans is instructive for other taxpayers.

Source: Planadviser.com, August 2022

Judge Slams Plaintiffs' Attorneys With $1.5 Million Judgement for "Reckless" Suit

A federal judge has affirmed a $1.5 million judgment against Schlichter Bogard & Denton LLP and Schneider Wallace Cottrell Konecky LLP for their role in bringing a "reckless" excessive fee suit.

Source: Napa-net.org, August 2022

A Beneficiary Form Is the Most Important Employee Benefit Form

The most important form in all employee benefits is an individual employee's 401k plan beneficiary form. In the absence of a valid beneficiary form, 401k plan documents will often control the distribution of plan proceeds upon an employee's death. In other words, the distribution of large sums of money could potentially be against the deceased employee's wishes. The best way to avoid this issue is to make sure that an individual employee's 401k beneficiary form exists, is current, and matches any estate planning documents.

Source: Masudafunai.com, August 2022

What Retirement Policies Should Your 401k Plan Have in Place

Having clear policies and procedures for 401k plans helps employees involved in the plan administration do their job more efficiently by mapping out steps to take when various situations arise. ERISA and the DOL guidance recommend retirement plans maintain some of these policies and, while not required by law, are helpful in the event of a DOL audit or participant litigation. This article reviews what policies you should consider having and what they entail.

Source: Consultrms.com, August 2022

IRS Notice 2022-33 Provides a Partial Extension of the 2022 Plan Amendment Deadline

The IRS has announced an extension of the deadlines for amending 401(a) qualified defined contribution and defined benefit plans, 403b plans, and governmental 457b plans. While the extension provides welcome relief in certain cases, some plan sponsors and Pre-Approved Plan Providers will still need to amend plans for certain CARES Act provisions and the Taxpayer Certainty and Disaster Tax Relief Act of 2020 by the original amendment deadline, the last day of the 2022 plan year.

Source: Asc-net.com, August 2022

Fidelity Q2 Analysis Shows Just How Hard Stock Losses Hit 401ks

Given the stock market's dismal performance in the second quarter of 2022 -- and the first half of the year in general -- it's no surprise that average 401k account balances at plans record kept by Fidelity decreased significantly during the second quarter that ended June 30.

Source: 401kspecialistmag.com, August 2022

Four Trends to Watch in 2022 and Beyond

Insights from the inaugural 2022 BlackRock "Read on Retirement" reveal a shifting landscape following over two years of market volatility, inflation, and a pandemic. The pandemic and recent market conditions understandably caused people to rethink their outlook on retirement and what they will need. It also inspired employers to offer more strategies to help employees save for the short and long-term. Here are four key findings from the survey that are trends to watch this year and beyond.

Source: 401kspecialistmag.com, August 2022

More TDF Underperformance ERISA Lawsuits Filed

This summer, plaintiffs represented by the increasingly active law firm Miller Shah LLP have filed a cluster of new ERISA lawsuits. The defendants in the cases include well-known national employers across the U.S., including Citigroup, Stanley Black & Decker, Booz Allen, Capital One, Wintrust, Cisco, and Genworth. The lawsuits all include nearly identical ERISA fiduciary breach allegations against the defendants, but these allegations stand in sharp contrast to the broader landscape of ERISA litigation.

Source: Planadviser.com, August 2022

Excessive Fee Suit Targets RK, Managed Account Fees

Another large 401k plan has been sued for a breach of fiduciary duty involving excessive recordkeeping fees and managed account services it says were worth nothing. This one has been filed in the US District Court for the Northern District of Illinois individually and as representative of a Class of Participants and Beneficiaries of the $1.5 billion Dover Corporation Retirement Savings Plan which, according to the suit, has some 18,331 participants.

Source: Napa-net.org, August 2022

A Guide Path for Your Glide Path(s)

A recent report and a new wave of litigation remind us that all target-date funds are not designed the same. A recent Morningstar whitepaper cautioned that "through" glide paths generally include around 13 percentage points more in equity at age 65 than their peers invested in "to" glide paths, as the average "through" series holds 46% in stocks versus just 33% for the average "to" series. That makes them riskier (or at least more volatile), and potentially riskier than those who defaulted into those options may know, or desire.

Source: Napa-net.org, August 2022

Appellate Court Backs DOL in Cybersecurity Subpoena

A federal appellate court says that the DOL is allowed to pursue its inquiry into the cybersecurity practices at a large recordkeeper. Alight argued on appeal that the subpoena is unenforceable because the DOL lacks authority to investigate the company, or cybersecurity incidents generally. Alight also argued that the subpoena's demands were too indefinite and unduly burdensome and that the district court abused its discretion by denying Alight's request for a protective order to limit the production of certain sensitive information.

Source: Napa-net.org, August 2022

401k Plan Provisions That Should Be Reviewed for "Tinkering"

When you set up a 401k plan, the plan provisions are not set in stone, so it's beneficial to look at them to determine whether they still fit your needs and the needs of your employees. Here are a few you might tinker with.

Source: Jdsupra.com, August 2022

Divorce and Retirement: It's a Matter of Trust

It's in your best interest to have a collaborative team that's working together, as well as someone who knows the divorce laws in your state and someone who knows finance.

Source: Investmentnews.com, August 2022

Retirement Protection Act Proposed in House

Representatives David Schwikert and Byron Donalds have introduced H.R. 8579, the Retirement Protection Act. The bill proposes modification of the saver's credit by replacing the three-tier formula with a single 50 percent credit percentage on contributions up to $2,000, with phase outs beginning at certain AGI thresholds.

Source: Futureplan.com, August 2022

Proposed QPAM Amendment Would Expand Criminal Disqualification Rules

In addition to the current list of offenses that disqualify a manager from acting as a QPAM, the amendment would codify the DOL's interpretation that foreign crimes substantially equivalent to the enumerated U.S. offenses result in disqualification. The amendment would add categories, short of actual crimes, permitting the DOL to strip a manager of QPAM status. The Amendment would also require QPAM management agreements to indemnify plan clients against losses resulting from the QPAM's disqualification, and impose a mandatory one-year winding down period following disqualification to help plans mitigate disruptions from changing advisors.

Source: Debevoise.com, August 2022

Canadian Employers Embracing Innovation, Flexibility in DC Plan Design

With inflation reaching its highest level in four decades and people facing several competing financial priorities, including simple day-to-day expenses, Canadian plan sponsors are bringing flexibility to their programs as they focus on catering to different needs and expanding the scope of their savings options.

Source: Benefitscanada.com, August 2022

IRS Extends Retirement Plan Amendment Deadlines

Many tax-qualified retirement plans, including non-governmental 403b plans and IRAs, were running short on time to make needed amendments to plan documents before the December 31, 2022, deadline to comply with recently enacted law changes. Under the new Notice 2022-33, plans and IRAs now have until December 31, 2025, to amend those documents.

Source: Bdo.com, August 2022

Are Automatic 401k Features Friend or Foe?

Every time it seems there's nothing new to say about auto features, new questions arise. Most of them spring from fallacies that continue to be perpetuated throughout the 401k industry. This article digs into many of the misunderstandings and why they each may be inaccurate.

Source: 401kspecialistmag.com, August 2022

Lawsuit Against Northern Trust Over TDFs Will Proceed

A federal judge has refused to dismiss a lawsuit against fiduciaries of the Northern Trust Company Thrift-Incentive Plan that alleges that because the defendants failed to remove underperforming funds from the plan or negotiate lower, reasonable fees, participants' account balances have suffered.

Source: Planadviser.com, August 2022*

Participant Loans: Common Loan Errors and How to Fix Them

Prohibited transaction violations associated with participant loans, which are corrected under the DOL's separate Voluntary Fiduciary Correction Program, are less common than the day-to-day operational failures that can result in taxation to the participant. Therefore, this article focuses on the solutions for correcting participant loan errors through the Employee Plans Compliance Resolution System and its Self-Correction Program.

Source: Newfront.com, August 2022

Participant Loans: Technical and Fiduciary Considerations

Of utmost importance is the obligation of plan sponsors to comply with the legal requirements governing participant loans. The failure to comply may lead to a taxable event for the borrowing participant and a prohibited transaction for the plan fiduciaries. Here is a review of the technical and fiduciary considerations involved when participant loans are available through your company 401k plan.

Source: Newfront.com, August 2022

State-Mandated Retirement Plans Gain Traction

This article explains that there is no federal mandate for businesses to offer retirement plans, but some states are filling the void. It detail which states have established mandates, and which ones have put them into action. And it points out why these moves may prompt some businesses to offer retirement plans beyond the states' mandate.

Source: Massmutual.com, August 2022

Employee Deferrals and Employer Contributions on Bonus Payments May Pose Challenges

An issue that can arise when considering the potential qualified status of a tax-qualified retirement plan is whether the definition of compensation under a plan is being properly implemented based on a participant's elective deferral election and corresponding employer contributions based on an employee's elective deferral election and the plan document. This article provides background on this issue and discusses the consequences of providing separate deferral elections on bonuses, the potential risks of permitting such separate elections, and related considerations that are important to maintain the tax-qualified status of a plan.

Source: Groom.com, August 2022

BlackRock 401k Investment Suits Send Message "Nobody's Safe"

A flurry of new 401k lawsuits challenging companies that offer their workers conservative, low-cost target-date funds has enraged retirement industry insiders who say the complaints mean no retirement plan is safe from litigation. The class actions are leveled at major companies defaulting employee investments into a suite of BlackRock index funds that automatically de-risk investments according to a specific date, usually when investors are expected to retire.

Source: Bloomberglaw.com, August 2022

Hot July Brought Cool 401k Traders

Amid the dog days of summer, 401k plan investors were light traders in July, according to the Alight 401k Index. There were no above-normal trading days, as Wall Street posted its best month since November 2020, the firm notes in its July 2022 Observations. In comparison, the month of June saw five above-normal trading days. Overall, there have been 33 above-normal trading days for the year to date.

Source: Asppa.org, August 2022

Why You Need Cybersecurity Insurance and How to Get It

The topic of cybersecurity insurance has crept to the top of the charts for the DOL's ERISA Advisory Council. Each year, the EAC picks topics it deems crucial to the administration of ERISA. For their May 6, 2022, meeting, they chose cybersecurity insurance and employee benefit plans as one of their topics. When the DOL and, specifically, the EAC take a closer look at a topic like cybersecurity insurance for those who handle employee benefit plan data, you can rest assured it will soon become a mandatory focus.

Source: Penchecks.com, August 2022

Senate Bill Would Curb ESG Investing in Retirement Plans

The Maximize Americans' Retirement Security Act (S. 4613), legislation introduced July 26 by Sen. Mike Braun, would clarify that the fiduciary duty of plan administrators is to select and maintain investments based solely on "pecuniary" financial factors. Joining Braun as cosponsors are Sens. Richard Burr, Tommy Tuberville, Cynthia Lummis, Roger Marshall, Roger Wicker, Steve Daines, and James Inhofe.

Source: Napa-net.org, August 2022

CommonSpirit Inspires Another Motion for Reconsideration in Excessive Fee Suit

In today's labor markets, much is said about offering competitive benefits. As employers compete for talent, retirement benefits have come more to the forefront as a way employers can offer an enhanced compensation package to potential employees or retain existing ones. However, some retirement plans have been left to languish in recent years. Since an employee's savings is generally the biggest driver of retirement benefits, there's a tendency to just leave it at that, thinking that as long as you are offering something to your employees and that your plan is meeting all the legal requirements, you're good. But if you are in a competitive hiring environment, that mindset may not cut it anymore.

Source: Napa-net.org, August 2022

Common 401k Plan Mistakes: Your Plan Isn't Competitive

In today's labor markets, much is said about offering competitive benefits. As employers compete for talent, retirement benefits have come more to the forefront as a way employers can offer an enhanced compensation package to potential employees or retain existing ones. However, some retirement plans have been left to languish in recent years. Since an employee's savings is generally the biggest driver of retirement benefits, there's a tendency to just leave it at that, thinking that as long as you are offering something to your employees and that your plan is meeting all the legal requirements, you're good. But if you are in a competitive hiring environment, that mindset may not cut it anymore.

Source: Conradsiegel.com, August 2022

IRS Extends Deadline to Adopt Plan Amendments Reflecting Recent Law Changes

The table here shows the original and revised amendment adoption deadlines for IRAs and various types of retirement plans. Plan sponsors will notice that under Notice 2022-33, the amendment deadline for the applicable SECURE Act, Miners Act, and CARES Act provisions is the same. The IRS anticipates that this will allow plan sponsors to adopt a single amendment that covers all three pieces of legislation, as applicable.

Source: Benefitsnotes.com, August 2022

How Are State Auto-IRAs Impacting the Small-Plan Market?

Employers in California, Illinois, and Oregon, three of the first states to launch programs to help private sector workers save for retirement, were still creating new plans in 2020 and were shedding existing plans at rates slower than or largely comparable to the national average, according to a newly updated analysis of Form 5500 data.

Source: Asppa.org, August 2022

The DOL Proposes to Update QPAM Exemption

One of the most frequently used prohibited transaction class exemptions is Prohibited Transaction Class Exemption 84-14, which provides an exemption for Qualified Plan Asset Managers. PTE 84-14 is generally regarded as the benchmark of prohibited transaction exemptions. However, in light of the increased frequency with which affiliates of QPAMs have been involved in foreign criminal conduct, DOL determined that it was appropriate to propose updates to the exemption impacting the qualification of the applicant.

Source: Wagnerlawgroup.com, August 2022

The New Vesting Schedule Debate

Surveys and anecdotal evidence suggest plan sponsors are shortening their plan's vesting periods, but there remains disagreement in the industry about whether vesting schedules may disappear.

Source: Planadviser.com, August 2022

Will New 401k Compliance Testing Issues Arise Because of COVID-19 Workforce Changes?

To help ensure that a 401k plan does not favor business owners or other highly compensated employees, plan sponsors are required to perform specific nondiscrimination tests. The COVID-19 pandemic is providing challenges in meeting these nondiscrimination tests with qualified 401k plans that have previously not experienced discrimination testing issues.

Source: Fulcrumpartnersllc.com, August 2022

Target-Date Funds: Evaluating and Selecting

The Qualified Default Investment Alternative investment decision is among the most important investment-related decisions a plan sponsor will make on behalf of plan participants. The selection of a target-date fund is likely to have the greatest impact on the largest number of participants and their ability to achieve their retirement objectives. Target-date products are relatively immune to participant inaction because they evolve as participants age. This characteristic makes target-date funds the most attractive QDIA and the most complex alternative. Because the decision is so critical, it carries major fiduciary implications.

Source: Fiducientadvisors.com, August 2022

IRS Extends Certain Amendment Deadlines for the SECURE and CARES Acts

On August 3, 2002, the IRS issued Notice 2022-33 which extends certain deadlines for qualified plans to amend their documents for the SECURE Act, the Miners Act, and the CARES Act. Before this Notice, amendments for all provisions of the Acts were due by the last day of the plan year beginning on or after January 1, 2022 (December 31, 2022, for calendar year plans).

Source: Erisadc.com, August 2022

Investments in Technology and Automation Pay Off for Retirement Plan Providers

Plan providers are making sizable investments in technology to enhance their suite of online resources to improve digital participant experiences and better connect with a younger generation entering the workforce, according to the latest Cerulli Edge -- U.S. Retirement Edition. From education-oriented designs to targeted communications, plan providers are leveraging the latest advances in digital technologies to complement or enhance human-provided services.

Source: Cerulli.com, August 2022

IRS Extends Retirement Plan Amendment Deadlines

Plan sponsors can certainly wait to adopt these amendments, and this would also allow further changes addressing subsequent guidance on the SECURE Act as well as future legislation to be addressed. However, for plan administration purposes, it could be helpful to amend plans before the end of the year and also provide participants with a summary of material modifications describing the changes, but this may require an additional amendment by the extended deadline.

Source: Bradley.com, August 2022

Avoiding Common Retirement Planning Mistakes

Most people dream of the day when they can go to bed without having to set an alarm for work. Retirement might seem like a far-off reality but retiring with a viable plan and sufficient money isn't something that happens overnight. To live out your retirement comfortably, you'll have to think ahead and plan accordingly. Unfortunately, it's easy to fall prey to common retirement planning missteps.

Source: Bks-partners.com, August 2022

Plan Fiduciaries: The DOL Proposes Enhanced QPAM Requirements

On July 26, 2022, the DOL released a proposed amendment to Prohibited Transaction Class Exemption 84-14, known as the Qualified Professional Asset Manager exemption. The QPAM exemption is frequently relied on by investment fiduciaries, including fund managers and investment advisers, to avoid engaging in transactions concerning employee benefit plans that might otherwise be prohibited by ERISA. If adopted, the proposed amendment would, among other things, increase the minimum capitalization and assets under management requirements for a manager to qualify as a QPAM, require that QPAMs register with the DOL, and require that agreements between QPAMs and their clients be amended to include specific indemnity and other provisions.

Source: Lowenstein.com, August 2022

Seventh Circuit Affirms Dismissal of ERISA Stock-Drop Case

Since the Supreme Court's ruling in Fifth Third Bancorp v. Dudenhoeffer, courts around the country have overwhelmingly rejected ERISA fiduciary-breach claims by 401k plan participants seeking relief related to investments in company stock funds. The Seventh Circuit recently continued that trend by affirming the dismissal of claims brought by participants in the Boeing 401k plan but did so on grounds that the fiduciary responsibilities associated with the company stock fund had been delegated to an independent fiduciary, and the insider fiduciaries had no duty to disclose corporate inside information to the plan participants or the independent fiduciary.

Source: Erisapracticecenter.com, August 2022

IRS Extends Deadlines for SECURE and CARES Amendments

The Notice states that the IRS anticipates that additional guidance will appear in the 2023 Required Amendments List, an annual list of changes in retirement plan qualification requirements. As a result, the IRS intends that plan sponsors will be able to adopt all necessary amendments on a single date.

Source: Eversheds-Sutherland.com, August 2022

The Impact of Missing the July 31, 2022, Deadline for Restating Pre-Approved 401k Plans

For the many employers that use a pre-approved 401k plan (or another type of defined contribution plan), the deadline to execute a restatement of the plan was July 31, 2022. An employer that missed the deadline will need to review whether a correction will be required to maintain the plan's favorable tax status and implement any required correction. Depending on the circumstances, some failures may require obtaining formal approval from the IRS through its Voluntary Correction Program, while others may be eligible for self correction.

Source: Benefitslawadvisor.com, August 2022

What Mutual Fund Fee Disparities Mean for Retirement Savings

When employees decide to leave their employer-sponsored retirement plan, either through retirement or a job change, many decide to roll their savings over into an individual retirement account. A recent study suggests that this can be a risky move financially, as IRA owners are more likely to face higher costs over time. According to a Pew issue brief, when an individual moves their savings over into an IRA, thousands of dollars in savings can be lost over time, simply because of differences in fees between funds or between types of shares within a fund.

Source: Planadviser.com, August 2022*

Lawsuit Accuses Fiduciaries of Chasing Low Fees Without Regard to Performance

Microsoft Corporation is the target of a new complaint in a series of lawsuits claiming that the BlackRock LifePath Index Funds suite of 10 target-date funds was an imprudent investment choice for defined contribution plans. The lawsuits accuse the defendants of selecting and retaining "poorly-performing investments instead of offering more prudent alternative investments that were readily available at the time."

Source: Planadviser.com, August 2022

IRS Provides Three-Year Extension for SECURE Act Amendments and Additional Limited Relief

IRS Notice 2022-33 provides extensions to the amendment deadlines for certain provisions of the Setting Every Community Up for Retirement Enhancement Act of 2019, the Bipartisan American Miners Act of 2019, and the Coronavirus Aid, Relief, and Economic Security Act. This Notice comes as welcome relief, albeit limited in some instances.

Source: Groom.com, August 2022

IRS Guidance Extends Deadline for SECURE & CARES Act Amendments

On August 3, 2022, in a welcome and surprising move, the IRS released Notice 2022-33, providing for an extension for qualified retirement plans to adopt amendments under the Setting Every Community Up for Retirement Enhancement Act of 2019, the Bipartisan Miners Act of 2019 (which provided defined benefit plans with an optional reduction in the minimum age for in-service distributions from age 62 to 59 1/2), and the Coronavirus Aid, Relief, and Economic Security Act.

Source: Erisapracticecenter.com, August 2022

IRS Extends SECURE, CARES Act Amendments Deadline

In a bit of good news for plan sponsors, the IRS announced in Notice 2022-33 on August 3, 2022, that it is extending upcoming plan amendment deadlines under the Setting Every Community Up for Retirement Enhancement Act of 2019, the Coronavirus Aid, Relief, and Economic Security Act and the Bipartisan Miners Act of 2019 to December 31, 2025.

Source: Cohenbuckmann.com, August 2022

The IRS Throws a Curveball: How to Knock the New Compliance Pilot Program Out of the Park

Earlier this summer, the IRS surprised the retirement plan world when it announced a new approach for narrowing the universe of plans seemingly worthy of its investigatory and audit resources. If your organization receives a letter under this new program, what will you do? Will you be prepared to respond? What if the answer is no?

Source: Qualifiedplanadvisors.com, August 2022

Complexity of QPAM Proposal Could Be a Concern

The DOL in late July announced a proposed amendment to the Class Prohibited Transaction Exemption 84-14. An attorney calls the objectives of the proposed amendment 'sensible,' but said implications could be 'unexpected and worrying.'

Source: Plansponsor.com, August 2022

Booz Allen Hamilton, Others Face Passive TDF Performance Lawsuits

Unlike many other ERISA lawsuits, the complaints suggest the plan fiduciaries in question should have considered more expensive target-date funds that might have performed better. The lawsuit was filed in the U.S. District Court for the Eastern District of Virginia, naming as defendants Booz Allen Hamilton Inc., the company's board of trustees, and various committees tasked with operating the management and technology consulting firm's defined contribution retirement plan.

Source: Planadviser.com, August 2022

The Most "Outrageous" ERISA Complaints Yet Filed?

One fiduciary insurance expert who has long been tracking ERISA litigation says a spate of new complaints filed in recent weeks are the "most outrageous" the industry has ever seen.

Source: Planadviser.com, August 2022

Swift Settlement for Excessive Fee Suit

Capozzi Adler and Miller Shah have wrested another settlement in an excessive fee suit in record time. This time it's the $1.2 billion Rush University Medical Center 403b plan (which was sued by four former workers just a few months ago) that has agreed to settle for $2.95 million as well as "meaningful non-monetary relief related to the ongoing management and administration of the Plan."

Source: Napa-net.org, August 2022

SEC Warns Firms Not to Neglect Conflicts of Interest

The SEC is warning broker-dealers and investment advisers that they need to take ongoing steps to identify and eliminate conflicts of interest, noting that all firms have them in some form.

Source: Napa-net.org, August 2022

BlackRock TDF Targeted in Another Suit

Claiming that the plan fiduciaries "...employed a fundamentally irrational decision-making process (i.e., inconsistent with their duty of prudence) contrary to basic economics and established investment theory," a new suit involving the BlackRock LifePath target-date funds has been filed.

Source: Napa-net.org, August 2022

Morningstar Urges DOL to Revisit TDF Guidance

While many employers do consider their participants' needs when selecting target-date fund glide paths, a new white paper argues there is too much homogeneity given the heterogeneity of workers' needs. As such, more can be done, say Morningstar Senior Analyst Lia Mitchell and Retirement Studies head Aron Szapiro, who examined the glide paths that plan sponsors use in different sectors and offer recommendations to the Department of Labor.

Source: Asppa.org, August 2022

Record Increases Projected for 2023 Retirement Plan Limits

The announcement of the official limits is still a few months away, but early projections from Mercer suggest that nearly all qualified retirement plan limits will increase by unprecedented amounts next year.

Source: Asppa.org, August 2022

What Plan Sponsors Need to Know About the New 90-Day IRS Preaudit Retirement Pilot Program

The IRS is piloting a new retirement plan compliance program that allows plan sponsors to correct plan defects 90 days before the commencement of an IRS audit. Here's what you need to know.

Source: Sidley.com, August 2022

Cybersecurity Invades Employee Benefit Plan Administration

Cybersecurity is a tech-centric term that often makes business unit leadership's eyes roll. That response is risky because cybersecurity ranks among the most vital issues facing human resources, finance, and administration executives. Employee benefit plan leaders face a new era that requires administration and risk management behaviors that are not part of traditional fiduciary best practice thinking.

Source: Rolandcriss.com, August 2022

Risk Literacy and Why Your Committee Should Consider It

This article offers insight into the complex topic of the various risks DC plan participants face. It also challenges traditional thinking about risk, which often oversimplifies risk as a single category and underestimates the impact various risks have on retirement outcomes. The author believes plan sponsors would do well to deploy time toward "risk literacy" and understand the various risks their participants face as they make critical plan oversight decisions. Risk literacy will help committees prioritize the way they spend time and inform key decision-making.

Source: Planpilot.com, August 2022

Keeping Up With the Securing a Strong Retirement Act

Because different provisions are included in the House and Senate versions of the ambitious retirement reform legislation, a reconciliation process is likely in store.

Source: Planadviser.com, August 2022

Summary of Provisions in the Securing a Strong Retirement Act

Staff on both sides of the Capitol are now working to negotiate a unified, bicameral version of retirement legislation that could potentially be included in a must-pass spending bill later this year. This chart compares the House and Senate bills and identifies differences among the bills.

Source: Groom.com, August 2022

DOL Proposes Amending QPAM Exemption

The DOL recently proposed an amendment to Prohibited Transaction Class Exemption 84-14. The proposed changes would have a material impact on asset managers and benefit plan investors. Comments and requests for a hearing on the Proposed Amendment are due by September 26, 2022. The Proposed Amendment would begin to apply 60 days after the date of final adoption in the Federal Register.

Source: Groom.com, August 2022

DOL Proposes Substantial Amendments to QPAM Exemption

These amendments would significantly impact entities that rely on the QPAM Exemption, as well as plans, plan fiduciaries, counterparties to transactions involving QPAMs, and others. The amendments would impose significant compliance burdens and costs on QPAMs, including the need to amend existing agreements to comply with the conditions. Additionally, the indemnification and hold harmless provisions are likely to increase the potential liabilities of a QPAM that becomes disqualified.

Source: Fiduciarygovernanceblog.com, August 2022

401k Safe Harbor Rules - 2022

A description of the 401k safe harbor rules, updated for 2022, as well as an explanation of the advantages and disadvantages of this plan design option.

Source: Consultrms.com, August 2022

DOL Issues Proposed Amendment to the QPAM Exemption

The DOL announced a proposed amendment to the prohibited transaction class exemption 84-14. The QPAM Exemption is a broad-based class exemption relied upon by many registered investment advisors who manage the assets of pension plans and other employee benefit plans subject to ERISA and other "plans" described in Section 4975 of the Internal Revenue Code. Without the availability of the QPAM Exemption, many investment managers would frequently be precluded from managing the assets of a Plan. The proposed modifications are reviewed here.

Source: Akingump.com, August 2022

Retiring (Much) Later: Average Age Up Big Since 1991

Americans are indeed working longer and retiring later than they used to, with an average retirement age that is four years later than it was in 1991. According to Gallup's annual Economy and Personal Finance survey, conducted each April, the average reported retirement age in the U.S. today is 61, four years older than the same survey found in 1991, when on average people reported they retired at age 57. And notably, the average expected retirement age among non-retirees is now 66, up sharply from 60 in 1995.

Source: 401kspecialistmag.com, August 2022


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