September 2021 Digest

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, 403(b) 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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Recent Court Decisions Extend the Statute of Limitations for Breach of Fiduciary Duty Lawsuits Under ERISA

The U.S. Supreme Court's decision in Sulyma and reliance on that decision by the District Court in the Bowers case have significantly weakened the three-year statute of limitations defense for fiduciary breach cases based on actual knowledge of a breach. In light of these decisions, plan fiduciaries should take actions outlined here to foreclose fiduciary breach suits and make the strongest possible case to have a fiduciary breach suit dismissed.

Source: Verrill-law.com, September 2021

Fee Disclosures Aren't Working. Here's How to Fix Them

The GAO tested participant understanding of some sample fee disclosures, and the results were disappointing. Almost a decade after the DOL fee disclosure regulations became effective, it is clear that they are failing in their intended goal of demystifying retirement plan fees. Without waiting for the DOL to act, plan fiduciaries can implement the GAO recommendations and insist that their participants get disclosures that clearly provide the essential information they need to make investment decisions.

Source: Rpaconvergence.com, September 2021

How You Can Help Secure Retirement Plan Data

Recordkeepers expressed excitement and concern about the future of the DC industry at the third annual InvestmentNews RPA Convergence Recordkeeper Roundtable and Think Tank. The DC industry has an opportunity not only to improve retirement income security but also to address the financial needs of workers, especially those who cannot afford a traditional financial adviser.

Source: Newportgroup.com, September 2021

Consolidation, Wellness and Micro Market Top of Mind for Recordkeepers

Recordkeepers expressed excitement and concern about the future of the DC industry at the third annual InvestmentNews RPA Convergence Recordkeeper Roundtable and Think Tank. The DC industry has an opportunity not only to improve retirement income security but also to address the financial needs of workers, especially those who cannot afford a traditional financial adviser.

Source: Investmentnews.com (registration may be required), September 2021

Back to the Future, Investment Fiduciary Style

With the Supreme Court's new term scheduled to begin in a few days, we move closer to the Court hearing the Northwestern University 403b case. The author believes that this case has the potential to be a landmark case, not just regarding the future of 401k and 403b litigation, but also for fiduciary litigation in general.

Source: Iainsight.wordpress.com, September 2021

Seventh Circuit Rejects Plan's Attempt to Compel Individual Arbitration

Recognizing that the Plan contained an unambiguous arbitration provision, and that "ERISA claims are generally arbitrable," the Seventh Circuit Court of Appeals nonetheless found that arbitration could not be compelled where the provision prospectively barred the plaintiff from pursuing certain statutory remedies.

Source: Beneficiallyyours.com, September 2021

Why the Roth 401k Is the Unsung Hero of Retirement Plans

One retirement savings vehicle doesn't get the attention it deserves, according to one financial expert. The Roth 401k is "the unsung hero, if you will, of your retirement plan," Sun Group Wealth Partners Managing Director Winnie Sun, especially for her clients whose "No. 1 goal" is to have tax-free savings in retirement.

Source: Yahoo.com, September 2021

Addressing Racial Inequities in Retirement Savings

Lower 401k contribution rates by Black employees are often overlooked. The latest survey, conducted in December 2020 among 2,104 U.S. adults with $50,000 or more in household income, found that historical disparities remain pronounced, even when excluding low-paid workers. HR leaders need to take a broad look at what they can do to help employees save, bearing in mind the challenges faced by members of historically disadvantaged communities.

Source: Shrm.org, September 2021

Who Is Liable for Retirement Plan Mistakes?

When a 401k or similar defined contribution plan fails to apply the correct definition of compensation in determining benefits, fails to calculate vesting service correctly, or doesn't make distributions to participants who need to get required minimum distributions, who is responsible? Plan sponsors are often surprised to learn that they are. Here is why your recordkeeper is not responsible and what to consider.

Source: Shrm.org, September 2021

IRS Issues Important Reminder on Application of IRC Section 415(c) Limit to 403b Plans

The IRS issued an important reminder of the unique application of the limit under Internal Revenue Code Section 415(c) to 403b plans on August 20, 2021. The IRS's "Issue Snapshot" highlighted a rule that has applied for decades, but with which 403b plan sponsors and administrators are often not familiar.

Source: Morganlewis.com, September 2021

Deemed Distributions: Participant Loans - Updated

Participant loans are available in many retirement plans, although plans are not required to offer participant loans. Failures may occur when participant loans exceed the maximum dollar amount, have payment schedules that do not meet the time or payment requirements or go into default when payments are not made. Each of these failures, and other issues, will cause the loan to become a deemed distribution for tax purposes. This updated IRS "Issue Snapshot" will summarize what triggers a deemed distribution and when it can occur.

Source: Irs.gov, September 2021

Cumulative Benefits of Retirement Income Solutions in Our DC System

This 13-page paper seeks to summarize the primary benefits of in-plan income solutions and will break down the benefits by participants, sponsors, and the societal benefit of enhanced retirement security achieved through the adoption of guaranteed income options within our DC system.

Source: Iricouncil.org, September 2021

How DC Plan Defaults Can Evolve to Improve American Retirement Security

From auto-enrollment to auto-escalation to auto-income. This is a 14-page paper on the evolving solutions available to sponsors, addressing fiduciary and portability concerns, and next steps for plan sponsors, recordkeepers, insurers, and consultants.

Source: Iricouncil.org, September 2021

Three Drawbacks of Using Only a 401k for Retirement

Some 60 million people are actively saving money to a 401k. The workplace retirement account has advantages, such as employer-funded contributions and tax-deferred investment earnings. Still, 401ks are not perfect. Depending on your situation, a 401k on its own might not fully support your retirement savings goals. To help you decide if you should save and invest outside of your 401k, here is a closer look at three drawbacks of using only a 401k for retirement.

Source: Fool.com, September 2021

Proposed 5500 Reform Won't Help 401k Fee Benchmarking

The author writes, "This month, the Department of Labor, IRS and Pension Benefit Guaranty Corp proposed changes to the Form 5500 -- a report most 401k plans must file annually to meet ERISA requirements. Two changes would require large Form 5500 filers to report more 401k fee information. I think more fee reporting is necessary. The reason? The changes won't fix my biggest beef with the Form 5500 today -- it does not report the data necessary to develop public and reliable 401k fee benchmarks."

Source: Employeefiduciary.com, September 2021

Three Key Differences Between a Roth 401k and a Roth IRA

Roth accounts are after-tax accounts with unique benefits for retirement savers. Namely, investments grow tax-free, and withdrawals aren't subject to tax during one's retirement years. But there are some key differences between Roth savings in a 401k plan and an individual retirement account. Here are some of the biggest.

Source: Cnbc.com, September 2021

Retirement Plan Committees and Inclusivity

Experts say elevating diversity and closing inclusivity gaps are an absolute must for any successful organization. Studies show that when employees think their organization is committed to and supportive of diversity and inclusion, companies report increases in the ability to innovate, responsiveness to changing customer needs, and team collaboration. This article investigates whether the same is true for retirement plan committees.

Source: Captrust.com, September 2021

What the Pandemic Taught Us About Target-Date Funds

The ability to "set it and forget it" has long made target-date funds an appealing investment for defined contribution participants. They can leave it to investment professionals to manage allocations and dial down risk as retirement nears. Yet 2020 highlighted another type of risk to TDF investors, the risk that severe volatility could prompt rash selling that crystallizes losses. Such was the case last March when the spreading COVID-19 pandemic spooked markets.

Source: Plansponsor.com, September 2021

Plan Document Restatements Essential to Retirement Plan Compliance

Two of the key rules for retirement plans are that tax-qualified retirement plans must be documented and that plan documents must include language that complies with numerous Internal Revenue Code provisions. Complying with the second rule can be a challenge, because the regulatory agencies that control retirement plans, such as the IRS and the DOL, frequently make changes that affect plans. In addition, enacted legislation can require retirement plan sponsors to update or amend their plan documents.

Source: Plansponsor.com, September 2021

Recordkeepers Planning to Amp Up Cyber Staff

In response to an increased threat of retirement account fraud, nearly a third of recordkeepers expect to boost their cybersecurity staff going forward, a new report from Cerulli finds. Even though plan providers have always been subject to cyberattacks, this is an issue that has become more acute in recent years, particularly during the remote work environment when many employees are working on less secure home networks and personal devices during the pandemic.

Source: Napa-net.org, September 2021

How Retirement Concerns Vary Among Ethnicities

A new study finds distinct differences among ethnicities regarding how they view their retirement risks and worries, as well as their interest in getting help from a financial professional. According to Allianz Life's 2021 Retirement Risk Readiness Study, the majority of Americans who identify as “BIPOC” -- black, indigenous, and people of color, including Hispanic and Asian Americans) -- believe they won't have enough saved for retirement (52% black, 56% Hispanic, and 62% Asian).

Source: Napa-net.org, September 2021

Five Plan Committee Missteps

There is frequently a difference between doing what the law requires and doing everything that you could do as a plan fiduciary. That said, there are things that plan fiduciaries must do, and things that, while not required, can keep the plan, and plan fiduciaries out of trouble. Here are five of those latter things.

Source: Napa-net.org, September 2021

The Looming Retirement Crisis Explained

Although cracks have been forming in the foundation of American retirement security for decades, the COVID-19 pandemic has only made them worse. This article unpacks how the "three-legged stool" of retirement -- Social Security, employer pensions, and personal savings -- has been slowly coming apart for decades and what we can do to stop it.

Source: Myubiquity.com, September 2021

Simple Concepts 401k Plan Sponsors May Not Be Aware Of

As a 401k plan sponsor, you're always on the end of a sales pitch and you may not understand some basic, eye-opening concepts about your 401k plan. This puts you are a disadvantage. This article will make you understand some interesting concepts.

Source: Jdsupra.com, September 2021

Proposed Bill Would Create Portable Retirement Accounts

Representative Jim Himes and Senator Mark Warner have announced legislation to establish universal, portable retirement accounts. The Portable Retirement and Investment Account (PRIA) Act of 2021 would create such accounts for every American at birth, in conjunction with the issuance of a Social Security number.

Source: Futureplan.com, September 2021

Cybersecurity and DOL Document Requests

The DOL's "Cybersecurity Document Requests" reveal the DOL has been asking for quite an extensive list of documentation. Moreover, the DOL has noted that plan administrators should be aware that they may need to consult not only with the sponsor of the plan, but with the service providers of the plan to obtain all the documents requested, and if they are unable to produce the requested documents the plan administrator must specify the reasons why the documents are unavailable.

Source: Retirementlc.com, September 2021*

Legislation Introduced to Establish Portable Retirement Accounts

Touted as a way to help gig workers, part-time workers and those without access to an employer-sponsored account, legislation has been introduced in both the House and Senate to create universal, portable retirement accounts.

Source: Ntsa-net.org, September 2021

ERISA and the Challenges of Using ESG in Retirement Plan Investing

It can be helpful for employers and retirement plan fiduciaries to understand the ERISA issues created by using ESG criteria in selecting and managing retirement plan investments, including why this remains an area of changing legal standards, especially in the last few years. This 2-page piece looks at the issues.

Source: Morganlewis.com, September 2021

More Companies Planning PEPs, With Potential in Auto-IRA States

States such as California, Oregon, and Illinois are requiring small businesses to either provide a 401k or sign up for the state program, and that is a massive opportunity for startup plans.

Source: Investmentnews.com (registration may be required), September 2021

Six Things Employers Need to Know Before Offering Cryptocurrency in 401ks

Cryptocurrencies are currently one of the hottest topics in the world and for good reason. Bitcoin's fluctuations over the past year have some employees and retirees asking to include cryptocurrencies in their employer-sponsored 401k retirement plans. The potential for negative valuation swings, on the other hand, has others saying they might be too risky for retirement savings. This Insight will provide six key considerations for Plan sponsors before considering including a cryptocurrency option in your retirement plans.

Source: Fisherphillips.com, September 2021

Treasury Pulling Back From Student Loan Retirement Plan Rules

The Biden administration has pulled back from working on new rules that would allow employers' retirement plans to make contributions to retirement savings plans based on their workers' student loan payments.

Source: Bloomberglaw.com, September 2021

IRS Updates Guidance Regarding Correction of Tax-Qualified Plan Errors Under EPCRS

Mistakes happen, even to tax-qualified plans and 403b plans that have implemented internal controls designed to reduce, if not eliminate, the likelihood of plan failures. To alleviate these disproportionate adverse tax consequences and encourage the correction of document and operational plan failures, the IRS maintains the Employee Plans Compliance Resolution System. The IRS periodically updates EPCRS, and its most recent version, Revenue Procedure 2021-30, issued on July 16, 2021, makes several significant changes that are reviewed here.

Source: Wagnerlawgroup.com, September 2021

Changes to Annual 5500 Reporting Requirements Proposed

The proposal package includes Form 5500 changes and the proposed rule. DOL also issued a fact sheet describes the package. The package would create a new direct filing entity called a Defined Contribution Group, make reporting equal for MEPs and PEPs, simplify how to count participants, add compliance questions, request additional information from multiemployer DB plans, and modify the filing requirements for single-employer DB plans.

Source: Segalco.com, September 2021

Vanguard Group Becomes the Second Domino to Fall in 401k Recordkeeper Detente on Plan Portability

Vanguard Group is introducing an oxymoron -- the portable 401k account -- with help from a firm that openly hopes to leverage Vanguard's deal to convince Fidelity Investments to open its 401k trillions to what MBAs call 'coopetition.' The $8-trillion Malvern, Pa., mega-manager announced Tuesday that it hired Retirement Clearinghouse to make it radically easier for a 40k plan participant to pack up their pension assets with their lunchbox and pocket calculator in a job switch.

Source: Riabiz.com, September 2021

Insurance Agents Charged With Duping California Educators in 403b Plans

The owner of a 403b plan administration firm and another insurance agent allegedly convinced educators to roll retirement plan money into an IRA to invest in the owner's companies, which were in poor financial shape.

Source: Plansponsor.com, September 2021

New Bill Aims to Solve for the Retirement Plan Coverage Gap

The Portable Retirement and Investment Account Act of 2021 would create accounts for people soon after they are assigned a Social Security number that they could contribute to whenever they don't have access to an employer-sponsored plan.

Source: Planadviser.com, September 2021

Northern Trust Accused of Fiduciary Breaches Related to AutoZone 401k

Northern Trust Corporation and Northern Trust, Inc., as investment fiduciaries, have been added as defendants in a lawsuit accusing AutoZone 401k plan fiduciaries of violating their ERISA fiduciary duties by permitting Prudential to steer an excess of assets towards its proprietary products via the GoalMaker asset-allocation solution.

Source: Planadviser.com, September 2021

Courts Giving DOL More Time to Claim ERISA Violations

The Department of Labor is relying on a recent Supreme Court decision to effectively extend the amount of time the agency has to bring fiduciary breach claims. DOL investigations often last years, so it is common for DOL to run up against the statute of limitations under ERISA.

Source: Groom.com, September 2021

District Court Dismisses Investment and Recordkeeping Claims Against 401k Plan Fiduciaries

A Kentucky federal district court ruled that a participant in CommonSpirit Health's 401k plan failed to state plausible claims for breach of fiduciary duty related to the fees and performance of actively managed target-date funds and recordkeeping fee. The court first rejected the plaintiff's claim that the plan fiduciaries should have offered a passively managed target-date suite instead of a more expensive and underperforming actively managed target-date suite because "actively managed funds and passively managed funds are not ideal comparators."

Source: Erisapracticecenter.com, September 2021

401k Fee Class Action Against Oshkosh Corporation Dismissed with Prejudice

Recently, the United States District Court for the Eastern District of Wisconsin granted a Motion to Dismiss, dismissing ERISA breach of fiduciary duty claims, failure to monitor claims, and prohibited transaction claims in a putative class action involving Oshkosh Corporation's 401k Plan. The district court relied heavily on Seventh Circuit precedent to dismiss the complaint, with prejudice, holding that it was not possible to plausibly infer violations of ERISA's duties, under Federal Rule of Civil Procedure 12(b)(6).

Source: Erisalitigationadvisor.com, September 2021

Plan Sponsors Now Have a Deadline for Providing Lifetime Income Illustrations

Employers who sponsor 401k plans and other DC plans in which participants may direct the investments of their accounts now have a deadline to provide lifetime income illustrations in those plans' benefit statements. The DOL recently published guidance addressing these requirements. While helpful, the guidance is still subject to change in a potential final regulation. As such, employers should work closely with their plan administrators and legal counsel to navigate the contours of the evolving lifetime income rules.

Source: Employeebenefitslawreport.com, September 2021

IRS Extends Interim Amendment Deadline for Preapproved 401k Plans

For adopters of preapproved plans, a sponsoring employer's tax-filing deadline is no longer relevant in determining the date by which an interim amendment must be adopted. Instead, the key date is the end of the second calendar year following the calendar year in which the new law change became effective for the preapproved plan.

Source: Compliancedashboard.net, September 2021

2022 Deadline Nears: Now is the Perfect Time to Review Your Retirement Plan Design

For the millions of business owners that offer a workplace retirement plan, the COVID-19 pandemic created many financial difficulties. However, as the economic climate improves, there is an opportunity for employers to refresh their company's retirement plan. With an important plan document restatement deadline happening in 2022, there's never been a better time for employers to reevaluate their current plan design and, if necessary, add or update features that align with their business objectives and retirement plan goals.

Source: Alliant401k.com, September 2021

The DOL's New Cybersecurity Audits and Informal Guidance

The DOL had begun asking cybersecurity questions on some plan audits in 2020 but recently began using a more comprehensive document request in plan audits. The DOL's cybersecurity document request to plan sponsors is broadly stated: "all documents relating to any cybersecurity or information security programs that apply to the data of the plan, whether these programs are applied by the sponsor of the plan or by any service provider to the plan."

Source: Wagnerlawgroup.com, September 2021

L Brands ERISA Lawsuit May Proceed

A judge has determined the fiduciary breach lawsuit filed against the former parent company of Victoria's Secret and Bath and Body Works, alleging excessive recordkeeping fees and other issues, may proceed to discovery.

Source: Planadviser.com, September 2021

Most Claims Move Forward in Suit Over Aon CITs in 401k Plan

A federal judge has denied motions to dismiss a lawsuit alleging fiduciaries of the Centerra Group 401k plan violated ERISA by selecting poorly performing collective investment trusts for the plan and allowing for excessive recordkeeping fees.

Source: Planadviser.com, September 2021

Principles for a Successful Retirement

Achieving retirement goals takes disciplined saving, spending, and investing, all of which can feel overwhelming, especially as the retirement landscape continues to change. These slides present seven essential retirement planning principles, giving investors the confidence to make more informed decisions and take positive steps toward a successful retirement.

Source: Jpmorgan.com, September 2021

Retirement Plan Providers That 401k Plan Sponsors Should Avoid

When it comes to important rules of life for 401k plan sponsors, there isn't much eloquence out there. But there are quite a few retirement plan professionals that plan sponsors should avoid. This article is about which of these retirement plan professionals that you should avoid.

Source: Jdsupra.com, September 2021

Exploring the Process of Adding an Income Solution to Your Retirement Plan

The author provide plan sponsors with a foundation from which to approach the fulfillment of fiduciary duties and confidently select an appropriate product to add as a retirement income solution to their plans.

Source: Iricouncil.org, September 2021

IRS Has New Requirements for Employer Discretionary Matches

The IRS has new Cycle 3 restatement requirements for employers that utilize a fully discretionary matching contribution formula to their pre-approved plans. To comply with the "definitely determinable benefits" requirement in which a plan is required to provide a definite predetermined formula for allocating plan contributions, employers must satisfy two requirements when approving a discretionary match.

Source: Hallbenefitslaw.com, September 2021

Agencies Propose Extensive Form 5500 Amendments

The DOL, Department of the Treasury, and Pension Benefit Guaranty Corporation recently released a notice of proposed revisions to the Form 5500 Annual Return/Report of Employee Benefit Plan filed for employee pension and welfare benefit plans under ERISA and the Internal Revenue Code. The package issued by the Agencies contains both a notice of proposed revisions to the Forms themselves as well as a notice of proposed regulatory changes to the applicable Form 5500 regulations.

Source: Groom.com, September 2021

Giving Employees the Power of Choice With Cryptocurrencies

Nearly a quarter of your employees' lives will be spent in retirement. Given the high stakes, a 401k plan should give every employee the chance to succeed. Cryptocurrencies may help make the difference. Independent research from Yale University and FTSE/Russell shows that individuals may increase their expected returns by investing up to 5% of their total portfolio in cryptocurrencies.

Source: Forusall.com, September 2021

EPCRS Update Offers New Tools to Correct Retirement Plan Errors

The updated version of EPCRS, which was published in Revenue Procedure 2021-30, supersedes the prior version of EPCRS. Plan sponsors and administrators should familiarize themselves with the EPCRS changes, which are generally effective July 16, 2021. This article provides an overview of some of the significant changes made to EPCRS.

Source: Erisapracticecenter.com, September 2021

How Important Are Beneficiary Forms?

When hiring a new employee, one of the initial tasks given to that employee is completing various beneficiary forms for the company's benefit plans. Most people will fill it out and not think about that initial election ever again. Some employees may not fill one out at all. So why is it a big deal?

Source: Asppa.org, September 2021

Video: 20 Questions to Benchmark Your Retirement Plan

When was the last time you reviewed your retirement plan: 5 years ago, 3 years ago? If it has been over a year, it may be time to benchmark your retirement plan, but it doesn't have to be a chore this time around. This video clip outlines five main areas of your retirement plan and the questions you should be asking.

Source: Alliant401k.com, September 2021

The Impact of 401k Cash-Outs on Retirement Income

Due to the power of compound interest, seemingly small amounts that leak from 401k accounts when people change jobs can cause major erosion to retirement nest eggs down the line. Fortunately, new and innovative ideas, such as auto portability, can help curb this leakage and preserve retirement assets. This paper seeks to examine what people do with their 401k balances when they leave an employer and looks at the demographics of people who roll in balances to their new employers.

Source: Alight.com, September 2021

What Participants Want From Employers' Retirement Plan Websites

More employers have been using retirement plan participant websites as a means of communication and education than they did in the past. A recent study found 81% of participants have logged into their accounts, with most signing in to check account balances or review investment options. Research finds that using certain strategies can make websites even more appealing to participants.

Source: Plansponsor.com, September 2021*

Complex Ruling Sees Nvidia ERISA Lawsuit Dismissed

The dismissal order in the case includes several points of success for the plaintiffs, and while the suit has been tossed out due to a lack of standing, the court has left room for them to file an amended complaint.

Source: Planadviser.com, September 2021

CIT's Role in the Retirement Space

The expanding retirement industry means plan sponsors will want to diversify their investment options and look to their asset managers to meet the need. Asset managers should take note of plan sponsors' need for more efficient and affordable ways to diversify their investment options. Part of that involves looking to the products that can help. Collective investment trusts are a natural choice for multiple reasons.

Source: Northerntrust.com, September 2021

Best Practices for Missing Plan Participants

Best practices for plan sponsors include creating a document to outline the lost participant search procedure. Following a written policy, which provides for several methods of attempted contact, can show the DOL that the plan is making its best good-faith effort to track missing participants. An essential step in creating a plan procedure is to document the implementation of the process. Then, documenting each attempt at locating missing participants is important.

Source: Watkinsross.com, September 2021

DOL Asks for Comments on Proposed Changes to Form 5500

The DOL has joined the IRS and the PBGC in requesting public comments on proposed revisions to the Form 5500 Annual Return/Report. At the same time, the DOL is publishing a notice of proposed changes to its implementing regulations under Title I of the Employee Retirement Income Security Act.

Source: Plansponsor.com, September 2021

How Often Should Plan Sponsors Review Their Plan Fees?

Without taking the proper measures of disclosing your fees or ensuring they're competitive and reasonable, your plan offerings probably won't seem as effective for your employees. As a sponsor, you should know that the higher your plan's fees, the less your employees will have to contribute to their plans. This is why you want to review your fees to make sure your employees can trust and depend on you to help them save for retirement. But how often should you review your plan fees?

Source: Planpilot.com, September 2021

CommonSpirit ERISA Suit Dismissed

An ERISA lawsuit challenging CommonSpirit Health's use of the Fidelity Freedom Funds target-date fund series and its recordkeeping fees has been dropped. The U.S. District Court for the Eastern District of Kentucky granted the defendant's motion to dismiss the complaint after agreeing that the plaintiff did not allege facts that proved imprudent conduct on the part of the defendants.

Source: Planadviser.com, September 2021

Regulators Unveil Proposed Changes to Group Form 5500 Reporting

The proposal unveiled Tuesday would establish a new type of direct filing entity called a Defined Contribution Group Reporting Arrangement and add a new Schedule DCG -- detailing individual plan information -- that such reporting groups must file.

Source: Pionline.com, September 2021

Lost but Not Forgotten: DOL Guidance on Missing Participants

Plan sponsors should work with their recordkeeping partners to understand their ability to regularly audit plan census information and to search for missing participants. Determining which steps to take should incorporate a review of ERISA's fiduciary duties, including the duties to act with care, skill, prudence, and diligence, along with the privacy concerns of social media or beneficiary outreach.

Source: Callan.com, September 2021

Retirement Plan Loans: A Brief Review

If your plan's adoption agreement is set up to allow loans, participants can borrow against their account balance. Some participants may find this an attractive option as the interest they pay on the loan is returned to their retirement account as opposed to other loans where the interest is paid to the lender. This is a brief review of retirement plan loans.

Source: Berrydunn.com, September 2021

A Rumor of the Death of GoPs

The retirement industry got two new plan types via the SECURE Act, pooled employer plans (PEPs) and "groups of plans" (GoPs). But proposed regulations issued on Sept. 14 might effectively kill the GoP provision as a useful product tool. This piece reflects the author's first look at the proposed rule, not a detailed analysis.

Source: Asppa.org, September 2021

House Panel Votes to Rein in Large Retirement Account Balances

Mega-Roth, backdoor IRAs and large retirement account balances would be limited under legislation approved Sept. 15 by the House Ways and Means Committee. In a near party-line vote of 24-19, the changes were approved as part of the $3.5 trillion Build Back Better Act reconciliation.

Source: Asppa.org, September 2021

Considering the Arguments for and Against Actively Managed Funds in DC Plans

The argument for whether actively managed funds are appropriate in DC plans has been going on for decades, and numerous excessive fee lawsuits against retirement plan sponsors have been pushing the needle toward the use of passive funds on DC plan investment menus. The debate continues following a recent publication from the CFA Institute Research Foundation which asks, "Is active management worth it?"

Source: Plansponsor.com, September 2021

TDF Usage Increases as Younger Participants Invest

The EBRI and ICI have found that participants are increasingly using target-date funds to save for retirement, especially younger participants. The new report by the two organizations found more 401k plan participants are using the funds than in the past. Fifty-one percent of 401k plan assets owned by participants in their 20s were invested in TDFs, versus 23% for those in their 60s.

Source: Planadviser.com, September 2021

Protecting Participant Data: How to Monitor and Mitigate Recordkeeper Conflicts of Interest

There are six areas where recordkeeping vendors have tried to monetize their relationship with retirement plans. This plan sponsor guide focuses on the fourth way of generating excess revenue, cross-selling retail financial products. For plan sponsors, it is important to understand how recordkeepers cross-sell retail financial products and what the plan sponsor's obligation is to reduce or eliminate such cross-selling.

Source: Multnomahgroup.com, September 2021

Podcast - Retirement Committee Field Guide: 401k Plans from the Platform Provider's Perspective

The purpose of the Retirement Committee Field Guide podcast is to educate retirement committee members and their advisors on committee composition, management, training, and best practices. Each month we interview a guest, such as a retirement plan advisor, consultant committee member, or academic, to provide insight on fiduciary basics, committee governance, emerging best practices, developing law, and related topics. This episode is about 401k plans from the platform provider's perspective.

Source: Mintz.com, September 2021

The Rules of 401k Plan Provider Engagement

Hiring a 401k plan provider isn't an easy process and there are so many mistakes that plan sponsors like you have been made. It's not like making any other decision of your own in life, because it's a fiduciary decision. As a plan fiduciary, you are responsible for the retirement assets of your employees. This article is about the rules of engagement in hiring 401k plan providers.

Source: Jdsupra.com, September 2021

Analyzing the BrightScope DC Plan Data in the Context of Excessive Fee Lawsuits

The annual report provides insights into plan design and trends and represents the most comprehensive data available to understand defined contribution plan fees. BrightScope has an express disclaimer that its report is for general information on fees and is not intended for benchmarking the costs of specific plans. But plaintiff lawyers often ignore this disclaimer and cite the report to support their excessive fee claims, and thus it is important to analyze the BrightScope data to evaluate how your plan compares. This article documents the significant trends and statistics in the BrightScope report.

Source: Euclidspecialty.com, September 2021

Second Circuit Revives Share-Class Claim in NYU Retirement Plan Class Action

The Second Circuit recently vacated the district court's dismissal of Plaintiffs' share-class claim. Sacerdote v. New York Univ. To begin, the Court observed that the notion that "prudent fiduciaries may very well choose to offer retail class shares over institutional class shares' because retail shares offer greater liquidity provides no basis to dismiss pleadings that otherwise generate plausible inferences of the claimed misconduct."

Source: Erisalitigationadvisor.com, September 2021

The Do's and Don'ts of Your 401k Fund Lineup

Here are five "do's" and five "don'ts" when it comes to the lineup of funds within your 401k plan.

Source: Conradsiegel.com, September 2021

The New EPCRS

Perfection is aspirational, especially when it comes to retirement plan administration. That is why 30 years ago, in 1991, the IRS created the Employee Plan Compliance Resolution System, a mechanism for plan sponsors to fix mistakes. Compliance with pre-approved correction methods grants plan sponsors forgiveness without punishment. But sometimes, even the approved correction methods need fixing.

Source: Belfint.com, September 2021

IRS Priority Guidance Plan Includes Retirement Items

The IRS has issued its initial 2021-2022 Priority Guidance Plan, in which it describes guidance projects in the current fiscal year. Many items in the plan have appeared in prior years' Priority Guidance Plans. A number of the guidance items deal with retirement savings arrangements, including those noted here.

Source: Ascensus.com, September 2021

Five Facts About Self-Directed Brokerage Accounts

Self-directed brokerage windows allow participants to establish a personal brokerage account within their employer's defined contribution plan. There are usually more investment options in brokerage windows than in the plan menu. This gives participants access to a broader array of stocks, bonds, mutual funds, and exchange-traded funds. This piece briefly reviews five facts about self-directed brokerage accounts.

Source: Alight.com, September 2021

Plan Cybersecurity Guidance: DOL Enforcement Warrants Plan Sponsor Action

Benefit plan sponsors and plan fiduciaries should take note and act quickly. The Department of Labor has issued a new cybersecurity guidance package with far-reaching effects and has already begun including this in its enforcement efforts.

Source: Poynerspruill.com, September 2021*

Ways and Means Greenlights Automatic Retirement Arrangements

The House Ways and Means Committee has approved the retirement subtitle of the Build Back Better Act as a way to help close the coverage gap and boost the existing retirement savings system. Among other things, the legislation would require employers without employer-sponsored retirement plans to automatically enroll their employees in IRAs or 401k-type plans.

Source: Napa-net.org, September 2021

Revenue Procedure 2021-30 Brings Welcome Changes to IRS Correction Program

Retirement plan administrators are required by law to abide by specific requirements in the Internal Revenue Code. If a plan administrator fails to administer the plan per Code requirements, the plan is at risk of being disqualified. The IRS, however, has allowed plan administrators to voluntarily correct mistakes through the Employee Plans Compliance Resolution System, and thereby continue to provide their employees with retirement benefits on a tax-favored basis. On July 15, 2021, the IRS published Revenue Procedure 2021-30 that updates EPCRS. This is a high-level overview of the significant changes included in Rev. Proc. 2021-30.

Source: Kriegdevault.com, September 2021

A Volatile Stock Market is a Menace for Fiduciaries

Plan sponsors face peculiar challenges when securities markets swing wildly. The novel COVID-19 pandemic ushered in a period of severe volatility in the stock and bond markets. Combine that with employees riddled with anxiety about the safekeeping of their retirement plan assets, and the scope of a fiduciary's burden seems unmanageable. On any regular day, the legal duty imposed on the members of investment and benefit plan committees is already formidable. The antidote for such challenging conditions is a precise and disciplined management process built on a foundation of principled standards. This 5-page article discusses ways duty-bound executives can cut their legal risks and sustain peace of mind despite our chaotic times.

Source: Rolandcriss.com, September 2021

Need a Do-Over? IRS Expands and Updates Qualified Plans Correction Guidance

The IRS recently issued Revenue Procedure 2021-30, which provides an updated version of the EPCRS. EPCRS is the IRS's comprehensive program for plan sponsors to correct tax-qualified plan errors. This EPCRS update expands plan sponsors' ability and methods to correct overpayments and to self-correct certain plan failures without filing a VCP application, which can be costly and time-consuming.

Source: Mwe.com, September 2021

401k Ideas That Look Great on Paper, But Awful in Practice

Business history is littered with ideas that looked great on paper but were awful in operation. With 401k plans, some ideas also look great on paper but are just a potential nightmare for you as a 401k plan sponsor. Here are a few of them.

Source: Jdsupra.com, September 2021

Fight Over DC Participants Tests Advisers' Partnerships With Providers

Providers cannot hope to create a sales force that competes with the 25,000 RPA specialists and hundreds of thousands of RIAs that dabble. But once the plan is sold, who has the right and ability to monetize the participants?

Source: Investmentnews.com (registration may be required), September 2021

Most Retirement Plan Savers Aren't Tapping Their Accounts Despite Pandemic

Americans continued to save for retirement through DC plans during the first half of this year despite ongoing economic stresses brought about by the COVID-19 pandemic, according to ICI's "Defined Contribution Plan Participants' Activities, First Half 2021." The study tracks contributions, withdrawals, and other activity in 401k and other DC retirement plans, based on DC plan recordkeeper data covering more than 30 million participant accounts in employer-based DC plans at the end of June 2021.

Source: Ici.org, September 2021

IRS Announces Opening of the Second 403b Pre-Approved Plan Cycle

Like the pre-approved plan document program for 401k plans, the 403b pre-approved plan document program is intended to be on a regular 6-year cycle. Many 403b plan providers and eligible employers, particularly QCCOs and Non-QCCOs, have been wondering when the second cycle would begin and what changes it might include. The IRS has now issued guidance on Cycle 2.

Source: Groom.com, September 2021

Keeping Retirement Plan Committees "In-Shape" With Fiduciary Training

The expertise and overall fitness of your organization's retirement plan committee are dependent upon their level of training: in this case, fiduciary training. Find out who should be included in this training, what it should cover and why, and how often fiduciary training should take place.

Source: Francisinvco.com, September 2021

Target-Date Funds: Evidence Points to Growing Popularity and Appropriate Use by 401k Plan Participants

Since 1996, the EBRI and the ICI have worked together on collecting and analyzing annual data on millions of 401k plan participants' accounts. This 21-page report analyzes 401k plan participant's use of target-date funds using year-end 2018 data from the EBRI/ICI 401k database. Key findings are summarized.

Source: Ebri.org, September 2021

Early House Budget Reconciliation Text Includes Retirement Reform

The House Ways and Means Committee has released draft legislative text as part of what is currently planned to be a $3.5 trillion tax and spending package. The draft legislative text has several retirement reform proposals.

Source: Ascensus.com, September 2021

401k Plan Sponsors See Value in Using a Single Recordkeeper

Plan sponsors using a single recordkeeper to manage multiple retirement plans see better overall time savings and fewer administrative drawbacks when compared to sponsors using multiple providers. That's a key finding from a survey released today by Principal Financial Group, which also revealed that respondents with one provider also reported higher rates of employee satisfaction and engagement with retirement benefits.

Source: 401kspecialistmag.com, September 2021

When Fiduciaries Fail

Reports are plentiful of employers trapped in legal proceedings for violating their trusted role as the overseer of their employees' retirement plans. Until recently, we only heard rumors of suspected lethargy among the overseers. But the frequency and number of failed leadership allegations among them on social media, in the 24-hour broadcast news cycle, and print media tends to taint the reputations of all employers in the public eye. Wisdom calls for a change in fiduciary behavior.

Source: Rolandcriss.com, September 2021

Oshkosh ERISA Challenge Squashed by District Court

Following oral testimony and arguments in December, the U.S. District Court for the Eastern District of Wisconsin has ruled against the plaintiffs in an ERISA fiduciary breach lawsuit filed against Oshkosh Corp., its board of directors, its retirement plan administration committee and some 30 individuals alleged to be fiduciaries. The lawsuit has been dismissed under Federal Rule of Civil Procedure 12(b)(6), with prejudice, based on the court's conclusion that the amended complaint fails to state a claim upon which relief can be granted.

Source: Planadviser.com, September 2021

DOL Watchdog Recommends Additional Action to Inform 401k Participants About Fees

The DOL could take steps to help 401k participants better understand the fees they pay as part of their retirement plans, according to the results of a July study by the U.S. Government Accountability Office. The GAO said it found that nearly 40% of 401k plan participants did not fully understand and have difficulties using the fee information DOL requires their plans to provide, while 41% incorrectly believed that they did not pay 401k plan fees. The agency offered five recommendations to the DOL.

Source: Hrdive.com, September 2021

Unpacking the latest DOL Fiduciary Investment Advice Rule

In December 2020, the DOL reinstated the five-part test and issued a revised interpretation of the definition of "investment advice" under ERISA. Additionally, a new prohibited transaction exemption was established. Then, in 2021, the DOL issued further guidance to clarify the rule changes.

Source: Fidelity.com, September 2021

DOL Fiduciary Rule 3.0: The Sprint to December 20

In the absence of further direction from DOL, it now has become incumbent on firms to accelerate their Rule 3.0 compliance project if the December 20 date is to be met, and in particular to implement PTE 2020-02 or an alternative solution if they are or may be serving as a fiduciary in rollover interactions.

Source: Eversheds-Sutherland.com, September 2021

Dust Off Your ERISA Fiduciary Liability Insurance Policy

Now is a great time to dust off your company's ERISA fiduciary liability policy to ensure your plan fiduciaries have robust, comprehensive coverage. Fiduciary liability policies provide coverage for claims related to the administration and operation of retirement and health and welfare plans. Unlike D&O coverage, fiduciary liability policies rarely get much attention but can similarly provide significant protection to a company's Board or other plan fiduciaries.

Source: Benefitslawadvisor.com, September 2021

Essential Form 5500 Filing Guidance for 401k Plan Sponsors

It's important to understand that the signer of Form 5500 is considered a plan fiduciary who has potential personal liability for the compliant administration of the 401k plan. This includes being responsible for the accuracy of the information contained on Form 5500. Accuracy is important not only because it's part of operating compliantly but because errors on Form 5500 can raise a red flag for the IRS or the DOL and could trigger an audit.

Source: Alliant401k.com, September 2021

Here's What Many Retirement Plan Committees Have in Common

Although retirement plan committees can be as varied as the companies that sponsor them, they often are similar in structure and approach. The Plan Sponsor Council of America recently surveyed retirement plan sponsors to learn what their committees have in common. This article briefly reviews the commonalities.

Source: Voya.com, September 2021*

IRS Updates Tools for Reviewing Retirement Plan Document Compliance

The IRS has updated nearly all of the "subject matter packages" used by IRS specialists when reviewing retirement plan documents. Each package consists of an Explanation, a Worksheet, and a Checksheet that are designed to be used together. In general, the Explanations describe the applicable legal requirements and provide citations to the Code and regulations, the Worksheets consist of yes-or-no questions, and the Checksheets provide lists of required plan provisions. While they were created for IRS personnel, these materials can also be used by plan sponsors to review a plan's compliance before submitting a determination letter application.

Source: Thomsonreuters.com, September 2021

Your 401k Plan Guide

Employer-sponsored 401k plans are the retirement savings vehicle of choice for millions of Americans. They allow us to squirrel away pretax dollars for our golden years and we do so automatically, without even thinking about it. In some cases, our employers contribute to our 401k kitties, too, via a company match. What could be better? As it turns out, a lot could be better.

Source: Morningstar.com, September 2021

Employee Benefit Plan Audits Set for Major Changes, More Transparency

Employee benefit plan audits and reporting will be quite different soon as changes in generally accepted auditing standards take effect. Communications with management and those charged with governance will be more substantial and robust. The auditor's report will be more comprehensive and clearer. And practitioners will no longer issue a disclaimer when management elects to have an audit performed under ERISA Section 103(a)(3)(C).

Source: Journalofaccountancy.com, September 2021

Reporting Rules for "Groups of Plans" Poised for Release

Proposed regulations drafted by the DOL implementing changes under the SECURE Act that allow a group of plans to file a single Form 5500 annual return could be released any day now. Based on the regulatory listing posted on the OMB website, it appears the White House has completed its review of the proposed regulations, which were sent to OMB on July 30. This is typically one of the last steps before a regulatory proposal is released publicly.

Source: Asppa.org, September 2021

How to Navigate the Future of the Retirement Industry

For the financial services industry -- especially those in the retirement recordkeeping business -- the growing savings gap has brought to the fore a big challenge: how can firms respond to emerging and growing customer demands with meaningful solutions?

Source: 401kspecialistmag.com, September 2021

Recordkeeper Consolidation Triggers Fiduciary Responsibilities

401k plan recordkeeper consolidation is proceeding at a rapid pace as a response to shrinking profit margins. If your recordkeeper is acquired, passivity is not an option for fiduciaries who are not already familiar with the buyer's business and fee structure. Fiduciaries have a legal responsibility to make sure that their plans have obtained competent services at a reasonable cost, which means that they need to take steps to determine whether staying put or finding a new record keeper is in the interest of plan participants.

Source: Rpaconvergence.com, September 2021

Plan Sponsors Should Eliminate Jargon in Their Communications

An Empower white paper makes the case that retirement plan sponsors and advisers should use simpler language in retirement plan communications, finding that participants are more likely to act on their retirement plans if they receive direct language. The report, conducted with research from the Harris Poll, stresses the importance of simplicity in communications, explaining that financial terms such as "deferral" and "allocation" can scare employees away from participating in a plan.

Source: Plansponsor.com, September 2021

Don't Be Like These 401k Plan Providers

401k plan sponsors using ineffective plan providers need the help of an ERISA attorney. Here are some "horror stories" from an ERISA attorney on things you shouldn't become and if some of these stories may describe you, you have time to change your behavior.

Source: Jdsupra.com, September 2021

Court Rules Inherited 401k Funds Are Protected in Bankruptcy

A North Carolina Bankruptcy Court decided that inherited 401k accounts do indeed receive creditor protection under ERISA as long as the funds are still in the plan at the time of the bankruptcy filing.

Source: Investmentnews.com (registration may be required), September 2021

Townsend Joins DOL as Retirement Advisor to Walsh

Kathleen Kennedy Townsend is joining the Department of Labor to help advance state and federal efforts to expand retirement savings programs. In an emailed statement, Townsend explained that on Aug. 30 she started a new role as Labor Secretary Marty Walsh's Representative on Retirement and Pension Issues.

Source: Asppa.org, September 2021

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