November 2023 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.

Use the SEARCH feature to located specific items from this digest and from our ARCHIVE.

Bed Bath & Beyond, Bankruptcy, and Fiduciary Litigation

In September 2023, former employees of Bed Bath & Beyond sued members of the company's 401k committee, the committee responsible for the prudent management of the company's 401k plan. The former employees allege they lost more than $5 million following the company's bankruptcy filing in April 2023, a loss the committee could have avoided. Here is a cautionary tale of Bed Bath & Beyond's bankruptcy.

Source: Woodruffsawyer.com, November 2023

Can a Plan Sponsor Limit Hardship Distributions?

The article answers this question, "Our 403b plan currently allows for hardship distributions, but the number of such distributions has been on the uptick in recent years. We don't wish to eliminate hardship distributions, but is there any way we can restrict their availability?"

Source: Plansponsor.com, November 2023

How to Make Your Retirement Plan Committee Better

To function as a successful 401k or 403b plan sponsor, you need a retirement plan committee that helps your company organize and administer your plan. While ERISA does not require the committee itself, committee members can keep your organization in compliance with all established regulations. To help you get the most out of your retirement plan committee, here are several strategies for your consideration. Implementing any or all of them could enhance your retirement plan committee's performance.

Source: Planpilot.com, November 2023

Crypto Remains Massive Compliance Risk for Retirement Fiduciaries

On November 20, the Securities and Exchange Commission charged Kraken, a crypto exchange, for operating as an unregistered securities exchange. This prompted Wagner Law Group partner Kimberly Shaw Elliott to caution fiduciaries of the risks of crypto assets, given their compliance issues. The Department of the Treasury issued a record-breaking multi-billion dollar fine against Binance Holdings Ltd., a crypto exchange, the next day, further compounding the fiduciary risks of crypto assets.

Source: Planadviser.com, November 2023

How to Navigate the New ERISA Fiduciary Advice Proposal

If you're confused and overwhelmed about the DOL's latest proposed rule defining who is an invest. advice fiduciary for purposes of the ERISA, you're not alone. But where does one begin, and how do they ensure they're not inadvertently tripped up? What, specifically, does it mean for retirement plan advisors, sponsors, and participants?

Source: Napa-net.org, November 2023

Are There Boogeymen in the New Fiduciary Proposal?

The author writes regarding the DOL's new fiduciary proposal that, "rumors abound, and some law firms (certainly those that represent the interests of those who would be newly subject to new regulations) have, to my read anyway, been inclined to see plenty of clouds in the silver linings -- and to characterize the new proposal as basically being a resurrection of the old one (to that end, the Halloween unveiling made for plenty of 'zombie' references) -- in the process imagining things that aren't actually 'there.'"

Source: Napa-net.org, November 2023

You Might Have a Problem With Your 401k Plan If...

When it comes to sponsoring a 401k plan, there are many situations that may lead to an immediate problem. This article will let you know which signs on your 401k plan are actual major problems.

Source: Jdsupra.com, November 2023

Federal Court Tosses 401k Plan Mismanagement Suit Against Old Dominion

A federal court judge in North Carolina dismissed a lawsuit in which a former employee alleged that Old Dominion Freight Line had violated its fiduciary duty under ERISA by mismanaging its workers' 401k plan. Specifically, ex-employee Harvey Davis claimed that Old Dominion failed to substitute cheaper investment funds for more expensive options, thus violating the duty of prudence under ERISA and failing to monitor the plan adequately.

Source: Hallbenefitslaw.com, November 2023

The Long Wait for the Long-Term Part-Time Guidance is Over

The DOL and IRS released on Friday their proposed rules for long-term part-time employees. The proposal answers many of the burning questions since the new eligibility standards first came to be under the SECURE Act back in 2019.

Source: Seyfarth.com, November 2023

A Victory for Plan Fiduciaries: The Second Circuit Clarifies the Pleading Standard for Prohibited Transaction Claims

For years, courts have struggled with the appropriate standard to apply to ERISA-prohibited transaction claims at the pleading stage. In Cunningham v. Cornell University, a case that involved a 403b defined contribution plan, the Second Circuit addressed the pleading standard necessary to sufficiently allege a party-in-interest prohibited transaction claim. The Second Circuit issued a well-reasoned opinion that may have significant implications for ERISA-prohibited transaction claims at the pleading stage.

Source: Groom.com, November 2023

Fred Reish on the New Fiduciary Rule: The Fiduciary Definition of Fiduciary

This post discusses the "fiduciary acknowledgment" definition of fiduciary invest. advice in the DOL's proposed fiduciary regulation. More specifically, the proposed regulation says that a person will be an ERISA and Code fiduciary if "The person making the recommendation represents or acknowledges that they are acting as a fiduciary when making investment recommendations."

Source: Fredreish.com, November 2023

A Guide to the DOL's Retirement Security Rule Proposal

The DOL's new "retirement security rule" package is the latest chapter in an almost 15-year effort by the DOL to amend the five-part test in its 1975 regulation for determining whether a person is a "fiduciary" by providing invest. advice for a fee. Very generally speaking, the Proposed Rule would significantly expand the circumstances under which a person could be treated as providing invest. advice that is subject to ERISA's fiduciary standards.

Source: Erisapracticecenter.com, November 2023

SECURE 2.0 Removes the RMD requirement for Roth 401k Accounts

The SECURE Act 2.0 brought about significant changes to retirement planning in the United States. Among its many provisions, one notable alteration has positively impacted Roth 401k accounts, the elimination of Required Minimum Distributions.

Source: Belfint.com, November 2023

IRS Issues Guidance on Pre-Approved Plans

The IRS in Revenue Procedure 2023-37 has issued fresh guidance on qualified pre-approved plans and 403b pre-approved plans which combines, conforms, clarifies, and updates rules for those plans set forth in prior revenue procedures.

Source: Asppa.org, November 2023

Target-Date Fund Theory and Evidence

TDFs say they follow the academic lifetime investment theory, but they are much riskier at the target date than this theory. Ron Surz argues that 401k participants are not getting the protection that academic lifetime investment theory prescribes and are therefore much less protected than they should be near retirement.

Source: 401kspecialistmag.com, November 2023

IRS Proposes New LTPTE Regulations for 401ks

The DOL and the IRS released proposed regulations for 401k plans for long-term, part-time employees. As currently drafted, they would go into effect starting Jan. 1, 2024. The new guidelines seek to better define LTPTEs, eligibility conditions, and treatment of former LTPTEs under the SECURE Act rules.

Source: 401kspecialistmag.com, November 2023

DOL Sues Shuttered Law Firm Over Participant's Assets

The Department of Labor sued the retirement plan of defunct law firm McCullough, Campbell & Lane LLP, and four of the firm's capital partners on November 20 for allegedly failing to terminate the company retirement plan, which holds $5.4 million in assets.

Source: Plansponsor.com, November 2023*

IRS Releases Draft 2024 Form 1099-R

The IRS has released a draft of the Form 1099-R to be used in 2024. This is an early release draft of the form, as well as its instructions, which the IRS is providing only to inform taxpayers, including benefits recipients.

Source: Ntsa-net.org, November 2023

$4.5 Million Settlement Struck in 401k Excessive Fee Suit

The parties in a suit that claimed a $7.3 billion MetLife 401k Plan "stocked the Plan's investment menu with their own proprietary index funds," while "participants got the short end of the stick" have come to terms with a significant recovery for the settlement class compared to the claims that were alleged.

Source: Napa-net.org, November 2023

Latest in 401k Litigation: Cap Group Sued, Metlife to Pay $4.5M Settlement

Capital Group, the provider of American Funds, was sued this month over its own $5 billion 401k plan. In that case, the plaintiffs in the proposed class action allege that the company breached its duties to the plan by "mismanaging and failing to remove imprudent investments" and not monitoring the fiduciaries it appointed. In the MetLife case, it will pay $4.5 million to settle a lawsuit over the company's 401k plan. That amount will resolve a 2021 case alleging that the insurance company violated its fiduciary duty to plan participants by including in-house products on the 401k menu rather than ostensibly superior funds from competitors.

Source: Investmentnews.com, November 2023

IBM 401k Replacement Elicits Questions From Retirement Leaders

IBM's decision to eliminate its 401k-match policy earlier this month was an awakening for advocates of the private retirement plan market, leading some to question whether the riddance signals a shift in how large playmakers prepare their employees for retirement.

Source: 401kspecialistmag.com, November 2023

Agencies Release 2023 Form 5500 Series, Reflecting SECURE Act Changes

Federal agencies have released the 2023 Form 5500 series, including Form 5500, Form 5500-SF, Form 5500-EZ, Schedules, and Instructions. The key revisions for 2023 reflect Code and ERISA amendments made by the SECURE Act and were described in a previous agency action. The changes relevant to 401k plan reporting are reviewed here.

Source: Thomson Reuters/EBIA, November 2023

Analysts Agree IBM Pension Thaw Benefits Both Participants and Plan Sponsor

IBM's decision to unfreeze the company's cash balance plan is heating up conversations across the defined benefit pension world on whether other firms -- including IBM's competitors -- will follow suit. IBM thawing its company cash balance plan supports workers, is an efficient and effective allocation of resources to retirement benefits, and indicates that large plan sponsors nearing full funding status may act to maintain their defined benefit plans.

Source: Plansponsor.com, November 2023

401k Suit Says Court Should Exclude Expert "Opinion"

A recent appellate court ruling that upheld a district court's rejection of expert witness testimony has been raised as a defense in an excessive fee suit. The suit in question involved the fiduciaries of the $5.2 billion L3Harris Retirement Savings Plan.

Source: Napa-net.org, November 2023

401k Contributions Steady, but Hardship Withdrawals and Loans Rise: Fidelity

While contribution levels have remained consistent, a troubling trend is that many individuals increasingly have been tapping their retirement savings through hardship withdrawals or loans. This is according to the latest data from Fidelity Investments' Q3 2023 retirement analysis, which shows that 2.3% of workers took a hardship withdrawal, up from 1.8% in Q3 2022. Notably, the top two reasons behind this uptick were avoiding foreclosure/eviction and medical expenses.

Source: Napa-net.org, November 2023

DOL's Retirement Security Rule Muddies Definitional Waters

The White House and the DOL framed the new fiduciary rule as a narrowly tailored regulation necessary to protect consumers in light of changes to the retirement system over the past five decades. However, the new proposal is better viewed as a sweeping regulatory overhaul that would change how much of the retirement services industry interacts with plans, participants, and individual retirement account owners. In this article, Michael Kreps, Groom principal and chair of the firm's Retirement Services group, explores the DOL's proposed rule for defining a fiduciary and current opposition to the rule.

Source: Groom.com, November 2023

Tracking Compensation and Getting It Right

According to the IRS, one of the most common mistakes that employers make when administering their retirement plans is using the wrong employee compensation. If the wrong amount is sent to your provider, this will lead to incorrect contribution calculations, incorrect plan testing, and leave the plan not operating under the plan document. To administer your plan properly, it is important to understand how your plan defines compensation and to make sure your definition is properly set up in your payroll system.

Source: Consultrms.com, November 2023

Hidden Advisor Fees: Ninth Circuit and DOL Let the Sunshine In

The sponsor fiduciary's obligation to review and monitor indirect compensation would also apply to fiduciary advisors. In addition to monitoring the reasonableness of the adviser's indirect compensation, there are several other conditions in the proposal related to the impartial conduct standards that may also require review and monitoring that are discussed in the article.

Source: Cohenbuckmann.com, November 2023

Annual Limits on Qualified Plans for 2024

On November 1, 2023, the IRS released Notice 2023-75, which sets forth the 2024 cost-of-living adjustments affecting dollar limits on benefits and contributions for qualified retirement plans. This chart summarizes the 2024 limits for benefit plans.

Source: Benefitsnotes.com, November 2023

Procrastinating on Retirement Saving Leads to Trouble

Research shows that procrastination plays at least a small role in why so many U.S. workers haven't saved enough to retire in the lifestyle they're accustomed to. The urgency of saving early has never been truer than it is for Millennials and Gen-Z.

Source: Bc.edu, November 2023

Informational Copies of the 2023 Form 5500 Series Released

The DOL's Employee Benefits Security Administration, the IRS, and the Pension Benefit Guaranty Corporation released informational copies of the 2023 Form 5500 Series. These versions of Form 5500, Form 5500-SF, and Form 5500-EZ to be used for reporting concerning the 2023 plan year, as well as Form 5558, are informational only.

Source: Asppa.org, November 2023

Retirement Policy and Regulatory Trends for 2024

As we head into the 2024 election year, experts are projecting the upcoming trends in retirement public policy and regulation. T. Rowe Price held its U.S. Retirement Market Outlook event this week, commenting on possible developments within retirement income, practices, and public policy.

Source: 401kspecialistmag.com, November 2023

More Americans Expect to Delay Retirement to Age 63

Today's inflationary environment is causing some to rethink their retirement plans down the line. The latest research from Empower finds that considering the current economic environment, more people estimate delaying their expected retirement by three years, for an average age of 63.

Source: 401kspecialistmag.com, November 2023

Automatic Enrollment, Reenrollment, and Retirement Outcomes

Millions of Americans who otherwise might not be saving for retirement have been enrolled by their employers into their 401k plans through automatic enrollment, and it has transformed the way that many Americans save for retirement. Plan sponsors have embraced the use of automatic enrollment as a means of creating employee engagement with retirement savings and promoting healthy financial behavior.

Source: Troweprice.com, November 2023*

100% of Large Retirement Plan Advisories Now Include Wealth Strategy, According to T. Rowe

There's no more holding out by large retirement plan advisory firms in offering a built-in wealth strategy for clients, according to researchers at T. Rowe Price. In the Retirement Leadership Forum 2021 Aggregator Survey, all advisers reported having a built-in wealth strategy to offer participants in the plan, said Michael Doshier, a senior defined contribution adviser strategist at T. Rowe Price.

Source: Planadviser.com, November 2023

DOL's Lost and Found Database Gets a Boost

The SECURE 2.0 Act's creation of an online searchable lost and found database at the DOL to help American workers find lost retirement savings benefits has moved one step closer to becoming a reality. The Technology Modernization Fund -- which invests in technology projects across government, providing incremental funding, technical assistance, and oversight -- announced that it is investing nearly $3.5 million at the DOL to help establish the online registry.

Source: Napa-net.org, November 2023

Cornell Captures Another Win in Long-Standing Excessive Fee Suit

Another university 403b plan has won yet another victory in staving off an excessive fee suit by the Schlichter law firm. The case involved Cornell University, which had already successfully fended off most of the claims in 2019. In this most recent ruling in the U.S. District Court for the Southern District of New York, Judge P. Kevin Castel ruled that the plaintiffs had plausibly argued that it was imprudent to pay annual recordkeeping fees of more than $115 per participant but presented no evidence that this caused the plan to suffer losses.

Source: Napa-net.org, November 2023

Retirement Plan Contributions Slipped in 2022

NAPA sister organization Plan Sponsor Council of America is out with its latest survey of 401k plans. It finds that after record contribution rates from participants and employers in 2021, plan contributions dipped in 2022. However, although participation and contribution rates slipped, they nonetheless remain strong.

Source: Napa-net.org, November 2023

Provisions to Kill DOL Fiduciary Proposal Add to Uncertainty

House legislation to fund the Department of Labor contains provisions to kill the agency's proposal to raise investment advice standards for retirement accounts, but the effort to scuttle the regulation faces strong opposition from Democrats. While the financial industry is trying to stop the proposal through the legislative process, it also has tried to slow it down by asking DOL for an extension on the public comment period, which is set to end Jan. 2. The agency denied that request Tuesday.

Source: Investmentnews.com, November 2023

D.C. Federal Court Judge Dismisses 401k Provider's Challenge to DOL Cryptocurrency Guidance

A D.C. federal court judge dismissed a 401k provider's lawsuit challenging the DOL guidance concerning cryptocurrency investments. In his ruling, the judge found that DOL guidance was not subject to judicial review, and the 401k provider lacked standing to file suit.

Source: Hallbenefitslaw.com, November 2023

Forfeitures Accounts -- The Next New Topic of ERISA Litigation Trends & Should You Be Concerned?

A handful of new ERISA litigation cases are aiming at forfeiture accounts and trying to pull them into the never-ending list of ways in which retirement plan fiduciaries have purported to breach their fiduciary duty to plan participants. The recent lawsuits argue that even though permitted by the plan document, it was a breach of fiduciary duty to exercise discretion to use the plan's forfeitures to reduce company contributions, rather than to offset expenses of the 401k plan.

Source: Graydon.law, November 2023

Plan Providers Need to Prove Value of Financial Wellness Programs

Financial wellness programs have grown to become a key component of the DC plan value chain, with close to 90% of recordkeepers presenting a financial wellness program that either is proprietary or offered in conjunction with a strategic partner, according to Cerulli. However, given the difficulty in measuring the success of these programs, plan providers will need to demonstrate the value they provide for plan sponsors and participants.

Source: Cerulli.com, November 2023

Third of DC Plan Sponsors Don't Expect Employees to Use Financial Wellness Programs: Survey

About a third (32 percent) of defined contribution plan sponsors that currently don't use a financial wellness program say it's because they don't expect employees to take advantage of it, according to a new survey by Cerulli Associates. However, the survey also found financial wellness programs have grown to become a key component of the DC plan value chain, with close to 90 percent of recordkeepers presenting a financial wellness program.

Source: Benefitscanada.com, November 2023

Navigating the New Age of Retirement Services

Laying the foundation for long-term financial stability means more than the traditional approaches to saving for retirement. Experts and industry leaders offered perspectives in recent panel discussions at the SPARK Forum concerning ways to help participants have a well-financed retirement, through work with individuals as well as through cooperation with other parts of the industry.

Source: Asppa.org, November 2023

Facts Don't Back Recent Criticism of Voluntary Retirement Plan Market

The author writes, "America's voluntary retirement plans are the envy of the world. Countries like Japan, South Korea, and the U.K. are trying to replicate the remarkable success of 401k plans and individual retirement accounts (IRAs), which have helped Americans from all walks of life build financial security and generational wealth. Yet, it's become fashionable to question the architecture of our retirement system, particularly voluntary retirement plans."

Source: 401kspecialistmag.com, November 2023

House Passes Amendments Blocking DOL Fiduciary Rule

The House of Representatives voted on November 15th to pass key amendments in H.R. 5894, or the Labor, Health, and Human Services, Education, and Related Agencies Appropriations Act, that would prevent the DOL from using any allocated funds for its fiduciary proposal.

Source: 401kspecialistmag.com, November 2023

Bipartisan Bill Backs 401k Plans for Teen Workers

The Helping Young Americans Save for Retirement Act, introduced by Senators Bill Cassidy and Tim Kaine, would lower the participation age of ERISA-covered defined contribution plans to 18-year-olds under certain circumstances, according to a statement released by the U.S. Senate Committee on Health, Education, Labor, and Pensions.

Source: 401kspecialistmag.com, November 2023

Three Takeaways From DOL's New Fiduciary Proposal

The U.S. Department of Labor's new proposal to expand what constitutes fiduciary investment advice under the Employee Retirement Income Security Act isn't as sweeping as a previous fiduciary rule that failed in court, but it's still an ambitious package that benefits lawyers need to be aware of, experts say. Here are three things to keep an eye on.

Source: Wagnerlawgroup.com, November 2023

United Airlines Sues Advisers for Scheme to Defraud 401k Pilot Participants

United Airlines Inc. and its retirement plan committee have filed a complaint against an independent advisor for an alleged scheme to defraud retirement plan participants through a personalized retirement account, according to court filings. United alleges that Keep Safe Investments LLC, J&K Connect LLC, and adviser Krisi Berge had, "unbeknownst to plaintiffs, and contrary to the terms of the plan," taken loans from the retirement accounts of participants in the United Airlines Pilot Retirement Account Plan for "personal gain."

Source: Planadviser.com, November 2023

AT&T Rebuffed in Controversial 401k Prohibited Transaction Ruling

The telecommunications giant's motion to have a controversial appellate court decision reconsidered by the full court has been rejected. The denial of a rehearing leaves the case where it was; with a directive for the lower court to reconsider the issue(s) already presented, but with the "new" interpretation of the issue provided by the appellate court. Or -- and as seems likely considering the sweeping impact of this decision, and its argued divergence from similar cases in other districts -- to appeal to a higher court.

Source: Napa-net.org, November 2023

Shifting the 401k "Balance"

IBM recently announced that they were making changes to its 401k. While it's certainly an interesting move, it seems unlikely to catch on more broadly. Retirement savers have not only long understood and appreciated the value of an employer match, and so seem unlikely to embrace "losing" that to a new plan they don't understand. As for plan sponsors, a big design change that requires sensitive and ongoing communication will almost surely give pause to even the most innovative. That said, it should serve as a reminder that plan designs can, and should, serve multiple purposes.

Source: Napa-net.org, November 2023

Plaintiff Drops Blackrock TDF Suit

As several similar suits have failed to gain traction in federal court, the participant-plaintiff in one of those suits has dropped his suit. The notice of voluntary dismissal was filed in the U.S. District Court for the Southern District of New York by Jermaine Anderson, a former worker at Advance Publications Inc., and a participant in the firm's $1.5 billion 401k plan.

Source: Napa-net.org, November 2023

Guidance on Section 603 of the SECURE 2.0 Act Concerning Catch-Up Contributions

The IRS has issued Notice 2023-62, which gives guidance on Section 603 of the SECURE 2.0 Act concerning catch-up contributions. The Notice delays the requirement in Section 603 for highly compensated individuals to make catch-up contributions on a Roth basis -- with no pre-tax option -- to qualified retirement plans effective January 1, 2024. Instead, the Notice establishes a two-year administrative transition period, during which all catch-up contributions by these individuals will satisfy the terms of Section 603, whether they are made on a Roth basis or not.

Source: Hallbenefitslaw.com, November 2023

Seven Steps Toward a New Paradigm for Retirement

The author suggests that the conventional wisdom on retirement is misguided. The approaching exhaustion of the Social Security and Medicare trust funds has stoked anxiety over the disappearance of these programs' support, while dire statistics about Americans' lack of retirement assets have propelled a belief of chronic under-saving. In the aggregate, neither view is quite right, and this mischaracterization has unearthed calls by some to dismantle the entire system. While the current system has serious flaws, however, it is still worth saving. To do so, policymakers need both an accurate assessment of the system's shortfalls and a menu of plausible options to improve them.

Source: Georgetown.edu, November 2023

The New Fiduciary Rule: Fixed Indexed Annuities

Statements from the White House indicate that the DOL and the White House are concerned that fixed-indexed annuities may be inappropriately sold to participants and IRA owners in connection with recommendations to roll over benefits from plans and to transfer money from IRAs. The reaction from the insurance industry and state insurance commissioners has been immediate and strong. If the proposals become final as written, the greatest impact of the changes will likely be on insurance agents, particularly independent producers. This article covers the impact on independent insurance agents, insurance companies, and annuities.

Source: Fredreish.com, November 2023

Department of Labor's Fiduciary Rule 4.0 Proposal

An initial analysis of the DOL's October 31 Fiduciary Rule proposal to again redefine ERISA fiduciary "invest. Advice" and to remake the complex of ERISA exemptions allowing conflicted advice. The author assesses that the proposal is not "more narrowly tailored" than the vacated 2016 rule.

Source: Eversheds-sutherland.com, November 2023

House to Vote on Bill Blocking Funding for DOL's Fiduciary Rule

The U.S. House of Representatives will vote on a spending bill (H.R. 5894) that contains key amendments restricting funding for the DOL's recently proposed fiduciary rule.

Source: 401kspecialistmag.com, November 2023

IRS Grants Much-Needed Two-Year Grace Period to Get Roth Catch-Ups All Caught Up

On January 1, 2024, Section 603 of SECURE 2.0 becomes effective, which mandates that plan sponsors provide Roth catch-ups for DC plans that offer catch-ups and have at least one participant who earned $145,000 of FICA wages in the prior year. This new mandate had plan sponsors and recordkeepers alike scrambling to understand the new rule and how to implement this new plan qualification requirement by yearend. This new rule raises several open questions. In this article, Groom principals Elizabeth Dold and David Levine explore IRS Notice 2023-63, which provides guidance for Section 603 of SECURE 2.0.

Source: Groom.com, November 2023*

DOL Proposes Major Changes to Fiduciary Advice Definition

On November 3, 2023, the DOL published a new set of regulatory proposals in its long-running effort to expand the circumstances under which a person will be considered an investment advice fiduciary for purposes of ERISA and the parallel provisions of the Internal Revenue Code and to change the landscape of prohibited transaction exemptions available to those fiduciaries. This article provides an overview of the 2023 Proposed Regulation.

Source: Groom.com, November 2023

CIT Providers Target Mid-Sized to Large DC Plans in 2024

Collective investment trusts have surpassed mutual funds as the top investment vehicle by defined contribution investment-only assets. CIT assets totaled $4.63 trillion as of year-end 2022, as improved capital market conditions coupled with continued robust demand within the defined contribution retirement plan space have contributed to ongoing growth, according to Cerulli's latest report.

Source: Cerulli.com, November 2023

You Can Call the DOL's New Investment Fiduciary Rule by Another Name, but it's Still the "Fiduciary Rule"

This proposed rule represents the most recent bid by the DOL to expand on the fiduciary rule first established in 1975 to make more investment advisors ERISA fiduciaries, and as a result, subject to the high fiduciary standards imposed by ERISA. This time, however, the DOL has labeled its new rule as the "Retirement Security Rule," rather than the more traditional "fiduciary" rule.

Source: Beneficiallyyours.com, November 2023

Increased Retirement Plan Startup Credit Proposed for Micro Businesses

Representative Claudia Tenney has introduced the Retirement Investment in Small Employers (RISE) Act to encourage small businesses with no more than 10 employees who received at least $5,000 of compensation in the prior year to adopt retirement plans. The RISE Act would replace $500 with $2,500 for a "Qualified Microemployer."

Source: Ascensus.com, November 2023

Prepare for Upcoming Changes to DC Plans Long-Term, Part-Time Employees

The SECURE Act of 2019 and the SECURE 2.0 Act of 2022 made many significant changes to retirement plans and how they operate. Some changes that become effective for plan years beginning in 2024 and later will be implemented automatically by service providers. However, some sponsors will need to start planning now for an important change that will apply to many plans effective as of January 1, 2024. One of these requires 401k plans to allow long-term, part-time employees to make salary deferral contributions.

Source: Wagnerlawgroup.com, November 2023

The Retirement Security (Nee Fiduciary) Rule Rides Again

At first blush, the DOL's proposal attempts to be grounded in the same five-part test it promulgated in 1975 that defined an investment-advice fiduciary. Even so, the new rule appears to make significant changes to the test including: (i) tying the "regular basis" prong to the business of the advisor and not the relationship between the advisor and the advisee; (ii) doing away with the "mutual agreement" requirement and, (iii) adding a requirement that the advisee understands that the advice is being provided in their "best interest."

Source: Wagnerlawgroup.com, November 2023

Maine's Mandatory Retirement Savings Program: What Employers Need to Know

On October 18, 2023, the Maine Retirement Savings Board adopted a final rule implementing Maine's state-run retirement savings program, the Maine Retirement Investment Trust or MERIT. MERIT is intended to help employees who do not have access to a retirement plan through their employer save for retirement by requiring automatic payroll deduction contributions to a Roth IRA. This post provides an overview of the final rule from an employer's perspective.

Source: Verrill-law.com, November 2023

Fiduciary Rule Advisory

The Department of Labor will soon be publishing in the Federal Register a proposed change to the definition of the term "fiduciary" under section 3(21) of ERISA, as well as amendments to two current class exemptions, PTE 84-24 and PTE 2020-02. This is a summary and overview of the proposals and their anticipated effects.

Source: Steptoe.com, November 2023

Small Businesses See Many Obstacles to Plan Creation, Lack Awareness of SECURE 2.0

A survey from Capital Group found that the primary obstacles to small businesses creating retirement plans were costs, complexity, and concerns about the size and stability of their business. The report also found that larger employers were much more informed about the SECURE 2.0 Act of 2022 and the law's impact on federal retirement policy.

Source: Planadviser.com, November 2023

Schlichter Sanction Swept Aside by Appellate Court

A federal appellate court has determined that a lower court "abused its discretion" in assessing a $1.5 million sanction against the Schlichter Bogard law firm.

Source: Napa-net.org, November 2023

Employee Attitudes Towards Their Retirement Benefits Contain Contradictions

While employees expect their defined contribution plan to be a key vehicle for funding their retirement, most are worried their retirement savings will not be enough to cover their expenses, according to new research from Buck.

Source: Napa-net.org, November 2023

Whole Foods 401k Targeted With Excessive Fee Suit

Another multi-billion-dollar 401k plan finds itself in the crosshairs of an excessive fee suit. This time it was participant-plaintiffs bringing suit against the Whole Foods Market Growing Your Future 401k Plan. The claims put forth are nearly identical to those filed in any number of these excessive fee suits.

Source: Napa-net.org, November 2023

When It's Time to "Say Goodbye" Your 401k's Financial Advisor

When it comes to the financial advisor working on a retirement plan, there are certain instances, outlined here, where a plan sponsor would be wise to say goodbye. It's very tough to say goodbye, but it beats putting the plan and company at risk to continue that relationship.

Source: Jdsupra.com, November 2023

The Who, the When and the "Oh, No" of 401k Plan Notices

It's that time of year when calendar year 401k plans must send annual retirement plan notices. As you work with your service providers to make sure all notices are sent, now may be a good time to reacquaint yourself with the more common notices and related 401k plan documents that must be provided to employees. Mistakes can happen especially with the "Who and the When," so here is a chart of the common notices with timing and recipients.

Source: Graydon.law, November 2023

The New Fiduciary Rule: An Overview

The DOL has released its package of proposed changes to the regulation defining fiduciary advice and to the exemptions for conflicts and compensation for invest. advice to plans, participants (including rollovers), and IRAs. This Fred Reish blog post is an overview of the new proposals. His follow-up posts will go into detail on each of the proposals.

Source: Fredreish.com, November 2023

Halloween 2023: DOL Fiduciary Rule Returns From the Dead

In this latest sequel, the DOL has promulgated another proposed amendment to the rules determining when a person who makes a recommendation to someone responsible for the investment of the assets of an employee benefit plan or individual retirement account is deemed to be a fiduciary. This proposed rule would, if adopted, substantially expand the occasions upon which such a recommendation will make a person a fiduciary. The rule would affect broker-dealers, banks, and insurance companies, and could affect any other financial services business that markets investment products to U.S.-based retirement plans and IRAs.

Source: Debevoise.com, November 2023

DOL Tries Once Again to Define What Constitutes Invest. Advice Under ERISA

On Friday, November 3, the DOL issued its latest attempt to redefine who is an invest. advice fiduciary under ERISA. In conjunction with the regulatory proposal, the DOL also published amendments to several existing prohibited transaction exemptions. The proposal has generated a strong adverse reaction from a broad coalition of industry trade groups. This is a review of the DOL's regulatory proposal and amendments.

Source: Carltonfields.com, November 2023

Key Issues to Know for the Proposed Fiduciary Rule

On October 31, the DOL released the highly anticipated proposed "fiduciary rule." The Biden administration continued its theme of eliminating "junk fees" in this instance addressing the cost of superfluous fees on Americans' retirement savings. The hundreds of pages that address the rule and related material are quite complex, but essentially they address several key issues reviewed here.

Source: Callan.com, November 2023

A Preview of Lifetime Income Issues Under the Proposed Fiduciary Regime

There is much to be considered under the new set of fiduciary rules recently proposed by the DOL, especially as we sort through the details of this new regulatory regime. However, regardless of what your position may be about the efficacy or appropriateness of these changes, there are a few striking characteristics regarding these new proposals that will "inform" many of the discussions (pro and con) that we are going to see.

Source: Businessofbenefits.com, November 2023

IRS Announces Increases on Benefits and Contributions Dollar Limitations for 2024

The IRS has announced cost-of-living adjustments that should be noted for retirement planning purposes. This is a chart that outlines employee benefit plan limits for 2024.

Source: Belfint.com, November 2023

Building a Strong 401k Pipeline

As the demand for retirement plan services grows, it becomes increasingly important for advisors to build a strong pipeline of potential clients. This article explores effective strategies and key steps that retirement plan advisors can take to build a robust 401k pipeline.

Source: 401k-marketing.com, November 2023

IBM Plans to End 5% Employer Matching in 401k Plan

IBM plans to end 5% matching contributions to employees' 401k accounts in favor of an automatic 5% retirement benefit provided to all employees, starting January 1, 2024. The technology corporation will still allow employees to make deferrals into a 401k, but it will direct 5% of each employee's salary into what it terms a "Retirement Benefit Account."

Source: Plansponsor.com, November 2023*

2024 Benefit and Contribution Limits

The IRS announced in Notice 2023-75 that many of the key retirement plan limits will increase next year. These limit increases are more modest than the 2023 increases, with some limits remaining the same. The Social Security Administration and PBGC also recently announced adjustments for the Social Security wage base, PBGC premiums, etc., for next year. This chart reflects the key limits for 2024, along with other frequently used benefit and compensation items.

Source: Groom.com, November 2023

Breaking Down the DOL's Five-Part Test

When word got out that the DOL was issuing its proposed fiduciary rule this week -- and that President Joe Biden would speak on its framing -- the retirement planning advisory industry had a lot to say. Almost all concluded with the idea that if enacted into law, the proposal would cause several changes to the DOL's five-part test. This article breaks those changes down.

Source: 401kspecialistmag.com, November 2023

IRS Bumps 2024 401k Contribution Limit to $23,000

The IRS today issued technical guidance regarding all of the cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2024 in Notice 2023-75. As predicted in forecasts earlier this year, the Internal Revenue Service announced that the amount individuals can contribute to their 401k plans in 2024 has increased to $23,000, up from $22,500 for 2023.

Source: 401kspecialistmag.com, November 2023

Employees Expect Workplace Plans to Completely Fund Retirement

Employees are banking on their DC plans to entirely fund their retirement, finds a new survey by human resources and benefits consulting firm Buck. The report surveyed employees' attitudes on top workplace features and found that 70% of workers expect their workplace plan to completely finance their retirement. Nearly half of all employees (45%) believe they need more than $1 million to retire, and 10% believe they need more than $2 million.

Source: 401kspecialistmag.com, November 2023

CalSavers Sees Retirement Plan Registrant Increase

The CalSavers retirement savings program continued to support an increase in registered employers, submitted retirement plan contributions, and participant-funded accounts in September, according to its latest participation report. In September, the number of employers registered with the state-run program for private sector employees hit 119,045, while 44,755 made payroll deductions, and funded participant accounts reached 455,255.

Source: Plansponsor.com, November 2023

Q3 Reports Show Growth for Retirement Sector Providers

Several financial services firms with divisions operating in the retirement sector reported third-quarter earnings and business highlights this week, with results showing general market and participant saving resilience. Fidelity, Principal, T. Rowe Price, and other firms with retirement sector business showed improved results compared with last year.

Source: Planadviser.com, November 2023

DOL Publishes New Adviser Fiduciary Rule for Public Comment

The DOL published a widely anticipated proposal that will redefine when retirement advice triggers fiduciary status under ERISA. The proposal would scrap the traditional five-part test for determining if an adviser is acting in a fiduciary capacity and replace it with a three-part test in which satisfying any one of the three conditions would make the adviser a fiduciary. The change, if implemented, would effectively create a stricter regulatory environment for financial professionals advising or selling investment products related to retirement savings.

Source: Planadviser.com, November 2023

State AGs Appeal Dismissal of Suit Challenging DOL's ESG Rule

A group of 26 state attorneys general has appealed to the 5th U.S. Circuit Court of Appeals the dismissal of their complaint challenging the legality of the Department of Labor's final rule permitting environmental, social, and governance factors to be used when selecting retirement plan investments. The Department of Labor's defense continues on two tracks, one in Wisconsin, and another in the 5th Circuit.

Source: Planadviser.com, November 2023

Secure an Employee Plan's Future by Proactively Self-Correcting

Retirement plan sponsors can take advantage of new and expanded self-correction remedies under the Employee Plans Compliance Resolution System even before the IRS releases updated guidance on it under SECURE 2.0. SECURE 2.0 provides retirement plan sponsors an avenue to control the narrative in resolving any compliance issues under EPCRS, say Grant Shuman and Anne Tyler Hall of Hall Benefits Law.

Source: Hallbenefitslaw.com, November 2023

Has ERISA Class Action Litigation Made a Positive Difference for Plan Participants?

The author writes, "A recent article this month in Pension & Investments asked ERISA lawyers whether class action litigation has made a positive difference for plan participants. The premise of the article was that while many critics issue harsh assessments about class action litigation, plan participants have nevertheless seen positive changes and fee reductions from the litigation.... Plan administration and investment fees are universally lower for nearly every plan, and large plans have adopted best fiduciary practices that include advice and monitoring of investments by sophisticated investment advisors. [But] the current slate of cases have an entirely different agenda."

Source: Euclidspecialty.com, November 2023

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