CFP Board Backs DOL Fiduciary Rule in Federal Court

Writing in an amicus, the CFP Board cautions that "If the Court accepts Plaintiffs' arguments, then this will leave open significant regulatory gaps that allow advisors to recommend financial products, including insurance products, that are not in the best interests of retirement investors, in contravention of [ERISA's] mandate to provide a high level of protection for retirement assets."

Source: Napa-net.org, June 2024

What Plan Sponsors Should Know About DOL's Final Fiduciary Rule

While the direct effect of the DOL's final fiduciary rule on plan sponsors appears modest, plan vendors may decide to modify their service models -- including associated fees -- and sales practices. This is a comprehensive review of the rule including implications for plan sponsors.

Source: Mercer.com, June 2024

Salesforce Settles ERISA Class Action With 50k Workers

Just a week before a bench trial was scheduled to begin, Salesforce reached a settlement with as many as 50,000 of its employees in a class action lawsuit over its 401k plan. The San Francisco-based software company faced claims of breach of its fiduciary duties under ERISA for failing to replace costly and underperforming investment options in the 401k plan. The workers had sought over $5 million in damages, plus prejudgment interest, to be divided among the plan participants in proportion to their account losses.

Source: Hallbenefitslaw.com, June 2024

The Growing Trend of Collective Investment Trusts

Many plan fiduciaries express surprise when learning that Collective Investment Trusts have existed longer than their 40 Act Mutual Fund counterparts. Collective trusts are similar to mutual funds given investors in both pool assets with others and own a portion of the fund. Both vehicles are daily valued and provide investors with a Net Asset Value. Additionally, both vehicles are professionally managed, audited annually, and provide investors with periodically produced "fact sheets." However, there are several key differences between mutual funds and CITs.

Source: Fiducientadvisors.com, June 2024

401k Plan Sponsor Fiduciary Best Practices For Lost Or Missing Plan Participants

When plan sponsors have lost contact with 401k plan participants, they must address several key questions. The DOL has recently asked for input on its proposal to deal with lost or missing plan participants. But the idea of a participant being missing or lost is less black and white than it seems.

Source: Fiduciarynews.com, June 2024

Milliman Was Falsely Accused of Fiduciary Breaches: Conservative Investment Strategies on Trial -- Opinion

Is it fiduciary malpractice to offer conservative investment strategies in a company-sponsored defined contribution plan? That was the key question in the fiduciary imprudence case that went to trial against Milliman and will be the same question in the upcoming trial against UnitedHealth. Milliman was accused of imprudence for hedging market volatility in target-risk funds. UnitedHealth is accused of selecting underperforming Wells Fargo target-date funds that were conservatively invested to avoid volatile technology stocks.

Source: Encorefiduciary.com, June 2024

New Research Finds Substantial Growth in Individual Account Retirement Plan Assets

A new research report published today by the Employee Benefit Research Institute found that after modest growth and declines in individual account retirement plan ownership and assets from 2016 to 2019, there was substantial growth from 2019 to 2022.

Source: Ebri.org, June 2024

Financial Incentives for Employee Participation in 401k

Employers who sponsor 401k and 403b plans without auto enrollment provisions have traditionally been challenged with increasing participation rates. Most employers were interested in different options to encourage more employees to affirmatively make elective deferral contributions into their retirement plans. Thanks to SECURE 2.0, for plan years beginning after December 29, 2022, employers that sponsor 401k or 403b plans may offer employees a "de minimis" financial incentive.

Source: Consultrms.com, June 2024

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