The retirement industry can be complex and filled with numerous acronyms, making it challenging to navigate. What is a TPA? TPAs specialize in administrative operations for plan sponsors, ensuring compliance with relevant laws and regulations, primarily those from the IRS and DOL. Their role involves various tasks to assist in managing retirement plans effectively.
A lawsuit has been filed against W.W. Grainger's 401k plan, which has over 30,000 participants and approximately $3.45 billion in assets, for alleged breaches of fiduciary duties under ERISA. The plaintiffs claim that the plan's fiduciaries misused forfeitures to benefit the company by reducing future employer contributions. This practice is said to violate the responsibilities of loyalty and prudence mandated by ERISA.
Employee matching contributions are a prevalent feature in employer-sponsored retirement plans, with 98% of employers offering some form of match to enhance employee savings. Beyond being a benefit, matching contributions serve as a strategic tool for employers to attract and retain top talent, boost productivity, and increase engagement. By linking matches to vesting schedules, employers can incentivize employees to remain with the company longer, resulting in increased savings for employees and better utilization rates for employers.
The IRS mandates that forfeitures in defined contribution plans must be utilized within 12 months after the end of the plan year in which they occur. Failure to comply with this timeline is deemed a compliance issue. Many plan sponsors unknowingly violate this requirement, leading to potential problems. However, the IRS is currently providing a temporary reprieve for affected plan sponsors, allowing them to resolve these compliance failures if they take action promptly.
Giant Eagle, a grocery store chain, has settled a class action lawsuit that claimed it violated ERISA by not adequately managing administrative and recordkeeping costs for its 401k plan. The lawsuit, led by a former employee, alleged that this negligence resulted in significant financial losses for plan participants. The details of the settlement reached through mediation, have not been disclosed. The case is Cheryl Kehrer v. Giant Eagle Inc. et al., in the U.S. District Court for the Western District of Pennsylvania.
SECURE 2.0 mandated, for the very first time, a special automatic enrollment arrangement be added to all new 401k and 403b plans. In this comprehensive article, Groom principals Elizabeth Thomas Dold and David Levine explore essential facets of the IRS proposed regulations covering this new mandate. They discuss which plans fall under the regulations, the functioning of automatic enrollment features, and any applicable exceptions. Additionally, the article details the necessary compliance steps and highlights specific considerations regarding mergers, acquisitions, and multiple employer plans.
The 2025 Defined Contribution Trends Survey analyzes key aspects of DC plan management, including governance, investments, fees, and plan design. As the 18th annual edition, it offers benchmarks for plan sponsors to compare their plans with peers and provides actionable insights to enhance plan effectiveness and participant outcomes. Conducted online at the end of 2024, the survey gathered responses from 89 DC plan sponsors across various industries, primarily from financial services and government. This article highlights the significant findings from the survey.
In 2024, plan sponsors were prioritizing investment management fees, fund and manager due diligence, and evaluation of investment structures, according to Callan's 2025 Defined Contribution Trends Survey. The survey, involving 89 plan sponsors, reveals that over 90% of the plans have assets exceeding $200 million, with 58% serving more than 10,000 participants. The findings aim to identify key trends affecting defined contribution workplace plans.
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Collected Wisdom™
Our researchers look for what they think are some of the better resources available to assist you in administering your plan or helping your clients. We group these resources in our COLLECTED WISDOM™ topics to make it easy for you to locate the information you need. Each item in a category contains a summary and date of when it was placed in the group.
We also maintain some older material in these collections for perspective and context.
