TOP
Experts in Personalized Retirement Plan Design & Administration

BPP401k.com Newsletter 03.01.17

Helping Millennials Save for Retirement Over the past several decades, employers have recognized that employees’ physical health impacts the workplace, prompting them to introduce wellness programs designed to help workers lose weight, quit smoking, increase their activity levels and more. Now businesses are learning that employees’ financial wellness is equally critical to individual and corporate health and are seeking ways to respond. Source: Shrm.org

Roth 401k Contributions, From the Participant’s Point of View More employers are making a Roth option available in their 401k and 403(b) plans. So, employees must decide if they want to save on a pre-tax (tax-deferred) basis or on an after-tax basis? This article reviews a number of factors an employee will have to consider. Source: Consultrms.com

Determining Retirement Readiness a Complex Task Just as retirement savings models do not factor in changes participants may make in their working lives and savings habits, retirement readiness calculators also do not look at the big picture. Source: Plansponsor.com

More Bad News on the 401k Front Based on new research, which relies on tax data instead of surveys, only about a third of workers are saving in a 401k or similar tax-deferred retirement plan. What’s more, it now appears — using this new research methodology — that only about 14 percent of employers offer retirement plans at all! How can that be? Source: Hreonline.com

Participants and HR Will Love the MEP 401k A 401k MEPs offers much more than lower expenses, to both plan sponsors and plan participants. Most immediately, 401k MEPs permit corporate executives currently exposed to fiduciary liability to mitigate a significant portion of that liability. Source: Benefitspro.com

Fiduciary and Plan Governance Material

Is the Prudent Man Standard Good Enough? Any law that holds human beings to the standards of an expert in any field is a high standard and one that can be difficult to meet even with the ablest of expert assistance. It’s often said that ERISA’s prudent man rule is the highest duty known to law. But is that enough? Source: Napa-net.org

Fiduciary Confusion: What’s a 401k Plan Sponsor to Do? There have been a lot of comments circulated on the impact of a delay in the implementation of the DOL’s fiduciary rule. And of course, the debate has once again been revived on the value of these new rules. Most important, though, is what this means for your 401k plan and participants and what your 401k fiduciary responsibility is. Source: Lawtonrpc.com

Education Is an Important Part of the Fiduciary Process There have been so many misconceptions that plan sponsors and advisors have had concerning ERISA 404(c) plans. They had this belief that if they just give a mutual fund lineup and some fund profiles to plan participants that they are exempt from liability. But, ERISA 404(c) protection is about following a process and fund profiles are just not enough education to give to plan participants. On the flip side, education to participants doesn’t have to amount to an MBA education. Source: Jdsupra.com

401k Index Funds — They Make it Easy to Reduce Fiduciary Liability Investment in equity index funds — and other passively managed investments designed to track a market index — is exploding. If you are a 401k fiduciary, this trend is great news. While it can be difficult for 401k fiduciaries to insulate themselves from investment-related liability using actively-managed funds, this job can be dead simple using index funds. Source: Employeefiduciary.com

Insight: Studies, Research, and White Papers

In Retirement, Spending Varies Widely by Region Most discussion about retirement preparation revolves around national averages, but a lot could depend on where you live in retirement, according to new research by the nonpartisan Employee Benefit Research Institute. Source: 401khelpcenter.com

BrightScope Releases Annual Top 30 401k Plans BrightScope announced the eighth BrightScope year-end ranking of the Top 30 401k Plans List, recognizing companies with the best 401k plans containing more than $1 billion in assets. Seven new companies in the list this year and some key statistics are provided. Source: 401khelpcenter.com

A Guide to Commonly Used DC Plan Investment Vehicles DCIIA produced this 21-page presentation to provide a better understanding of the various investment vehicles that are commonly used within DC plans, their benefits and drawbacks, and considerations for deciding which structure to use. Source: Dciia.org

Two-Thirds of Americans Aren’t Putting Money in Their 401k U.S. Census Bureau researchers have come up with estimates that rely on tax data, which should be more reliable than surveys. Their conclusion: Only about a third of workers are saving in a 401k or similar tax-deferred retirement plan. Also, the gap is far wider than expected between the number of employers offering retirement plans and the number of workers saving in them. Source: Bloomberg.com

Back to Basics: Investment Terminology This short article features some investment terminology with which plan fiduciaries should be familiar as they evaluate plan investments. Source: Cammackretirement.com

DC Trends Survey In addition to a focus on fees. other trends include an increase in recordkeeper search activity, a movement to institutional fund structures, a de-emphasis on revenue sharing, and the adoption of fee policy statements. Source: Callan.com

Retirement Plan Access and Participation Across Generations This paper examines data to look for differences among millennials, Generation Xers, and baby boomers in how many participate in employer-sponsored retirement plans. Then it explores some key reasons for those differences and notes similarities in access rates, participation rates, and reasons for not taking part. Source: Pewtrusts.org

Retirement Transitions in Four Countries This 20-page Vanguard research studies the transition to retirement in four countries — the United States, Canada, the United Kingdom and Australia — all in various stages of a shift from defined benefit to defined contribution workplace retirement systems. Source: Vanguard.com

The Retirement System Diaries: The So-Called Retirement Crisis By “crisis” we don’t mean anything obvious like war, famine, or national penury. Instead, “retirement crisis” has come to mean simply that people aren’t saving as much as they should and won’t be able to retire with enough money to maintain their late-career standard of living. This is not a crisis. The real crisis is fiscal and global. Simply put, we’ve promised ourselves more retirement benefits than we can afford. Source: Pentegra.com

American Views on Defined Contribution Plan Saving The survey polled respondents about their views on DC retirement saving and their confidence in 401k and other DC plans. Survey responses indicated that households value the discipline and investment opportunity that 401k plans represent and that households were largely opposed to changing the tax preferences or investment control in those accounts. Source: Ici.org

Items of Special Interest to Service Providers

The Impending Fiduciary Armageddon of (Most) Mutual Fund Share Classes Under a fiduciary rule, there is only a legitimate need for one or two share classes at most. Thus, whether it’s the DOL fiduciary rule or one that follows within a few years from the SEC, what we’ll soon see is an Armageddon that destroys most mutual fund and variable annuity share classes, as we complete the shift from selling whatever products we can get paid to sell, into advisors who actually sell advice and implement the best solutions we can at the lowest cost available. Source: Kitces.com

Target-Date Funds

Understand Your Target-Date Fund Series To help out plan sponsors and investment committees, the DOL offers tips for ERISA plan fiduciaries with respect to choosing target-date funds, including the establishment of a process for the periodic review of your selected target-date funds. The DOL reminds plan sponsors that plan fiduciaries are required to periodically review the plan’s investment options to ensure that they should continue to be offered. Source: Orbablog.com

Court and Other Legal Issues

Oracle Corp. Faces Setback in 401k Fee Lawsuit Oracle Corp. got some bad news on Feb. 16 when a magistrate judge recommended that a proposed class action challenging the fees in its 401k plan move forward. Source: Bna.com (registration may be required)

J.C. Penney Agrees to Settle 401k Suit Department-store chain J.C. Penney is poised to pay $4.5 million to settle allegations over company stock in the firm’s 401k plan, following a district court judge’s preliminary approval of the settlement. Source: Investmentnews.com (registration may be required)

An Ironic Twist to 401k Fee Lawsuit Settlements It appears that companies who manage corporate retirement plans for their clients can’t even properly oversee their own 401k plans for their own employees from a fiduciary standpoint. Talk about a case of the “cobbler’s children having no shoes”! Source: Greenspringwealth.com

Legislative and Washington DC

New Labor Secretary Nominee Brings Legal Mind to Fiduciary Debate Alexander Acosta, nominated Thursday to lead the Department of Labor, drew praise today as a thoughtful, experienced candidate likely to express mainstream conservative views on regulations. Source: Insurancenewsnet.com

Cybersecurity Issues

401k Service Providers and Cybersecurity: Questions to Ask 401k plan fiduciaries have an obligation to secure and keep private the personally identifiable information of plan participants and beneficiaries. Part of this essential task is ensuring that plan service providers take cybersecurity preparedness and plan data protection seriously. Source: 401khelpcenter.com

Cybersecurity Risks and Liabilities for Employers, Retirement Plan Sponsors and Fiduciaries Many employers historically were only concerned with privacy and security for health plans under the privacy regulations. However, there are other references to protecting participant information in ERISA and employee information that should not be overlooked. Cybersecurity should be a consideration for every employer and retirement plan fiduciary. Source: Winstead.com

Cybersecurity Considerations for Employee Benefit Plans One of the most significant challenges that face employee benefit plans is the reliance on service providers to manage daily activities of the plan. As a result, employee benefit plans typically share sensitive employee data and beneficiary and employer information with these service providers. Based upon historical cybersecurity breaches, third parties can be considered the weakest cybersecurity link. Source: Schneiderdowns.com

DOL’s Fiduciary Rule

Fiduciary Rule Update: Is the Applicability Date Applicable? There have been informal indications that the process used by the Department of Labor in 2009 to delay (and eventually withdraw) the participant investment advice regulations and class exemption is a likely example of the process occurring now. Source: Groom.com

Upheld, Delayed and Under Review-Heads are Spinning over the Fiduciary Rule Changes are coming so fast it is hard to process them. So far, all three cases challenging the Fiduciary Rule have upheld it without reservation. Even though the Trump Department of Labor is not bound to follow the reasoning in the court decisions, it is required to hold new hearings on its proposals with respect to the Rule. Source: Cohenbuckmann.com

DOL Retains Perfect Record in Fiduciary Rule Challenges The Labor Department’s fiduciary rule survived yet another legal challenge when a federal judge in Kansas upheld the rule on its merits after previously refusing to block the rule’s enforcement. Source: Bna.com (registration may be required)

Compliance and Regulatory

2017 Annual Plan Deadlines for Plan Years Ending December 31, 2017 This 7-page chart, although not intended to be exhaustive, includes the key annual events which must occur within a specific deadline for a calendar year plan. The chart is intended to serve as a tool that can be used by employers to monitor compliance over the plan and calendar year. Source: Voya.com

2017 Retirement and Employee Benefits Compliance Calendar This 1-page chart is intended to provide plan sponsors with a list of notable retirement plan deadlines. The deadlines in this chart assume a calendar-year plan year. Source: Strategicbenefitservices.com

Is Your 401k Plan in Compliance? As a 401k plan sponsor are you confident that your plan complies with all current employee benefits laws and regulations? Does the plan operate within its current provisions? If you’re not certain, then it’s time for an annual self-checkup. Source: Dgccpa.com

Missed the PPA Restatement Deadline? If you missed the PPA restatement deadline and failed to update your 401k plan document, you can still update it. And if you update it by April 30, 2017, then there are discounted penalties from IRS. Source: Benefit-Resources.com

2017 Compliance Checklist for Retirement Plans Subject to ERISA As a retirement plan sponsor, you know how important it is to comply with ERISA and the ever-changing reporting and disclosure requirements mandated by the federal government. This checklist incorporates defined benefit, defined contribution, and ERISA 403(b) requirements and provides information on the materials that you will need to file, filing due dates and agencies to which the filings should be made. Source: Prudential.com

 

Share This!
WordPress › Error

There has been a critical error on this website.

Learn more about troubleshooting WordPress.