Headlines about "401(k) plans"

Gathered from the web by the editors at BenefitsLink.com.
[Guidance Overview] FINRA's 'Reminder' About Rollovers Is News to Many
"[R]egulators believe that industry practices encourage retirees to make rollovers without a full understanding of their options and the relative costs for each option.... Couched as a 'reminder,' FINRA's year-end Regulatory Notice 13-45 describes practices that many broker-dealers and their registered representatives will find difficult to implement.... The guidance lists ... factors that broker-dealers and their registered representatives must consider and evaluate to determine whether a recommendation to take a distribution and rollover is suitable. In practice, broker-dealer firms and their representatives will have a difficult time obtaining this information." (DrinkerBiddle)

[Opinion] ASPPA Head Brian Graff Blasts Retirement Suggestions from Capitol Hill (and Others)
"[E]veryone talks about tax reform and fiduciary regulations, but ... the bigger threat is a failure of policy makers in DC to understand that retirement policy needs to be looked at from a holistic perspective and not from a parochial view within their own committees. For example, a tax committee will look at retirement policy as a pure tax policy analysis and fail to reflect any thinking on what it means for retirement.... There's no committee with the singular responsibility to look at how to focus on pure retirement policy." (Fiduciary News)

What to Do With Your 401(k) When You Retire
"The ability to invest in nearly anything is a central attraction of an IRA ... as is the chance to get away from the extra administrative costs and pricey fund options that dog some 401(k) plans. Other respondents said they chose to roll over multiple 401(k) accounts from multiple employers to a single IRA for convenience and simplicity.... Several respondents said they had in fact chosen to stay put in their high-quality, low-cost plans, citing extra creditor protections and the ability to pick up a bit of extra yield in a stable-value offering." (Morningstar)

[Guidance Overview] DOL Proposes Rules for Summary of Fee Disclosures, Aims to Help Smaller and Mid-Size Employers
"A possible approach is for recordkeepers to receive the information from various designated alternative investments and consolidate the information in its own fee disclosure material. Another possibility is that a third party electronic data base may provide the necessary information. The DOL estimates that it will take 7.4 hours to find all the required information! ... The technology costs to develop a guide, consolidate the required information and populate the guide on a plan by plan basis might be quite expensive." (ERISAdiagnostics, Inc.)

High Fees Eroding Many 401(k) Retirement Accounts
"[A] new study finds that the typical 401(k) fees -- adding up to a modest-sounding 1 percent a year -- would erase $70,000 from an average worker's account over a four-decade career compared with lower-cost options. To compensate for the higher fees, someone would have to work an extra three years before retiring.... [The] analysis, backed by industry and government data, suggests that U.S. workers, already struggling to save enough for retirement, are being further held back by fund costs." (Associated Press)

401(k) Index Observations, March 2014
"March was a light trading month for investors in their defined contribution plan ... Overall, the daily transfer volume in March averaged 0.021% of the total daily balances, slightly lower than February's value of 0.023%. In addition, there were zero days in March with above normal transfer activity levels, marking the first month of zero above normal trading days since August 2013." (Aon Hewitt)

Best Practices in Design for 401(k) and 403(b) Plans
"A progressive plan design supports plan objectives which the plan sponsor regularly communicates. Employer profit sharing contributions are less valuable in terms of motivating participants to contribute than employer matching contributions.... Many larger plan sponsors re-enroll all participants in the QDIA option (usually target date funds) every year. This practice increases plan participation while ensuring that participants are invested appropriately for their age." (Lawton Retirement Plan Consultants)

[Opinion] The Rube Goldberg Theory of 401(k) Plan Fee Disclosure
"The fee disclosure rules enacted in 2012, which were intended to plug the leak, are flawed. Reminiscent of the infamous 'it depends on what the definition of the word "is" is,' one flaw depends on what the definition of 'disclosure' is. Some service providers apply the Einstein theory of disclosure, while others use the Rube Goldberg theory." (Paladin Research & Registry)

[Opinion] 'Unsafe' in Any Fund Line Up: Dominated Funds in 401(k) Plans
"It can always be argued that the losses from Dominated Funds are the result of participant investment decisions. It's an obvious truism that but for the participant's decision, there would be no losses. But, does that seem to be a reasonable application of ERISA's fiduciary standard of prudence in choosing to include/retain a fund in the line up that is ex ante a poor investment choice?" (ERISA Fiduciary Administrators)

The President's 2015 Budget and Retirement Benefits
"On March 4, 2014 the Obama Administration released its 2015 fiscal year budget. The retirement benefits-related provisions of the 2015 budget are generally similar to those in the 2014 budget.... Increase PBGC premiums... Prohibit individuals from accumulating over $3.2 million in tax-preferred retirement accounts... Reduce the value of itemized deductions and other tax preferences to 28 percent... Automatic workplace pensions... Repeal the deduction for dividends paid with respect to employer stock held by an ESOP that is sponsored by a publicly traded corporation. Eliminate stretch-IRA treatment (including 'stretch' payments under defined benefit plans).... Eliminate age 70-1/2 required minimum distributions for balances of $100,000 or less.... Give IRS authority to require electronic filing of certain employee benefit plan tax information." (October Three Consulting)

[Guidance Overview] Building a Safe Harbor Escape Clause
"An important consideration in deciding whether to suspend employer contributions is that the plan will then be subject to nondiscrimination testing which could cause the highly compensated employees to receive a distribution of excess salary deferral and matching contributions. Additionally, a required top-heavy contribution could force the employer to make a 3% top-heavy minimum contribution, almost identical to the nonelective safe harbor contribution that is suspended in the first place." (Belfint Lyons & Shuman, CPAs)

Employment Statistics, Fiduciary Duty and 401(k) Investor Angst
"[O]ne of the most important things that [plan sponsors and fiduciaries] need to manage is 401k investor angst. We all know the only 401k investors who lost following the 2008/2009 market collapse were those who panicked and sold.... Many investment professionals, while not complaining about last year's high market gains, have expressed concerns about the market outpacing the fundamental data. [A recent] white paper suggests this disconnect may exist." (Fiduciary News)

[Guidance Overview] IRS Rev. Rul. 2014-9 Offers Rollover Due Diligence Safe Harbor (PDF)
"Although the requirement to offer a rollover does not require transferring funds to defined benefit plans, such plans are not precluded from accepting rollovers, as IRS clarified in its regulations. Indeed, recent guidance from IRS and PBGC affirms the ability to make such rollovers and explains how various qualification and benefit guarantee rules operate for them." (Buck Consultants)

[Guidance Overview] IRS Expands In-Plan Roth Rollovers
"Plans may restrict the type of contributions eligible for an in-plan Roth rollover.... Amounts transferred to a Roth account are subject to the same withdrawal restrictions as before the transfer.... The 5-year Roth clock starts on the first day of the plan year in which the participant makes their first Roth contribution to the plan.... If the retirement plan provides and the employee is eligible, an employee may receive an in-service distribution to help pay for the taxes." (TRI-AD)

[Guidance Overview] IRS Issues Guidance on Reducing or Suspending Safe Harbor 401(k) Contributions During a Plan Year
"The IRS has allowed employers who make safe harbor matching contributions to reduce or suspend their safe harbor match during the plan year. However, for those employers who make nonelective contributions, under prior guidance, the employer had to prove a financial hardship in order to reduce or eliminate the nonelective contributions during the plan year. The new IRS guidance provides consistency for all safe harbor designs now." (TRI-AD)

[Guidance Overview] Two New Safe Harbor Procedures for Rollovers to Qualified Plans
"The IRC has been amended several times to simplify the rules relating to eligible rollover distributions to tax-qualified retirement plans. However, the related regulations governing eligible rollover distributions have not been updated to reflect all of these changes. IRS Revenue Ruling 2014-9 provides two hypothetical examples that illustrate how plan administrators of qualified retirement plans may use to: [1] Be deemed to have reasonably concluded that an amount is a valid rollover contribution ... [2] Correct this situation if that assumption is later determined to be incorrect." (Practical Law Company)

Great-West Buys JPMorgan's Large-Market Recordkeeping Business
"The newly combined Great West will take its $220 billion retirement company and add a hefty $167 billion in assets from JP Morgan, which ranked ninth in terms of assets.... The newly combined firm, with its $387 billion is assets, is now second in terms of retirement assets -- next only to Fidelity ... The newly combined firm will have 6.8 million participants. The deal encompasses the majority of JP Morgan's retirement business -- including the company's own $16.4 billion retirement plan as well as the American Airlines, Bechtel and Cisco Systems retirement plans... [and] Proctor and Gamble's $14 billion retirement plans[.]" (RIABiz)

Let the Questions Begin: Preparing for Automation in Your DC Plan
"When you've decided to tackle automation, be it auto enroll, auto escalation or even default investments, it's helpful to get prepared before you call the consultants, lawyers, and your service providers. While each plan's process for implementing automation varies, there are some key process concepts and questions to consider. Let's split them into the plan sponsor 'settlor' side activities and the fiduciary activities." (David N. Levine, for Defined Contribution Institutional Investment Association [DCIIA])

[Guidance Overview] Implementing Automatic Features in Defined Contribution Plans (PDF)
"Are there any maximum limitations or requirements that plan sponsors should consider when implementing an automatic contribution escalation program? ... Is there a required initial default contribution rate for automatic contribution escalation programs? ... Must automatic contribution escalation programs have a 1 percent step-up auto escalation rate? ... Are plan sponsors required to tie the initial default contribution rate under an auto enrollment program to the plan's maximum matching contribution percentage?" (Defined Contribution Institutional Investment Association [DCIIA])

A Fiduciary Perspective on 401(k) Fees
"The early results of fee disclosure regulations point to two developing issues: [1] adviser fees are coming down as a deflationary fee spiral has set in and, [2] more and more advisors are acknowledging fiduciary status with the plan. As more third party experts are hired to help busy small to mid-size companies police their fiduciary duty, the power of a prudent process will flush out both losers in performance and high expenses." (401kFeeDisclosure.com)

Participant Trading: What Is Behind the Low Numbers?
"[O]nly 10% of retirement plan participants engaged in trading in 2013 -- down from 20% in 2004.... This is good news for sponsors and participants, as research shows that active traders, on average, don't fare as well as nontraders. One classic gender-based trading study, for example, documented that men trade 45% more than women and that trading reduced men's net returns by 2.65 percentage points a year -- as opposed to a reduction of 1.72 percentage points for women." (Vanguard)

Hope Floats: Eighth Circuit Reverses First Verdict Against Service Provider Based on Handling of Float Income
"The Eighth Circuit held that the terms of the plans broadly granted discretionary authority to ABB and that, therefore, ABB's decisions could not be disturbed so long as they were reasonable. However, the District Court had been largely silent as to the standard of review and its analysis gave little, if any, deference to ABB.... [The] Eighth Circuit held that failure was harmless with respect to the ruling against ABB regarding the amount of fees paid by the plans. The Eighth Circuit held that there was adequate evidence to support that decision, even allowing deference to ABB, including that ABB's own consultant warned ABB that the plans were overpaying Fidelity and that those payments might be subsidizing ABB's corporate expenses paid to Fidelity." (Alston & Bird, LLP)

Pending Supreme Court Case Could Make Company Stock Investments Toxic
"If the Supreme Court upholds the 6th U.S. Circuit Court of Appeals' decision in the case of Fifth Third Bancorp et al. vs. Dudenhoeffer, it also could discourage defined contribution plans from adding company stock to -- or keeping company stock in - their investment menus. However, if the high court reverses the appeals court, that would reinforce the barrier - already endorsed by several other appellate courts -- that participants face in proving a sponsor's fiduciary failure when the price of company stock in the plan falls." (Pensions & Investments)

Eighth Circuit Affirms Judgment Against 401(k) Plan Fiduciaries for Excessive Recordkeeping Fees
"Certain aspects of the Appeals Court's holding are generally favorable to plan sponsors (for example, the court's discussion of 'improper hindsight bias' and its holding regarding the appropriate standard of review). Nevertheless, the ABB case illustrates the importance of having the plan sponsor's board of directors (or appropriate plan committee) meet regularly to ensure procedural due diligence, including with respect to the selection of investment options and the monitoring of recordkeeping fees." [Tussey v. ABB, Inc., No. 12-2056 (8th Cir. Mar. 19, 2014)] (McCarter & English)

Are Small Businesses Paying Too Much in 401(k) Fees?
"[T]he majority (70%) of small business owners who review their fee disclosures feel prompted to comparison shop, and 29% said they plan to look for a new retirement plan provider.... [S]mall business owners who read their fee disclosure statements still consider 3% (on average) to be a reasonable price to pay.... 35% of small business owners said they negotiated or plan to negotiate better pricing with their current plan provider... 82% of businesses reported that at least some employees took action as a result of their 401(k) fee disclosure notice." (ShareBuilder 401k)

[Opinion] Why Even the Supreme Court Can't Fix Your 401(k)
"[E]ven if the Supreme Court [in the upcoming case of Tibble v. Edison International] addresses the broader question of whether choosing higher-fee funds over identical lower-fee alternatives is a breach of the fiduciary duty that plan sponsors have to their participants, it still won't address the key problem with 401(k) plans: that your employer has so much control over the account in the first place.... As policymakers consider reforms to employer-sponsored retirement funds, the real question is whether employers need to be part of the retirement savings process at all." (Motley Fool)

DOL Cracks Down on Employer 401(k) Issues
"Although Labor Department officials ... say the majority of cases are errors in reporting and do not result in civil lawsuits, the numbers of benefit plan cases investigated (of all kinds) are still impressive: the DOL closed 3,677 investigations in 2013, with nearly 73 percent of those resulting in monetary fines or other corrective action. Lawsuits were filed in 111 of those cases. The department says it is working to educate employers about how to avoid errors, including conducting seminars and providing information on the DOL website." (Treasury & Risk)

[Guidance Overview] PBGC Proposes Lifetime Benefit Rollover Option for DC Participant Account Balances
"Under the new proposal, benefits earned from a rollover generally would not be affected by PBGC's maximum guarantee limits. Currently the agency's maximum guaranteed benefit for a 65-year-old retiree is almost $59,320 a year.... The PBGC and other advocates hope that their proposed standards for lifetime income accounts can produce the benefits of a lifetime income with little risk to the recipients." (Solutions Law Press)

Participation Rate in 401(k) Plans Greater for Men than Women
"Although the data show fewer women participating in plans, the investments that women choose appear to be slightly more diversified with 70% of women meeting a minimum level of diversification -- a minimum of two equities and a fixed fund and less than 20% in employer stock -- in their 401(k) account investments versus 67% of men. The difference has been stable for the last two years. One potential driver of this difference in diversification is the use of managed investment options: 74% of women have money in managed investments, versus 71% of men." (Wells Fargo)

New 401(k) Plan Sponsor Fiduciary Worry: Study Reveals Previously Unpublicized Conflict of Interest Can Harm Mutual Fund Performance
"A [new] study ... has discovered a previously underreported hidden conflict-of-interest in many mutual funds that can cost investors significantly in terms of performance. Unlike other conflicts-of-interest (like 12b-1 fees and revenue sharing), this particular conflict-of-interest is not disclosed in the mutual fund prospectus. It's almost impossible for a retail investor to find and uncovering it in specific situations can tax even the most ardent professional adviser." (Fiduciary News)

Tussey v. ABB: Opening Up New Avenues for Excessive Fee Litigation and Putting the Final Nail in the Coffin of Hecker v. Deere
"[O]ne of the most important parts of the holding in Tussey v. ABB was not the float issue, heavily focused on by most reports, but the Eighth Circuit's ringing rejection of the thesis, pressed by the Seventh Circuit in Hecker, that it was enough to defeat an excessive fee claim that a plan provided a range of investment options with a range of fees; the Eighth Circuit ... put a well-deserved end to that line of argument[.]" (Stephen Rosenberg of The McCormack Firm, LLC)

[Opinion] The Problem of 401(k) Mapping to Dominated Funds
"[T]he problem of dominated funds suggests a simple reform ... But a recent decision suggests the possibility of an even more pernicious problem. Instead of failing to map participants' investments away from dominated funds, Tussey vs. ABB, Inc. suggests the possibility that fiduciaries at times might be eliminating funds and mapping these investments toward high-cost dominated funds." (Prof. Ian Ayres of Yale Law School, in Forbes)

The 401(k) Plan of the Future Is Available Now
"Encouraging participants to save more is integral to a best practice redesign of the 401(k) plan. Increasing the match cap to 6% of eligible pay from lower levels encourages participants to save at a level that is much more likely to result in meeting their long term goal of attaining an adequate level of retirement readiness. Limiting the number of outstanding loans for each participant will also have a positive impact in terms of limiting 401(k) asset outflows due to the perpetual use of plan assets to meet day-to-day spending needs. Re-enrollment of current plan participants enables them to take a fresh look at how they are investing their contributions since many participants are managing what is most likely their first or second largest asset under the 'set it and forget it' mantra." (Pentegra Retirement Services)

Using Index Funds in Defined Contribution Plans (PDF)
"A plain vanilla, stripped-down S&P 500 index fund can be made available to participants for a few basis points.... For the most part, the fee is designed only to cover the investment management costs; it does not provide for the considerable expenses of running a defined contribution plan. Compliance, legal, communications, administration and the other plan necessities all cost significant amounts of money. To help defray those costs, slightly more expensive index funds have been created that provide revenue sharing to help offset plan administrative costs." (Cammack Retirement)

Four Questions to Ask About Your 401(k)'s Target-Date Fund
"Investors love [target-date funds] because they're easy to understand. Pick a retirement year and a manager will choose a group of funds to get you there. But life is rarely that simple. Here are some questions to ask: [1] What's Inside the TDF? ... [2] What's the Glidepath? ... [3] How Much Does it Cost? ... [4] Does the Glidepath Work For You?" (Forbes)

Fiduciary Duty and Investment Advice: Attitudes of Plan Sponsors
"Nearly nine in ten (89%) plan sponsors say that they would favor (68% 'strongly,' 21% 'somewhat') requiring DC providers to give advice that is in the best interest of plan participants. Nearly as many plan sponsors (88%) favor requiring DC providers to clearly explain to plan participants if the provider's advice is not obligated to be in the participant's best interest (59% 'strongly' favor, 29% 'somewhat' favor)." (AARP)

Eighth Circuit Rules Against 401(k) Plan Fiduciaries in Revenue Sharing Case
"The Court's findings related to recordkeeping services provide important examples of items that plan fiduciaries should address when evaluating recordkeeping and other third-party services. In addition, plan sponsors should ensure that plan fiduciaries receive fiduciary training on a regular basis so that plan fiduciaries understand their legal responsibilities. This training can demonstrate good faith compliance with ERISA requirements and may prevent or mitigate future litigation." [Tussey v. ABB, Inc., No. 12-2056 (8th Cir. Mar. 19, 2014)] (Winston & Strawn LLP)

The Paternalization of Participant-Directed Plans (PDF)
"Most experts agree that the system is well-designed, with the proper incentives and structure in place to make it possible for American workers to achieve a secure retirement. However, workers are experiencing significant shortfalls in retirement savings.... [T]he flaw in the system may point back to the participants and their investment choices.... [R]etirement plan participants may be finding themselves overwhelmed by the investment decision-making required of them." (Arnerich Massena)

A Lone Ranger of the 401(k)'s
"The suit on behalf of ABB's plan participants was filed by Jerome J. Schlichter, a partner at Schlichter Bogard & Denton in St. Louis. Since he began suing companies over fiduciary failures eight years ago, he has settled six 401(k) cases ... The settlements have generated $125 million in recoveries to 300,000 participants, minus legal fees, and secured major reductions in plan costs for the future.... 'As these cases have progressed and the settlements occurred, more judges are understanding the practices and the harm to retirees,' Mr. Schlichter said. 'A body of law is developing, setting out fiduciary practices and standards.'" (The New York Times; subscription may be required)

Looking at 2013 401(k) Testing in the Rear View Mirror
"The 'it' is the March 15 deadline for 401(k) testing to determine whether Highly Compensated Employees ('HCEs') contributed more than the IRS allows when compared to the Non-HCEs.... Time to consider the road ahead and what can be done to avoid returning 401(k) contributions to the HCEs. Here are a few options for employers in this situation to consider[.]" (The Retirement Plan Blog)

[Opinion] Get the Facts Straight Before Dissing the Current Retirement System
"Many overlook the fact that, even in the DB heyday, workforce mobility resulted in many, many workers never qualifying for that 'large' pension check. The truth is, neither the 401(k) nor the DB plan was created to be only leg upon which a retiree would stand during retirement.... But before wringing our hands and running for cover, accompanied by shouts of 'the sky is falling,' let's consider some data that suggests that things may not be as bleak as some profess." (Todd Berghuis, for Ascensus)

[Guidance Overview] Many Retirees Face April 1 Deadline to Take Required Retirement Plan Distributions (PDF)
"The [IRS] reminded taxpayers who turned 70-1/2 during 2013 that in most cases they must start receiving required minimum distributions (RMDs) from Individual Retirement Accounts (IRAs) and workplace retirement plans by Tuesday, April 1, 2014. The April 1 deadline applies to owners of traditional IRAs but not Roth IRAs. Normally, it also applies to participants in various workplace retirement plans, including 401(k), 403(b) and 457 plans." (Internal Revenue Service [IRS])

Three Easy Ways to Tune-Up Your 401(k) for Spring
"[1] Make a Rational Use of the Menu of Funds. Just because your plan offers 30 choices doesn't mean that you have to invest in every fund.... [2] Become More Passive.... Instead of loading up on actively managed funds, move as much money as possible to index funds.... [3] Focus on Simplicity. Investing doesn't have to be complicated, even though employers rarely make it easy for you." (Forbes)

'Return-Envy' in Target Date Funds
"[T]he worst that can happen is very, very bad decisions on both the part of the fiduciaries and individual investors. Return-envy is really the root of that return-chasing behavior -- the greed and fear. And, for fiduciaries, it can make them make decisions that aren't in the best interest of their plan, that don't really marry to their philosophy of what they're trying to accomplish for the individual participants. And, for investors, it can lead them to make those self-defeating kinds of decisions that have very negative effects on their long-term retirement-saving success." (Wells Fargo)

Can You Really Set it and Forget It?
"[S]ponsors often fail to consider that their TDF strategy could be more conservative or aggressive than others -- even options with similarly shaped glide paths -- depending on the underlying funds and strategies.... TDFs are not static investment vehicles. Providers often make adjustments to glide paths and underlying holdings in their TDFs that can change the fund's risk and return profile." (planadviser)

Why Are So Many Different Regulators Voicing Concern Over Rollover Practices?
"Tamara Cross, assistant director of education, workforce and income security issues at the [GAO] ... points to a wide range of research showing rollovers into IRAs could top $2.1 trillion over the next five years ... With so much money flowing out of the employer-sponsored plan environment, it's no surprise multiple regulators want to head off potential conflicts of interest and make sure participant dollars are treated fairly, Cross says." (planadviser)

Really? I'm Saving Too Much for Retirement?
"[T]here are too many variables that change during retirement, and retirement spending on average does not increase at the same level of inflation. In fact, the higher an employee's pre-retirement income is, the lower the percentage replaced needs to be. It's hard to argue that a person earning $200,000 needs to replace as much income as someone earning $20,000 to cover their basic needs.... [R]etirees may actually only need to save 50-60% [of pre-retirement income]. That's 20% less than the conventional rule of thumb." (The Principal Blog)

Your Retirement-Planning Time Table: It Pays to Consider the Details Early
"It's never too early to start dreaming. And, of course, the earlier you actually start saving for your retirement, the easier it will be to amass the amount you'll need to fund your desired lifestyle. If you want to retire at 60, for example, you should get serious about planning by the time you hit your mid-40s." (Consumer Reports)

Many RIAs Merely 'Accommodating' Retirement Plans Business
"Managing the retirement business requires following complicated rules designed to protect retirement plan participants -- small investors -- as well as employers. The survey reveals that RIAs consider the retirement business to be a burden. At the same time, the retirement business is projected to deliver robust growth as baby boomers move into their golden years, defined contribution plans attract more assets and the federal government sanctions the growth of the employer-sponsored defined contribution model." (InsuranceNewsNet.com)

8th Circuit's Tussey Decision to 'Punt'
"The 8th Circuit's ruling seems to ignore the intent, purposes, and goals of ERISA by putting the administrator's interests ahead of those of the plan participants, despite the numerous violations of ERISA by the plan and the plan's administrator/fiduciary.... [T]he 8th Circuit overturned the district court's ruling that found the plan and plan sponsor in breach of their fiduciary duties of loyalty and prudence despite overwhelming evidence of such violations. The 8th Circuit's basis for their decision, the allegation that [the District Court judge] failed to give proper deference to the discretion of the fiduciary, is difficult to accept." (The Prudent Investment Adviser Rules)

Supreme Court Seeks Government View in Tibble; Limitations Period, Deference Level at Issue
"Signaling its potential interest in plan fee litigation, the U.S. Supreme Court invited the U.S. Solicitor General to file a brief expressing the government's views in a widely publicized plan fee case involving the statute of limitations applicable to claims challenging fiduciaries' selection of plan investment options.... In the employees' petition for review, they focused on the portions of the Ninth Circuit's ruling related to the statute of limitations and to the appropriate level of fiduciary deference." (Bloomberg BNA)

Supreme Court Asks for DOL Input in Tibble v. Edison Petition
"In a surprise move, the Supreme Court has asked the Solicitor General of the United States, working in conjunction with the [DOL], to file a brief offering their view on the issues.... [T]hese issues are ripe for decision by the Supreme Court. Defining exactly how the 6 year statute of limitation should be interpreted would provide needed clarity to both plan participants and plan sponsors.... [T]he issue of deference to ERISA fiduciaries could not be more timely, as the 8th Circuit in the Tussey v. ABB appeal found that the district court should have viewed the action of the ABB defendants with regard to investment decisions at issue in the case through a lens of deference." (FRA PlanTools, LLC)

The DOL's Proposed 401(k) Fee Roadmap: Merely Ineffective, or a Major Plan Sponsor Sandtrap?
"Will the proposed 'roadmap' be enough to show plan sponsors where to easily find service provider fees? ... [S]kepticism reigns among [some] professionals.... The idea of a simple one-page summary has been brought up before. It would include a single line for service and a single line for the fee.... But the problem goes beyond disclosure, no matter how efficient it is." (Fiduciary News)

[Guidance Overview] DOL Continues Focus on Fiduciary Responsibility to Review Retirement Plan Fees, Aims to Simplify Review Process
"[T]he key elements required to be pinpointed in the guide represent the information that the DOL believes is critical in evaluating whether compensation paid to a service provider is reasonable. Plan fiduciaries should, therefore, be sure to review each of these elements as they evaluate their service providers' fees." (Calfee Halter & Griswold LLP, via Mondaq; free registration may be required)

Two Takeaways from Fidelity's Court Battle
"While plan sponsors may not be in the position to adequately manage a retirement plan on top of their other executive responsibilities, investment advisors are in a role that can be critical to keeping the plan sponsor on track. Whether advisors hire a 3(16) to act on behalf of the plan sponsor, or simply ensure that vendor value and compensation reviews are occurring on an annual basis, they can impact the effectiveness of their plan sponsor clients and help safeguard against fiduciary violations." (Roland|Criss)

[Guidance Overview] 2014 Compliance Checklist for ERISA-Covered DB, DC and 403(b) Plans (PDF)
44 pages. Excerpt: "The Compliance Checklist incorporates defined benefit (DB), defined contribution (DC) 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." (Prudential)

Eighth Circuit Issues Widely Anticipated Excessive Fee Decision in Tussey v. ABB
"The Eighth Circuit upheld the $13.4 million decision against ABB regarding recordkeeping fees paid to Fidelity, but reversed and remanded the $21.8 million award based on losses due to mapping from the Vanguard fund to Fidelity's funds. The Eighth Circuit also reversed the $1.7 million based on float income." [Tussey v. ABB, Inc., No. 12-2056 (8th Cir. Mar. 19, 2014)] (Practical Law Company)

[Guidance Overview] DOL Proposed Regulation on 408(b)(2) 'Guide' -- Impact on Service Providers
"The DOL has requested comments on the appropriate length of the document, and the regulation will be amended to insert a specific number of pages.... [S]ome TPAs may be disclosing their indirect compensation payments from insurance companies and mutual fund complexes through a separate document ... In that case, the TPA would be using multiple documents and would need to either develop a guide or consolidate the disclosures into a single document.... [M]ost recordkeepers will need to develop a 408(b)(2) disclosure guide.... Broker-dealers will probably bear the greatest burden of compliance with the guide requirement, if it becomes final in its proposed form." (Drinker Biddle)

Auto-Enrollment: Helping Employees Invest in Their Retirement
"Gen X and Gen Y savers (those born between 1965 and 1995) now are making up more than half of the participants in defined contribution plans. As Baby Boomers retire, this increasing trend is likely to continue. However, the total amount of assets held by these generations is still under half of the total defined contribution plan assets. While the number of the Gen X and Gen Y savers are continuing to rise, employers can look for ways to help increase participation of those generations in retirement savings and boost their assets for retirement." (Schneider Downs)

Fidelity Investments Wins Huge in the 'Biggest 401(k) Case in Decades'
"This case validates the DOL's message that employers need to look more carefully at fees, says Fred Reish, an attorney with Drinker Biddle & Reath LLP.... Even though Fidelity is off the hook in this case for fees, Reish questions whether recordkeepers could get fined for excessive fees in the future.... But in this ABB case, the court didn't question Fidelity for its recordkeeping fees. Instead, the court determined that ABB failed to complete its due diligence for the recordkeeping fees paid to Fidelity. In addition, ABB didn't benchmark its recordkeeping fees." [Tussey v. ABB, Inc., No. 12-2056 (8th Cir. Mar. 19, 2014)] (RIABiz)


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