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Small Business Owners Could Benefit from Financial Advice

"A new study by Securian Financial Group looked at the different challenges facing small business owners of different generations. What it found is that Baby Boomers and GenXers have similar concerns, but could use the advice of financial advisors for their varied saving priorities."

Report of the Working Group on Financial Literacy of Plan Participants and the Role of the Employer

Excerpt: The 2007 ERISA Advisory Council formed a Working Group on Financial Literacy of Plan Participants (hereinafter referred to as the 'Working Group') to study numerous issues in increasing the financial decision-making skills of plan participants. The desired result of the Working Group was to discover and present matters that would enhance the ability of plan participants to manage assets throughout their financial life cycle.

Best Practices for Meeting Prudent Person Standard on 401(k)

Excerpt: Securian identified six best investment fiduciary practices for retirement plan sponsors. They include: Maintaining an investment policy statement with clear goals and objectives for the plan. Meeting ERISA section 404(c) requirements when constructing an investment array so employees can create diversified portfolios of varying degrees of risk that meet their investment needs. Prudently selecting and monitoring a default investment that qualifies as a Qualified Default Investment Alternative (QDIA). A QDIA provides a plan with relief from the fiduciary liability of investment outcomes for participants using the plan's default investment option, according to Securian. Avoiding proprietary fund requirements. Some investment firms bundle their investment options, forcing plan sponsors to include options that may not fit the plan's investment policy, Securian officials said. Demanding fee transparency and revenue neutrality. Selecting an investment array that is appropriate for employees' knowledge and skill levels, thus preventing employee investment decisions that can be harmful to their ability to meet their retirement objectives.

PBGC Technical Update 19-1 Waives Financial Information Reporting Requirement for Certain Pension Plan Controlled Group Members

"PBGC in Technical Update 19-1 is waiving the requirement ... to provide member-specific financial information for filers whose ultimate parent ... is: [1] Not a foreign entity. [2] A foreign entity, if filers provide: [a] consolidated financial statements (or federal tax returns if consolidated financial statements are not available) for US controlled group members; and [b] any other financial information required for the filing."

PBGC Opens Special Financial Assistance Application Period for Plans in Priority Group 6

"On February 11, 2023, PBGC will begin accepting applications for Special Financial Assistance for eligible plans in Priority Group 6. Priority Group 6 includes those plans for which PBGC projects a present value of financial assistance payments under section 4261 of ERISA that would exceed $1 billion in the absence of SFA."

Financial Services Committee Republicans Form ESG Working Group

"House Republicans will establish a working group to 'combat the threat to our capital markets posed by those on the far-left pushing environmental, social, and governance (ESG) proposals' ... [M]embers say it's 'committed to protecting the financial interests of everyday investors and ensuring American capital markets remain the envy of the world.' "

Differences in Financial Perspectives and Retirement Security by Racial and Ethnic Groups (PDF)

15 pages. "Plan sponsors, advisors and employers need to understand the differences in financial perspectives and retirement security by racial and ethnic groups and identify strategies to help reduce disparities and improve benefit programs and their outcomes. Human resources and employee benefit strategies -- as well as bigger picture organizational strategies that support human resource strategies -- can improve retirement security for these Americans, while other solutions can benefit individuals without access to employer-sponsored retirement plans."

Financial Performance of Medicare Advantage, Individual, and Group Health Insurance Markets

"[T]his brief examines and compares the financial performance of insurers in the Medicare Advantage, individual, and fully-insured group markets, using data reported by insurance companies to the National Association of Insurance Commissioners ... [The authors] analyze how insurers’ gross margins vary across the three markets, over time, and among insurers ... The brief also examines medical expenses as a percentage of premiums collected (simple loss ratios) across these three markets."

Financial Services Group Targets Employers in 401(k) Push

"With its new Save 10 program, the Financial Services Roundtable hopes to show individuals the value of saving money for retirement -- and employers the value of adding a 401(k) program if they don't already offer one.... The group's approach is partly defined by its research, which found that many people fail to save for retirement if their company does not offer an 'auto-save' program. Companies that automatically enroll employees in retirement plans increase those saving for retirement from 64 percent to 82 percent."

Lincoln Financial Group Comment Letter to DOL on Lifetime Income Illustration in Pension Benefit Statements (PDF)

"Lincoln believes that illustrations based on reasonable non-safe harbor assumptions should be permitted.... Lincoln agrees that guidance is needed on how to comply with a retirement income illustration requirement without running afoul of [FINRA] rules.... Lincoln believes that the illustrations should be required to contain either single life annuity illustrations only, or in the alternative, both single life and joint and survivor annuity illustrations, without regard to a participant's actual marital status. We do not believe the illustration should include joint and survivor annuity illustrations only on benefit statements of married participants and beneficiaries."

The Principal Financial Group Comment Letter to DOL on Lifetime Income Illustration in Pension Benefit Statements (PDF)

"We believe that any regulations around these illustrations must first do no harm. Requiring formats or methodologies that are highly complicated or inflexible, we believe, would greatly hamper the use of illustrations and undermine the primary objective which is to give participants a realistic view of how well their current savings would support their lifestyle in retirement."

Financial Services Industry Trade Groups Rip Fiduciary Standard

Three financial services industry trade groups [IRI, SIFMA and FSR] are signaling to the Department of Labor (DOL) that they will fight tooth-and-nail to sustain the current exemption of the sale of retirement investment products from a fiduciary standard.

Court Allows Ambac Financial Group Stock Drop Case to Proceed

Excerpt: [The District Judge] held that plan fiduciaries at Ambac Financial Group cannot simply blindly follow plan documents in contravention of the mandates of ERISA ... and at the same time satisfy their fiduciary obligations.

Report of the Working Group on Financial Literacy of Plan Participants and the Role of the Employer

Excerpt: For plan sponsors who wish to craft their own program, a best practices grid would point to the core literacy skills needed for a successful retirement. The Working Group recommends that the Department of Labor determine and publish best practices for the plan sponsor and fiduciaries to consider for use in educating plan participants with a focus toward increasing financial literacy.

Financial Industry Groups Warn SEC That AI Proposal Would Hurt Retirement Savers

"The potentially wide reach of [the proposed rule] has drawn widespread criticism across the financial industry. The ERISA Industry Committee ... said the rule would apply to a 'vast swath of tools' that investors rely on daily, including those related to helping investors save for retirement.... 'It is so far out of bounds, it's more like a concept release than a rule proposal,' said Chris Iacovella, CEO of the American Securities Association ... 'There is nothing for the chairman to do other than throw it in the garbage.' "

EBRI testimony before ERISA Advisory Council Working Group on Financial Literacy and the Role of the Employer (PDF)

6 pages. Excerpt: Does the plan sponsor have any responsibility for educating participants about their decisions at retirement? ERISA Sec. 404c, and implementing regulations, would seem to suggest that employers that want to treat plans as being self-directed must provide substantial financial education. Since most sponsors make the declaration of being 404c compliant, they seem to answer your first question themselves[.]

Hartford Financial Services Group Inc. Has Been Hit with Two New Stock Drop Class Action Lawsuits

Excerpt: The lawsuits allege a fiduciary breach by continuing to have company stock as a retirement plan investment option after it was no longer prudent because of the firm's subprime mortgage exposure. In the two federal court suits filed last week in Connecticut, employees Denise Jump and Joe DeSalvo claim having company stock in the plan was no longer appropriate because of the company's heavy exposure to mortgage-related assets -- including investments in the troubled Fannie Mae, Freddie Mac, Lehman Brothers Holdings, Washington Mutual, and American Insurance Group.

Grouping Benefits to Enhance Financial Wellness

"Instead of giving employees a list of benefit products, plan sponsors should consider presenting them as resources for different life stages, which can lead to better participation."

Financial Wellness Programs Can Benefit from a Group Long-Term Care Option (PDF)

"For Gen-Xers and Baby Boomers, 'retirement readiness' is a pressing concern, and includes addressing retirement income, healthcare, and various related expenses.... LTC insurance can play a critical role in providing 401(k) insurance for those who see its value[.]"

Alder Financial Group Comment Letter to SEC on Duties of Brokers, Dealers and Investment Advisers

"On the surface its easy to equate [broker-dealers and investment advisors] as they both aim to provide investment advice to the public. In practice, however, the sales relationship between B/Ds and their customers and the fee-only relationship between RIAs and their clients are fundamentally different in almost every way.... [T]rying to regulate these two businesses under one set of rules would be unworkable, place a huge recordkeeping burden on RIAs and ultimately not do anything to protect the investing public."