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<< Older News  |  June 22, 2021


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DOL Issues Its First Cybersecurity Guidance for Plan Sponsors, Fiduciaries and Service Providers
King & Spalding Link to more items from this source
[Guidance Overview]
June 22, 2021

"[T]he new guidance more closely aligns the data privacy and security requirements of United States retirement plans with the requirements outside the United States and with general corporate standards. The guidance is based on the central premise that '[r]esponsible plan fiduciaries have an obligation to ensure proper mitigation of cybersecurity risks.' "

Tags: Cybersecurity  •  Retirement Plan Administration

Best Interest Standard of Care for Advisors, Part 55 Link to more items from this source
[Guidance Overview]
June 22, 2021

"[C]hanges are being considered for both the definition and the exemption.... The change to the fiduciary definition will likely cause even more advisors and agents (and their firms) to be fiduciaries for plans, participants and IRA owners. The changes to the exemptions will impose additional compliance burdens on investment advisers, broker-dealers, banks and insurance companies."

Tags: Fiduciary Duties  •  Retirement Plan Investments

Taking a Fiduciary Holistic Approach: How Can 401(k) Participant Data Be Used?
Fiduciary News; free registration required Link to more items from this source
June 22, 2021

"It's long been assumed by recordkeepers and other 401k portal providers that critical participant data can and perhaps should be used to give employees up-to-date information on their financial situation.... At some point, however, the best interest of the retirement saver crosses the line into a privacy violation. It's just too tempting to use this information for business purposes.... Is this a real conflict-of-interest or only an apparent one? This quandary comes about because there's a real question of ownership of the data."

Tags: Fiduciary Duties  •  Retirement Plan Administration

Plan Sponsor Pitfalls When Using a Section 3(38) Investment Manager
CAPTRUST Link to more items from this source
June 22, 2021

"Pitfall #1: No ongoing formal monitoring process ... Pitfall #2: Contracting with a 3(38) investment manager but acting in a 3(21) investment advisor capacity ... Pitfall #3: Allowing room for guesswork or interpretation ... Pitfall #4: Assuming all 3(38) investment manager services are equal."

Tags: Fiduciary Duties  •  Retirement Plan Investments

Editor's Pick Pension Risk Transfer: Evaluating Impact and Barriers for De-Risking Strategies (PDF)
Society of Actuaries Link to more items from this source
June 22, 2021

64 pages. "This paper provides background for how plan sponsors have historically managed risk within their pension plan ... and covers the options plan sponsors have to transfer that risk ... Recent market drivers are discussed ... which have impacted many of the recent trends ... [The paper provides] a framework for plan sponsors considering a risk transfer, along with a number of items that should be considered throughout the process ... [and discusses] potential risk transfer alternatives and innovations, as well as providing a forecast of where the market may go in the future."

Tags: Funding of DB Plans

Editor's Pick Deep Learning for Liability-Driven Investment (PDF)
Society of Actuaries Link to more items from this source
June 22, 2021

63 pages. "[T]his research contributes to the existing literature in three ways. First, it introduces [Reinforcement Learning (RL)] and deep learning to actuaries and tries to build some connections with actuarial concepts. Second, it provides a workable example to demonstrate the application of RL to LDI and assess its effectiveness. Without simplifying any liability and asset modeling, it shows the potential of RL to solve complex actuarial problems.... Third, sample implementation codes are made public for educational purposes[.]"

Tags: Funding of DB Plans  •  Retirement Plan Investments

Majority of Americans Are Reluctant to Discuss Retirement Concerns
Allianz Life Insurance Company of North America Link to more items from this source
June 22, 2021

"Americans are more worried than ever about a variety of retirement risks in 2021 including concerns about healthcare costs (71% versus 65% in 2020), the rising cost of living (67% vs. 59% in 2020) and the impact of a market downturn on retirement savings (66% vs. 54% in 2020). People are most interested in getting professional guidance about how to prevent running out of money before they die (66%) and understanding the impact of a market downturn's impact on savings (64%)."

Tags: Retirement Plan Design

What Level of Long-Term Services and Supports Do Retirees Need?
Center for Retirement Research at Boston College Link to more items from this source
June 22, 2021

"This analysis, using two decades of data from the Health and Retirement Study, classifies the severity of care needs, accounting for both intensity and duration. The results suggest about one-fifth of retirees will need no support at all and about one-quarter will have severe needs, with the rest facing low to moderate needs. The demographic patterns are as expected: those who are married, better educated, white, or in better health have more manageable needs."

Tags: Retirement Plan Design

Employers Make Enhancing the Employee Experience a Top Priority for Post-Pandemic Success
Willis Towers Watson Link to more items from this source
June 22, 2021

"Most respondents believe a positive employee experience is a key driver of engagement (82%), employee wellbeing (79%), productivity (79%), and ability to attract and retain talent (80%).... Less than one in seven (13%) say the pandemic has receded enough to end temporary pandemic-related policies and programs. The rest indicate they will be ready to do so during the second half of this year (59%) or in 2022 or beyond (28%)."

Tags: Health Plan Design  •  Misc. Benefits  •  Retirement Plan Design

Spring 2021 DOL Regulatory Agenda Includes Retirement Plan Projects
October Three Consulting Link to more items from this source
June 22, 2021

"The Agenda includes four significant [DOL] regulatory initiatives ... [1] mandatory annual DC plan lifetime income illustrations, required by the [SECURE Act] of 2019; [2] fiduciary duties with respect to retirement plan investments based on environmental, social, and corporate governance (ESG) factors and with respect to proxy voting; [3] a revision of the DOL advice fiduciary rule; and [4] implementation of the SECURE Act's DC 'group of plans' combined 5500 provision. In this article [the authors] briefly review, and provide some background on, these projects."

Tags: Fiduciary Duties  •  MEP/PEP  •  Retirement Plan Administration  •  Retirement Plan Investments - ESG  •  SECURE Act

Technology-Driven Retirement Plan Challenges
Business of Benefits Link to more items from this source
June 22, 2021

"[T]here seems to be a growing number of tools which may finally be giving vendors a chance to thrive in what has largely been a legacy driven retirement technology market. Making these sorts of technology accommodations is not easy, and there will be many firms which will not be able to compete over time. A number of recent legislative initiatives, in particular, really contemplate advanced technology which makes technology expertise all the more critical for service providers."

Tags: Retirement Plan Administration

Tenth Circuit Makes Clear That Arms-Length Service Agreements Without Evidence of a Prior Relationship Are Not Prohibited Transactions
Jackson Lewis P.C. Link to more items from this source
June 22, 2021

"Plaintiffs contended, '[b]ecause [the recordkeeper] is a service provider and hence a 'party in interest,' its 'furnishing of' recordkeeping and administrative services to the Plan constituted a prohibited transaction[.]' The Tenth Circuit soundly rejected that notion, noting '[t]he class's interpretation leads to an absurd result: the initial agreement with a service provider would simultaneously transform that provider into a party in interest and make that same transaction prohibited under Section 1106.' " [Ramos v. Banner Health, No. 20-1231 (10th Cir. June 11, 2021)]

Tags: Fiduciary Duties

California Teacher Retirement Data
403bwise Link to more items from this source
June 22, 2021

"CalSTRS processed 11,706 service retirements and paid $15.9 billion in retirement, disability and survivor benefits and purchasing power supplemental payments. Members retired with an average of 24.3 years of service credit and a monthly member-only benefit of $4,614. The average member age at retirement was 63.3 years old."

Tags: State and Local Government Plans

How to Pre-Fund a Legacy So You Can Enjoy Your Retirement Guilt-Free
Kiplinger Link to more items from this source
June 22, 2021

"A life insurance death benefit is income tax-free. Can't say that about an IRA or 401(k). Both of those get eaten up by income taxes. Not to mention, there are several bills on the hill calling for the elimination of the step-up-in-basis rule, with some exclusions.... The peace of mind is knowing that whatever happens in the future ... my kids will at least get the $1 million life insurance policy. The peace of mind is also knowing that now that the kids' inheritance is planned for, I am free to spend all my retirement money on retirement."

Tags: Death Benefits & Life Insurance  •  Retirement Plan Design

American Academy of Actuaries Comment Letter to IRS: Increasing Flexibility Relating to Maintenance and Application of Funding Balances (PDF)
American Academy of Actuaries Link to more items from this source
June 22, 2021

"Specifically we suggest: [1] Extending the deadline for elections to create or apply funding balances by one month to coincide with the Form 5500 filing deadline; [2] Extending the deadline for elections to reduce (waive) funding balances beyond the end of the plan year; [3] Modifying specific and standing elections to provide greater flexibility by allowing formulaic elections; and ... [4] [P]roviding an additional standing election to waive funding balances under certain circumstances."

Tags: Funding of DB Plans

Case Study: Communicating a Voluntary Early Retirement Program
Milliman Link to more items from this source
June 21, 2021

"Since the pandemic turned all of our lives upside down last year, we've seen an uptick in [employers] seeking creative ways to trim organizational costs while minimizing the negative impact on employees ... Voluntary early retirement programs can offer a win-win situation for employers and employees alike, giving employees nearing retirement a financial incentive to leave early while achieving a reduction in labor cost for employers."

Tags: Retirement Plan Design

DB Plan Sponsors Shouldn't Fear Investing in Real Assets
PLANSPONSOR; free registration may be required Link to more items from this source
June 21, 2021

"Real assets reduce the overall volatility of a portfolio, introduce more efficiency and improve risk-adjusted returns.... The amount DB plans invest in real assets is in part based on the size of their cash obligations.... Real asset constructs should include an array of strategies, spanning traditional and specialist mandates, and be inclusive of different liquidity terms and/or capital lock-ups."

Tags: Retirement Plan Investments

Maine Poised to Offer State-Run Retirement Program
American Retirement Association [ARA] Link to more items from this source
June 21, 2021

"The measure would require each covered employer to allow its covered employees to decide whether or not to contribute to a payroll deduction Roth IRA by automatically enrolling them but with the opportunity to opt out.... [C]overed employees who opted out would be automatically reenrolled at regular intervals but have the opportunity to opt out again."

Tags: Local Regulation  •  Retirement Plan Design

New Jersey May Allow Some Workers Back Into Pension System, a Decade After They Were Removed
Politico Link to more items from this source
June 21, 2021

"[As] the state ramps up its contribution to a system that's underfunded by tens of billions of dollars, it's also considering restoring eligibility to some public employees -- state and county prosecutors, administrative law judges and workers compensation judges -- after new hires were taken out of the system more than 10 years ago to lighten the financial burden."

Tags: Funding of DB Plans  •  Retirement Plan Design  •  State and Local Government Plans

Retirees: If You Love Income, You Should Love Cash Flow Even More
Morningstar Link to more items from this source
June 21, 2021

"Current conditions reinforce what has been growing apparent for the past several decades: Rather than chasing ever-shrinking income sources -- and risk under-diversifying and courting extra volatility in the process -- retirees should focus on generating cash flow in retirement instead.... This grouping includes Social Security ... income from working ... income from passive non-portfolio sources such as property rentals or royalties ... [and] cash values on life insurance as well as reverse mortgages."

Tags: Misc. Distribution Issues  •  Retirement Plan Design  •  Retirement Plan Investments

How Can We Retire Early Without Paying So Much in Taxes?
The Madison Leader Gazette Link to more items from this source
June 21, 2021

"Is it worth just paying the 10% penalty on early withdrawals versus paying tax and converting a large amount of the former 401(k) plans to a Roth? My company does allow withdrawals through the rule of 55 but you have to withdraw it all and I know I don't want that tax liability."

Tags: Misc. Distribution Issues  •  Retirement Plan Design  •  Retirement Plan Information for Employees

New Maine Law Requires State Pension Fund to Divest Fossil-Fuel Companies
Pensions & Investments Link to more items from this source
June 18, 2021

"Maine Gov. Janet Mills signed into law a bill that would require the $17.6 billion Maine Public Employees Retirement System, Augusta, and the state treasurer to divest holdings in fossil-fuel companies by Jan. 1, 2026.... The legislation also requires the pension fund and the state to halt investing in multiple fossil-fuel companies."

Tags: Retirement Plan Investments - ESG  •  State and Local Government Plans

EBSA Issues Guidance on Disclosure of Phone Call Recordings
Robinson & Cole LLP Link to more items from this source
[Guidance Overview]
June 18, 2021

"Benefits claim fiduciaries may wish to consider their internal systems for recording calls, and for tracking and locating any recordings that are made. In particular, they may wish to consider developing a procedure or guideline concerning when calls can or should be recorded, and what is done with a recording after it is made. In addition, fiduciaries may wish to consider whether such recordings, if made, should automatically be included in the claim file."

Tags: Health Plan Administration  •  Retirement Plan Administration

Audio Recordings Are Up for the Taking!
Seyfarth Link to more items from this source
[Guidance Overview]
June 18, 2021

"[With Information Letter 06-14-2021, the DOL] has waded into a long-simmering debate about whether audio recordings of phone calls between a plan participant and the plan's administrator or insurer should be provided to the participant when challenging a benefit determination under the plan, and they have come down squarely on the side of the participant."

Tags: Health Plan Administration  •  Retirement Plan Administration

Judge Rules MetLife Suit Alleging Underpaid Pension Payments Can Proceed
Pensions & Investments Link to more items from this source
June 18, 2021

"The plaintiffs said MetLife's use of mortality tables from 1971 and 1983 violated an ERISA rule that alternate benefits had to be 'actuarially equivalent' to benefits, as if participants had reached the traditional retirement age, according to the judge's ruling." [Masten v. Metropolitan Life Ins. Co., No. 18-11229 (S.D.N.Y. Jun. 14, 2021)]

Tags: Retirement Plan Administration  •  Retirement Plan Design

<< Older News  |  June 22, 2021

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