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<< Older News  |  April 15, 2021

News

All News > 401(k) Plans

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Tips for Hiring a Service Provider with Strong Cybersecurity Practices (PDF)
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL] Link to more items from this source
[Official Guidance]
Apr. 14, 2021

"Ask about the service provider's information security standard ... Ask the service provider how it validates its practices ... Evaluate the service provider's track record in the industry ... Ask whether the service provider has experienced past security breaches, ... Find out if the service provider has any insurance policies that would cover losses caused by cybersecurity ... [M]ake sure that the contract requires ongoing compliance with cybersecurity and information security standards[.]"

Tags: 401(k) Plans  •  Cybersecurity  •  Retirement Plan Administration

Editor's Pick Best Practices for Retirement Plan Service Provider Cybersecurity Programs (PDF)
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL] Link to more items from this source
[Official Guidance]
Apr. 14, 2021

"Plans' service providers should: [1] Have a formal, well documented cybersecurity program. [2] Conduct prudent annual risk assessments. [3] Have a reliable annual third party audit of security controls. [4] Clearly define and assign information security roles and responsibilities. [5] Have strong access control procedures. [6] Ensure that any assets or data stored in a cloud or managed by a third party service provider are subject to appropriate security reviews and independent security assessments. [7] Conduct periodic cybersecurity awareness training. [8] Implement and manage a secure system development life cycle (SDLC) program. [9] Have an effective business resiliency program addressing business continuity, disaster recovery, and incident response. [10] Encrypt sensitive data, stored and in transit. [11] Implement strong technical controls in accordance with best security practices. [12] Appropriately respond to any past cybersecurity incidents."

Tags: 401(k) Plans  •  Cybersecurity  •  Fiduciary Duties  •  Retirement Plan Administration

DOL Announces New Cybersecurity Guidance for Plan Sponsors, Plan Fiduciaries, Record-Keepers, Plan Participants
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL] Link to more items from this source
[Guidance Overview]
Apr. 14, 2021

"This guidance is directed at plan sponsors and fiduciaries regulated by [ERISA] and plan participants and beneficiaries....

  • Tips for Hiring a Service Provider: Helps plan sponsors and fiduciaries prudently select a service provider with strong cybersecurity practices and monitor their activities, as ERISA requires.
  • Cybersecurity Program Best Practices: Assists plan fiduciaries and record-keepers in their responsibilities to manage cybersecurity risks.
  • Online Security Tips: Offers plan participants and beneficiaries who check their retirement accounts online basic rules to reduce the risk of fraud and loss."

Tags: 401(k) Plans  •  Cybersecurity  •  Fiduciary Duties  •  Retirement Plan Administration  •  Retirement Plan Information for Employees

Starting a 401(k)? Short Initial Plan Year Is Probably a Bad Idea
Employee Fiduciary Link to more items from this source
Apr. 14, 2021

"Most plans are better off making their effective date retroactive to the first day of the normal plan year -- January 1 in the case of a calendar-based plan -- to establish a 12-month initial plan year.... A full 12-month plan year will probably mean larger contributions for plan participants and less administrative complexity for employers."

Tags: 401(k) Plans  •  Retirement Plan Administration  •  Retirement Plan Design

Gamification Tips for 401(k) Education
Fiduciary News; free registration required Link to more items from this source
Apr. 13, 2021

"Gamification may be driven by a perception that it appeals to younger workers, but all age groups intuitively understand what it means.... 401k plan sponsors and their service providers can use a tip learned from corporate trainers who use gamification and must contend with the issue of privacy."

Tags: 401(k) Plans  •  Retirement Plan Administration

IRS Lists Solo 401(k) Plans as Audit Target
E is for ERISA Link to more items from this source
Apr. 12, 2021

"The Service's TE/GE (Tax Exempt and Government Entities) division has identified one-participant 401(k) plans as among its current audit initiatives.... [This article lists] some common solo 401(k) compliance pitfalls. If you are a solo 401(k) sponsor, check your plan design and operations to determine if these might be issues for you."

Tags: 401(k) Plans  •  Retirement Plan Administration

Employer 401(k) Cybersecurity Responsibilities
Lawton Retirement Plan Consultants Link to more items from this source
Apr. 8, 2021

"Review and monitor providers ... Check insurance coverage ... Review provider contracts ... Get help if you need it ... This issue is evolving."

Tags: 401(k) Plans  •  Cybersecurity  •  Retirement Plan Administration

401(k) Education: Teaching Parents to Teach Their Children
Fiduciary News; free registration required Link to more items from this source
Apr. 6, 2021

"[T]he teacher (the financial service provider) develops preparatory materials for the students (the employees). The students are then given a homework assignment to use the preparatory materials to develop their own lesson plans to teach other students (in this case, children, whether they be the employees' kids, school children, or scouts seeking merit badges).... When you learn by teaching, you're conditioned to believe you've already learned what you're teaching."

Tags: 401(k) Plans  •  Retirement Plan Administration

An Updated Look at 401(k) Participant Behaviors During the COVID-19 Crisis
Morningstar Link to more items from this source
Apr. 5, 2021

"[A]pproximately 3.0% of participants using retirement managed accounts stopped using their respective investment strategies during 2020 (that is, they began self-directing).... Among self-directors, ... roughly 13% changed equity allocations by more than 5% ... Participants self-directing their accounts who made allocation changes tended to move to more-conservative portfolios, especially during the first quarter of 2020[.]"

Tags: 401(k) Plans  •  Coronavirus (COVID-19)  •  Retirement Plan Investments

Participant Directed Investments Through Brokerage Windows: The Last Frontier, or a Trap for the Unwary?
The Wagner Law Group Link to more items from this source
Apr. 2, 2021

"The realm of ERISA plan investments through these arrangements remains largely uncharted territory. Fiduciaries operate under the broad understanding that ERISA Section 404(a) fiduciary duties of prudence and loyalty apply, but with little guidance on how."

Tags: 401(k) Plans  •  Fiduciary Duties  •  Retirement Plan Investments

SECURE Act Allows 401(k) Distributions for Birth or Adoption
Employee Benefits Report Link to more items from this source
[Guidance Overview]
Apr. 1, 2021

"QBOAD gives employees the option to take up to $5,000 per parent per child from a 401(k) or other eligible retirement plan without paying the 10 percent early distribution penalty for withdrawing funds before age 59½."

Tags: 401(k) Plans  •  Retirement Plan Design  •  SECURE Act

Designing a 401(k) Plan: Six Key Decisions
Employee Fiduciary Link to more items from this source
Mar. 31, 2021

"[1] Define the 'Employer' ... [2] Understand the differences between safe harbor and traditional 401(k) plans [chart included] ... [3] Choose your employee and employer contributions ... [4] Define plan compensation ... [5] Define employee eligibility ... [6] Choose your distribution and loan options."

Tags: 401(k) Plans  •  Retirement Plan Design

Talking Points for QACAs, Coverage Requirements and After-Tax Contributions
Definiti Link to more items from this source
Mar. 31, 2021

"Not only does automatic enrollment help employees make retirement savings a priority, the automatic enrollment feature also defaults participant contributions all the way up to the company’s maximum matching amount. QACA plans check many boxes for a plan sponsor."

Tags: 401(k) Plans  •  Retirement Plan Design

Editor's Pick Retire That Thinking: Uncovering Better Strategies for Retirement Readiness (PDF)
Capital Group Link to more items from this source
Mar. 31, 2021

"Nearly 7 in 10 investors (68%) are confident they will reach their retirement goals ... Nearly 9 in 10 investors (87%) favor creating a regular 'retirement paycheck' to manage spending during their retirement years."

Tags: 401(k) Plans  •  Retirement Plan Design

Forfeitures: The Final Frontier
Ferenczy Benefits Law Center Link to more items from this source
Mar. 30, 2021

"At the end of the plan year, as part of the annual administration, forfeitures should be examined and addressed in some way.... [T]he forfeitures must be used. They can't be hoarded year after year."

Tags: 401(k) Plans  •  Retirement Plan Administration

Editor's Pick Navigating the Number Jumble: A 403(b), 401(k), and 457(b) Comparison
CAPTRUST Link to more items from this source
Mar. 26, 2021

"[F]or those plan sponsors with choice, like private tax-exempt 501(c)(3) charitable organizations, digging into the differences may help clarify which plan type, or combination of plan types, to offer. [This article discusses and compares] the most significant distinctions among the three types of plans[.]"

Tags: 401(k) Plans  •  403(b) Plans and Annuities  •  457 Plans  •  Retirement Plan Design

Will Moving My Company Ownership Into a Trust Impact Our 401(k) Plan?
DWC Link to more items from this source
Mar. 25, 2021

"Ownership percentages are used to determine things as routine as who your highly compensated and key employees are for nondiscrimination testing to more involved items such as whether your company must be aggregated with any others as part of a controlled group or affiliated service group.... What can make this determination such a challenge are the ownership attribution rules. "

Tags: 401(k) Plans  •  Retirement Plan Administration

Advisors Can Help Employers Address 401(k) Plan Testing Failures
Newport Group Link to more items from this source
Mar. 16, 2021

"[This article provides] a summary of the most common types of testing failures and excess contributions that should be corrected as soon as possible following the end of the plan year to avoid excise taxes and to maintain the tax qualified status of the plan."

Tags: 401(k) Plans  •  Retirement Plan Administration

Survey Reveals Widespread Lack of Knowledge About Retirement Account Fees
Rebalance360 Link to more items from this source
Mar. 10, 2021

"Over half of Americans surveyed (57%) falsely believe that they pay either no fees, or very low fees, to maintain their retirement investment accounts.... 66% of those surveyed have changed their approach to retirement investing as a result of COVID-19, with 62% saving more for retirement as a result of COVID-19.... 51% of those surveyed unsure of the breakdown of their investments between stocks and bonds."

Tags: 401(k) Plans  •  Coronavirus (COVID-19)  •  Retirement Plan Administration  •  Retirement Plan Investment Costs

401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2018
Employee Benefit Research Institute [EBRI] Link to more items from this source
Mar. 5, 2021

"Three-quarters of participants in their twenties had more than 80 percent of their 401(k) plan accounts invested in equities at year-end 2018 ... At year-end 2018, 19 percent of all 401(k) participants who were eligible for loans had loans outstanding against their 401(k) plan accounts, unchanged since 2016."

Tags: 401(k) Plans  •  Retirement Plan Design  •  Retirement Plan Investments

SECURE Act Changes: Risks and Opportunities
HUB International Link to more items from this source
[Guidance Overview]
Mar. 4, 2021

"Some changes are required, others are optional. Some provisions have tight deadlines. Others give you more breathing room. And, relevance depends on your plan and its pool of participants and variations like numbers of full- to part-time workers."

Tags: 401(k) Plans  •  Retirement Plan Administration  •  Retirement Plan Design  •  SECURE Act

Year-End 2020 Self-Directed 401(k) Balances Up 13% Year-Over-Year Despite Ongoing Volatility and Q1 Market Lows
Charles Schwab Link to more items from this source
Mar. 3, 2021

"Average account balances finished the year up 31% compared to the lows they experienced at the end of Q1 2020. The majority of participant assets continue to be held in equities (35%), up from Q4 2019 at 29%. Mutual funds were the second largest holding at 31%, followed by ETFs (18%), cash (14%), and fixed income (2%)."

Tags: 401(k) Plans  •  Retirement Plan Investments

The 401(k) Fiduciary Dilemma: More Participation or More Savings?
Fiduciary News; free registration required Link to more items from this source
Mar. 2, 2021

"Compliance requires participation not be limited to high-net-worth individuals. However, if plan sponsors focus too much on merely getting employees to not opt-out, are they then sacrificing the more meaningful goal of saving an adequate amount? To fully appreciate this, you need to understand what happened with the OregonSaves program."

Tags: 401(k) Plans  •  Retirement Plan Design

401(k) Funds Are Being Diverted for Medical Expenses
HR Daily Advisor Link to more items from this source
Mar. 1, 2021

"60% of Americans withdrew funds from their individual retirement account (IRA) or 401(k) in 2020.... [An] additional 27% borrowed against their 401(k) during COVID.... 41% of these account holders did so to pay medical expenses."

Tags: 401(k) Plans  •  Coronavirus (COVID-19)  •  Misc. Distribution Issues

Avoid the Most Common 401(k) Compliance Error with These Best Practices
Cassell Plan Audits Link to more items from this source
Feb. 25, 2021

"[T]he first step is to audit all of your company's income types against the inclusions and exclusions outlined in your benefits plan, point by point. Make sure each compensation type is correctly flagged as eligible compensation for 401k contribution calculations."

Tags: 401(k) Plans  •  Retirement Plan Administration


<< Older News  |  April 15, 2021

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