"[T]he Final Rule does not include a finalized Schedule MEP, which the Final Rule implies will be published in advance of the 2022 Form 5500 filing deadline. Additionally, the Final Rule does not directly address Form 5500 filings for 'groups of plans' (GoPs, referred to in the NPRM as 'defined contribution groups' or DCGs), which were discussed at length in the NPRM."  MORE >>

"Petitioners claim that respondents violated their duty of prudence by, among other things, offering needlessly expensive investment options and paying excessive recordkeeping fees. The Court of Appeals for the Seventh Circuit held that petitioners' allegations fail as a matter of law, in part based on the court's determination that petitioners' preferred type of low-cost investments were available as plan options. In the court's view, this eliminated any concerns that other plan options were imprudent. That reasoning was flawed. Such a categorical rule is inconsistent with the context-specific inquiry that ERISA requires and fails to take into account respondents' duty to monitor all plan investments and remove any imprudent ones.... Accordingly, we vacate the judgment below and remand the case for reconsideration of petitioners' allegations." [Hughes v. Northwestern Univ., No. 19-1401 (S. Ct. Jan. 24, 2022)]  MORE >>

"Northwestern University employees who lost their challenge against retirement plan fees persuaded the Supreme Court ... to grant them another round of litigation. At just six pages in length, the decision is short, finding that the Seventh Circuit put too high a value on the fact that retirement plan participants had choice over their investments." [Hughes v. Northwestern Univ., No. 19-1401 (S. Ct. Jan. 24, 2022)]  MORE >>

"[F]ederal courts dealing with motions to compel arbitration of these disputes have issued inconsistent decisions on the requirements to force arbitration of ERISA fiduciary breach claims and class action waivers. A decision just issued by a federal district court judge in Florida has upheld a plan's mandatory arbitration policy and highlights the importance of adding plan language setting out a plan's mandatory arbitration policy in a plan amendment." [Holmes v. Baptist Health South Florida Inc., No. 21-22986 (S.D. Fla. Jan. 20, 2022)]  MORE >>

"[T]he Seventh Circuit ... reasoning differs slightly from the lower court in at least one significant respect that is supportive of the idea that ERISA claims can be arbitrated. But in other respects, the Seventh Circuit's decision points to some possible limits on what plan sponsors may require be arbitrated. The upshot is continued uncertainty that plan sponsors will have to navigate to the extent they wish to require arbitration of ERISA claims." [Smith v. Bd. of Directors of Triad Mfg., Inc., No. 20-2708 (7th Cir. Sept. 10, 2021)]  MORE >>

"During December, the estimated cost to transfer retiree pension risk to an insurer in a competitive bidding process decreased from 99.9% of a plan's total liabilities to 99.3% of those liabilities.... [T]he average annuity purchase costs across all insurers also decreased, from 103.2% to 102.8%."  MORE >>

"Pension funds ... have spent the last decade seeking out higher investment yields from alternative investments like private equity in response to stagnating returns from more traditional investments. Recently a few funds have started to experiment with even more non-traditional vehicles such as cryptocurrencies and NFTs to improve investment results."  MORE >>

"While private equity has long been a part of defined benefit plan investment portfolios, DC plan sponsors have historically steered clear of incorporating alternative assets in their plans due to litigation concerns and structural issues such as liquidity and valuation needs."  MORE >>

"The worst decade for balanced fund returns in the US was located, but even with this bad start the crudest sort of balanced portfolio could still be made to sustain income to age 101.... In the 20th century US, the analyses find a 30/70 allocation to be inferior to a 60/40 allocation when the goal is to sustain inflation-adjusted income for as long as possible ... [T]wo centuries of global market history indicate that exhaustion of tax-sheltered retirement savings before the age of 100 is unlikely to occur for retirees who model their asset mix after those seen in Target Date funds."  MORE >>

"Determine whether the plan qualifies for an ERISA Section 103(a)(c)(3) audit.... Be prepared for additional information requests.... Be open to additional audit feedback for ways to strengthen your plan."  MORE >>

"[1] More ESG (environment, social and governance) investment options in workplace savings plans.... [2] Addition of retirement income options as a part of a workplace savings plans.... [3] 'Dependent-related benefits' that provide a range of caregiving support, spanning from daycare to elder care.... [4] Helping employees create an emergency savings fund to address financial emergencies.... [5] Student debt repayment options."  MORE >>