"The three distribution methods described in the previous guidance are largely unchanged, but some of the requirements have been clarified.... The life expectancy tables that can be used to determine substantially equal payments have been updated.... A 5% floor has been added to the maximum interest rate that can be used when applying the fixed amortization or fixed annuitization method.... A safe harbor method can be used to determine the account balance when applying the fixed amortization and fixed annuitization methods."  MORE >>

"Given the disagreement among district courts as to the propriety of ERISA plans' relief-limiting provisions, plan sponsors that wish to maximize the enforcement potential of their arbitration provisions should ensure that the language does not preclude relief available under ERISA -- and severability provisions should authorize courts to sever only those portions of a plan that are unenforceable or contrary to law." [Holmes v. Baptist Health South Florida Inc., No. 21-22986 (S.D. Fla. Jan. 20, 2022)]  MORE >>

"By focusing on, and rejecting, the Seventh Circuit's 'investor choice' rationale, the Supreme Court avoided the need to address the various other issues that have divided lower courts wrestling with the massive surge of excessive fee and investment prudence litigation brought against the fiduciaries of 401(k) and 403(b) plans since 2015." [Hughes v. Northwestern Univ., No. 19-1401 (S. Ct. Jan. 24, 2022)]  MORE >>

"In upholding dismissal of plaintiffs' claims, the Seventh Circuit noted that Northwestern 'provided prudent explanations for the challenged fiduciary decisions involving alleged losses or underperformance' and that plaintiffs' allegations 'depict valid reasons' for Northwestern's decisions. 'Due regard' for these explanations and reasons could be sufficient for the Seventh Circuit to still find plaintiffs' claims implausible and uphold dismissal consistent with the Supreme Court's opinion." [Hughes v. Northwestern Univ., No. 19-1401 (S. Ct. Jan. 24, 2022)]  MORE >>

"[M]any plan fiduciaries simply add 'ESGs' to investment lineups and assume it is prudent because there are other funds in the same investment category that clearly meet the prudent selection requirements. This Supreme Court decision states clearly that all funds, including ESGs, must stand on their own as prudent investment options." [Hughes v. Northwestern Univ., No. 19-1401 (S. Ct. Jan. 24, 2022)]  MORE >>

"First, the Supreme Court held that fiduciaries cannot judge the prudence of higher-fee investment options based solely on the availability of other lower-cost investment options in the plan.... Second, the Supreme Court recognized that plan fiduciaries have a range of judgments that are all proper, provided they are reasonable." [Hughes v. Northwestern Univ., No. 19-1401 (S. Ct. Jan. 24, 2022)]  MORE >>

"The lawsuit calls into question the plan's use of what it calls 'custom' target-date funds (TDFs), which the plan uses as its qualified default investment alternative (QDIA). According to the complaint, the TDFs are managed by BlackRock and mirror the BlackRock LifePath Index Funds, a collective investment trust (CIT) TDF suite." [Locascio v. Fluor Corp., No. 22-0154 (N.D. Tex. complaint filed Jan. 24, 2022)]  MORE >>

"Total U.S. annuity sales were $254.8 billion in 2021, up 16% from 2020. This represents the highest annual annuity sales since 2008, and the third highest sales recorded in history ... Total annuity sales were $63.4 billion in the fourth quarter, 8% higher than fourth quarter 2020.... Total variable annuity (VA) sales were $32.3 billion in the fourth quarter, up 17% from prior year. In 2021, total VA sales were $125.6 billion, 27% higher than prior year."  MORE >>

"Massachusetts Secretary of State William Galvin ... said his office will investigate broker-dealers offering target-date funds, concerned about changes that created large tax bills for small-dollar investors.... Galvin said his securities division sent letters seeking information from companies including BlackRock Inc, T. Rowe Price Group, a unit of Vanguard Group and others."  MORE >>

"Public pensions closed out 2021 with a funded status of 85.5%, up from 83.9% in Q3 and the highest recorded funded status since ... 2016. In aggregate, these plans experienced an investment return of 3.21% for the quarter, though individual plans' estimated returns ranged from 0.57% to 6.80%. Nearly half of the plans in [this study] are now funded over 90%[.]"  MORE >>

"Conventional wisdom assumes all retirees spend their balance through retirement, buying the same amount of goods and services each year. But different retirees have different spending and saving preferences... Have your clients answer these questions to uncover their preferences and use the insight to better align solutions to who they are."  MORE >>

"The top reason for leaving or considering leaving [for employees age 50 and over] was being near retirement age. Not surprisingly, the pandemic played a major role -- about two in five (38%) never would have retired, left a job, or considered leaving a job had it not been for the pandemic. One in five retired earlier than planned because of the pandemic."  MORE >>

"State and local workers say they are considering changing jobs because they want a higher salary or a better benefits package (52%), are burned out from stress during the pandemic (47%), and/or want better work-life balance (36%). Public sector employees are considering retiring and/or leaving the workforce entirely due to pandemic burnout (42%), a desire to do things that bring joy (37%), and tension from working with the public [students' parents] (26%)."  MORE >>