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Retirement Plans Newsletter

January 28, 2022

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Is Your Plan's Matching Contribution Formula Delivering Results?

"Offering matching contributions under a 401(k) plan can serve two purposes: [1] Provide a valuable benefit to your employees; and [2] Encourage plan participants to play a meaningful role in preparing for their own retirements. The trick is to do both in a way that is affordable for both you and your employees. How can your company best perform that balancing act?"  MORE >>


Expect the Breach of Fiduciary Duty Cases to Keep On Coming

"The Supreme Court's decision ... makes clear that offering a large investment menu under a retirement plan will not protect a plan sponsor from a breach of fiduciary claim if some options offered under the plan are imprudent and not timely removed from the menu." [Hughes v. Northwestern Univ., No. 19-1401 (S. Ct. Jan. 24, 2022)]  MORE >>

Ice Miller LLP

In First Post-Hughes Decision, District Court Declines to Dismiss 401(k) Fee Complaint

"The court expressed its view that Hughes 'suggested' that a defined contribution plan participant may state a prudence claim by merely alleging that the plan offered higher priced retail class mutual funds instead of available identical lower-cost institutional class funds.... [T]he district court appears to have, at a minimum, over-emphasized the Supreme Court's holding as to the plausibility of mutual fund retail share class claims" [Goodman v. Columbus Regional Healthcare System, No. 21-0015 (M.D. Ga. Jan. 25, 2022)]  MORE >>


Supreme Court Clarifies Duty of Prudence for ERISA Fiduciaries

"The Court did not flesh out the factual contours of the duty of prudence or address the district court's factual finding that certain of the plan administrators' decisions were prudent. Nor did the Court directly address questions regarding the proper pleading standard for fiduciary imprudence or discuss what factual allegations would be sufficient to allow the employees' claims to survive a motion to dismiss. The decision thus leaves open to fiduciaries to explain the investment options provided, including those that may charge higher fees." [Hughes v. Northwestern Univ., No. 19-1401 (S. Ct. Jan. 24, 2022)]  MORE >>

Paul, Weiss, Rifkind, Wharton & Garrison LLP

SCOTUS Revives Excessive Fee Claims Against University Plan Fiduciaries

"The Court's decision certainly does not provide plan fiduciaries with a road map on how to successfully get these cases disposed of on motions to dismiss. If anything, the decision suggests that lower courts should undergo a deeper analysis of the facts to determine whether fiduciaries acted prudently given the totality of the circumstances present at the time the relevant actions were taken." [Hughes v. Northwestern Univ., No. 19-1401 (S. Ct. Jan. 24, 2022)]  MORE >>

Fox Rothschild LLP

Formulating a Retirement Spending Plan: Using a Registered Indexed Linked Annuity to Mitigate Risk Exposure

"This paper examines the impact to probability of success when an advisor and client make changes to the factors they can control, then quantifies the portfolio's exposure to uncontrollable risks they cannot control. The paper demonstrates that adding registered indexed linked annuities (RILAs) with guaranteed lifetime income to a portfolio improves outcomes by reducing exposure to the four uncontrollable risks of retirement."  MORE >>

Mark Paulson and Gregory Goin, via SSRN

Updated Fiscal Plan Directs Funds to New Puerto Rico Pension Trust

"[The fiscal plan] incorporates Puerto Rico directing $10.3 billion during the next 10 years to a new pension reserve trust. That new fund will ease future commonwealth budgets as the island spends about $2.3 billion annually to cover benefits to public workers because the retirement fund is depleted."  MORE >>

Pensions & Investments

Benefits in General

Data Privacy and Security: Key Concerns for Employee Benefit Plans

"[1] Do you collect more information than required or retain information longer than necessary, possibly increasing your risk of a breach? [2] Do you know how your data flows internally? Are there safeguards to make sure only those who need to see data can access it? [3] With whom do you share data externally? Should you hold vendors to a particular privacy or security standard? [4] Should you be using encryption or other security measures with respect to your data? [5] What are your procedures in the event of a security breach?"  MORE >>

Groom Law Group

Executive Compensation and Nonqualified Plans

[Official Guidance]

Text of SEC Announcement Reopening Comment Period with Specific Comment Requests for Dodd-Frank Pay-for-Performance Proposed Regs (PDF)

29 pages. "The [SEC] is reopening the comment period for its proposal to implement Section 953(a) of the [Dodd-Frank Act].... The Proposed Rules were first set forth in a release published in the Federal Register on May 7, 2015 ... The reopening of this comment period is intended to allow interested persons further opportunity to analyze and comment upon the Proposed Rules in light of developments since the publication of the Proposing Release and [the SEC's] further consideration of the Section 953(a) mandate, including by responding to the additional requests for comment included in this release.... Comments should be received on or before [30 days after date of publication in the Federal Register]."  MORE >>

U.S. Securities and Exchange Commission [SEC]

SEC Chairman's Statement on Reopening of Comment Period for Pay-for-Performance Regs

"In 2015, the Commission proposed rules to implement the Dodd-Frank Act's 'pay versus performance' requirement. These proposed rules relied upon total shareholder return as the sole measure of financial performance. Some commenters expressed concerns that total shareholder return would provide an incomplete picture of performance. In this reopening release, we are considering whether additional performance metrics would better reflect Congress's intention in the Dodd-Frank Act and would provide shareholders with information they need to evaluate a company's executive compensation policies."  MORE >>

U.S. Securities and Exchange Commission [SEC]

Employee Benefits Jobs

View job as Retirement Contributions Specialist
for Alerus Retirement Contributions Specialist


Arden Hills MN

Press Releases

Franklin Templeton Selects Ascensus to Host Personal Retirement Path Managed Account Services Offering


Custodia Financial Announces Free Access to Form 5500 Data via

Custodia Financial

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

2022 Legislative Update

February 3, 2022 WEBCAST


IRAs: Establishing and Amending

February 8, 2022 WEBCAST


Executive Compensation Academy: Hot Compensation Topics

February 10, 2022 WEBCAST

Hunton Andrews Kurth

What Every Retirement Plan Fiduciary Needs to Know

February 15, 2022 WEBCAST


Understanding PRT

March 3, 2022 WEBCAST


Last Issue's Most Popular Items

IRS Updates Guidance on Substantially Equal Periodic Payments Exception to 10% Additional Tax

Thomson Reuters / EBIA

Understanding the Great Resignation and Work for Older Adults


Supreme Court Declines to Establish Pleading Standard for Defined Contribution Plan Excessive Fee Litigation


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BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587.

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