"Under the final rulemaking, trusted advisers will have to: [1] Meet a professional standard of care when making recommendations (give prudent advice); [2] Never put their financial interests ahead of the retirement investor's when making recommendations (give loyal advice); [3] Avoid misleading statements about conflicts of interest, fees, and investments; [4] Charge no more than what is reasonable for their services; and [5] Give the retirement investor basic information about the adviser's conflicts of interest.... The rule and exemptions are carefully designed to honor retirement investors' legitimate expectation of advice that is in their best interest."  MORE >>

"The final definition is substantially broader than the 1975 rule, however, it is significantly narrower than DOL's 2023 proposal. As an example, DOL has recognized that a variety of sales activity does not give rise to fiduciary status.... This opens up a range of possibilities for interactions amongst sophisticated parties to remain non-fiduciary in nature in a way that may not have been possible under the Proposal.... While most of the changes [to PTE 2020-02] added burdens, e.g., expanded disqualification provisions, DOL did respond to some industry requests for more flexibility ... [T]he final PTE 84-24 amendment considerably narrows the community of insurance professionals eligible for exemptive relief for the receipt of compensation in connection with the recommendation of insurance and annuity products."  MORE >>

"The final rule narrows the contexts in which a covered recommendation will constitute ERISA fiduciary investment advice and makes clear that the test for fiduciary status is objective ... [A] new paragraph in the regulatory text confirms that sales recommendations that do not satisfy the objective test will not be treated as fiduciary advice, and that the mere provision of investment information or education, without an investment recommendation, is not advice within the meaning of the rule."  MORE >>

"Notice 2024-35 extends the relief period through 2024, waiving the excise tax for failure to take RMDs during this period for those beneficiaries subject to the 10-year rule in 2024. The Notice also confirms that failure to make these RMD payments during the extended relief period will not jeopardize plan qualification.... [T]his RMD waiver only applies to beneficiaries utilizing the 10-year rule and not the eligible designated beneficiaries utilizing the life expectancy rule."  MORE >>

"[B]eneficiaries subject to the 10-year rule and obligated to take annual required minimum distributions get a waiver of the 25% excise tax that could have otherwise applied to their 2024 RMDs. It is important to note that the excise tax is waived, not the RMDs. This distinction determines your options and your RMD obligations."  MORE >>

"Here we have ... another case of a federal judge noting that the thresholds for considering a motion to dismiss a case before those presentations and discovery are required to be tilted in favor of the party not pushing for dismissal -- the participant-plaintiff. All of which feels uncertain in the result(s), and certainly inconsistent between federal district courts[.]" [Brookins v. Northeastern Univ., No. 22-11053 (D. Mass. Apr. 17, 2024)]  MORE >>

"Under the SECURE 2.0 Act of 2022., plan sponsors can add new features to their 403(b) plans to increase opportunities for participation and access to retirement plan funds. Separately, the [IRS] recently expanded its determination letter program to include individually designed 403(b) plans. This affords plan sponsors that do not use a service provider's pre-approved plan document a helpful new avenue to seek approval of their 403(b) plans in written form."  MORE >>

"According to over 50% of Millennials surveyed, obtaining 'financial independence' is a more significant indicator of retirement than simply turning 65.... 22% of Millennials want to work longer because they 'enjoy' their jobs or don't have enough money saved for retirement, while 47% want to retire as soon as they can afford it."  MORE >>

"The funded percentage decreased from 99.4% to 98.5%. The pension deficit increased from $8.5 billion to $19.9 billion. The average return on investments was 7.2%. The average discount rate decreased from 5.18% to 5.01%. The average expected return on assets assumption increased from 5.8% to 6.4%."  MORE >>

"Due to the absence of statutory guidance in defining employee under ERISA, plan sponsors have often defaulted to the definition of employee under the Internal Revenue Code ... The use of the new economic realities test to determine the existence of an employee-employer relationship may simplify the analysis for plan sponsors and provide a more definitive classification."  MORE >>