"The [EBSA] has issued interim final regulations (IFRs) that expand the scope of the abandoned plan program to encompass plans whose sponsors are in liquidation under Chapter 7 of the Bankruptcy Code and related amendments to Prohibited Transaction Exemption 2006-06. The IFRs and PTE amendments, which adopt with modifications the proposed regulations from 2012, are effective July 16, 2024. The DOL has requested comments on numerous aspects of the IFRs. Comments are due by July 16, 2024."  MORE >>

"The final rule is intended to create a fiduciary standard that applies uniformly to all investments that individual retirement investors may make with respect to their retirement accounts.... [T]he DOL has narrowed the contexts in which an investment recommendation will be considered fiduciary investment advice under ERISA Section 3(21)(A)(ii) with respect to an employee benefit plan. The final rule also amends the parallel definition of a fiduciary under Internal Revenue Code Section 4975(e)(3)(B), that applies to 401(a) and 403(b) plans, individual retirement arrangements (IRAs), including SEP and SIMPLE IRAs, health savings accounts (HSAs), Archer medical savings accounts (MSAs), and Coverdell education savings accounts (ESAs)."  MORE >>

"Although the district court criticized the Mators for failing to make an 'apples to apples' comparison, pointing to differences in service codes employed by the various plans, the Third Circuit concluded that the Mators' allegation that all plans received similar services rendered their claim plausible despite the coding differences.... And the court was persuaded that the Mators had sufficiently stated that a cheaper comparable service was available through their allegation that the plan obtained just that when it switched service providers in 2020. " [Mator v. Wesco Distribution, Inc., No. 22-2552 (3d Cir. May. 16, 2024)]  MORE >>

"One-third of plan sponsors have no implementation plans, with 7% reporting not knowing 'where to begin.' Among small sponsors managing plans with less than $25 million in assets, the level of unpreparedness is especially high, with 56% not having plans in place to implement the measures."  MORE >>

"The first item to address when un-terminating a plan is to understand if there was a Board of Directors' resolution to terminate the plan. If so, the Board will need to execute another resolution to rescind the resolution to terminate the plan. Also, any executed plan amendments to terminate the plan would have to be reversed with a subsequent amendment to reinstate the plan."  MORE >>

"For 2020, [the 401k Averages Book] found that 401(k) plans with $500,000 in assets paid an average of 1.71% for bundled administration services (0.66% recordkeeping + 1.05% revenue sharing). That's higher than the 1.63% average [this study] found for smaller plans that averaged $189,367.06 in assets."  MORE >>

"[O]nly 16% of non-advice users reported feeling very confident in their retirement investment strategy. By comparison, three times that, or 47% of defined contribution (DC) managed account program users, reported feeling very confident in their strategy.... When asked to select the correct definition of 'target-date funds' and 'managed accounts,' approximately two-thirds of participants (67% and 71%, respectively) were either 'not sure' or selected an incorrect definition"  MORE >>

"Emerging fiduciaries should prepare to deliver more value on burdensome issues for plan sponsors, investigate plan designs that shift administrative duties, and consider desired roles in pooled or group plan solutions."  MORE >>

"T. Rowe Price examined 11 of our U.S. Retirement Funds with at least 10‑year records ... On average, the 11 funds outperformed their benchmarks in 96% of rolling five‑year periods and in every rolling 10‑year period since inception, net of fees."  MORE >>

"The Ninth Circuit's rudimentary error of statutory construction has significant ramifications that are prejudicial to plan sponsors. The ruling produces what other courts have dubbed an 'absurd' result of turning nearly every transaction with a service provider into a 'per se prohibited transaction.' On a practical level, it allows the trial bar to challenge every essential plan service provider contract, even when perfectly lawful." [Bugielski v. AT&T Servs., Inc., No. 21-56196 (9th Cir. Nov. 8, 2023; cert pet. filed Apr. 5, 2024; amicus brief filed May 9, 2024)]  MORE >>

"[Here] are five critiques of the GAO report that are specific recommendations to all TDF regulators, including the DOL. [1] Risk near the target date is much higher than it should be.... [2] There's a more meaningful distinction than 'To' versus 'Through' ... [3] Collective Investment Trust TDFs should be scrutinized ... [4] There's only one workforce demographic that actually matters ... [5] Participant interests are not aligned with the interests of those who were interviewed for the study."  MORE >>

"Disclosure changes should focus on simplification and actionability.... The agencies should recommend fully authorizing universal default electronic delivery.... Plans should not be required to track engagement with electronically-delivered documents.... Reporting to the agencies should be tailored."  MORE >>

"If the Final Rule becomes effective, companies should reevaluate their reliance on noncompete covenants to create a substantial risk of forfeiture for purposes of postponing taxation on Section 83 transfers ... [and] for purposes of postponing FICA taxation on nonqualified deferred compensation plan deferrals.... If the Final Rule applies to [a] tax-exempt organization, then a noncompete may not be applied as a substantial risk of forfeiture under the organization's 457(f) plan."  MORE >>

"The 2024 Proposal seeks feedback on so-called potential alternatives to the 2024/2016 Proposal's provisions. These questions are essentially the new part of the 2024 Proposal, and the agencies explain that they reflect their 'additional supervisory experience, changes in industry practice, and other developments' since the 2016 Proposal. These potential alternatives, on balance, could make the 2024 Proposal more prescriptive than the 2016 Proposal."  MORE >>