"[A]dvisors cannot generally avoid fiduciary status through disclaimers that are at odds with their other communications with the retirement investor.... Advisors will no longer be required to provide cost comparisons and rollover specific documentation for an investor to roll over his or her account from one IRA to another IRA or to change account type.... Advisors will no longer be required to report self-corrections to the DOL for violations of PTE 2020-02.... Robo-advice will be covered under PTE 2020-02."  MORE >>

"Cisco was able to win ... because of the flexibility it had built into its IPS, giving the committee discretion as to what to do if a fund did not meet a target.... For the foreseeable future, plaintiffs lawyers will be on the hunt for sponsors that include 'underperforming funds' in the plan fund menu. Committees may address this issue by explicitly recording/summarizing in their minutes any discussion of fund performance, especially with respect to funds that are 'underperforming.' " [Bracalente v. Cisco Systems, Inc., No. 22-4417 (N.D. Calif. May 20, 2024)]  MORE >>

"The retirement plan committee for the engineering firm's $5.1 billion plan is sued over the fees participants paid after being defaulted into managed accounts.... The allegations are of note as managed account use in retirement plans is seeing growth as plan sponsors seek to offer more personalized investing and advice in workplace plans." [Hanigan v. Bechtel Global Corp., No. 24-0875 (E.D. Va. complaint filed May 24, 2024)]  MORE >>

"[T]he Second Circuit ... joined three other circuits in refusing to enforce plan language requiring individual arbitration of plan-wide claims seeking monetary relief. However, the Ninth Circuit has enforced plan language requiring arbitration and limiting actions to individual arbitrations." [Cedeno v. Sasson, No. 21-2891 (2d Cir. May 1, 2024)]  MORE >>

"So long as defined contribution plans under ERISA are complex -- some liken them to Old Testament Gods -- with lots of rules and very unforgiving -- there will be a need for TPAs just as companies and individuals need a CPA to navigate the Internal Revenue Code.... But like all sectors of the DC ecosystem, TPAs must evolve and face what seems like existential threats, with some becoming an extension of a plans' HR department."  MORE >>

"[Employers] should review the administrative changes required ... to track the after-tax savings accurately.... [T]he contributions must be reported on Form 1099-R.... If the employee is not aware that the employer has not taken out taxes, they may face a higher tax burden when they file their tax return."  MORE >>

"Phased retirement solutions may be more pertinent in those critical job functions where the organization is facing a severe talent gap over the next few years. ... [E]arly retirement programs might be needed more in areas where the next generation of talent is looking for opportunities to grow and there is an overflowing succession pipeline. Estimating the ROI of these programs will rely on a deep understanding of both organizational- and individual-level retirement readiness"  MORE >>

"In the six years before the pandemic, the percentages for working past age 62 had been fairly stable -- averaging 54.6 percent; in the four years since the pandemic, the percentages have been declining, with an average of 49.4 percent -- a drop of 5.2 percentage points. The responses for age 67 also show a decline, but the pattern is less dramatic. The percentages averaged 35.2 before the pandemic and 32.3 in the four years since, for a drop of 2.9 percentage points."  MORE >>

"[W]orkers ages 65 or older make up a larger portion of the age 55 or older workforce than they did in 2000. The percentage of those ages 65 and older increased from 23% of the age 55 or older workforce in 2000 to 29.5% in 2023. This happened while the labor force participation rates of those ages 55-64 surpassed pre-pandemic levels, while the labor force participation rates of those ages 65 or older did not."  MORE >>

"More than half of American households do not retire all at once ... Partially retired households tend to spend more in the years preceding retirement and continue to spend more post-retirement than their fully retired peers.... [P]lan sponsors can help participants prepare to retire on their desired timeline, balance the risks associated with longevity and spending volatility, and gauge whether flexible retirement income options might help them meet their stable expenses."  MORE >>

"Education and the Workforce Committee Chairwoman Virginia Foxx (R-NC) sent letters to International Brotherhood of Teamsters President Sean O'Brien, AFL-CIO President Elizabeth Shuler, and Service Employees International Union President Mary Kay Henry demanding answers regarding their respective unions' attempts to leverage pension plan holdings to engage in shareholder proxy voting activism."  MORE >>

"[C]lass actions that allege retirement plan investments charge too much and earn too little have increased over the past two decades.... [Y]ears of case law have failed to clarify the law ... Should the outcome of excessive fee cases depend on where the case is filed? ... Can Congress curb these actions by codifying the prudent process? ... What can employers do while awaiting a legislative solution?"  MORE >>

13 pages; May 2024. Topics: [1] Golden Parachute Payments Guide overview; [2] Potential adjustments in a golden parachute examination; [3] Golden parachute reporting requirements; [4] Documents to review in a golden parachute examination; [5] Nine steps to perform in a golden parachute examination; [6] Form 1120 examination flow chart.  MORE >>