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Newport Group to Settle Claims of Mismanaging Church Retirement Plan

"Clergy and church employees of the African Methodist Episcopal Church, Nashville, Tenn., have secured a $40 million settlement from Newport Group, the third-party administrator of church retirement plans in a complex, long-running lawsuit against multiple defendants[.]" [Carmichael v. Harris, No. 22-1127 (W.D. Tenn. proposed settlement Mar. 4, 2025)]

What the Ascensus Purchase of Newport Group Means to Advisers

"This deal almost certainly means that 401(k) record keepers will move to stage four of the consolidation curve in the next three years, the stage in which five to seven providers have a 70% to 90% share of the market.... But there are still more than 40 national record keepers, as well as over 400 regional record-keeping TPAs, not to mention well-funded fintechs like Vestwell and Guideline."

Ascensus, Newport Nonqualified Platforms Hit by Infosys Cybersecurity Issue

"Ascensus and its subsidiary, Newport Group Inc., have had their nonqualified retirement plan services affected by a cyberattack on business processes firm Infosys McCamish Systems LLC. The platform that Ascensus and Newport use has not been able to update nonqualified user accounts since November 2."

A Plan Sponsor's Duty to Search for 'Missing' Participants

"The lack of comprehensive guidance has left plan sponsors unsure of how to fulfill their fiduciary responsibilities at a time when these regulatory agencies are increasing their enforcement focus on missing participant issues.... If the plan document does not list search procedures that must be followed, plan sponsors should develop policies and procedures with respect to missing participants[.]"

Tax and Other Incentives to Inspire Prospective Plan Sponsors

"[T]he SECURE Act extended the deadline for establishing a qualified retirement plan from the end of the business's tax year to the business's tax-filing deadline for that tax year, plus extensions.... A small employer ... may be able to claim up to $15,000 in tax credits over three years to offset the costs of establishing and administering a plan, including the cost of educating employees about the plan.... A small employer may also claim a $500 tax credit for each of the first three years its plan includes an eligible automatic enrollment feature."

Design Your Retirement Plan to Drive Distribution Goals

"Plan features such as hardship distributions and loans tend to be popular because they help employees feel more comfortable putting money into the plan knowing they can access their savings in the case of an emergency. It is important to weigh the benefits and considerations of each distribution feature and how they could affect your plan's objectives."

Strategies to Help Employers Prevent Plan Leakage

"There are several strategies ... to reduce leakage ... [1] [S]etting a limit on the number of outstanding loans at a time, allowing only one loan per year and setting a minimum loan amount.... [2] [A]llowing only one hardship distribution per year or reducing the sources available for hardship distributions. [3] Offering an emergency savings account associated with payroll deduction to help participants better prepare to manage a financial emergency."

Add Value by Helping Plan Sponsors Develop a Fiduciary Calendar

"A good starting point is to develop written procedures for overseeing each aspect of plan management, including the criteria to be examined and used to make decisions, such as when to replace a plan investment alternative or conduct a service provider search. Assigning specific plan governance topics to fiduciary meetings throughout the calendar year is one way plan sponsors can make certain their fiduciary oversight practices are comprehensive, consistent from year to year, and documented."

Managing Compensation and Benefits in a Competitive Labor Market

"Financial wellness programs are being offered by more organizations ... Non-qualified plans continue to be critical for executive recruiting and retention ... Increased communication around employee benefits, continued remote work opportunities, and training on diversity, equity & inclusion initiatives are the most prevalent employee benefits strategies implemented in 2021.... [E]mployers continue to pass on a greater portion of [health plan] costs to employees through higher premium payments and deductibles, as well as leveraging employee wellness initiatives."

Preview of 2021-2022 Compensation, Retirement and Benefits Trends Survey

"Salary increases are on the rebound, approaching 3% for executive and salaried exempt employees, and above 3% for the hourly non-exempt workforce.... Companies are implementing, or considering implementing, increased health and welfare benefits for employees. Among retirement plans, financial wellness programs are on the rise."