The Department of Labor (DOL) updated current cybersecurity guidance for plans governed by the Employee Retirement Income Security Act, including health and welfare plans.
The new Compliance Assistance Release provides best practices in cybersecurity for plan sponsors, plan fiduciaries, recordkeepers, and plan participants.
The release updates DOL’s 2021 guidance and includes Tips for Hiring A Service Provider, Cybersecurity Best Practices, and Online Security Tips.
The Alera Group Inc., from Deerfield, Illinois, announced the purchase of Minnesota-based Advanced Capital Group Inc.
The deal brings $24 billion in a retirement plan and wealth assets, increasing Alera’s total retirement assets to $45 billion.
Advanced Capital Group provides consulting services for employer-sponsored retirement plans, endowments, and foundations.
When I was at that semi-prestigious law firm many moons ago, I developed this plan review called the Retirement Plan Tune-Up. I’d look at the plan document, plan design, costs, the Fiduciary process, basically anything that the plan sponsor can grow at me and I’d do it for $750.
When I started my law firm, I kept that program and even had brochures about it. I gave speeches at some great 401(k) Rekon events to tout them as well and I’ll be honest, maybe I’ve done about 10 of them in 15 years. The fact is that most plan sponsors tune out the need to take care of their plan and usually only take care of it when it needs to. Plan sponsors for the most part are reactive rather than pro-active. They don’t understand the threats to liability as a plan sponsor until it happens to them.
I’m not trying to mean or denigrate Plan sponsors. The fact is they’re busy running their business and they don’t understand the nature of fiduciary responsibility and the continued need for vigilance. Some plan sponsors, but most don’t and that is always going to be an uphill battle.
I worked at a place where employees were passive-aggressive and never said anything about how things bad are, except when they stopped supplying free milk for the coffee machine. That was always my point in my fierce debate on automatic enrollment with the greatest salesperson I ever knew, Richard Laurita.
When the Pension Protection Act of 2006 was signed into law, it codified automatic enrollment and I became supportive of it because it finally held plan sponsors harmless as long as they invested those automatic enrollment assets in a QDIA. Since we were working at a third-party administration (TPA) that had a side advisory practice, I thought this was a good idea to push. Rich, being a plan sponsor’s best friend as a salesman, thought it was a bad idea because he believed (as someone who always expressed his opinion) that people would cause headaches for the human resources staff, by complaining. I said at 3%, people won’t notice. I think studies have shown I was right, I mean that automatic enrollment works. Auto escalation, I don’t think works that well because like with anything else, too much of a good thing is bad and I believe that auto-escalation, will get to the point where an employee will no longer be passive-aggressive because they will no longer be able to afford being automatically enrolled.
I’m glad that the Sixth Circuit has joined other Federal appeals courts in stating that arbitration provisions are invalid as a prospective waiver of rights and remedies guaranteed under ERISA.
In this recent case, Parker v. Tenneco, the participants claimed that plan fiduciaries didn’t use a prudent process for selecting, monitoring, and replacing plan investment options and that fees for managed account services, recordkeeping, and account administration were excessive. The fiduciaries sought to compel arbitration, arguing that the plans contained individual arbitration provisions that required participants to arbitrate their claims on an individual basis rather than suing on behalf of the plans or in a representative capacity (such as in a class action). The trial court sided with the participants, however, ruling that the individual arbitration provision impermissibly limited participants’ substantive rights under ERISA.
While I don’t like frivolous court cases (hello cases against some target date funds), people should have a right to pursue class action claims for excessive fees.
I’m old enough to remember when they would do ads for the Yellow Pages and they told you should let your finger do the walking.
When getting ready for that Internal Revenue Service audit, you may not need to let your fingers do the walking. However, you should always have your plan document and an annual valuation nearby. When I say plan document, I mean the plan document, IRS opinion letter, and amendments. The valuation report is the annual testing summary that lists the census, compensation information, and testing. If you don’t have those documents, get them. Whether you have an audit or not, you need them.
If you have a great product, but lousy distribution, you’re not going to do well. Yet the same thing is on the flip side if you have great distribution, but a lousy product.
Whether it’s a pooled employer plan, a great IRA product, or anything retirement plan-related, great distribution is certainly key.
However, you need a great product you go along with it. How often, do I hear about plan providers with these great distribution channels, yet are offering a product that won’t get much traction in the marketplace?
A PEP that’s more expensive than a single employer plan or a 3(16) service that does nothing isn’t going to succeed even if you have distribution channels the size of Coca-Cola’s.
There is always that line that you’re hired to be fired. No matter how great you are as a plan provider, you will certainly get fired by a client if you haven’t already.
However, if you’re consistently losing clients, it might be time to look in the mirror. I’m not talking about a client that fired you, I’m talking about a recent downturn and numerous terminations of your services.
There might be a lot of reasons that could be affecting you (referrals to another provider that has gone bad, costs, competency, lack of communication, etc.), but you need to start looking in the mirror and developing a plan to right your ship.
I’ve worked at some companies that struggled and the reason they struggled is because they couldn’t deal with the truth.
It’s 2024 and let us face some facts: behavior that might have been tolerated in the 1970s and 1980s isn’t tolerated today.
Thankfully, I’ve worked on my own for the last 14 years, so I don’t have to deal with the day-to-day nonsense that goes on with being an employee (there is a reason I went out on my own). If you have employees, understand their perspective and understand their feelings. They might not think your joke is funny and how you handle some sensitive topics as a joking matter.
My wife has worked for some law firms for the last few years and her tales from the workplace truly stagger me that they still operate as it is 1974, not 2024.
You’re running a business, not a locker room. If you want to continue with the approach that it is, don’t be surprised if you get caught up in a joke that went awry and led to an EEOC complaint or litigation.
I write a ton of articles as you may know and I will have advisors contacting me and suggesting some topic titles. I have adapted some of these suggestions, but there is one article idea that I had to turn down a few years ago.
I had an advisor who wanted me to write an article against the concept of trustee-directed/pooled 401(k) plans.
I won’t be writing that article anytime soon as I think plan participants are better off if trustees direct investments. But theorizing that is like telling people that Betamax was better than VHS, what is better isn’t always popular. Participant-directed invested 401(k) plans on a daily valued platform are the present and future, so no point in pushing trustee-directed plans either.
Trustee-directed plans are better because the smarter people in the room (advisors supporting the trustees) would be making investment decisions rather than the people with the least amount of background to do it.
