Timing is everything and a new proposed fiduciary rule has bad timing. While I support changes to the current rule, a rule with about a year before the next Presidential election, means a rule that is proposed, but may not have much of a lifespan, if it’s ever enacted.
We have been through this before in 2016, and I would hate history repeating itself.
I understand why people in the industry would have issues with the proposed legislation, known as “Retirement Savings for Americans Act.”
If passed the law would create a retirement savings program by the Federal government. . Full- and part-time workers who lack access to an employer-sponsored retirement plan would be eligible for an account, and they would be automatically enrolled at 3% of their income. They could choose to increase or decrease their withholding, or opt out entirely at any time. Independent workers (would also be eligible). Low- and moderate-income workers would be eligible for a 1% automatic contribution (as long as they remain employed) and up to a 4% matching contribution via a refundable federal tax credit.
I understand why the industry would be threatened by it, but I think any plan that increases retirement plan coverage for employees is a good thing. People will see this as an unfair competition where the Federal government is competing against private business in the 401(k) space, but I just think that any program, like State IRA programs, will increase the sponsorship of private 401(k) plans.
Again, litigators are trying to create class action lawsuits against large plans. This time, I think they’re scraping the bottom of the barrel.
The newest wave of cases is dealing with forfeitures and larger companies using forfeiture to reduce employer contributions. Unless these forfeiture provisions are drafted poorly where forfeitures must be used to pay administrative expenses first, I just don’t think the cases will go anywhere.
Final regulations updating the the rules governing the filing and processing of applications for administrative exemptions from the prohibited transaction provisions of ERISA, the Internal Revenue Code and the Federal Employees’ Retirement System might be released soon.
The White House Office of Management and Budget’s (OMB) indicated that a final rule updating the prohibited transaction exemption procedures was submitted for
The proposed amendment will help clarify the types of information and documentation required for a complete application.
My latest article for JDSupra.com can be found here.
My latest article for JDSupra.com can be found here.
Ascensus said it will begin offering the Ascensus American Funds Pooled Employer Plan on its independent, open-architecture recordkeeping platform beginning in spring 2024.
The new investment solution is focused on creating a unique portfolio that matches a participant’s financial needs more closely than a traditional target date fund allocation determined only by age. Wilshire will serve as the 3(38) fiduciary.
Ameritas has announced a new pooled employer plan (PEP) for organizations sponsoring ERISA 403(b) plans.
The 403(b) PEP is a retirement plan where instead of a nonprofit sponsoring their own plan, they can become an adopting employer. This removes many burdens for nonprofits, allowing them focus on their mission.
The 403(b) PEP will have Ameritas serve as the recordkeeper, LeafHouse as the 3(38) investment fiduciary and FiduciaryxChange as the pooled plan provider.
intellicents has selected The Standard to roll intelli(k) PEP, which is a pooled employer plan that offers a solution for businesses with broad and flexible design capabilities.
The intelli(k) PEP bundles 3(38) investment governance and 3(16) administrative governance into a seamless packaged solution.
Thanks to litigation, the Securities and Exchange Commission will likely approve a few Bitcoin-centric exchange-traded funds. That begs the question, will those ETFs be allowed as investments within 401(k) plans?
My answer: probably yes. ETFs eliminate some of the issues that the Department of Labor had with cryptocurrency, namely volatility and custodial security. Time will tell if I’m right.
