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June 1st, 2018

Northwestern University Prevails in ERISA 403(b) Challenge

A new decision handed down by the U.S. District Court for the Northern District of Illinois, Eastern Division, strongly rejects arguments that fiduciaries of the Northwestern University 403(b) retirement program failed to act with the loyalty and diligence required by the Employee Retirement Income Security Act (ERISA). Throughout the text of the compliant, the court points out that participants in the 403(b) plan, and a related supplemental savings plan also being considered, had a large and, over time, increasing amount of choice in terms of what active and passive investment options to use—and whether to purchase what plaintiffs suggested were overly expensive annuities. This degree of choice makes the plaintiffs’ claims that the plan was setting them up to overpay on certain investment options unjustified, the decision concludes. The court also questions the common notion asserted in 403(b) plan lawsuits that employers such as Northwestern are overpaying for recordkeeping. Read more >
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Groom Law Group and Cammack Retirement Group will field your questions concerning 403(b) plans and regulations. Email rebecca.moore@strategic-i.com with Subject Ask the Experts


Penn State Announces New Retirement Program Fee Practices

The plan to adopt a fee-leveling approach and rebate revenue sharing to participants comes as many institutions of higher learning face lawsuits challenging their 403(b) plan fees. Read more >

Non-Electing Church Plans Subject to Some Pre-ERISA Requirements

Non-electing church plans are exempt from the Employee Retirement Income Security Act (ERISA) provisions pertaining to participation, coverage, and vesting; however, these plans are subject to the requirements for participation, coverage and vesting that were in effect on September 1, 1974, prior to the enactment of ERISA. Read more >

Generations Share Financial Advice With Recent Grads

StreetWise, the E*TRADE quarterly tracking study of experienced investors, found 72% of survey respondents overall would advise recent graduates to take advantage of employer 401(k) plans. And 64% overall would advise them to start a portfolio, no matter how small. These were also the top two pieces of advice from Millennials (58% and 59%, respectively), while Generation X and Baby Boomers rated taking advantage of employer 401(k) plans and spending less than they make the highest—77% and 66%, respectively for Gen X, and 86% and 81%, respectively for Boomers. E*TRADE says the study suggests Millennials are more focused on investing for retirement than many think. Read more >

Compensation and Benefit Limits Affected by Short Plan Year

If a short plan year is created when a plan is amended, terminates or is newly adopted, proration of the Internal Revenue Code annual compensation dollar limit and limit on DC plan additions will be needed. Read more >

Break From the Grind: Office Temperature Can Be a Bone of Contention in the Workplace

Office temperature is causing workers to turn on each other and is also having an impact on productivity, according to a CareerBuilder survey. Nearly half of workers (46%) say their office is either too hot or too cold. Fifteen percent of workers say they have argued with a coworker about office temperature. Read more >

Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

Advertising: Paul Zampitella paul.zampitella@strategic-i.com

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