PLANSPONSOR Weekend Newsdash
Week ending August 3rd, 2018

For retirement plan sponsors wanting knowledge and tips about the design and administration of their plans, court opinions often offer details. For those fearing participant lawsuits when contemplating a plan design change, it is helpful to know what constitutes a settlor decision versus what constitutes a fiduciary decision. Plan sponsors often do what they think is right even with a lack of regulator guidance or lack of engagement from participants. Most are doing the best they can to provide a plan design that is most helpful to participants and to stay in compliance with rules, laws and regulations when administering their plans. This edition of PLANSPONSOR Weekend focuses on plan design and administration.

Editor's choice
NYU Claims Victory in 403(b) Plans Lawsuit
In the first university 403(b) plans case to go to trial, a federal judge includes in her opinion all prudent processes the plan sponsor engaged in when considering providers, fees and investments. Read more >
Independent Contractors’ ERISA Lawsuit Fails to State Actionable Claim
The dispositive question is not whether the claimants were employees but whether, considering them as employees, they were eligible to participate in an ERISA plan according to the specific terms of the plan under consideration. Read more >
Plan Sponsors Shouldn’t Fear Making Settlor Decisions
Retirement plan sponsors often fear participant backlash when making decisions that could actually help improve participant outcomes, but the law is on their side, as plan amendments are considered settlor functions. Read more >
Missing Inaction
What are the rules for locating missing retirement plan participants and what should plan sponsors do when they’re found? Read more >
Data and Research
Simpler Retirement Plan Communications Make No Difference in Employee Decisions
In conclusion, an IZA Institute of Labor Economics study found, “the data do not support the idea that presenting optional 401(k) plan information in a simpler, more compact way will improve employees’ retirement planning choices. However, we did find that financial literacy was positively associated with better choices.” Read more >
Hardship Withdrawal Safe Harbor Covers Tuition, But Not Loan Repayments
Plans which permit non-safe harbor hardship distributions could theoretically approve a participant’s hardship distribution request for the repayment of student loans, but those relying on the safe harbor cannot. Read more >
AT&T Sued Over Calculation of Early Retirement Benefits

The plaintiffs say the plan’s terms reduce benefits using “Early Retirement Factors” and “Joint and Survivor Annuity Factors” which result in plan participants receiving less than the actuarial equivalent of their vested accrued benefit, as required by ERISA.

Congressional Leaders Want SECURE Act Passage in 2019

Based on the conversations industry advocates are having in Washington, none of the leadership in the Senate or the House opposes passage of the SECURE Act.

New Lawsuit Highlights Importance of Cybersecurity for Retirement Plans

A former 401(k) plan participant is suing the plan sponsor and plan providers after unauthorized distributions were made from her account.

IRS Releases 2019-2020 Priority Guidance Plan

The IRS invites public comments and suggestions about guidance.

DC Plans 3.0 Will Really be Tailored to Individual Situations

Bob Collie, head of research at the Thinking Ahead Institute, tells PLANSPONSOR version 3.0 will be customized by “hyper-customization and integrated whole-of-life wealth management” that takes into account all of a person’s savings.

Editorial: Alison Cooke Mintzer


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