What are your participants saving for? Oftentimes, retirement planning success is measured solely by financial metrics. This article from Retirement Times explores the non-financial side of planning for retirement.
Do you know what the differences are between an ERISA fidelity bond and fiduciary liability insurance? These coverages insure different people and have different ERISA requirements. Click here for a brief explanation of the differences between the two.
Compliance with section 404(c) of ERISA is an important consideration: it protects plan fiduciaries from liability for losses that result from the investment decisions made by participants. Is your plan compliant? Click here for a concise outline of plan sponsor 404(c) responsibilities.
One of the largest misconception about index funds is that their only distinguishing feature is their fees. It’s not uncommon to hear, “index funds are just holding the stocks or bonds in the index, so we don’t need to pay attention to them.” This assumption, however, is an oversimplification. Many investors don’t realize that all index funds are not created equally. For more information, click here.
Plan participants sometimes forget to update their beneficiary designations after divorce or other life changes. This article discusses the rules relating to beneficiary designations, a US Supreme Court decision regarding divorced participants who fail to remove their ex-spouse as beneficiary, and what plan sponsors can do to address these issues and look out for the best wishes of their participants. The article can be viewed here.
Upon first blush, to the extent an employee from the general populace can and wishes to make a contribution as a committee member, there seems to be no reason why they shouldn’t participate on the committee. In practice, most committees consist of executives from finance (preferably the CFO), benefits and human resources. Due to the potential personal liability exposure, if there is interest from other lay people who wish to represent the vote of the participant base, they are best served participating as a non-voting member with no discretionary capabilities. This type of person should be identified and documented as a non-voting member assuming there is no intent to take on fiduciary status and the potential liability attached to all retirement committee members.
Millennial participants (those born between 1981 and 1997) are a distinct cohort that plan sponsors and their advisors must consider when designing fund menus. The following article discusses investment lineups, communication, and education considerations for younger workers. Please view here.
Plan sponsors increasingly recognize the benefits of allowing retired participants to leave their assets in the plan. However, participants passively enrolled in the plan's qualified default investment alternative (QDIA) may not continue to be appropriately invested after retirement. Read further for a discussion of these considerations here.
As more and more participants are accustomed to receiving information electronically, it is tempting to plan sponsors to dispense with paper altogether. However, not all communications can be provided in this manner. This article reviews the types of participant communications that are permitted by ERISA to be sent electronically: Participant Notices.