401k

News & Analysis as of

Advisors have to offer Investment Education

Advisors ask me all the time of the role of education in participant directed 401(k) plans. Participant directed 401(k) plans that are governed under ERISA §404(c) offer the plan sponsors liability protection based on a...more

FINRA’S Reminder About Rollovers: News To Many

A number of government and regulatory agencies—the Government Accountability Office (the GAO), the Department of Labor (the DOL) and, most recently, the Securities and Exchange Commission (the SEC), and the Financial Industry...more

The Headache of Plan Loans

They often say that the road to hell is paved with good intentions. I don’t know who said it first (I heard it was originated with St. Bernard, the saint, not the dog), but perhaps they were a 401(k) plan sponsor that had a...more

Oops, I Forgot To Distribute A Safe Harbor Notice For My Company's 401(k) Plan, Now What?

The Internal Revenue Service often publishes correction methods for common errors involving qualified retirement plan administration issues. One of the most common errors is failing to notify eligible employees of their safe...more

IRS Issues Guidance on Recognition of Same-Sex Marriage Under Tax-Qualified Retirement Plans

On April 4, 2014, the Internal Revenue Service issued Notice 2014-19 providing guidance on the application of the U.S. Supreme Court’s decision in United States v. Windsor (“Windsor”) to tax-qualified retirement plans (such...more

View From McDermott: Expanded In-Plan Conversion Opportunities Will Boost Roth 401(k) Balances

The number of defined contribution plans (including 401(k), 403(b) or 457(b) plans) with a Roth feature has grown significantly in recent years. Roth 401(k) is gaining popularity due in part to tax hedging or tax...more

Treasury Department Issues Guidance on Application of Same-Sex Marriage Ruling to Retirement Plans

On April 4, 2014, the Department of the Treasury issued its long-awaited supplemental guidance on when and how tax-qualified retirement plans (including 401(k) plans) must comply with Windsor v. United States, in which the...more

This is What a TPA Does and Why a Retirement Plan Sponsor Should Hire a Good One

One of my favorite movies of all time is The Deer Hunter. It’s a story about the Vietnam War and the post-traumatic stress disorder a group of friends from Western Pennsylvania who were drafted together and fought alongside...more

The needs of the Plan outweigh the needs of the Plan Provider

A family member once said: “there are a lot of yous (sic) and only one me.” That may not be the nicest and most selfless thing to say, but that’s something retirement plan sponsors should think when it comes to the needs of...more

Retirement Benefits: Which Way Does the Whistle Blow?

The Issue: A terminated employee makes a claim against the employer for damages. The company says it fired him for stealing from the company. He says it was in retaliation for reporting law violations by the employer (that...more

U.S. Appeals Court Affirms Judgment Against 401(k) Plan Fiduciaries for Excessive Recordkeeping Fees

On March 19, 2014, the U.S. Court of Appeals for the Eight Circuit (the “Appeals Court”) issued its highly anticipated ruling in the case of Tussey v. ABB, Inc., affirming a Missouri trial court’s $13.4 million judgment...more

How a 401(k) Financial Advisor Can Limit Their Liability

There is the old saying that the cobbler’s children have no shoes. I know that firsthand when my mother threatened to call an electrician because my father the electrician didn’t have time to do some electrical work in our...more

District Court Relies on Fee Disclosure Regulation to Dismiss Complaint

A federal district court in New York last month dismissed a class action complaint brought by a company sponsoring a 401(k) plan. The plaintiff, in Skin Pathology Associates v. Morgan Stanley, alleged, among other claims,...more

Despite Upholding A $13.4 Million Judgment Against Plan Fiduciaries, The Eighth Circuit Gives Plan Sponsors A Lot To Like In...

On March 19, 2014, a three judge panel of the United States Court of Appeals for the Eighth Circuit issued its decision in Tussey v. ABB, Inc., No. 12-2056 (8th Cir. Mar. 19, 2014). The case came to the Eighth Circuit on an...more

IRS Addresses Correction Method For Failure To Timely Provide Safe Harbor 401(k) Notice

In its retirement plan newsletter, the IRS stated that plan sponsors of safe harbor 401(k) plans who fail to issue safe harbor notices to employees on a timely basis may be required to make different corrections for different...more

The Complete Worthlessness of The 401(k) Fiduciary Warranty

When it comes to selling products and services, marketing is everything. Marketing can help push a product or service into popularity, regardless of whether it’s good or not. Spuds MacKenzie was such great marketing; it made...more

Eleventh Circuit Joins Fourth Circuit in Rejecting Continuing Breach Approach to ERISA's Statute of Limitation

When a participant of a defined contribution plan complains that the plan fiduciaries breached their duties in failing to remove poor performing funds from the 401(k)’s investment options, is the date of the breach when the...more

Two law school professors and their 401(k) study

There is a tendency to shoot the messenger because folks don’t like the message. I ought to know. Whether it was in college, law school, or working at a third party administrator, I was the messenger of some terrible news....more

Finding Love in All of the “Right” Places – Part 1: Deferred Compensation Opportunities within Captive Insurance Companies -...

Overview - In my last article, I produced an overview of closely held insurance companies aka captive insurance companies and their excellent tax benefits for businesses. Separate and apart from the risk management...more

Fiduciary Breach Claims Barred by ERISA’s Six-Year Statute of Limitations

The Eleventh Circuit recently dismissed a participant’s fiduciary breach claims against SunTrust’s 401(k) plan fiduciary committee members on the ground that the claims for imprudently selecting certain investment options was...more

Your 401(k) Plan and the Shape of the Earth

I used to work with a very smart lawyer who said that he could give a legal opinion that the world was flat if his qualifying language was not limited. In that case, he would have stated something on the order of: this...more

Potential clients and the plan provider ties that bind

How many times as a retirement plan provider that you contact a retirement plan that is paying too much money and getting too little back in plan services? If you’re a registered investment advisor offering 3(38) service and...more

“Toxic” TPAs a 401(k) Plan Sponsor Should Avoid Hiring

While most of the news about 401(k) plan fiduciaries and their responsibilities is about plan expenses, plan investments, and participant education, there is very little topic about the one issue that is important that most...more

The Wild Wild West of non-ERISA 403(b) Plans

I always say that as bad as 401(k) plans may be, 403(b) plans are in much worse shape. It didn’t help that the Internal Revenue Service only issued regulations that governed them only 30 years too late, back in 2008. It also...more

The ERISA Litigation Newsletter - February 2014

The employee benefits issues to be considered by the U.S. Supreme Court continue to be of great significance to plan sponsors and fiduciaries. This month we review the Court's employee benefit decisions from 2013 and also...more

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