‘Tis the season for “best of,” “most,” and of course, “naughty and nice” list making.  In this episode Nevin (Adams) and Fred (Reish) share theirs with regard to retirement plans.

In that holiday classic “Santa Claus is Coming to Town,”Santa is said to be “making a list and checking it twice…” all with the purpose of finding out “who’s naughty and nice.” Well, in this special holiday-inspired episode, Nevin and Fred share their lists.  So, who/what is going to wind up with a lump of coal in their stocking?

Here are our lists:

Naughty 

1. Surveys that promote bogus data to generate business for themselves.  Scare techniques generally, including by those who use surveys and studies to do that.

2. Frivolous lawsuits - given multiple chances to make their claim(s) - the forfeiture suits primarily (note:  some of that comes from apparent conflicts in the laws and regulations…for example, the IRS says that using forfeitures to offset contributions is possible, but the DOL says that, if left to discretion, it is a fiduciary duty that must be in the best interest of participants.

3. Social Security looming shortfalls left unaddressed - and everyone says it won't be a problem.  

4. The lack of any integrated fiduciary/institutional answer to retirement income. Although the steps taken, e.g., the SECURE Act, are “nice.”

5. The complexity of the laws governing qualified plans, especially when it comes to small employers.

Nice

1. Signs that people are saving more and better. Evidence in PSCA, Vanguard and Fidelity surveys.  The very low costs of saving through 401(k) plans as compared to retail (andpartially the plaintiffs’ attorneys who have contributed to that).

2. DOL backing plan fiduciaries on the forfeiture reallocation suit.  

3. More personalized target-date funds/managed accounts.

4. Pooled Employer plans (though keep an eye on themarketing and administration of these programs down the road).

5. Mandatory automatic enrollment for new 401(k) and 403(b) plans.

6. Retirement issues continue to be a bipartisan issue mostly). 

Episode Resources:

Misleading headlines/surveys

Talking Points: Third Time No Charm in ‘Forgotten Account’ Fantasy

Talking Points: IRA ‘Junk’ Bunk

No 'Magic' in These 401(k) Retirement Numbers

Talking Points: A Red Flag for a ‘Red Flag’ Report).

Social Security

'Nothing' Doing About Social Security?

Forfeiture Stuff

DOL Backs HP in Forfeiture Reallocation Suit Appeal

SECURE 2.0 and Retirement Income

SECURE Act and Guaranteed Income (Part 3) - Fred Reish

6 Obstacles to Retirement Income Adoption

PEPs

Nevin & Fred: Could a Predominant PEPs Prediction Prove Positive?

Automatic Enrollment

The SECURE Act 2.0: The Most Impactful Provisions (#1–Automatic Plans) - Fred Reish

The SECURE Act 2.0: The Most Impactful Provisions #13 — Starter 401(k) Plans and Safe Harbor 403(b) Plans - Fred Reish

Things I Worry About (6): Automatic Enrollment (5) and PEPs - Fred Reish 

Plan sponsors have a lot to do – and a lot to do withhelping Americans prepare for retirement – and a lot of things that help them do so.  In this episode, Nevin (Adams) and Fred (Reish) share their lists of things plan sponsors should be thankful for this holiday.

There’s obviously a LOT to be thankful for, not the least ofwhich is that plan sponsors are often doing what they do for retirement planning in the midst of an array of other pressing concerns. 

That said, there have been any number of innovations andevolutions over the years – and as we come to that time of the year when we’re inclined to give thanks – well, here are our lists:

- The 401(k) - how was America going to retire without it?

- ERISA 404(c) -participant directed investments safe harbor (without it, plan fiduciaries are responsible for ALL participant investment decisions (even the dumb ones)

- EGTRRA (Economic Growth Tax Relief and Recovery Act of 2001) - which, among other things, lifted the harsh contribution limits of TRA86, gave us Roth option.

- Target-date funds – making it easier for participants to benefit from professional money management.

- PPA (Pension Protection Act of 2006) – which “sanctioned” (via safe harbors) automatic enrollment and qualified default investment alternatives (QDIA) – including the afore-mentioned target-date funds.  Created FLOORS, not ceilings for retirement savings.

- Index funds – helping provide a cost-effective investment structure, first via various share classes, and now via collective investment trusts.

-  SECURE 2.0 (the SECURE 2.0 Act of 2022) – which provided 90+ OPTIONS for improved retirement savings that plan sponsors can choose from (or not).    Lots of options in SECURE 2.0 that are OPTIONAL.

-  The plaintiffs’ bar – well, some of them anyway.

-  ERISA’s preemption provision – one set of federal laws that trump various state rules and regulations, and give us a single set of (admittedly complex) federal rules.

And one more – but you’ll have to listen to find out!

Happy Thanksgiving!

-         Nevin E. Adams, JD

As Halloween approaches, and thoughts turn to ghosts,goblins and things that go bump in the night, Nevin (Adams) & Fred (Reish) turned their focus to things that SHOULD have the attention of (and perhaps even scare) plan fiduciaries.

Now, there are lots of things that require careful attention, selection and monitoring of plan assets and services by planfiduciaries; advisors and plan sponsors alike. But there are some things that may sneak up on even the most attentivefiduciary – things like:

Your target-date fund glidepath(s) – Is it “to”retirement or “through” retirement, is it appropriate for your participant base, and do THEY know what it is (particularly at the projected date of retirement)?

The degree of personalization in a “managed” account– How personalized is it, what data elements are considered, is the cost (relative to a target-date fund alternative) reasonable for the value provided, and who pays it?  Is it structured as a qualified default investment alternative (QDIA)?

Cybersecurity – What provision(s) have your providersmade in securing participant data (particularly in view of the sample questions provided by the Labor Department), and are you prepared to deal with those questions in a DOL audit?   

Participants that leave their accounts “behind” – Whatprocedures do you have in place to communicate with, and in some cases track down for distributing benefits?  Are youable to appropriately track and administer required minimum distributions (RMD)?

Ignorance of fees – Do you know what fees are being paid by the plan, to whom, for what, and how?

Personal liability – Plan fiduciaries are personally liable for the actions they take (or don’t) with regard to plan administration.  Traditional organizational insurance policies don’t cover that, nor does the fiduciary bond required. What provision(s) have you made to insure against that possibility?

Episode Resources

5 Things That (Should) Scare Plan Fiduciaries

Target- Date Funds

DOL: Target Date Retirement Funds - Tips for ERISA Plan Fiduciaries

Cybersecurity

DOL Cybersecurity Program Best Practices

Tips for Hiring a Service Provider with Strong Cybersecurity Practices

Cybersecurity tips for participants

Participant “Leave Behinds”

National Registry of Unclaimed RetirementBenefits: https://www.unclaimedretirementbenefits.com/

A nationwide, secure database listing of retirement planaccount balances that have been left unclaimed by former participants of retirement plans.

Retirement Savings Lost and Found Database: https://lostandfound.dol.gov/

EBSA is helping America's workers and beneficiaries searchfor retirement plans that may still owe them benefits by establishing a public Retirement Savings Lost and Found Database through the SECURE 2.0 Act of 2022. This database serves as a centralized location to find lost or forgottenbenefits and get information on how to obtain those funds.

Fiduciary Insurance

5 Dangerous Fiduciary Assumptions

The value of fiduciary liability insurance How plan fiduciaries can protect themselves from litigation Fiduciary liability insurance offers protection from claims | Invesco US

On September 15, the IRS/Treasury announced the much-anticipated final regulations on SECURE 2.0’s new limits on catch-up contributions.  In this episode Nevin & Fred talk about what lies ahead.

These final regulations apply to retirement plans thatpermit participants who have attained age 50 to make additional elective deferrals that are catch-up contributions—which will now be restricted to Roth for individuals making $145,000 or more (adjusted for inflation), effective in January.

A recent Plan Sponsor Council of America survey found thatfewer than 5% of plan sponsors said they were “ready to go” with these changes, while more than 4 in 10 were “struggling with payroll logistics.”  On the other hand, nearly as many (40.2%) said they expected to be ready by January 1.

Things to note:

1.  This IS going to happen (some had thought/hoped there would be an extension).

2.  If your plan doesn’t allow Roth, you can't do Roth catch-ups(or catch-ups for those earning more than $145k in FICA wages). 

3.  You don't have to allow Roth.  But with this change, you might want to reconsider. 

4.  You’ll get more time/flexibility to correct mistakes (andthere will surely be mistakes). 

In this episode we’ll also discuss the issues surrounding personalization and personal data: lawsuits challenging utilization for purposes NOT related to the plan—and massive SEC fines for allegedly inadequate disclosures.

Episode Resources:

 Catch-Up “Muster”

Breaking News: IRS Releases Final Roth Catch-UpRegulations

Are Plan Sponsors Ready for Roth Catch-Ups?

IRS Grants Two-Year Delay in Roth Catch-Up Requirements

Auto-Enrollment and Roth Catch-Up Guidance Proposed byIRS

Personalization Issues

Schlichter Says Empower Improperly Used Data in 401(k)Managed Account Push

Schlichter Targets TIAA, Morningstar in Multi-Plan Suit

Empower, Vanguard Managed Account Disclosures TriggerMammoth SEC Fines

Bonus: Songs to Retire By - Fred Reish  

On August 7, President Trump issued a much-anticipatedexecutive order, directing the Labor Department to (re)consider barriers to defined contribution plans accessing alternative investments.  Nevin & Fred check it out – and theimplications.

More specifically, an executive order directed the Secretary of Labor to, among other things, “reexamine the Department of Labor’s guidance on a fiduciary’s duties regardingalternative asset investments in ERISA-governed 401(k) and other defined-contribution plans” – a stance widely seen as encouraging the consideration of alternative assets in defined contribution plans, including 401(k)s and 403(b)s.

The EO states as “the policy of the United States that everyAmerican preparing for retirement should have access to funds that include investments in alternative assets…”

That policy is, however, conditioned to situations “when therelevant plan fiduciary determines that such access provides an appropriate opportunity for plan participants and beneficiaries to enhance the net risk-adjusted returns on their retirement assets.”

While the Executive Order doesn’t immediately changeanything, it sets in motion the possibility of a less restrictive regulatory view on so-called, “alternative” assets, including private markets, real estate, digital assets, and lifetime income.

The Executive Order calls out “burdensome lawsuits that seek to challenge reasonable decisions by loyal, regulated fiduciaries,” as well as “stifling Department of Labor guidance” that is says has “denied millions of Americans opportunities to benefit from investment in alternative assets.”

Episode Resources

BreakingNews: Trump Signs EO to Advance Private Market Investments in 401(k)s

LifetimeIncome Also Cited in Private Markets Executive Order

TalkingPoints: Pandora’s Box

ThingsI Worry About (12): Private Funds and 401(k) Plans - Fred Reish

DOLPulls Guidance Cautioning Fiduciaries About Private Equity in 401(k)s

In recent days, federal courts have dismissed two notablesuits regarding forfeiture reallocation, but most notably the Labor Department has now weighed in on behalf of plan fiduciaries in another case.  Could this be a turning point?  Nevin & Fred weigh in.

The suits – against JP Morgan and Wells Fargo – weredismissed in different courts on different grounds.  Still, they came at a time, and in a way, that suggests at least some federal courts are now inclined to see practices long sanctioned by practice (and the IRS) as meritless.

The real game changer, of course, might be the LaborDepartment’s “friend of the court” filing on yet another suit – one that the fiduciary defendants have already had success in challenging the suit, and yet find themselves (still) in court litigating the issue(s).

Speaking of the Labor Department, a federal judge in Texasrecently ruled on a suit filed challenging the application of the so-called fiduciary regulation, most specifically with regard to its implications on rollovers.

So what does all that portend for ERISA plan fiduciaries?  And what might the anticipated executive order from the Trump Administration expanding/opening the door for private assets in defined contribution mean?

All this and more in the latest episode of Nevin (Adams)& Fred (Reish)…

Episode Resources

Forfeitures

DOL Backs HP in Forfeiture Reallocation Suit Appeal

Wells Fargo Fends Off Forfeiture Fiduciary Suit

JP Morgan Gets Clear Win in 401(k) Forfeiture Reallocation Suit

Fiduciary Suit

Federal Court Vacates Part of Rollover Rule

Private Markets

Retirement Plan Participants Want Access to Private Market Investments

Private Market Investments: Promises and Potential Pitfalls 

https://issuu.com/usaretirement/docs/napa_net_the_magazine_summer_2025

Empower’sMurphy Responds to Warren's Private Market Criticism

Some call them “lies”—but in this episode, Nevin (Adams) andFred (Reish) highlight some of the most common—and confusing topics—about retirement plan responsibilities.

Inspired by Fred Barstein’s “10 Biggest Lies Told to 401(k) Plan Sponsors,” the prolific podcasting pair parse a passel of problematic misperceptions regarding retirement plan responsibilities.

We’re talking about things like:

• RFP requirements,
• cheap investment picks,
• CIT assumptions,
• PEP perceptions,
• recordkeeper reliance, and
• the limits of advisor accountability. 

And that’s not all!  See how their list matches yours.

Episode Resources

Online Security Tips

Online Security Tips - U.S. Department of Labor

Title: Online Security Tips Author: Employee Benefits Security Administration, United States Department of Labor Subject: Tips to reduce the risk of fraud and loss to your retirement account by maintaining online access, using strong passwords, enabling multi-factor authentication, and protecting against phishing attacks.www.dol.gov

Nevin (Adams) & Fred (Reish) brought their prolific,pugnacious, and provocative perspectives in a live podcast format to the record-breaking NAPA 401(k) Summit.

In part 1 the precocious podcasting pair talked about anumber of lessons to be learned from recent litigation, including:     - Who bears the burden of proof in ERISA litigation—according to the United States Supreme Court (bad policy, but “good” law)?- A rare jury trial—and a BIG settlement.  Why they’re rare (but may become more common).  Oh, and it involved a multiple employer plan (MEP).   - Fred clarifies his prediction on PEPs (but he’s still a fan).

In part 2, the pugnacious pair presciently pontificated on:      - What to make/do about the recent surge in litigation regarding plan forfeitures;    - What to consider in light of recent developmentsregarding private investments in defined contribution plans;    - The implications of/for proxy voting by definedcontribution plans in the aftermath of recent litigation regarding American Airlines.

Episode Resources

Forfeitures

Forfeiture Litigation Update

Impact of Forfeiture Lawsuits on Plan Sponsors

Alternative/Private Investment Trends

The Growing Case for Alternatives in Retirement Saving: NAPA 401(k) Summit

How Advisors REALLY Feel About Private Markets Investments in 401(k)s

Proxy Voting

How Fiduciaries Can/Should Fulfill Proxy Voting Responsibilities: Hauser

Trump-led DOL to Address ESG Rule Through Rulemaking Process

Nevin (Adams) & Fred (Reish) brought their prolific,pugnacious, and provocative perspectives in a live podcast format to the record-breaking NAPA 401(k) Summit.

That’s right, at the mid-point of the 2025 NAPA 401(k)Summit, the precocious podcasting pair talked about a number of lessons to be learned from recent litigation, including:

• Who bears the burden of proof in ERISA litigation—according to the United States Supreme Court (bad policy, but "good" law)?
• A rare jury trial—and a BIG settlement.  Why they’re rare (but may become more common).  Oh, and it involved a multiple employer plan (MEP).

• Fred clarifies his prediction on PEPs (but he's still a fan).

And that’s just Part 1! 

Episode Resources 

Burden of Proof Ruling

Supremes Back Cornell Plaintiffs in ERISA Burden of ProofStandard

Oral arguments in the case:  Supremes Hear ERISA Burden of Proof Case

The Cornell University Litigation “Saga”  https://www.napa-net.org/header/search/?q=cornell

ERISA Jury Trials

Jury Slaps Pentegra with $39 Million in Damages in MEPExcessive Fee Suit

Fidelity Wins Motion on Jury Demand

PEP Perspectives

Nevin & Fred: Could a Predominant PEPs Prediction ProvePositive?

PEPs Will Match Single Employer Plan Adoption in 5 to 10 Years: Fred Reish

As interest rates rise, so has interest in pension risktransfer (PRT)—and litigation.  Nevin & Fred take a look at what’s underlying (and undermining) that focus, aswell as a new suit alleging aggressive participant marketing.

Pension risk transfer is an aptly named process undertakenby an organization that wants to transfer its pension obligations to another entity, typically an insurance company. The process itself is a fiduciary decision requiring carefulconsideration of the entity to which those obligations are transferred—and therein lies the basis of a recent spate of litigation regarding those choices (and during a period of time in which PRT volumes have been setting records). 

For those not familiar with the underpinnings of the pensionrisk transfer (PRT—because we need another acronym), IB 95-1, issued by the Department of Labor in 1995 (in the wake of the Executive Life collapse), outlines the fiduciary standards to be used in selecting an annuity provider for a pension risk transfer. That includes considerations of the provider’s investment portfolio, size relative to the annuity contract, level of capital and surplus, liability exposure andavailability of state government guaranty associations.

In 2024, and in accordance with the provisions of the SECURE2.0 Act of 2022, the Labor Department basically concluded that while it was open to, and still considering, potential updates to Interpretive Bulletin 95-1, it felt that that document “continues to identify broad factors that are relevant to a fiduciary’s prudent and loyal evaluation of an annuity provider’s claims-paying ability and creditworthiness.” Additionally, EBSA found it “desirable for guidance in this area to remain principles based.” 

In this episode, Nevin (Adams) and Fred (Reish) talk about the trends and issues here.  They also look at a new lawsuit that brings up an old issue—a recordkeeper’s access toparticipants and alleged promotion of their offerings. 

Episode Resources:

Another Pension Plan Popped by Pension Risk Suit

Verizon Pension Risk Transfer Challenged in Court

Fiduciary Duty a Factor in Pension Risk Transfers

New ERISA Suit Alleges High Fees, Low Performance, Improper Forfeitures