Greetings loyal PLANADVISER readers! With so many important and rapidly evolving national news stories playing out right now, it can be hard to keep track of more mundane matters like retirement plan litigation and regulations. Yet the fiduciary duties of prudence and loyalty remain paramount in the operation of tax-qualified retirement plans. With that in mind, collected below is a recap of some of the most important legal and regulatory developments of recent weeks. We hope you find the reporting helpful and consider sharing some of what you read with a client or colleague.
The Supreme Court has denied review of the lawsuit accusing Principal Life Insurance Co. of violating ERISA by setting the crediting rate for a guaranteed investment contract such that it can “retain unreasonably large and/or excessive profits.”
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A district court in California has proven to be skeptical of claims suggesting that active management funds are categorically imprudent retirement plan investments; the ruling also defends the use of revenue sharing.
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The high court has been asked to weigh in on whether allegations that investment fees charged were excessive compared to other investments is sufficient to state a claim of imprudence.
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A federal judge found Abbott defendants were not fiduciaries with regard to the alleged acts, but claims against Abbott’s retirement plan recordkeeper were allowed to stand.
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The proposal creates a mandatory automatic enrollment individual retirement account program for employers that do not offer a retirement plan and employ at least five people.
Sources say the House Ways and Means Committee will likely vote to advance the Securing a Strong Retirement Act of 2021, often called a follow-up to the SECURE Act, as soon as tomorrow afternoon.
The markup hearing, punctuated by a unanimous vote to advance the legislation, demonstrated that retirement security issues are capable of bringing together members of Congress who don’t agree on much else.
Though retirement plans can allow individuals to self-certify that they qualify for a penalty-free coronavirus-related distribution, should the IRS discover otherwise during a future audit, a participant can be subject to substantial penalties.
