Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
December 18th, 2019
Industry Enthusiasm, Questions About SECURE Act Timeline
In the near term, some of the more modest provisions of the SECURE Act will probably be the most influential, sources agree, but over time the industry impact could be profound. Read more >
Fiduciary Clarity Will Be Essential for Successful Open MEPs
Open MEPs as detailed in the SECURE Act offer a structure for a small plan to get maximum fiduciary support, experts say, but the roles and responsibilities of all the parties involved must be carefully coordinated. Read more >
Replacement Strategies for the ‘Stretch IRA’
The SECURE Act was stalled in the U.S. Senate for months due to several lawmakers’ concerns that it does away with so-called “stretch IRAs,” which are used by the wealthiest Americans as a highly tax efficient inheritance vehicle. If and when the SECURE Act does away with stretch IRAs, inheritance experts say, other effective tax mitigation strategies can replace them. Read more >
Why 529 Education Savings Plans Are More Valuable Than Ever
Experts Predict Major Growth in Retirement Coverage, Benefits
Advisers Recommend Fiduciary Outsourcing Services, Mostly for Small Plans
A Reminder to Avoid Fraudulent Hardship Withdrawals
Biden’s First Veto Keeps DOL’s ESG Rule in Place
Sponsored message from PLANADVISER
The U.S. House and Senate have passed a bipartisan appropriations package. Folded into the sweeping legislation are virtually all of the provisions of the Setting Every Community Up for Retirement Security Act (SECURE Act), including a laundry list of popular proposals aimed at expanding and modernizing the defined contribution retirement plan system. In this special edition newsletter, readers can find in-depth coverage of the SECURE Act’s most important elements, from “open MEPs” to an annuity selection safe harbor for plan fiduciaries.
Simplification to Encourage Retirement Benefits
The SECURE Act provides nondiscrimination testing relief for pension plans still providing valuable retirement benefits to long-tenured employees; more time to adopt retirement plans, allowing employers more flexibility to offer plans at start up or during a transition; and consolidated Form 5500 filings for similar plans with the same investments and fiduciaries, which is particularly relevant to achieving economies of scale for plans that are not part of a MEP. Read more >
Assessing the Open MEP Opportunity
Lower-priced 401(k) options have become available, so open MEPs or PEPs will need to be priced competitively to penetrate the small business market. The SECURE Act sweetens the deal for employers by offering tax incentives for businesses opening new plans and for businesses with plans that add auto-enrollment. Read more >
Who Will Distribute Open MEPs?
For retirement plan advisers, passage of open MEP legislation could change relationships with plan sponsors and providers, as well as create the need for new distribution models. Read more >
Market Mirror
Wednesday, the Dow was down 27.88 points (0.10%) at 28,239.28, the NASDAQ increased 4.38 points (0.05%) to 8,827.74, and the S&P 500 slipped 1.38 points (0.04%) to 3,191.14. The Russell 2000 closed 4.17 points (0.25%) higher at 1,661.73, and the Wilshire 5000 was up 4.69 points (0.01%) at 32,508.38. The price of the 10-year Treasury note was down 4/32, increasing its yield to 1.928%. The price of the 30-year Treasury bond fell 1 2/32, bringing its yield up to 2.363%.
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