Several New Programs Will Begin to Enroll Workers, Some Begin Implementation Planning for 2023 Launch, While Others Consider Legislative Proposals and Partnership Opportunities
2022 STATE PROGRAM STATUS
States will continue to lead with new, innovative programs and proposals during the 2022 legislative sessions. For access to the most up-to-date, interactive 2022 state map, with detailed tracking of implementation status, legislative action, and summaries of bills introduced at the state and local level, visit State Programs and Legislation (log in required).
As 2021 ended, more than 20 states and cities had introduced legislation to establish new programs or form study groups to explore their options. Since 2012, at least 46 states have acted to implement a new program, study program options, or consider legislation to establish state-facilitated retirement savings programs. Today, there are 15 states and 2 cities that have enacted new programs for private sector workers.
17 Programs (15 states and 2 cities)
To date, new programs have adopted one or a combination of these four models:
There are now 17 enacted retirement savings programs (15 states and 2 cities**) for private sector workers.
*The new Hawaii program is a variation on the auto-IRA model. Eligible employers must notify their employees about the program and, if employees choose to opt-in to the program, employers must then facilitate contributions to the programs.
**New York City’s program is expected to merge into the New York State program. The Seattle, WA program is on hold indefinitely pending state legislative action.
As of April 1, 2022, 6 states of these 15 state programs (4 auto-IRA – OR, IL, CA and CT and 2 others – MA and WA) are open to employers and workers.
For an overview of all the state programs (with hyperlinks to state program websites and additional information), see State-Facilitated Retirement Savings Programs: A Snapshot of Plan Design Features (21-02, October 31, 2021 UPDATE)
For more information and a breakdown by state, please visit https://cri.georgetown.edu/states/
Did you miss our latest webinar featuring Mark Lewis with MAP Retirement? If so, check out the replay and learn how to help your small business clients save on their year-end taxes.
In case you missed this week's webinar regarding 401K plan setup for small business clients, please find our replay below. Jerrod Weiss with LT Trust helps explain how there is still time to help your small business clients set up 401K plans for 2021?
Did you miss this week's Small Market webinar featuring American Trust? If so, don't miss the replay to learn how the partnership between BidMoni and American Trust can help advisors build their business!
BidMoni Small Market Solution Webinar Replay
BidMoni has partnered with five national Recordkeeping firms and one national TPA firm to create the first ever fully digital 401K marketplace. We have worked with advisors across the country to remove the friction points in selling smaller plans, including:
- Identifying opportunities
- Generating proposals
- Running plan comparisons
- Plan onboarding
What is a 3(16)? Why should advisors be partnering with independent 3(16)'s to grow their practice? View our webinar replay with guests Jim Sharp and Russell McNorton to learn more!
Advisors should take care of their own plans and advise clients about this growing problem.
By Alison L. Martin | June 25, 2020 at 09:30 AM
Almost every employer sponsoring a retirement plan should to be mindful of potential fiduciary liability under the Employee Retirement Income Security Act of 1974 (ERISA).
According to an article published by the America Bar Association, between increased regulatory scrutiny by the Department of Labor and private litigation brought by the ever-expanding plaintiff’s bar, ERISA lawsuits are at an all-time high.
One of the most significant ERISA litigation trends is “excessive fee claims.” In a nutshell, these allege that a retirement plan’s fiduciaries allowed the plan to overpay for recordkeeping and use expensive and underperforming investments. These claims can cost millions of dollars to defend, and settlements can reach tens of millions of dollars.
A financial services company that sponsors a retirement plan may be sued, along with its executives, for excessive fee claims even when they don’t provide any professional services to the plan.
This is because, as plan fiduciaries, they have a duty to ensure that plan fees and investments provided by third parties are reasonable. Moreover, pursuant to ERISA, plan fiduciaries may be personally liable for these losses and the plans do not provide indemnification for them.
What About Smaller Plans?
Although these claims were historically filed against fiduciaries of large plans, the last few years have seen an uptick in lawsuits against fiduciaries of smaller plans, including plans well under $100 million in assets.
It’s apparent that fiduciaries of smaller plans should no longer consider themselves immune from litigation risk.
With a surge in litigation, it’s important that all advisors, regardless of their or their client’s plan size, understand the recent trends pertaining to excessive fee claims and the characteristics that may make them more susceptible to litigation.
What can they do to protect themselves? Of course, plan fiduciaries should always act with care andundivided loyalty to the plan and its participants. And while there’s no foolproof way to avoid an excessive fee claim, there are a few steps that may help reduce exposure:
Click here to view the entire article via ThinkAdvisor.