Compliance Stuff

It is increasingly evident that artificial intelligence (AI) is reshaping all facets of business, and its impact on employee benefit plans is no exception. From automating plan administration to personalizing participant communications, AI introduces both new opportunities and new responsibilities for those overseeing Employee Retirement Income Security Act of 1974 (ERISA)-covered retirement and health plans (Plans). Plan sponsors and fiduciaries should understand how AI intersects with their legal obligations under ERISA and take proactive steps to leverage this technology responsibly to improve participant outcomes. How AI is Already Impacting Plan Operations AI technologies are already being integrated into various aspects of Plan management and operations. Fiduciaries should understand how these technologies can benefit participants and beneficiaries—and how to mitigate associated risks. Ignoring AI is no longer a prudent option. For example, AI-driven platforms can analyze indivi...

  The U.S. Department of Labor (DOL) indicated in court documents that it intends to begin new rulemaking to replace a previous rule that permitted 401(k) plan fiduciaries to consider environmental, social, and governance (ESG) factors when choosing investment options in the plan. Quick Hits The DOL will no longer apply a previous rule that allowed retirement plan fiduciaries to take ESG factors into account when selecting investment options . Twenty-six states challenged the rule in the Fifth Circuit Court of Appeals. Plan fiduciaries may continue to rely on financial factors to make decisions about which investments to include in the plan. Under the Employee Retirement Income Security Act (ERISA), retirement plan fiduciaries are required to select and monitor plan investments in accordance with ERISA’s fiduciary duties. Among those duties are the requirements to prudently select and monitor plan investments, to diversify plan investments in most cases, and to act solely in the i...

 401(k) plans must operate according to the terms of a written plan document. Amendments are sometimes necessary to reflect new legal requirements or discretionary changes. According to the IRS, failing to adopt an amendment timely is one of the most common 401(k) mistakes made by employers today. This oversight can lead to significant consequences, including IRS penalties and missed opportunities for plan enhancement. A basic understanding of the 401(k) amendment rules can help employers avoid this trouble with help from their 401(k) provider. This guide will cover some of the basics. 401(k) Plan Amendment Deadlines A 401(k) plan amendment can be either “interim” or “discretionary.” Interim amendments are required to update a plan for law changes, while discretionary amendments are voluntary. Below are the general adoption deadlines for these amendments: Interim amendments – must be adopted (signed and dated) no later than the end of the second calendar year following the calendar...