The average 401(k) plan offers a variety of investment options

The average large 401(k) plan offered 27 investment options — including a mix of equity funds, bond funds, and target date funds, according to a recent study by BrightScope and the Investment Company Institute (ICI). © Shutterstock “Employers recognize the importance of being able to customize the design of their 401(k) plans to suit their […]

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The average large 401(k) plan offered 27 investment options — including a mix of equity funds, bond funds, and target date funds, according to a recent study by BrightScope and the Investment Company Institute (ICI).

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“Employers recognize the importance of being able to customize the design of their 401(k) plans to suit their workforces, which is one of the strengths of the 401(k) system,” Sarah Holden, ICI’s senior director of retirement and investor research, said. “Employers use the flexibility of the 401(k) system—including a wide variety of investment options and the structure of employer contributions—to build plans that encourage employee participation and make it easier for participants to plan and save.”

It also found that plan fees continue to decline.

“The 401(k) marketplace is constantly evolving, and with that, the overall costs of 401(k) plans for participants have declined,” Brooks Herman, vice president of data and research at BrightScope, said. “There are a variety of factors contributing to the decrease of fees and expenses in plans, including increased competition and the growing size of the 401(k) marketplace, as well as public disclosure of plan costs. All of these factors benefit participants and help them continue to grow their retirement nest eggs.”

The study also revealed that 85 percent of large 401(k) plans offered employer contributions. Employer contributions most commonly are structured as a simple matching contribution. Additionally, nearly 60 percent of larger 401(k) plans automatically enrolled their participants.

Finally, all large 401(k) plans included domestic equity funds, international equity funds, and domestic bond funds. Also, 80 percent of large 401(k) plans offered target-date funds while 69 percent offered guaranteed investment contracts (GICs) and 65 percent offered other types of balanced funds. In addition, 44 percent offered money funds, and 30 percent offered international bond funds.

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Bill targets retirement planning simplification

Sen. John Kennedy (R-LA) has crafted a bill designed to enhance retirement savings plan options while simplifying the process.© Shutterstock Kennedy said the measure would make it easier and less expensive for small businesses to offer retirement plans, like 401(k)s, by encouraging small businesses to band together through organized business associations, like chambers of commerce, […]

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Sen. John Kennedy (R-LA) has crafted a bill designed to enhance retirement savings plan options while simplifying the process.

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Kennedy said the measure would make it easier and less expensive for small businesses to offer retirement plans, like 401(k)s, by encouraging small businesses to band together through organized business associations, like chambers of commerce, to sponsor affordable retirement plans for all of the associations’ members.

“Millions of Americans work for small businesses that don’t have the resources to offer their employees retirement plans, which can make saving for retirement challenging and complicated,” Kennedy said. “This bill will make retirement plans more simple and available to people who own or work for small businesses. Americans know the value of hard work, and we work like dogs hoping that one day, we’ll be able to kick back and retire. This legislation will help make those retirement dreams more accessible to many hard-working Americans.”

Bureau of Labor Statistics maintains one-third of private sector employees did not have access to employer-sponsored retirement plans three years ago, and only 47 percent of employees of small businesses with fewer than 50 employees have access to defined retirement contribution plans, such as 401(k)-style plans.

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OCC Enforcement Actions and Terminations

The Office of the Comptroller of the Currency (OCC) today released new enforcement actions taken against national banks, federal savings associations, and individuals currently and formerly affiliated with national banks and federal savings associations.

The Office of the Comptroller of the Currency (OCC) today released new enforcement actions taken against national banks, federal savings associations, and individuals currently and formerly affiliated with national banks and federal savings associations.

Read more / Original news source: https://www.occ.gov/news-issuances/news-releases/2019/nr-occ-2019-69.html?utm_source=RSS_feed&utm_medium=RSS

OCC Enforcement Actions and Terminations

The Office of the Comptroller of the Currency (OCC) today released new enforcement actions taken against national banks, federal savings associations, and individuals currently and formerly affiliated with national banks and federal savings associations.

The Office of the Comptroller of the Currency (OCC) today released new enforcement actions taken against national banks, federal savings associations, and individuals currently and formerly affiliated with national banks and federal savings associations.

Read more / Original news source: https://www.occ.gov/news-issuances/news-releases/2019/nr-occ-2019-69.html

Insurance association commends Senate for holding hearing on terrorism insurance

The leadership of the American Property Casualty Insurance Association (APCIA) recently commended the Senate Banking Committee for holding today’s hearing on the reauthorization of the Terrorism Risk Insurance Program.© Shutterstock The Terrorism Risk Insurance Program was reauthorized in 2015 by President Barack Obama and was extended through Dec. 31, 2020. It was initiated on the […]

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The leadership of the American Property Casualty Insurance Association (APCIA) recently commended the Senate Banking Committee for holding today’s hearing on the reauthorization of the Terrorism Risk Insurance Program.

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The Terrorism Risk Insurance Program was reauthorized in 2015 by President Barack Obama and was extended through Dec. 31, 2020. It was initiated on the idea that sustaining a viable private market for terrorism insurance depends on a federal backstop.

“APCIA commends Chairman Crapo and members of the Senate Banking Committee for holding today’s hearing. APCIA strongly supports reauthorization of the current TRIA program as quickly as possible, for as long a duration as possible, and without changes to the current thresholds,” Nat Wienecke, senior vice president of federal government relations at APCIA, said.

Wienecke said that although the program does not expire until the end of 2020, it is imperative that TRIA is reauthorized this year.

“This fall, insurers will begin to negotiate new policies with durations running past TRIA’s expiration and have provisions ending terrorism coverage should TRIA lapse. Reauthorizing TRIA as soon as possible also will avoid disruptions and confusion in the marketplace for both insurers and their consumers,” Wienecke said. “APCIA will continue to work with Congress on a long-term reauthorization of TRIA.”

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NAFCU favors reform of the Bank Secrecy Act

The National Association of Federally-Insured Credit Unions (NAFCU) is supporting legislative efforts to strengthen and reform the Bank Secrecy Act (BSA) laws while combating illicit activity.© Shutterstock In correspondence to the House Financial Services Committee, NAFCU Vice President of Legislative Affairs Brad Thaler extended gratitude to lawmakers and urged them to mirror the beneficial ownership […]

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The National Association of Federally-Insured Credit Unions (NAFCU) is supporting legislative efforts to strengthen and reform the Bank Secrecy Act (BSA) laws while combating illicit activity.

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In correspondence to the House Financial Services Committee, NAFCU Vice President of Legislative Affairs Brad Thaler extended gratitude to lawmakers and urged them to mirror the beneficial ownership requirements found in H.R. 2513, which was introduced by Rep. Carolyn Maloney (D-NY).

The NAFCU maintains Maloney’s bill would help financial institutions comply with the new customer due diligence rule by requiring companies to disclose their true beneficial owners, to the Financial Crimes Enforcement Network.

“Credit unions support efforts to combat criminal activity in the financial system,” Thaler wrote, adding the institution works to prevent tax evasion, money laundering, and terror financing.

Under the guidelines of Maloney’s measure, officials said the information would then be used to create a database of beneficial ownership that would be available to law enforcement agencies and financial institutions – adding it recently advanced out of the House Financial Services Committee.

Thaler also maintains BSA requirements are a burden to implement and urged the committee to continue to look for ways to provide credit unions with regulatory relief by reforming and strengthening BSA laws.

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SEC amends rules on determining auditor independence

The Securities and Exchange Commission (SEC) has amended rules on determining whether an auditor is independent when he or she has a lending relationship with certain shareholders of an audit client.© Shutterstock The existing rule states an auditor is not independent if that auditor is in a lending relationship with its audit client.  However, the […]

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The Securities and Exchange Commission (SEC) has amended rules on determining whether an auditor is independent when he or she has a lending relationship with certain shareholders of an audit client.

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The existing rule states an auditor is not independent if that auditor is in a lending relationship with its audit client.  However, the SEC has discovered that in certain circumstances, the existing Loan Provision may not have been functioning as it was intended.

The amendments look to focus the rules on those lending relationships that reasonably may bear on external auditors’ impartiality or objectivity. To do this, the amendments improve the application of the Loan Provision for the benefit of investors while reducing compliance burdens.

Specifically, they focus on beneficial ownership rather than on both record and beneficial ownership; replace the existing ten percent bright-line shareholder ownership test with a significant influence test; add a known through reasonable inquiry standard for identifying beneficial owners of the audit client’s equity securities.  Further, they exclude from the definition of audit client, for a fund under audit, any other funds that otherwise would be considered affiliates of the audit client under the rules for certain lending relationships.

“This rulemaking reflects the staff’s extensive experience and judgment, and I thank them for their continued commitment to retrospective review,” SEC Chairman Jay Clayton said.  “The amendments we are adopting today will more effectively identify debtor-creditor relationships that could impair an auditor’s objectivity and impartiality, as opposed to certain more attenuated relationships that are unlikely to pose such threats.”

These amendments become effective 90 days after they are published in the Federal Register.

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SIFMA offers dissenting view of NJ fiduciary rule

The Securities Industry and Financial Markets Association (SIFMA) is offering a dissenting opinion regarding New Jersey’s proposed rule to create a state fiduciary standard.© Shutterstock “To best protect investors and avoid investor confusion, the optimal approach is to defer to the uniform, nationwide, heightened, best interest standard for broker-dealers which is embodied in the SEC’s […]

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The Securities Industry and Financial Markets Association (SIFMA) is offering a dissenting opinion regarding New Jersey’s proposed rule to create a state fiduciary standard.

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“To best protect investors and avoid investor confusion, the optimal approach is to defer to the uniform, nationwide, heightened, best interest standard for broker-dealers which is embodied in the SEC’s now final Reg BI,” SIFMA officials wrote in their letter to the New Jersey Bureau of Securities. “A state-by-state approach, on the other hand, would result in an uneven patchwork of laws that would be duplicative of, different than, and possibly in conflict with federal standards. It would also heighten investor confusion. We urge the Bureau to pause its rulemaking process, review Reg BI and reevaluate its proposal before deciding whether it is necessary to proceed with an additional state regulation.”

The correspondence also addressed potential broader negative consequences for the state in the wake of its industry footprint.

“The finance and insurance industry has roughly 200,000 employees in the state of New Jersey and accounts for almost 5 percent of all employment in the state,” the letter stated. “Every dollar spent in the securities industry in New Jersey generates an additional $1.22 for the state economy and every job in the securities industry generates an additional 1.34 jobs statewide.”

It is the SIFMA’s position the plan would represent a fundamental change in the way the securities sector operates in the state and would fundamentally alter its relationship with millions of New Jersey investors.

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