Business of Benefits

Business of Benefits

Tag Archives: 401(k) Loan Insurance

Tax Act’s Participant Loan Changes Compels Fresh Review of “Uncomfortable” Loan Fiduciary Obligations

Posted in Fiduciary Issues
The Tax Cuts and Jobs Act’s participant loan changes (which delays the account offset on loan defaults related to unemployment or plan termination) triggers something we would all rather not look at:  the “uncomfortable” manner in which ERISA’s fiduciary rules apply to loans and their administration.These changes should cause plan sponsors and recordkeepers to consider new choices about their handling of loan defaults, something they haven’t had to do in nearly 18 years. This matters because changing a plan’s loan rules is not a minor technical act. Loans are investments subject to the same ERISA prudence rules as any other plan investment, and changes to loan procedures impacts the investment.… Continue Reading

Aggregation Models, Plan Loan Insurance, Lifetime Income Patents: Addressing Retirement Security by “Looking Through the Wrong End of a Telescope”

Posted in Fiduciary Issues, Lifetime Income, Multiple Employer Plans
In an almost stealth-like way, innovation is creeping into the marketplace and creating ways to address critical retirement issues, even without an incubator. Though these programs can do little to address what I view as the basic retirement inadequacy issue-that is, employers are generally moving away from the traditional notion of building adequate retirement programs into their employment models-they are making progress toward making the best of what we've got.… Continue Reading
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