Products March 12, 2020

Investment Product and Service Launches

iJoin creates managed account program, and Ameritas launches glide-path tool for employer-sponsored plans.

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Art by Jackson Epstein

iJoin Creates Managed Account Program

iJoin has introduced its Managed Account Program (MAP), which it says provides financial advisers an evolved, “manage it for me” investing option for retirement plan participants.

Founded on liability-driven investing principles, iJoin’s goal-based MAP personalizes recommendations based on each person’s age, income, savings and dozens of other known data points to achieve retirement income sufficiency.

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At the discretion of the plan adviser and plan sponsor, iJoin‘s MAP may be implemented as the plan’s qualified default investment alternative (QDIA), providing Employee Retirement Income Security Act (ERISA) 3(38) fiduciary protection to both the plan and participants. In doing so, the plan sponsor simultaneously obtains safe harbor protection by conducting a re-enrollment event, the firm says.

The product assigns, monitors and updates the investment strategy for each investor based on market performance, accumulated savings, contribution rates and other factors. The approach is designed to accommodate a retirement plan’s existing investment lineup and 3(38) investment manager. The core logic may be applied to investment lineups seeking to achieve a target rate of return or an expected rate of return.

The program applies a liability-driven investment methodology in modeling each person’s retirement funding need, defined as the cost of an annuity that would yield the desired retirement income. iJoin’s calculations use market annuity prices to fund inflation-adjusted, lifetime retirement income. The calculator also incorporates external income sources such as Social Security, outside pensions and other savings.

Ameritas Launches Glide-Path Tool for Employer-Sponsored Plans

Ameritas has launched a new glide path strategy for employer-sponsored retirement plans called RetireExpress.

RetireExpress is said to offer a personalized, yet simplified, investment approach based on age, location, account balance and other individual factors. The integration of this glide path strategy will allow participants the potential to achieve retirement goals and reduce financial insecurity by allocating investments to be more conservative with age.

In addition to RetireExpress, the Ameritas retirement plans division recently launched a new plan sponsor website, an enhanced back-end customer support system and optimized fee management and billing support. Later this year, plan sponsors will have the option to outsource administrative burdens through SimpleAdmin from Ameritas.

Compliance March 12, 2020

IRS Issues 2020 Cumulative List for Pre-Approved DB Plans

Among other things, items on the cumulative list include changes related to the Supreme Court DOMA ruling, hardship withdrawal changes and regulations for statutory hybrid plans.

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The IRS has issued Notice 2020-14, which sets forth the 2020 Cumulative List of Changes in Plan Qualification Requirements for Pre-Approved Defined Benefit Plans (2020 Cumulative List).

As described in section 17 of Revenue Procedure 2016-37, cumulative lists identify changes in the qualification requirements of the Internal Revenue Code that are required to be taken into account in a pre-approved plan document submitted under the pre-approved plan program administered by the IRS and that will be considered by the IRS for purposes of issuing opinion letters.

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The 2020 Cumulative List is to be used by pre-approved plan providers to submit opinion letter applications for pre-approved defined benefit (DB) plans during the third six-year remedial amendment cycle, which begins May 1, 2020, and ends January 31, 2025. Defined benefit plans may be submitted for approval during the on-cycle submission period, which begins August 1, 2020, and ends July 31, 2021.

Among other things, items on the cumulative list include changes related to the Supreme Court ruling on the Defense of Marriage Act (DOMA), regulations under section 401(k) to delete the six-month prohibition on employee contributions to all plans maintained by the employer (including DB plans) after a hardship distribution, and regulations under section 411(a)(13) providing guidance on statutory hybrid plans.

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