GA October 2021 Newsletter

  • VOLUME XLVIII | NUMBER XLV | October 2021

    • DOL Cybersecurity Tips

      Due to the increase in technology use, as plan sponsor it is vital to take the necessary steps to combat cyber security. You may want to establish Security Standards, a Formal Cybersecurity Program, utilizing Multi-Factor Authentication, Cybersecurity Insurance, and much more. Per the DOL, plan sponsors should ask the service provider about the following: • Security Standards • Security Practices • Security Policies • Audit Results • Security Validation Process • Security Levels Implemented • Past Security Breaches • Cybersecurity Insurance • Cybersecurity Guarantee Per the DOL, plan sponsors should consider the following actions: • Establish a formal Cyber Security Program • Conduct annual risk assessments • Hire third party consultant to audit security controls • Define and assign information security roles and responsibilities •...

       

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    • Regret Aversion: Fighting the FOMO of the Financial World

      Regret aversion is a construct in behavioral finance theory that suggests investing decisions are, at least in part, driven by fear of later regretting a “wrong” choice. Functional MRI neuroimaging studies of the brain have demonstrated a biological correlation to this phenomenon in the form of increased activity within the medial orbitofrontal cortex and amygdala. The fear is real — and it can have serious consequences for participants. How Does Regret Aversion Impact Investors? There’s no singular effect of regret aversion on investor decision making because the fear of regret may relate to either taking action or not taking action. And that fear may translate into greater risk-taking — or excessive attempts to minimize risk. Carried on a wave of exuberance and fear of missing...

       

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    • Self-Directed Brokerage Accounts To Add to Your Plan or Not: That is the Question

      Participants may be attracted to self-directed brokerage accounts (SDBAs) because of the seemingly infinite choice of investment options. While it’s tempting, much consideration should be given when contemplating an SDBA option for your qualified retirement plan. There are several fiduciary issues your committee should discuss, decide, and document. Outside Advisors The impetus for the interest may be that participants want to take advantage of the advice from an outside advisor with the intention of giving them access to the account to make trades. If so, the advisor may be said to perform as a discretionary investment manager. ERISA Section 3(38) requires the plan sponsor to enter into an agreement with the advisor, as well as monitor the advisor’s actions. “Unsuitable” Investments The plan sponsor could...

       

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    • Participant Memo: October 2021 – What is Roth and What Does it Mean for Me?

      A few things to consider when choosing between making traditional or Roth contributions.

       

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