Defined Contribution in Review - 2Q21 - Janus Henderson Investors

Defined Contribution in Review
2Q21

WHAT’S INSIDE

Our quarterly Top DC Trends and Developments is designed to help CEOs, CFOs,
treasurers, human resource and benefits professionals and investment committees stay
up-to-date on recent events that could have an impact on plans or plan participants. Inside
you will find the following information:
 Quarterly Highlights: A summary of plans and sponsors making the news
 Participants’ Corner: Timely insights about the retirement readiness of plan participants
 Legislative Review: A summary of new and pending legislation
 Regulatory Review: News from the Department of Labor and other regulatory bodies
 Legal Review: An update on high-profile ERISA cases
 Global Headlines: A brief synopsis regarding global retirement issues
We hope you will find the information helpful, and we are happy to answer any questions
you may have.

                                                                                              2

QUARTERLY HIGHLIGHTS

QUARTERLY HIGHLIGHTS
Dawn Food Products Offers Comprehensive Well-Being Package

 The century-old, family-owned bakery ingredient and solutions company provides
  employees with a comprehensive health and well-being benefit in addition to a 401(k) plan
 One of the benefits is a telemedicine service, provided by Teledoc Health Inc. and Health
  Advocate Inc., a national health and patient advocacy and assistance company that
  answers employees’ medical questions and explains their medical bills
   Prior to the pandemic, utilization of these added benefits averaged between 6% to 10%, but in
    March 2020, utilization increased to 27%
   Employees not enrolled in the Dawn medical plan can access the telemedicine services for $6
    per month and access may be retained after separating from service
 Other wellness benefits include a Boston Mutual critical illness insurance plan that
  provides benefits to seriously ill employees who incur medical bills not covered by the
  company’s high-deductible health care plan and an Allstate term-to-age-100 life
  insurance plan

                                                                                                    4

QUARTERLY HIGHLIGHTS
Aflac Reinvests Tax Savings into 401(k) Plan

 Following the Tax Cuts and Jobs Act of 2017, Aflac Inc. pledged to invest $250M in
  employee benefits and community outreach within three to five years
 Effective 2018, the company increased its 401(k) match from 50% on the first 6%
  deferred to 100% up to 4% and provided a one-time $500 employer contribution
   To communicate the changes to the plan, the company used regular internal communications,
    social media and internal meetings
 An important objective of the company outreach plan was to help educate younger
  employees with the goal of helping them develop good saving behaviors through
  ongoing contributions and dollar-cost-averaging; approximately 38% of their employees
  are millennials
 The plan presently boasts a 93% participation rate and an average deferral of 7.4%

                                                                                                5

QUARTERLY HIGHLIGHTS
Trucking Company Adopts Auto Features and Account Security

 Knight-Swift Transportation, a trucking company based in Phoenix, Arizona, added
  features to their company's $386M 401(k) plan that included 3% auto-enrollment and
  1% auto-escalation up to 10%
 One year after the changes were made, the participation rate increased from 26% to 57%
 The company also launched an employee education campaign around account security
  and began using two-factor authentication
   The campaign combined humor – an image of a cow with the tagline, “High Steaks! Take steps
    to help protect your 401(k)” – with a raffle of Ring doorbells for participants who had their
    access secured
   Approximately 800 accounts enrolled in two-factor authentication

                                                                                                    6

QUARTERLY HIGHLIGHTS
403(b) Sponsor Voluntarily Follows ERISA

 While the First Church of Christ, Scientist, headquartered in Boston, Massachusetts, is
  not subject to ERISA, the church has voluntarily chosen to adopt fiduciary best practices
  and operate as though they were since 2011
 In 2017, the church negotiated a 50% fee reduction from their record-keeper and
  increased auto-enrollment from 2% to 3% and the auto-escalation cap from 5% to 10%
 More recently, the plan’s committee implemented a policy to select the share class for
  each option with the lowest net investment fee incurred by the participants, which is not
  always the share class with the lowest expense ratio
 Almost 75% of participants are saving at or above the maximum matching rate, and the
  average balance is $106,000

                                                                                              7

QUARTERLY HIGHLIGHTS
The Farfield Co. Finds Success Even Without a Match

 Despite not offering a matching contribution, the participation rate is 83% and the
  average deferral is 11% at the Pennsylvania-based construction company
   For small plans with up to $20M, the average participation rate is 60% and average deferral rate
    is 7.1%, according to Vanguard’s “How America Saves” report
 The company prefers to allocate capital toward wages and gives employees the
  flexibility to decide how to spend their money; in this case, the company must pay its
  trades-people a required rate for state-funded construction projects
 Officials attribute the company’s strong results to employee education, flexible plan
  design and online investment tools
 In addition to auto-enrollment and auto-escalation, the company allows employees
  to change their deferrals as frequently as weekly by going to an online retirement
  plan website

                                                                                                       8

QUARTERLY HIGHLIGHTS
99% Retain Managed Account Option After Reenrollment

 First PREMIER Bank and PREMIER Bankcard, based in Sioux Falls, South Dakota,
  recently automatically reenrolled all participants into a managed account; out of 2,100
  participants, only 14 rejected the option
   The plan sponsor pays 100% of the managed account fees, which total approximately
    22 basis points
 The reenrollment follows several enhancements made to the plan including:
   Raising the maximum match from 4% to 5% of compensation
   Increasing the automatic enrollment initial deferral from 3% to 5% for all new hires
   Offering new educational programs that cover retirement readiness, Social Security and Health
    Saving Accounts (HSAs)

                                                                                                    9

QUARTERLY HIGHLIGHTS
KSOP Plan Sponsor Eliminates Revenue Sharing

 Johnson, Mirmiran & Thompson Inc., an employee-owned engineering and architectural
  firm headquartered in Maryland, decided to eliminate revenue sharing from its KSOP
   Most of the existing funds had a zero-revenue share class and plan assets were simply
    transferred; a few funds did not have a zero-revenue share class and in those cases, any
    revenue sharing was credited back to the participant
   An educational program was initiated to help participants understand that there would be a new
    line item on their statements reflecting fees, where previously the fees were embedded in their
    fund's returns
 As the company has multiple sites, a designated employee at each of the separate
  locations acts as a plan “ambassador” to pass information about the KSOP on to
  other employees

                                                                                                      10

QUARTERLY HIGHLIGHTS
PeopleShare Offers Student Loan Debt Repayment Benefit

 PeopleShare, a mid-Atlantic-based employment agency, decided to adopt a provision
  within the recently enacted Consolidated Appropriations Act of 2021 that extends for five
  years the tax-free treatment of employer-provided student loan repayment up to $5,250
 Of the company’s 172 employees, 43% are age 30 or under and student loan balances
  are a huge source of financial stress
 Employees need to work at PeopleShare for 90 days to be eligible but may submit to
  human resources their loan repayment information on their first day of employment

                                                                                              11

PARTICIPANTS’ CORNER

PARTICIPANTS’ CORNER
Study Finds Target-Date Funds Underperform, Overcharge

 Researchers from Villanova University and Michigan State University found that from
  2000 to 2019, target-date funds underperformed compared to a similarly constructed
  portfolio of non-target-date funds
 In their paper, “The Unintended Consequences of Investing for the Long Run: Evidence
  from Target Date Funds,” researchers hypothesized that target-date investors are
  generally inattentive and less likely to sell due to underperformance or excessive fees
 As a result, product providers exploit this characteristic by using target-date funds to
  offset outflows from poorly performing underlying funds and not selecting underlying
  funds with the lowest share class available

                                                                                             13

PARTICIPANTS’ CORNER
Abandoned IRAs Total $790M for 72½-Year-Old Owners

 In the report, “Abandoned Retirement Savings,” researchers from the U.S. Treasury,
  Federal Bank of Chicago and University of Wisconsin found that 2.7% of 72½-year-
  old IRA owners in 2017 had an abandoned account (defined as never having taken a
  required minimum distribution), with a total value of $790M
   Among those with abandoned IRAs, the median balance was $5,351, or about 12% of the
    owner’s annual income
   The likelihood of abandonment decreased with income but was still 3.0% for accounts with
    balances near $10,000
 The study found that abandonment was 10 times higher for automatic rollovers
  (forced transfers of participant balances between $1,000 and $5,000)

                                                                                               14

PARTICIPANTS’ CORNER
Do Participants Consider Non-Financial Assets in Asset Allocation Decisions?

 In a study of more than 36,000 defined contribution participants, researchers from
  Morningstar and Texas Tech University found that participants with more aggressive
  (conservative) non-financial assets had more conservative (aggressive) 401(k)
  portfolios, consistent with economic theory
 Non-financial assets were defined as occupation and housing:
   Occupation was measured as the total compensation volatility for the participant’s industry
    (mining had the highest volatility and health care had the lowest volatility)
   Housing was measured as the variability of home prices in the participant’s state of residence
    (Nevada had the highest variability and Iowa had the lowest variability)
 While the results were statistically significant (the relationship was not due to chance),
  the economic significance was minimal

                                                                                                     15

PARTICIPANTS’ CORNER
A Fresh Look at Roth Conversions

 According to a researcher at Santa Clara University, a Roth conversion was found to be
  beneficial most of the time although the benefits are often small and slow to arrive
 The study, “When and for Whom are Roth Conversions Most Beneficial? A New Set of
  Guidelines, Cautions and Caveats,” explains that the benefit of a Roth is not necessarily
  contingent upon higher tax rates in the future or the ability to pay the tax on the
  conversion from outside funds; rather, the benefit of a conversion is because of the tax-
  free compounding of returns

                                                                                              16

PARTICIPANTS’ CORNER
Seven Sponsors Share Thoughts on their Plans’ Dynamic QDIA

 A paper by the Defined Contribution Institutional Investment Association (DCIIA)
  reported the results of interviews conducted with seven plan sponsors (under $250M)
  who recently adopted a dynamic QDIA
   A dynamic QDIA generally is a plan default that begins with a target-date or risk-based option
     and upon reaching a certain account size or age, automatically transitions to a different option
     such as a managed account
 Plans either defaulted all participants into the new dynamic QDIA or only existing QDIA
  participants; in both cases, all participants were given the opportunity to opt-out either
  via a website or by contacting a call center
 On average, the plan sponsors reported that the opt-out rate was low and did not feel
  that there were any surprises during the adoption and implementation processes

                                                                                                        17

PARTICIPANTS’ CORNER
PSCA Conducts Retirement Plan Committee Survey

 The Plan Sponsor Council of America conducted a survey of retirement plan committee
  practices in April 2021; 255 plan sponsors participated, representing a wide range of
  industries and plan sizes
 Among the key findings:
   64% of organizations have one committee, 31% have two or more committees, and 5% do not
    have a retirement plan committee
   Nearly 80% of organizations have a document that establishes their plan committee(s), but far
    fewer (38%) specify which job positions serve on the committee
   The most common criteria for determining who serves on a committee is job title, followed by
    experience and willingness to participate
   About two-thirds of committees meet quarterly and about 20% meet semiannually
   65% of organizations have legal council participate in committee meetings

                                                                                                    18

PARTICIPANTS’ CORNER
Morningstar: Target-Date and Managed Accounts “Sticky” in 2020

 Research from Morningstar that investigated the investment behavior of over 520,000
  401(k) participants in 2020 found that only 3.5% of target-date users and 3% of
  managed account users opted out of a strategy in 2020
 Conversely, among self-directed investors, approximately 13% changed their equity
  allocations by more than 5%; these participants tended to be older, have higher income
  and have higher balances
 Self-directed participants who made changes tended to move to a more conservative
  allocation during the first quarter; these participants underperformed participants who did
  not make any changes by approximately 750 basis points

Basis point (bp) equals 1/100 of a percentage point. 1 bp = 0.01%, 100 bps = 1%.

                                                                                                19

PARTICIPANTS’ CORNER
Incorporating Diversity and Inclusion in DC Plans

 In their 2020 survey of DC plan sponsors, Willis Towers Watson found that close to
  two-thirds of respondents are extending their organization’s broad D&I efforts to their
  retirement plans
 “Moving the Needle on Defined Contribution Plans” offers four suggestions for plan
  sponsors to consider:
     Target specific cohort
     Extend diversity and inclusion to the committee composition
     Include culture and diversity when assessing asset managers
     Boost the financial well-being of plan participants

                                                                                            20

PARTICIPANTS’ CORNER
EBRI: Retirement Confidence Resilient During COVID-19

 Despite the COVID-19 pandemic, the Employee Benefit Research Institute’s 2021
  Retirement Confidence Survey found that 80% of retirees are confident in their ability to
  live comfortably throughout retirement, up from 76% when the survey was last
  conducted in March 2020
 Despite the challenges of 2020, retiree lifestyle and expenses were largely unchanged
  and confidence in Medicare and Social Security programs reached an all-time high
 The 2021 survey included an oversampling of African American and Hispanic
  respondents to investigate the unique challenges faced by these demographics;
  the survey found:
   Compared to white respondents, African Americans and Hispanics were more likely to consider
    debt a major or minor problem and were more likely to say that a connection or commonality
    between them and an advisor is important
   Hispanics, regardless of income, were more likely to say helping friends and family now is more
    important than saving for their own retirement

                                                                                                      21

PARTICIPANTS’ CORNER
New Glossary Available to Help Sponsors Navigate DC “Lingo”

 The Defined Contribution Institutional Investment Association (DCIIA) recently published
  its “The Retirement Tier Glossary;” this tool was designed to help plan sponsors and
  investment committees understand the vernacular often used in connection with defined
  contribution plans
 Specific terms and definitions provided include:
   Money-out-report: In-depth review of participant behavior provided by the record-keeper
   Annuity rollover service: A platform that compares the prices of annuities outside the plan that
    are available to participants from multiple insurance companies
   Cognitive risk: Risk of declining mental capacity, which impairs a person’s ability to make sound
    financial decisions
   Institutionally priced: Product, platform or fund that is offered at a lower cost than available to
    retail investors

                                                                                                          22

LEGISLATIVE REVIEW

LEGISLATIVE REVIEW
SECURE 2.0 Unanimously Passed in Committee

 The Securing a Strong Retirement Act of 2021 (SECURE 2.0) unanimously passed the
  House Ways and Means Committee on May 5, 2021; various versions of the bill,
  including the Retirement Security and Savings Act and Improving Access to Retirement
  Savings Act, were also recently introduced in the Senate
 This legislation contains provisions that would:
   Make it easier for small businesses to establish and maintain 401(k) and other retirement plans
   Expand access to retirement savings plans for low-income Americans without coverage
   Provide more certainty and flexibility during Americans’ retirement years

                                                                                                      24

LEGISLATIVE REVIEW
Bill Would Allow Additional Penalty-Free Distributions

 The Enhancing Emergency and Retirement Savings Act of 2021, introduced by Senators
  James Lankford (R-OK) and Michael Bennet (D-CO), would allow penalty-free
  “emergency personal expense distributions” from employer-sponsored retirement plans
  and IRAs
 Under the proposal, one emergency distribution per calendar year of up to $1,000 of the
  individuals’ vested balance would be permitted
   The withdrawn funds must be returned before another emergency distribution from the same
    plan would be permitted
 An emergency is defined as a distribution for purposes of meeting unforeseen or
  immediate financial need relating to necessary personal or family expenses

                                                                                               25

LEGISLATIVE REVIEW
Proposal Introduced to Encourage More ESG Investments

 Senators Tina Smith (D-MN), Patty Murry (D-WA) and Representative Suzan DelBene
  (D-WA) have introduced the Financial Factors in Selecting Retirement Plan Investments
  Act in both chambers of Congress
 This bill would amend ERISA to make it clear that plans may consider ESG factors in
  investment decisions, provided plans consider such investments in a prudent manner
  consistent with their fiduciary obligations
 Additionally, the proposed legislation would formally repeal the Trump administration’s
  DOL rule as well as “limit future regulatory actions that impose unfair regulatory burdens
  in an effort to discourage ESG investing by ERISA plans”

                                                                                               26

LEGISLATIVE REVIEW
Congress Asks GAO to Review Target-Date Funds

 Senator Murry (D-WA) and Representative Scott (D-VA) have requested the
  Government Accountability Office (GAO) to review target-date funds
 Specific areas of concern include the amount allocated to equity investments in 2020
  target-date funds and the use of private equity as an underlying holding
 The GAO is asked to consider the “possible legislative or regulatory options that not only
  bolster the protection of plan participants, who are nearing retirement or are retired, but
  also achieve the intended goals of target-date funds”

                                                                                                27

LEGISLATIVE REVIEW
New State and City Mandated Auto IRA Programs

 Maine and Delaware have enacted legislation that will require businesses that do not
  offer a private-sector retirement program to automatically enroll employees into a payroll
  deduction IRA program
 Meanwhile, the House of Representatives in New York has voted to amend existing
  legislation that would make its voluntary auto-IRA program mandatory for businesses
  with 10 or more employees
 New York City has also recently passed legislation that would require businesses
  with five or more employees to offer a private sector option or participate in an
  auto-IRA program

                                                                                               28

REGULATORY REVIEW

REGULATORY REVIEW
3Q21 Compliance Calendar

 July                                    August                                 September
   July 29: Summary of material            August 2: Deadline for IRS Forms      September 15: Deadline for
    modifications (SMM) is due to            5330, 5500, 5558 and annual            money purchase and target-
    participants (i.e., 210 days after       benefit statements for plans not       benefit plans to make required
    the end of the plan year in which        offering participant-directed          contributions and for sponsors that
    the change was adopted) unless it        investments                            file a corporate tax extension to
    was included in a timely updated        August 14: Deadline for                make 2020 profit-sharing and
    summary plan description (SPD)           participant-directed DC plans to       matching contributions
                                             provide participants with the         September 18: Requirements to
                                             quarterly benefit/disclosure           include lifetime income disclosures
                                             statement and statement of plan        in benefit statements furnished to
                                             fees charged during the 2nd            participants
                                             quarter of 2021                       September 30: Summary annual
                                                                                    reports are due to participants
                                                                                    from calendar year-end plans

                                                                                                                          30

REGULATORY REVIEW
DOL Issues Interpretative Guidance on Investment Advice Exemption

 On April 13, 2021, the DOL (Department of Labor) issued a set of FAQs addressing its
  new prohibited transaction exemption (PTE 2020-02); this PTE allows investment advice
  fiduciaries to receive variable compensation, provided certain requirements are satisfied
 The FAQs provide additional guidance on PTE requirements including the impartial
  conduct requirement, written acknowledgment of fiduciary status, disclosure of conflicts
  of interest, documentation of rollover advice and annual retrospective reviews
 Most notably, the guidance makes it clear that the DOL intends to make further changes
  to the existing regulatory framework for providing fiduciary advice, which may include a
  new fiduciary rule

                                                                                              31

REGULATORY REVIEW
DOL Issues Cybersecurity Guidance for Retirement Plan Industry

 On April 14, 2021, the DOL issued a cybersecurity guidance package consisting of
  three parts:
   Tips for hiring a service provider with strong cybersecurity practices
   Cybersecurity program best practices for service providers
   Online security tips for participants
 While the guidance is framed as “tips” and “best practices,” the guidance is grounded in
  the premise that responsible plan fiduciaries have a duty to mitigate cybersecurity risk
  and that service providers and plan participants have an important role to play

                                                                                             32

REGULATORY REVIEW
Executive Order Issued on Climate-Related Financial Risk

 On May 20, 2021, President Joe Biden issued an executive order directing the DOL to
  consider publishing, within 180 days, a proposed rule to suspend, revise or rescind the
  Financial Facts in Selecting Plan Investments and Fiduciary Duties Regarding Proxy
  Voting and Shareholder Rights final rules published during the Trump administration
 The DOL was also directed to identify what actions can be taken under ERISA to
  “protect the life savings and pensions of United States workers and families from threats
  of climate-related financial risk”
 This executive order follows the March 10, 2021, announcement that the DOL will not
  enforce either of the final rules until it publishes new guidance

                                                                                              33

REGULATORY REVIEW
IRS Provides Additional Guidance on Partial Termination Relief

 On April 27, 2021, the IRS provided additional FAQs regarding the partial termination
  relief provisions contained in the Consolidated Appropriations Act of 2020 (CAA)
   The CAA provided that a partial plan termination would not occur if the number of active
    participants covered by the plan on March 31, 2021, was at least 80% of the number covered
    on March 13, 2020
 Highlights of the new FAQs include:
   Active participants may be defined in a consistent, reasonable and good faith interpretation
   More than one plan year may qualify for relief
   The number of active participants counted on March 31, 2021, does not have to consist of the
    same individuals as the number counted on March 13, 2020
   Reduction in active participation does not need to be limited to reasons brought on by COVID-19

                                                                                                      34

REGULATORY REVIEW
2021 Retirement Plan Compliance Priorities Published

 The IRS’ Tax Exempt and Government Entities Office has announced its retirement plan
  compliance priorities for fiscal year 2021
 Areas of focus include:
   Small exempt organizations with an emphasis on the administration of plan investments,
    party-in-interest transactions and plan loan violations
   Operational, qualification and document failures of one-person 401(k) plans
   Ensuring large defined benefit plans satisfy the required minimum distribution requirements
   Participant loans comply with the maximum loan amount and repayment rules

                                                                                                  35

REGULATORY REVIEW
IRS Publishes List of Top Mistakes in Voluntary Correction Program Submissions

 Under the IRS’ Voluntary Correction Program (VCP), plan sponsors can correct errors
  that may otherwise be identified in a plan audit
 In a new post, the IRS has identified the most common mistakes made by VCP users
 Some of the mistakes identified include:
     Not following the VCP submission procedures
     Making multiple submissions of the same VCP case
     Rejection of remitted user fees
     Submission involving plan loan defects and late amendments

                                                                                        36

LEGAL REVIEW

LEGAL REVIEW
Court Limits Fiduciary Breach Lawsuit to Sponsor and Committee, Not Individuals

 In the case of Luense v. Konica Minolta Business Solutions U.S.A., the participants sued
  the plan sponsor, the sponsor’s board of directors and its individual members, the plan
  committee and its individual members, and several other individuals with plan-related
  responsibilities for alleged fiduciary breaches
 A federal trial court dismissed claims against the members of the board of directors and
  plan committee because the plaintiffs failed to sufficiently allege that those parties were
  fiduciaries with respect to the contested conduct
 In this case, the court concluded that because a committee’s fiduciary duties are
  exercised collectively, individuals are not necessarily subject to fiduciary breach claims
  merely due to their participation

                                                                                                38

LEGAL REVIEW
Can Participants Sue If No Loss is Suffered?

 The Third Circuit will review the case of Boley v. Universal Health Services after the lower
  court dismissed the defendant’s argument that the case never should have received class
  certification because the three plaintiffs only invested in seven out of the plan’s 37 options
 The defendants unsuccessfully argued that in a case heard by the Supreme Court in
  2020 (Thole v. U.S. Bank), defined benefit plan participants cannot bring a suit against
  plan fiduciaries if no loss was suffered
 This case is the first example of using the Supreme Court ruling in a defined
  contribution-related lawsuit

                                                                                                   39

LEGAL REVIEW
Courts Divided on Whether Fiduciary Duty Claims are Arbitrable

 In two recent cases, the courts did not allow an employment-related arbitration
  agreement to be used to settle fiduciary breach claims
   In March 2021, the Second Circuit reversed a district court order compelling arbitration in
    an alleged breach of fiduciary duties based upon an arbitration clause in an employment
    agreement
   Similarly, in January 2021 a district court in Ohio also declined to enforce arbitration of breach
    of fiduciary claims under an employment agreement; these cases will be heard by the Sixth
    Circuit in appeal
 These decisions follow the Ninth Circuit court’s Dorman decision, in which an arbitration
  agreement within the plan document was upheld

                                                                                                         40

LEGAL REVIEW
Plan Data Not Considered a Plan Asset

 The U.S. District Court for Southern District of Texas granted a motion to dismiss in the
  case of Harmon v. Shell Oil
 The plaintiffs argued that plan data such as participant names, income levels, Social
  Security numbers, contribution levels, investment holdings and distribution eligibility are
  a “plan asset” and users of this information for cross-sell purposes should therefore be
  deemed a fiduciary
 The courts disagreed, although the case is likely to be appealed

                                                                                                41

LEGAL REVIEW
Forum-Selection Clause Upheld by Ninth Circuit

 The Ninth Circuit had upheld the enforceability of forum-selection clauses in ERISA plans
   A forum-selection clause within the plan document identifies the appropriate and exclusive
    venue to bring plan disputes; these clauses may help plan sponsors specify a venue that is
    close by and/or convenient
 This decision follows similar findings in the Sixth and Seventh Circuits and district courts
  in the Third and Fourth Circuits

                                                                                                 42

LEGAL REVIEW
Key Developments Involving 403(b) Plans

 U.S. attorneys have asked the Supreme Court to review the excessive fee case
  involving Northwestern University; last year the Seventh Circuit affirmed a lower court’s
  decision to dismiss the case
 WakeMed Health and Hospital has agreed to settle a fiduciary breach case that includes
  a $975,000 settlement and requires the plan to conduct an RFP; similarly, the terms of
  the Columbia University settlement have been announced and include a $13M
  settlement, mandatory annual fiduciary training, rebating all revenue sharing and
  conducting an RFP
 New lawsuits alleging excessive fees have been brought against Bronson Healthcare
  Group, Wake Forest University, Baptist Medical Center and University of Tampa

                                                                                              43

GLOBAL HEADLINES

GLOBAL HEADLINES
Two of Three Canadians Did Not Save During COVID-19

 According to the Canadian Retirement Survey from Healthcare of Ontario Pension
  Plan and Abacus Data, 63% of Canadians did not save any money during the pandemic,
  up 5% from the prior year
 In addition, 48% said they are very concerned about having enough money in
  retirement, and retirement was more of a concern than physical health (44%), mental
  health (40%), debt load (31%) and job security (26%)
   Retirement was the second-greatest concern after daily cost of living
 COVID-19 disproportionately impacted younger and lower income groups:
   Those ages 44 and younger were twice as likely to have had their finances harmed compared
    to those ages 60 and older
   Those with income less than $50,000 were also twice as likely to have had their finances
    harmed compared to those with income over $100,000

                                                                                                45

GLOBAL HEADLINES
Netherlands Regulators Concerned About Lack of Cost Transparency

 Dutch regulators have reported that in a study of 166 pension annual reports, 90 (54%)
  pension schemes within the study did not correctly report costs
 Mandatory information about costs was partially missing in one of five reports; in 34%
  of the annual reports monitored, mandatory figures on costs were present but not
  accurately reported
      Other deficiencies found were only 10% of pensions reported gross and net returns, and 25% of
           boards gave an opinion on asset management costs
 In 2022, the Netherlands will shift to a new system where costs incurred will be deducted
     from participants’ pension assets

Paredes-Vanheule, Adrien. “Dutch reg’ chides pension funds for lack of transparency on costs.” Asset News. April 2021.

                                                                                                                         46

GLOBAL HEADLINES
Changes Approved for Australian Superannuation Program

 Your Future, Your Super Bill has been approved by parliament and will make three
  notable changes to the superannuation program:
   The Australian Prudential Regulation Authority will evaluate MySuper default options annually;
    products that underperform their benchmark by 0.5% per year over an eight-year period will be
    required to inform its members, and products that fail two consecutive annual tests will not be
    able to accept new members until performance improves
   If an employee with an existing fund does not nominate a fund to receive superannuation
    contributions at the start of a new job, the employer will pay the contributions to the employee’s
    existing fund rather than to the employer’s default fund
   Individuals ages 65 and 66 are now permitted to make up to three years of non-concessional
    superannuation contributions

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GLOBAL HEADLINES
Report Finds Changing Expectations Among UK Workers

 A report by the Institute of Fiscal Studies found that workers are changing expectations
  and attitudes about their retirement prospects. Specifically, the report found:
   In 2017, 78% expected to get some retirement income from an employer savings plan, up from
    63% in 2013
   Between 2006 and 2017, the age at which men in their 40s and early 50s said they expected
    to retire increased by two years, while women’s expected retirement age increased by two and
    a half years
 These changes overlap with regulatory changes that have required employers to
  automatically enroll workers in a savings plan and raised the minimum age to collect
  benefits under the UK social security system

                                                                                                   48

DEFINED CONTRIBUTION CAPABILITIES
AND RESOURCES

DEFINED CONTRIBUTION CAPABILITIES

                                                45+ years of industry experience, retirement excellence and leadership
                                                $31.05 billion in DC assets under management as of 3/31/21
                                                Products utilized by the top 25 DC record-keepers in the industry
                                                Availability on over 200 recordkeeping platforms
                                                We offer our investments in vehicles appropriate for retirement plans,
                                                 including zero-revenue sharing mutual fund share classes, subadvised
                                                 portfolios and through a suite of Collective Investment Trust products

Note: Not all record-keepers provide quarterly DC AUM data, therefore AUM data is based on the most recently available information.

                                                                                                                                      50

Important information
A retirement account should be considered a long-term investment. Retirement accounts generally have expenses and account fees, which may impact
the value of the account. Non-qualified withdrawals may be subject to taxes and penalties. For more detailed information about taxes, consult a tax
attorney or accountant for advice.
Tax information contained herein is not intended or written to be used, and it cannot be used by taxpayers for the purposes of avoiding penalties that
may be imposed on taxpayers. Such tax information and any estate planning information is general in nature, is provided for informational and
educational purposes only, and should not be construed as legal or tax advice.
The information contained herein is for educational purposes only and should not be construed as financial, legal or tax advice. Circumstances may
change over time so it may be appropriate to evaluate strategy with the assistance of a financial professional. Federal and state laws and regulations
are complex and subject to change. Laws of a particular state or laws that may be applicable to a particular situation may have an impact on the
applicability, accuracy, or completeness of the information provided. Janus Henderson does not have information related to and does not review or
verify particular financial or tax situations, and is not liable for use of, or any position taken in reliance on, such information.
In preparing this document, Janus Henderson has relied upon and assumed, without independent verification, the accuracy and completeness of all
information available from public sources.
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Henderson Group plc.
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C-0821-39246 12-30-22                              366-15-431934 08-21