PLANADVISER - November/December 2021 - 9

ments in a sufficiently automated and
systematic manner by the deadline and
these challenges and concerns could
have delayed their ability to rely on the
exemption as the department intended.
Benefit Limits for
Qualified Plans for 2022
The IRS has announced, in Notice
2021-61, that the contribution limit for
employees who participate in 401(k),
403(b) and most 457 plans, as well as
the federal government's Thrift Savings
Plan, will increase to $20,500, up from
$19,500 this year. The catch-up contribution
limit for employees ages 50 and
over enrolled in the aforementioned
plans remains unchanged at $6,500.
The limitation regarding SIMPLE
[savings incentive match plan for
employees] retirement accounts will
increase from $13,500 to $14,000.
The defined benefit (DB) plan annual
benefit limit under Section 415(b)(1)(A)
of the Internal Revenue Code (IRC) will
increase from $230,000 to $245,000. For
a participant who has separated from
service before January 1, 2022, the DB
plan benefit limit under Section 415(b)
(1)(B) is computed by multiplying the
participant's compensation limitation,
as adjusted through 2021, by 1.0534. The
limitation for defined contribution (DC)
plans under Section 415(c)(1)(A)-i.e.,
annual additions-has been increased
for next year from $58,000 to $61,000.
The limitation used in the definition of
" highly compensated employee " under
Section 414(q)(1)(B) will increase from
$130,000 to $135,000.
RISE Act Advances With Various
Retirement Plan Provisions
The U.S. House Committee on Education
and Labor has voted unanimously
to advance legislation introduced
earlier in November that would
improve access to retirement plans for
employees and ease plan administrative
burdens for employers.
The Retirement
Improvement and
Savings Enhancement (RISE) Act (H.R.
5891) includes provisions introduced
in other pieces of legislation, including
the Securing a Strong Retirement Act,
often called " SECURE 2.0, " a reference
to 2019's Setting Every Community Up
for Retirement Enhancement (SECURE)
Act. SECURE 2.0 was passed unanimously
by the House Ways and Means
Committee in May.
According to a fact sheet about the
RISE Act, the legislation would establish
an online, searchable " Retirement Lost
and Found " database at
the Department
of Labor (DOL) to help workers
keep track of their retirement savings
as they move from job to job; allow
403(b) retirement plans to participate
in multiple employer plans (MEPs) and
pooled employer plans (PEPs); ensure
more part-time workers are offered
opportunities to join a retirement plan;
clarify rules on the recovery of inadvertent
overpayments to retirees, minimizing
hardships; enable employers to
provide small financial incentives, such
as low-dollar gift cards, to encourage
workers to participate in retirement
plans; and simplify and clarify
reporting and disclosure requirements
related to retirement plans.
SEC Actions Underscore
Adviser Risks, Responsibilities
Experts watching the regulatory
actions of the Securities and Exchange
Commission (SEC) note that the new
leadership under the Biden administration
has refocused the role of the
securities market regulator to prioritize
what is in the best interest of
investors, as opposed to favoring the
commercial interests of registered
investment advisers (RIAs), broker/
dealers (B/Ds) and fund distributors.
To this end, the SEC's division of
recently
examinations
concluded
a
series of reviews to assess the practices
of advisers providing robo-advisory
services and to ensure that advisers
are accurately and fairly assessing and
collecting their fees. As the SEC leadership
explains in the first of two risk
alerts, millions of investors, individually
and through their employer-sponsored
retirement plans, now entrust
their savings to advisers who provide
their investment advisory services
online, via automated mobile apps and
desktop computer programs.
In the SEC's view, the use of such
services can raise important investor
protection implications. The SEC warns
The SEC warns
that a robo
adviser's clientsurvey-andmonitoring
process
may not
appropriately
capture a given
client's risk
tolerance ...
that a robo adviser's client-surveyand-monitoring
process may not
appropriately capture a given client's
risk tolerance, which could result in
the provision of advice to invest in
securities not aligned with the client's
best interest. An added consideration
with the development and delivery
of automated and highly scaled roboadvisory
services is that failures may
be repeated many times over before
they are noticed and corrected, magnifying
the negative impact of problems
that arise.
The second risk alert offers insight
on compliance issues arising from
investment advisers' fee calculations.
For this alert, the SEC's examinations
staff conducted about 130 reviews of
SEC-registered investment advisers,
identifying various deficiencies related
to the advisory fees charged by many
firms. As the risk alert explains, these
deficiencies often resulted in financial
harm to clients,
including from overbilling
of advisory fees, the inaccurate
calculation of tiered or breakpoint fees,
and the inaccurate crediting back of
certain fees due to clients, especially
prorated fees for onboarding them or
prepaid fees for terminated accounts.
Recognizing that there is no such
thing as a one-size-fits-all approach,
the SEC staff closes the risk alert by
providing observed examples of policies
and practices, to assist advisers
with compliance in these areas.
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PLANADVISER - November/December 2021

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