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Small- and Medium-Sized Illinois Employers: Deadlines Fast Approaching for Illinois Secure Choice Act Registration
"[E]mployers in Illinois who are not exempt will be required either to have a retirement savings program in place for their workforce or to register under the Illinois Secure Choice Program. The deadline for registering is July 1, 2019, for those employers with 100-499 employees. For employers with 25-99 employees, the registration deadline is November 1, 2019. Larger employers were required to register last year, although many large employers already have retirement plans for their workforce and are exempt under the Secure Choice Program." (Hinshaw & Culbertson LLP)
SECURE Act Changes That Affect Your 401(k)
"Part-time employees must be eligible to contribute.... Distribution rules modified and new withdrawal event created.... New flexibility for non-elective safe harbor plans.... Increased maximum contribution for auto escalation safe harbor plans.... New disclosure of projected retirement income.... Annuity safe harbor for fiduciaries.... Open Multiple Employer Plan (MEP) option." (401kTV)
DOL Rule to Expand Multiple-Employer DC Plans Advances Amid Legal Issues
"[DOL] regulations making it easier to form defined contribution multiple-employer plans (MEPs) are under review by Office of Management and Budget's Office of Information and Regulatory Affairs.... [T]he 2018 proposed MEP rules largely track provisions in the final DOL rules for association health plans (AHPs). A federal district court struck down key portions of the AHP rules earlier this year[.]" (Mercer)
Retirement Plan Participation Among Selected Demographic Segments (PDF)
Infographic. "In 2014, the Current Population Survey questionnaire was redesigned, resulting in a drop in retirement plan participation estimates when compared with the results from the original questionnaire.... The youngest cohort and Hispanic workers recorded the lowest levels of plan participation.... Lower participation levels among Hispanic workers persisted across each of the income categories." (Employee Benefit Research Institute [EBRI])
Retirement Lessons from the Four Seasons
"Financial wellness is a thing, even if you have a lot of money ... Retirement may not be so bleak, even when you're in financial difficulty ... Retirement paths can be very different, even among friends ... Celebrities -- and everyone else -- are living a lot longer." (Cammack Retirement Group)
[Opinion] Cash Balance Plans Could Make a Comeback
"The Pew Research Center and the Arnold Foundation have been actively pushing cash balance plans in Kansas, Kentucky, Alabama, and Virginia. They tout cash balance plans as a solution to the problem of pension underfunding, as some magic combination of defined benefit pension plans and defined contribution 401(k)-style plans. In reality, cash balance plans are a failure for public employees and taxpayers." (National Public Pension Coalition)
Debt Close to Retirement and Its Implications for Retirement Well-Being
"The most financially-knowledgeable older adults are the least likely to report that they hold too much debt or that they are financially fragile. Older people with higher incomes and more education people tend to hold long-term debt, such as mortgages, while those with lower incomes and less education tend to carry high-cost debt, such as payday loans." (TIAA Institute)
A Close Look at 401(k) Plan Design, Investments and Fees Using 2016 Data (PDF)
84 pages. "Larger 401(k) plans are more likely to report that they automatically enroll workers into the plan.... More than 90 percent of 401(k) plans in the sample with more than $50 million in plan assets had participant loans outstanding, compared with ... 36 percent of plans with less than $1 million.... In 2016, more than three-quarters of the large 401(k) plans in the sample with automatic enrollment also had both employer contributions and participant loans outstanding, compared with less than two-thirds of plans in the sample without automatic enrollment." (BrightScope and Investment Company Institute [ICI])
Nonqualified Deferred Comp Plans: The 401(k) Excess Contribution Solution
"A 401(k) refund immediately becomes unplanned taxable income for the employees, and potentially a lost opportunity to collect company matching dollars for 401(k) savings.... Nonqualified deferred compensation plans (NQDC) can be designed to allow plan participants to defer an amount of their base salary equal to the refund, to create a tax neutral event for the year in which the refund occurs." (Fulcrum Partners LLC)
Panel Discussion: Current Issues in Employee Benefits & Executive Compensation
"What EBEC issue has had the greatest impact on your clients in the past 12 months? ... What is the most interesting EBEC matter on your desk right now and what are the issues involved? ... Are there any EBEC issues that are on the horizon that could significantly impact your clients and/or your practice? Can you describe the potential impact?" (Thomson Reuters Practical Law)
IRS 2018-2019 Priority Guidance Plan, Third Quarter Update (PDF)
37 pages. Updated March 31, 2019; released June 17, 2019. Employee benefits items begin on page 14. (Internal Revenue Service [IRS])
Retirement Planning Assumptions to Avoid
"[1] You can always keep working.... [2] You'll need only 70-80% of your pre-retirement income ... [3] You'll be in a lower tax bracket once you retire.... [4] The stock market will save you.... [5] There's always Social Security." (Charles Schwab)
Delta Pilots' Fight with PBGC Is Grounded by Supreme Court
"The U.S. Supreme Court on [June 17] declined to review an appellate court ruling in a case brought against the [PBGC] by Delta Air Lines Inc. pilots ... The plaintiffs ... are claiming the agency earned 'massive investment returns' off the recovered assets, instead of sharing some returns with participants, which they argue constitutes a fiduciary breach." [Lewis v. PBGC, No. 17-5068 (D.C. Cir. Dec. 21, 2018; cert. denied June 17, 2019)] (Pensions & Investments)
Dealing with the Legacy of the 403(b) 'Money Purchase' Plan
"It is a very common practice in the 403(b) market for an employer to specifically identify the percentage of compensation it will deposit as an employer contribution to their 403(b) plan ... It has been typical for 401(a) plan sponsors to treat plans with set percentage of compensation as 'Money Purchase Plans' ... But does this rule apply to 403(b) plans? This is not an esoteric issue. If you truly believe that your 403(b) plan is a 'money purchase plan' several things happen." (Business of Benefits)
[Opinion] Achieving Economies of Scale in State-Facilitated Retirement Savings Programs
"By joining together, states have the potential to offer better services and reduce the cost of building or supporting a retirement savings platform. A multi-state approach of one kind or another can make the process easier and more cost-effective -- and can accelerate the date when a program can become self-sustaining and fees can be reduced." (AARP)
Stopping the Clock on Retirement: Target Wealth Stopping Time Problems
"Retirement planning attempts to build sufficient funds to retire at a fixed, predefined horizon.... [T]hese strategies either have a large risk of falling short of the goal or require excessive savings.... Instead of optimizing wealth at a fixed future time, [the authors] optimize on the stopping time at which one has sufficient wealth." (James W. Shearer and Harvey J. Stein, via SSRN)
401(k) Plans Loosen Vesting as Labor Market Gets Tighter
"While experts agree that vesting schedules reduce costs, they question whether they indeed lower turnover, saying today's increasingly mobile workers will jump to new jobs for better-paying positions regardless of the money they leave behind in unvested company contributions." (Pensions & Investments)
Actuarial Equivalence and DB Plans
"Philosophically, reflecting current mortality and interest in AE is a reasonable thing to do.... Litigating the issue from one side leaves sponsors trapped unfairly between a desire to bring their assumptions up to date, and anticutback regulations restricting their ability to do so.... Safe harbor regulations allowing for periodic AE updates without anticutback concerns would illuminate this admittedly obscure topic to the benefit of sponsors and participants alike." (The Principal Blog)
These Companies Have the Best 401(k) Plans
"What makes a high-quality plan? Low fees, of course. And a good company match.... Here are the top 401(k) plans across various industries -- including some, like health care and technology, that have above-average job growth." (Money)
[Opinion] Establishing Dedicated Asset Reserves to Fund Different Types of Retirement Expenses
"[The authors believe] that it would be beneficial for these two types of expenses to be further segmented into recurring and non-recurring core/adaptive expenses, and [also] believe using present values to develop the required reserves for these expense categories (and other expected expenses) is superior to using variations of the 4% Rule proposed by [Michael Kitces]." (Ken Steiner, FSA Retired)
[Opinion] Will the SECURE Act Increase Retirement Security?
"For years the retirement industry has bemoaned the lack of a lifetime income option in defined contribution plans.... DC plan sponsors have -- largely -- seen little upside in signing on for a decision that they see as carrying with it a liability that extends well beyond the employment relationship.... The SECURE Act attempts to resolve some of that resistance ... Arguably, a legislative safe harbor is 'safer' than one staked out by regulators, but plan fiduciaries hoping to find a fiduciary 'free pass' won't find one here, despite the concerns expressed in the Times." (Data 'Points')
CalSavers Moves to Dismiss Amended Complaint Challenging Program under ERISA
"The new motion challenges the amended complaint as not presenting any new arguments. It argues that CalSavers is not preempted by ERISA because it is not an employee benefit plan under ERISA nor does it require employers to maintain an ERISA plan." (Murphy Austin)
Oregon Set to Penalize Noncompliant Employers Without Retirement Plans
"Now that OregonSaves - the country's first state-run retirement plan for employers who do not sponsor a qualified retirement plan - is in full swing, effective January 1, 2020, penalties of up to $5,000 per calendar year may be imposed on noncompliant employers." (Buck)
The Impact of Extreme Changes in Defined Contribution Plans on Retirement Income Adequacy in America
"[T]his Issue Brief provides a comprehensive exploration of the impact on retirement income adequacy ... if defined contribution retirement plans were completely eliminated.... The youngest age cohort (those currently ages 35-39) would suffer the most, with average retirement deficits increasing 23 percent from $49,182 to $60,253.... The Issue Brief then analyzes the opposite end of the ... spectrum by exploring the impact of a ... scenario where every employer ... is assumed to sponsor a defined contribution plan.... The youngest age cohort would benefit the most from this scenario, with average retirement deficits decreasing 24 percent from $49,182 to $37,506." (Employee Benefit Research Institute [EBRI])
Employers Help Workers Build Household-Emergency Funds
"A growing number of employers are helping workers start emergency savings accounts, reflecting concern over the impact money problems are having on productivity levels and workers' ability to retire. Companies ... are encouraging employees to fund emergency accounts, in some cases by offering them cash and other incentives. Others are diverting a portion of employees' paychecks into rainy-day funds related to their 401(k) plans." (The Wall Street Journal; subscription may be required)
Inflation and Retirement Annuities
"The only retirement contract that both insures against longevity risk and hedges against inflation is a life annuity that is linked to the consumer price index (CPI).... An annuity that is not linked to the CPI [a 'nominal annuity'] ... is measured in units that are different from Social Security, so it would be a mistake to add the two in computing a replacement ratio.... The vast majority of income annuities sold are fixed in nominal dollars.... The purpose of this article is to explore the reasons behind this puzzle and to suggest ways to solve it." (Professor Zvi Bodie, via SSRN)
What the SECURE Act Could Mean for Businesses
"In order for a plan to be treated as a MEP or what would be called a 'pooled employer plan,' a 'pooled plan provider' (PPP) would have to be selected and be responsible for performing all necessary administrative duties to ensure compliance with regulations such as ERISA and the IRS Code. The PPPs would serve as a fiduciary and administrator, and be subject to registration, audit and examination by regulators." (MassMutual)
Segmenting Retirement Expenses Into Core vs. Adaptive Buckets
"[W]hat defines more flexible 'discretionary' spending to fund wants (rather than needs) isn't just a function of certain categories of expenses, or funding solely the expenses necessary to ensure base-level safety and survival needs. Instead, retirees can upgrade their lifestyle across any number of traditionally 'essential' spending categories as well ... as long as there's a clear resource bucket to show how long that spending can be sustained, and when the retiree really may have to adapt!" (Nerd's Eye View)
401(k) Participants' Investing Behavior May Leave Them Short
"[A]lthough 401(k) participants believe they need $1.7 million, on average, to retire, many are not investing enough to reach that goal. The nationwide survey of 1,000 401(k) plan participants also reveals the outsized role of the 401(k) in Americans' financial lives, with most (58%) saying it is their only or largest source of retirement savings. Moreover, two-thirds (65%) of those surveyed say participating in a 401(k) plan was their first experience with investing -- yet when it comes to using a 401(k), 64 percent view themselves as savers rather than investors." (Charles Schwab)
How America Saves 2019: Vanguard Defined Contribution Plan Data (PDF)
121 pages. "Over the past decade, plan sponsors have increasingly turned to plan design to influence employee retirement savings behavior. As a result, plan participation rates have improved and participant portfolio construction has also improved.... [This study provides] a 15-year look back highlighting automatic enrollment and the evolution of balanced investment strategies." (Vanguard)
How a Raising the Age for Required Withdrawals Could Impact Your Retirement
"The Secure Act, which passed the House of Representatives in May and awaits action in the Senate, would increase the age for required minimum distributions to 72 from 70-1/2. A theoretical $500,000 portfolio, earning 5% annually, would have $33,500 more at age 89 if the RMDs started at age 72." (CNBC)
Group Annuity Market Pulse, First Quarter 2019
"Sales of [$900 Million] of group annuities were placed during the first quarter of 2019. The first quarter of 2019 was active with 20 transactions completed, following a very active fourth quarter in 2018. Significant activity is expected throughout the year, with some large transactions expected in the second half of the year." (Willis Towers Watson)
Why Employers Should Think Twice About Adding Annuity Payments to Their 401(k) Plans (PDF)
"[A]lthough Section 401(k) plan fiduciaries, by following the DOL and SECURE Act safe harbors, receive significant protection in the event an insurance company becomes financially unable to make annuity payments, there is nevertheless a substantial amount of other due diligence, outside of the scope of the safe harbors, that fiduciaries will need in undertake to satisfy their duties of oversight under ERISA." (Blank Rome LLP, via Bloomberg Tax Management Compensation Planning Journal)
More Pension Lump Sum Cashout De-risking Activity Expected in 2019
"Pension plan sponsors looking for significant cash savings and de-risking opportunities have another favorable environment to pull the participants' lump sum cashout lever this year.... Employers that have previously offered a lump sum cashout to participants should be aware that this doesn't exclude them from pursuing a de-risking program again.... [P]lan sponsors will also want to consider ... [1] Potential increases to contribution requirements; [2] One-time accounting charges that could be triggered; [3] Potential increase to annuity purchase pricing upon plan termination." (Findley)
Congress Looks to Overhaul Retirement System for First Time in More Than a Decade
"Through some version or another, this legislation has been proposed for nearly five years. This is the farthest it has gone ... The real centerpiece is the multiple-employer defined-contribution plans expansion. Time will tell whether this will drastically increase the number of small employers offering 401(k) plans or whether the ones that do today obtain real savings through economies of scale." (Lockton)
Growing Number of Lawsuits Claim 'Old' Mortality Tables Deprive Participants of Benefits
"Two plaintiffs' law firms ... have now filed seven lawsuits in federal courts ... against the pension plan sponsors -- MetLife, American Airlines, PepsiCo, U.S. Bancorp, Rockwell Automation, Anheuser-Busch, and, the latest, Huntington Ingalls -- as well as against the plans' fiduciaries. The lawsuits typically allege that the plans calculate the amounts of non-single life annuity forms of benefits (such as a joint-and-survivor, preretirement survivor or certain-and-life annuities) using mortality table assumptions that are not reasonable, resulting in lower benefits that what the plaintiffs are entitled to under ERISA." (Groom Law Group)
Only 11 Percent of US Private-Sector Wage and Salary Workers Participate in Defined Benefit Pension Plans (PDF)
"[T]he percentage of private-sector wage and salary workers participating in an employment-based defined benefit (DB) pension plan plummeted by 71 percent since 1979 ... [T]he percentage of private-sector wage and salary workers participating in DB plans decreased from 38 percent in 1979 to 11 percent in 2017. Correspondingly, the percentage participating in defined contribution (DC) plans went from 17 percent to 46 percent (some workers participated in both types of plans)." (Employee Benefit Research Institute [EBRI])
House Passes the SECURE Act, Senate Will Consider -- 401(k) Plans Would Be Affected in Big Ways
"In its current form, the SECURE Act is an amalgamation of a number of pension-related proposals that have been offered on and off during the course of the past several years. In fact, the Senate presently has a similar bill before it that was introduced last year, entitled the Retirement Enhancement Securities Act (RESA). Many of RESA's provisions could eventually make their way into the SECURE Act, and, of course, the SECURE Act might also be significantly modified through committee or other Congressional action before being finalized." (Compliance Dashboard)
Younger Workers Put Student Loan Aid Near Top of Desired Benefits
"Health insurance, paid time off and student loan repayment aid -- in that order -- were the top three benefits identified by recent college graduates and those approaching graduation when asked what benefits they most value from an employer.... [R]espondents with college debt most wanted any new benefit dollars from their employer to go toward helping them repay their loans." (Society for Human Resource Management [SHRM]; membership may be required to view article)
Companies Lure Young Workers by Helping with Student Loan Repayments
"When it comes to luring top Millennial talent, companies have a new pitch: offering to pay down a portion of employees' student debt. With student loans outstanding reaching $1.5 trillion this year, employers realize it's a perk that can attract some of the best educated recruits. Among those who have student debt, the average owed was $32,731 ... That's enough that many younger households aren't ... doing things they want, like having kids, buying homes or saving for retirement." (Forbes)
CalSavers Moves to Dismiss ERISA Preemption Complaint
"The new motion ... argues that CalSavers is not preempted by ERISA because it is not an employee benefit plan under ERISA nor does it require employers to maintain an ERISA plan. CalSavers establishes IRAs for employees who participate and IRAs are not ERISA plans.... Employers are only required to perform ministerial acts under the law and program and have no discretion as to the administration of the program." (Murphy Austin)
Bipartisan Bill Paves the Way for Significant Retirement Plan Reforms
"The SECURE Act ... proposes a number of changes to existing retirement plan rules that are designed to make it easier for employees to save for retirement. The legislation aims to help employees achieve retirement security by ensuring that more workers have access to a retirement plan, are able to save enough money to maintain their standard of living in retirement and do not outlive their retirement savings." (McDermott Will & Emery)
Senate Republicans Raise Concerns Over House's Bipartisan Retirement Bill
"Among the items causing concern are the House's resistance to letting people pay for home-schooling expenses with money in 529 tax-advantaged education-savings accounts. Senators are also looking at a House-passed provision that relaxes pension-funding rules for some community newspapers and considering whether they want to make even larger retirement-policy changes than the House[.]" (The Wall Street Journal; subscription may be required)
[Opinion] Confusing Annuity Options May Be Coming to Your 401(k)
"Among the two dozen or so rule changes is a provision that is strongly supported by insurance companies but has consumer advocates worried. It would eliminate some of the liability for employers who add annuities to the menu of options for their 401(k) plans -- including expensive and complex products that purport to offer the peace of mind of a guaranteed income stream." (The New York Times; subscription may be required)
Deal-Breaking M&A Issues Related to Employee Benefit Plans and Executive Compensation
"The list [in this article] is intended to facilitate the detection, negotiation, and resolution of possible employee benefit plan and executive compensation-related problems.... [S]ellers may defuse risks and streamline negotiations through proactive pre-sale planning.... [B]uyers may maximize their deal-related protections (and their post-closing alternatives) by assuring early stage attention to [these items]." (The Wagner Law Group)
Consider Retirement Plan Mandates When Expanding to New States
"[M]any employers -- especially employers that currently offer 401(k) or pension plans to their employees -- may quickly dismiss these laws as not applicable. However, as employers add small employee groups, resulting from multistate expansion through organic growth or acquisitions, they should be aware of state-run retirement plan mandates to ensure compliance and avoid the accumulation of penalties." (Foley & Lardner LLP, via National Law Review)
New State-Run IRA for Private Sector Opens July 1
"A new state workplace retirement savings program, CalSavers, will open to an estimated 250,00 to 300,000 employers on July 1 -- offering an automatic IRA payroll deduction for the 7.5 million California workers with no retirement plan on the job.... For businesses with five or more employees, the program is mandatory. They must offer employees CalSavers, or a qualified retirement plan chosen by the employer, to avoid a penalty for repeated non-compliance of $750 per employee." (Calpensions)
55% of Americans Are Making This Retirement Planning Mistake
"Not only do many retirees end up unable to keep working well into retirement, despite their plans to do so, but it's also very common for older Americans to be forced to retire earlier than expected. In fact, while 54% of workers expect to work past the age of 65, the average retirement age reported by current retirees was just 61." (Motley Fool)
SECURE Act: Key Changes for Plan Sponsors and Employers
"[1] Expansion of part-time employee eligibility ... [2] Changes to section 401(k) safe harbor plans ... [3] Addition of 'qualified birth or adoption distributions' ... [4] Prohibition on using credit card arrangements for plan loans ... [5] New lifetime income disclosure requirement ... [6] New portability for lifetime income investment options ... [7] Nondiscrimination testing relief for closed defined benefit plans ... [8] Changes to minimum required distributions ... [9] New statutory safe harbor for annuity provider selection." (Proskauer Rose LLP)
A Mistake With Lingering Regret: Cashing Out Your 401(k)
"Each year, 5.9 million American women enrolled in 401(k) plans will change jobs. 2.4 million, or 41%, will cash out completely.... [W]omen ages 25-34 will change jobs every 2.7 years, and for women with 401(k) balances less than $5,000, cash out rates soar to 71%.... [A] typical 25-year old woman could change jobs three times prior to age 34 and cash out two of her first three 401(k) balances. At 34, she would preserve only $5,100 in retirement savings, which will yield just $13,900 in savings by age 67.... [H]ad she avoided cashing out, she would have $83,700 at retirement." (Women's Institute for a Secure Retirement [WISER])
GAO Report: Retirement Security -- Some Parental and Spousal Caregivers Face Financial Risks
"About 10% of Americans per year cared for an elderly parent or spouse from 2011 through 2017. These family caregivers may risk their long-term financial security if they have to work less or pay for caregiving expenses such as travel or medicine.... Spousal caregivers at or near retirement age had less in retirement assets or Social Security income than non-caregivers. Experts and studies identified ways to potentially improve caregivers' retirement security, such as increasing their Social Security benefits." [GAO-19-382, pub. May 1, 2019, released May 31, 2019] (U.S. Government Accountability Office [GAO])
Can Employees Release ERISA Fiduciary Breach Claims?
"[A] federal district court ... determined that a general release that stated 'by signing this document you are releasing all known claims' without mentioning ERISA prevented a participant from suing an ESOP trustee for fiduciary breach. The decision contains a good discussion of the factors to be reviewed in determining whether such a release is valid and enforceable." [Innis v. Bankers Trust Co. of South Dakota, No. 16-650, (S.D. Ia. Apr. 30, 2019)] (Cohen & Buckmann, P.C.)
RESA and SECURE Act's 'Non-MEP' Fintech Alternative May Have Greater Impact Than MEP Provisions
"These rules are based upon old DOL regulations called 'Group Insurance Arrangements' (or GIAs) for welfare plans ... which permit unrelated employers on the same insurance platform to file a single Form 5500. Under the proposed statutory language, retirement plans participating in a group arrangement could rely upon a single annual report filed by the common Plan Administrator, subject to requirements similar to that required of the GIA ... [T]his arrangement will be more welcome in the TPA community than a MEP." (Business of Benefits)
Changes in Savings Needed to Cover Health Expenses in Retirement (PDF)
"Between 2018 and 2019, the savings needed to fund insurance premiums and drug expenses have risen 5 percent for some cohorts and have fallen 11 percent for others. The main reason for the predicted annual decrease in needed savings for some is related to the adjustment that is made each year to re-establish the baseline for out-of-pocket spending associated with prescription drug use." (Employee Benefit Research Institute [EBRI])
Current Population Survey: Checking in on the Retirement Plan Participation and Retiree Income Estimates
"[T]he U.S. Census Bureau redesigned the CPS questionnaire in 2014 ... The survey redesign resulted in lower retirement plan participation estimates -- which some policy advocates have misinterpreted as actual changes in the employment-based retirement plan system.... This study finds: [1] The overall percentage of workers participating in a retirement plan leveled off ... [2] The survey estimates do not conform to trends in another government survey ... [3] The ratio of participation within demographic groups remained the same after the redesign ... [4] The survey redesign did not fully capture retiree income." (Employee Benefit Research Institute [EBRI])
Legal Protections for State Pension and Retiree Health Benefits
"[S]tate laws vary significantly with respect to: [1] The source of protection for employee retirement benefits. [2] The aspects or features of pension benefits that are protected. [3] The participants who are entitled to such protection.... And in each state, these protections vary by source, be it the state constitution, statutes, or court decisions.... Understanding how retirement benefits are protected is crucial for policymakers as they explore options to manage their state's increasing pension costs." (The Pew Charitable Trusts)
Retirement Plan Outcomes: The Missing Puzzle Piece
"A plan sponsor can have a best-in-class investment array and extremely low fees, but if the participants cannot retire on time because their retirement account balances are insufficient, then the whole purpose offering a retirement plan is defeated! Not to mention the myriad of issues created when employees are forced to work past the age that they would normally retire." (Cammack Retirement Group)
[Guidance Overview] Updated EPCRS Expands Self-Correction Opportunities for Retirement Plan Sponsors
"Under the expanded program, self-correction can be used to correct operational failures by adopting retroactive plan amendments to conform the plan terms to the plan operations if: [1] the amendment would result in an increase of a benefit, right, or feature; [2] the increase is provided to all eligible employees under the plan; and [3] the increase is permitted under the code and satisfies the general correction principles of EPCRS." (Wilson Sonsini Goodrich & Rosati)
Cost of a Retirement Plan? Just $2.64 Per Hour
"[A] recent study [concluded] that employers could restore retirement security by contributing $5,500 per year to each employee's retirement account -- approximately $2.64 an hour ... By shifting retirement savings burdens to employees, employers have saved significant money over the last four decades.... [The study's author] contends that businesses can pass a larger portion of their savings back to workers and avoid a societal retirement catastrophe." (San Antonio Express-News)
[Opinion] The SECURE Act and RESA: The Good, the Bad and the Ugly
"[Certain provisions of the Setting Every Community Up for Retirement Enhancement (SECURE) Act and the Retirement Enhancement and Savings Act (RESA)] reduce barriers to complicated and opaque 401(k) products and investments favored by many large insurance and mutual fund companies.... [T]hese products and investments are likely to benefit providers more than 401(k) participants.... The fiduciary safe harbor appears to only protect employers from a provider that can't afford to pay promised benefits. The employer would still be responsible for determining whether the lifetime income option is 'prudent' ... A tough job given the complexity of these insurance products." (Employee Fiduciary)
 
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