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36 Matching News Items

1.  Auto Rollover IRAs for Force-Outs: Controlling Fiduciary Risk and Unwanted Taxable Income
PenChecks Link to more items from this source
Feb. 19, 2024
"All uncashed checks are a fiduciary risk because they remain plan assets, and there is an ongoing responsibility to search for the missing participants. In addition, using checks for force-out distributions of $1,000 or less can result in unwanted taxable income and potential penalties for participants.... Address both the fiduciary risk and unwanted taxable income by using the automatic rollover IRA for all force-out distributions -- from $1 to $7,000."
2.  The Unclaimed Retirement Benefits Problem, and What to Do About It
PenChecks Link to more items from this source
Feb. 6, 2024
"[R]ecent headlines [put] the total amount of lost or forgotten [retirement plan] assets well north of a trillion dollars. The sheer size of the number has the retirement plan industry's attention, as well as concern from politicians and policymakers. There's an increasing consensus that something should (MUST) be done."
3.  SECURE 2.0 Force Out Limit and Plan Audits
PenChecks Link to more items from this source
Aug. 9, 2023
"Effective for force out distributions to Automatic Rollover IRAs made after December 31, 2023, the new limit will be $7,000. This change will be helpful to all plan sponsors, but especially those at or just over the 100-person participant count for purposes of plan audit requirements.... A few things to note about the new $7,000 cap and what to do if your plan wants to take advantage of it."
4.  SECURE 2.0 Provides New Tools to Assist Plan Participants in Crisis
PenChecks Link to more items from this source
Apr. 16, 2023
"In addition to making the hardship distribution rules more flexible, SECURE 2.0 expands on the ability of defined contribution plan sponsors to make penalty-free distributions to participants who have personal emergencies. In some cases, the permanent SECURE 2.0 provisions are modeled on temporary relief granted for specific federal disasters or under the CARES Act."
5.  Avoiding Improper Retirement Plan Distributions: The DOL and the Good, the Bad and the Ugly
PenChecks Link to more items from this source
Aug. 23, 2022
"One of the challenges of administering a retirement plan is the timely and proper payment of distributions to plan participants.... More complicated situations include: [1] Missing or non-responsive participants with less than a $5,000 balance in their retirement account.... [2] Retired participants, at or beyond normal retirement age, who have not started receiving their retirement benefits. [3] Deceased participants in Defined Benefit plans. [4] Uncashed/unclaimed distributions."
6.  U.S. Supreme Court Opines on Fiduciary Responsibilities in Design of Self-Directed Plans
Carol I. Buckmann, for PenChecks Link to more items from this source
Mar. 9, 2022
"A few lower court decisions issued after Northwestern refused to dismiss the claims, which could mean that in the future fiduciaries might find it more difficult to have cases dismissed at an early stage and avoid trials. Just offering a broad selection of investment choices won't protect fiduciaries from being sued. In fact, if a menu has a very large number of funds, it is likely that one or more funds in the mix could be cited as imprudent." [Hughes v. Northwestern Univ., No. 19-1401 (S. Ct. Jan. 24, 2022)]
7.  Neither Snow Nor Rain Nor Heat ... Stays These Plan Disclosures
Nevin Adams, for PenChecks Link to more items from this source
Aug. 2, 2021
"Electronic delivery of plan notifications offers many advantages, not the least an opportunity for significant cost savings to the plan.... If participants follow basic cyber security protocols, these email communications ... are likely more secure than those delivered via traditional mail. Plus, personal email addresses generally travel with individuals when they move, making it easier for plan administrators to have at least one form of up to date contact information."
8.  New Fiduciary Rule Provides More Protection for Rollover Advice
PenChecks Link to more items from this source
Oct. 12, 2020
"If an advisor satisfies the five-part test and is making a rollover recommendation in a fiduciary capacity, the advisor must utilize a prohibited transaction exemption in order to receive compensation such as commissions or 12b-1 fees. This exemption requires the advisor to acknowledge fiduciary status in writing, disclose any conflicts and fees, and make a determination that a rollover is in the participant's best interest."
9.  Can Your Plan Records Be Hacked?
PenChecks Link to more items from this source
Dec. 8, 2019
"Fiduciaries should ... make sure their in-house systems are as secure as possible ... [and] should also: [1] Make sure their service providers' systems are secure. [2] Insist that their service provider agreements permit them to audit their service provider's systems. [3] Include specific cybersecurity obligations in their service provider agreements. [4] Be careful about agreeing to service provider contract provisions that may limit their remedies if there is a security breach. [5] Not assume their existing fiduciary liability policy provides cybersecurity coverage."
10.  Permissive Transfers of Uncashed Checks from ERISA Plans to State Unclaimed Property Funds
Advisory Council on Employee Welfare and Pension Benefit Plans, Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL] Link to more items from this source
July 10, 2019
Written statements by invited witnesses, submitted for June 26 meeting of ERISA Advisory Council: [1] G. Allen Mayer, Illinois State Treasurer's Office, on behalf of the National Association of Unclaimed Property Administrators (NAUPA); [2] Meghan Aguirre, Nebraska State Treasurer's Office; [3] Mark William Bracken, Massachussetts Office of the Treasurer and Receiver General; [4] Dennis Johnston, Utah Office of the State Treasurer; [5] George M. Sepsakos and Kevin L. Walsh, Groom Law Group; [6] M. Garrett Hohimer and Holly Tardif, Alight Solutions; [7] Michael Hadley, Davis & Harman; [8] Aliya Robinson, ERISA Industry Committee (ERIC); [9] Jan M. Jacobson, American Benefits Council; [10] Peter Preovolos and Spiro G. Preovolos, PenChecks, Inc.; [11] J. Spencer Williams, Retirement Clearinghouse LLC.
11.  The Fiduciary Rule May Be Dead, But Fiduciary Responsibility Isn't
PenChecks Link to more items from this source
July 12, 2018
"Nevada, New York and Massachusetts have taken steps to provide greater fiduciary protections through law changes and enforcement. Other states may follow their lead.... [T]here are issues whether states are permitted to act in this area due to ERISA preemption, and the status of these laws and state enforcement is not clear."
12.  'Reasonable Cause' for a Missed Required Minimum Distribution
PenChecks Link to more items from this source
May 8, 2018
"When a participant is actually retired can be a 'facts and circumstances' determination. Has the participant been laid-off, or completely severed from employment? Is the participant on an unpaid leave of absence or on a medical or disability leave? Is the participant completely retired or still working two days a week? ... A missed RMD resulting from an employer's misunderstanding of the employee's retirement status could be a good case for a reasonable cause to have the 50% penalty waived."
13.  Tips for Preventing Uncashed Retirement Checks
PenChecks Link to more items from this source
Apr. 25, 2018
"[1] Before an employee leaves, have your HR person remind them of their retirement plan and explain why it's important they take it with them.... [2] Encourage departing employees to roll over their retirement plan to their new employer.... [3] Have the employee verify their current address.... [4] If they don't have a definite address, as in the case of a move, have them provide the address of a family member where the check can be sent."
14.  What to Do with Missing Participants and Required Minimum Distributions
PenChecks Link to more items from this source
Apr. 11, 2018
"[T]he IRS website states that employers and plan administrators of ongoing plans may want to consider periodically using one or more of the search methods described in [DOL FAB 2014-01], as this can provide evidence of making a reasonable effort to locate RMD-eligible missing participants."
15.  Qualified Plan Beneficiary Rules, Part 3
PenChecks Link to more items from this source
Dec. 12, 2017
"[A] surviving spouse has the option of rolling the funds into his or her own IRA or to a qualified plan, if the qualified plan accepts rollovers. However, many factors determine how and when the rollover should occur."
16.  Collecting Taxes on 401(k) Deferrals: The Wrong Policy at the Wrong Time
Carol Buckmann, J.D., via PenChecks Link to more items from this source
Nov. 13, 2017
"Congress is looking for ways to pay for a reduction in corporate tax rates, and the money has to come from somewhere. So why not collect the tax on 401k contributions now? This short-term gimmick eliminates individual choice and risks thwarting the long-term goal of increasing retirement savings. What can we do to convince our elected officials this is a bad idea?"
17.  Are You Up to Date on Qualified Plan Beneficiary Rules?
PenChecks Link to more items from this source
Nov. 13, 2017
"Many different rules impact the administration of paying a deceased participant's benefit to the correct beneficiary. These include knowing your plan document, required minimum distribution (RMD) regulations for beneficiary options, spousal consent issues, properly completed beneficiary designation forms, and having iron-clad procedures for paying beneficiaries. Keeping up to date with these rules can save you time, money and aggravation."
18.  The Case Against Delaying the Fiduciary Rule
Carol J. Buckmann, JD, via PenChecks Link to more items from this source
Aug. 29, 2017
"The uncertainty hurts those who would be regulated by the Rule ... How much effort should they devote to complying with rules that may or may not survive this new administrative review? Should companies limit the individuals who are allowed to become fiduciaries? Or, should they institute broad education programs for their advisors when that might not end up being necessary? Can they unwind their new procedures if the law is changed?"
19.  Is Your Retirement Plan Overlooking Required Beginning Dates? (PDF)
William Grossman, via PenChecks Link to more items from this source
Aug. 15, 2017
"Each retirement plan document defines [required beginning date (RBD)], and is not required to adopt [the] broad regulatory definition.... A plan designed to permit the delay of RBD for non-5% owners (until retirement after age 70-1/2) will find there are non-5% owner participants who work beyond age 70-1/2 that anticipated starting RMDs at age 70-1/2 to supplement their income.... Therefore, a plan designed to delay RBD should include an in-service distribution provision to allow the plan to calculate what a participant's RMD would have been and distribute it when requested, but as an in-service distribution rather than an RMD."
20.  Say It Loud and Clear: The Importance of Good Plan Communications
PenChecks Link to more items from this source
July 12, 2017
"As pre-approved plans in which boxes are checked to select plan provisions became popular, vendors stopped drafting SPDs and notices that described the plan provisions that actually applied to the participants. As a result, confusing and unhelpful text such as, 'Your plan has one of the following four contribution formulas' started appearing in SPDS and safe harbor notices.... SPDs are supposed to be self-contained documents, not a list of questions to ask the plan sponsor or check elsewhere. It is not clear that 'one size fits all' SPDs are compliant because these communications certainly don't do the job of explaining the plan provisions in plain language."
   Next »

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