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Director, Retirement Benefits

Wespath Benefits and Investments
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Loren D. Stark Company (LDSCO)

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<< Older News  |  December 4, 2020


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Editor's Pick Income Is the Outcome: A Review of Lifetime Income Solution (PDF)
Russell Investments Link to more items from this source
Dec. 1, 2020

21 pages. "The sole focus of DC plans has historically been to accumulate assets during the working years, with little support provided to participants in retirement.... The 'landing gear' of our DC system are solutions designed to help participants convert their accumulated retirement balances into lifetime income. This paper provides a review of product types available to do so."

Tags: Retirement Plan Design

Editor's Pick 2020 End of Year Plan Sponsor 'To Do' List, Part 4: Qualified Retirement Plans
Snell & Wilmer Link to more items from this source
Nov. 30, 2020

"[This article] covers qualified plan issues ... [and] provides you with a 'To Do' List of items on which you may want to take action before the end of 2020 or in early 2021."

Tags: Retirement Plan Administration

Editor's Pick California’s New FSA Notice Requirement Leaves Employers Asking Questions
Covington & Burling LLP, via Lexology; free registration required Link to more items from this source
[Guidance Overview]
Nov. 24, 2020

"Employers that have employees residing in California are now required ... to provide notification in two different forms to employees about deadlines for withdrawing funds from flexible spending accounts (FSAs). One of the forms of notification may be electronic.... The notice requirement purports to apply to all FSAs, including dependent care FSAs, health care FSAs, and adoption assistance FSAs. Virtually all other aspects of implementing the law are left open to interpretation."

Tags: Cafeteria Plans  •  Local Regulation

Editor's Pick The HSA Shoebox Rule
ABD Insurance & Financial Services Link to more items from this source
Nov. 23, 2020

" [IRS Notice 2004-50] confirms that as long as the requirements are followed, 'there is no time limit on when the distribution must occur.' ... The HSA Shoebox Rule Requirements: [1] The expense was incurred after the HSA was established; [2] The individual keeps records sufficient to later show that the distributions were exclusively to pay or reimburse qualified medical expenses; [3] The qualified medical expenses have not been previously paid or reimbursed from another source; and [4] The medical expenses have not been taken as an itemized deduction in any prior taxable year."

Tags: HSAs  •  Health Plan Administration

Editor's Pick IRS Bends on CARES Act Funding Deadline; PBGC Follows Suit
Mercer Link to more items from this source
[Guidance Overview]
Nov. 20, 2020

"[F]or calendar-year plans and some noncalendar-year plans starting late in the calendar year, the [effective interest rate (EIR)] almost certainly won’t be known by the Jan. 4 contribution due date. In that case, sponsors should estimate interest using the highest of the three segment rates for the plan year. This conservative approach will ensure that the contribution is at least as large as needed to satisfy minimum requirements. If the actual EIR is lower than the estimate, the sponsor can create prefunding balance with the excess contributions. However, what this means for PBGC premiums is unclear."

Tags: Funding of DB Plans  •  PBGC

Editor's Pick 2020 End of Year Plan Sponsor 'To Do' List: Executive Compensation
Snell & Wilmer Link to more items from this source
Nov. 20, 2020

"[1] Last chance to correct certain Section 409A document failures discovered in 2020 ... [2] Nonqualified deferred compensation deferral elections should be made on or before December 31, 2020 ... [3] Take certain action to address impact of Tax Cuts and Jobs Act on Section 162(m) ... [4] Certain nonqualified deferred compensation plans must be amended before December 31, 2020 ... [5] Code Section 6039 information statements due by January 31, 2021 ... [6] Restore COVID-19 related salary reductions before March 15, 2021 ... [7] Revisit other COVID-19 related compensation decisions."

Tags: Coronavirus (COVID-19)  •  Executive comp

Editor's Pick PBGC to Allow Contributions Made by January 4, 2021 to Count for 2020 PBGC Variable-Rate Premium
October Three Consulting Link to more items from this source
[Guidance Overview]
Nov. 19, 2020

"[This] possibility may be significant for, e.g., employers who want to make a CARES Act contribution that reduces 2020 variable-rate premiums but would like to deduct that contribution in 2021.... [S]ome sponsors can reduce 2020 PBGC variable-rate premiums by accelerating 2021 quarterly contributions to January 4, 2021. Under this strategy, the sponsor, in effect, takes the amount of contributions required to be made for 2021 and contributes it for 2019."

Tags: CARES Act  •  Coronavirus (COVID-19)  •  PBGC  •  Retirement Plan Administration

Editor's Pick The Race to Register: DOL Issues Final Rule on PPP Registration
Groom Law Group Link to more items from this source
[Guidance Overview]
Nov. 18, 2020

"The Final Rule creates a new Form PR that PPPs will be required to file at least 30 days before the PPP 'begins operations.' ... [T]he Form PR will be publically available, and requires the disclosure of certain information that is both sensitive and confidential.... [The authors] expect that both the DOL and plaintiffs counsel will use the Form PR database for purposes of targeting enforcement efforts and lawsuits. Moreover, the failure to file the initial Form PR or any supplement could endanger the status of the PPP, and ultimately the PEP."

Tags: MEP/PEP  •  Retirement Plan Administration

Editor's Pick Final Health Plan Transparency Regs to Phase In (2022-2024)
HUB International Link to more items from this source
[Guidance Overview]
Nov. 18, 2020

"[If] an employer with a self-funded plan enters into a contract with a TPA to have the TPA handle these disclosures, the employer, through its group health plan, is still ultimately responsible. By contrast, employers with insured plans may contract with their health insurance carrier to provide these disclosures and the carrier will ultimately be responsible. Therefore, contractual amendments will likely be coming in 2021."

Tags: Health Plan Administration  •  Health Plan Costs

Editor's Pick Building Better Retirement Systems in the Wake of the Global Pandemic
Olivia S. Mitchell, via SSRN Link to more items from this source
Nov. 17, 2020

"In the wake of the global pandemic known as COVID-19, retirees, along with those hoping to retire someday, have been shocked into a new awareness of the need for better risk management tools to handle longevity and aging. This paper offers an assessment of the status quo prior to the spread of the coronavirus, evaluates how retirement systems are faring in the wake of the shock ... [and examines] insurance and financial market products that may render retirement systems more resilient for the world's aging population. Finally, potential roles for policymakers are evaluated."

Tags: Coronavirus (COVID-19)  •  Retirement Plan Design  •  Retirement Plan Policy

Editor's Pick HSAs and Domestic Partners
ABD Insurance & Financial Services Link to more items from this source
[Guidance Overview]
Nov. 16, 2020

"The employee will have the standard family HSA contribution limit, but the employee typically will not be able to take tax-free medical distributions from the HSA for the domestic partner's medical expenses."

Tags: Domestic Partner or Same-Sex Benefits  •  HSAs

Editor's Pick DOL Issues Final ESG Rule; Focuses on Pecuniary Factors
K&L Gates Link to more items from this source
[Guidance Overview]
Nov. 13, 2020

"[P]roduct manufacturers should [1] review how ESG factors are integrated into the investment process and whether such factors are pecuniary factors, ... [2] prepare to receive enhanced scrutiny ... from consultants and plan sponsors, and [3] consider whether any sub-advisers have been properly reviewed from an ERISA perspective.... Plan sponsors should ... [1] consider whether changes should be made to RFPs and RFIs used in connection with hiring consultants, and [2] consider whether they have the necessary tools and expertise to evaluate ESG matters in addition to more traditional investment matters."

Tags: Retirement Plan Investments - ESG

Editor's Pick Loans and Distributions Under the CARES Act: Questions and Concerns
Ferenczy Benefits Law Center Link to more items from this source
[Guidance Overview]
Oct. 30, 2020

"Several sections of the [CARES] Act relate to retirement plans, specifically those relating to distributions and loans to qualified individuals, which provide relatively ready access to money for those suffering financially from the pandemic and the related quarantine.... This article reviews these provisions of the CARES Act, as well as the questions and concerns that have arisen in its wake."

Tags: 401(k) Plans  •  CARES Act  •  Coronavirus (COVID-19)  •  Misc. Distribution Issues  •  Retirement Plan Administration

Editor's Pick When Can Employers Terminate COBRA Coverage During the COVID-19 Outbreak Period?
Miller Johnson Link to more items from this source
[Guidance Overview]
Oct. 29, 2020

"With the lack of guidance from the DOL and IRS ... it makes sense for a plan to treat a qualified beneficiary's COBRA coverage status during the election period and payment period -- which are lengthened by the outbreak period -- using the same method as the plan treats a qualified beneficiary's COBRA coverage status during the election and payment periods absent the outbreak period. And, whatever option a plan chooses, it must make sure that a qualified beneficiary's COBRA coverage status during the election and payment periods is clearly communicated to any health care provider that inquires."

Tags: COBRA  •  Coronavirus (COVID-19)

Editor's Pick Can We Destroy the Paper Records for Our ERISA Plans and Retain Our Records in Electronic Form?
Thomson Reuters / EBIA Link to more items from this source
Oct. 29, 2020

"While requirements vary somewhat from agency to agency and some special rules may apply, those imposed by the DOL for the use of electronic recordkeeping [include]: ... [1] The electronic records must be maintained in reasonable order in a safe and accessible place, and in a manner in which they can be easily inspected, examined, and reproduced.... [2] The electronic recordkeeping system must have reasonable controls to ensure the confidentiality, integrity, accuracy, authenticity, and reliability of the electronic records, and adequate records of the management practices for the electronic system must be established and implemented."

Tags: Health Plan Administration  •  Retirement Plan Administration

Editor's Pick 2021 Dollar Limits Affecting Benefit Plans
Thomson Reuters Practical Law Link to more items from this source
[Guidance Overview]
Oct. 28, 2020

2021 dollar amounts and applicability listed and described:

Tags: Cafeteria Plans  •  Health Plan Design  •  Retirement Plan Administration

Editor's Pick ESG Investing and Public Pensions: An Update
Center for Retirement Research at Boston College Link to more items from this source
Oct. 27, 2020

"Public pension plans have engaged in social investing since the 1970s in response to state mandates. More recently, the plans themselves have embraced a 'new' form of investing that incorporates environmental, social, and governance (ESG) factors. ESG investing is based on the notion that taking account of non-financial factors will lead to better investment outcomes. Some also believe ESG investing can further socially beneficial practices. The evidence suggests, however, that social investing: [1] yields lower returns; and [2] is not effective at achieving social goals. Hence, any form of social investing is not appropriate for public pension funds."

Tags: Retirement Plan Investments - ESG  •  State and Local Government Plans

Editor's Pick Fiduciary Liability Insurance Premiums Are Soaring -- What Are Plan Sponsors to Do?
Cohen & Buckmann, P.C. Link to more items from this source
Oct. 26, 2020

"[E]ven responsible fiduciaries can be sued ... [and] 2020 promises to be a banner year for 401(k) plan litigation. Now P&I reports that fiduciary liability insurance premiums are up 35% as a result of costly awards and settlements. Plan sponsors are also being required to pay more -- P&I gives an example of a $2 million payment -- just to be able to renew policies. This trend can only accelerate as 2020 fiduciary breach lawsuits continue to be filed and older lawsuits continue to be settled at a fast pace."

Tags: 401(k) Plans  •  Fiduciary Duties  •  Retirement Plan Investments

Editor's Pick Text of DOL Self-Compliance Tool for the Mental Health Parity and Addiction Equity Act (MHPAEA) (PDF)
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL] Link to more items from this source
[Official Guidance]
Oct. 26, 2020

39 pages; rev. Oct. 2020. "The goal of this self-compliance tool is to help group health plans, plan sponsors, plan administrators, group and individual market health insurance issuers, state regulators, and other parties determine whether a group health plan or health insurance issuer complies with the Mental Health Parity and Addiction Equity Act (MHPAEA) and additional related requirements under [ERISA] that apply to group health plans.... This tool provides a number of examples that demonstrate how the law applies in certain situations and how a plan or issuer might or might not comply with the law.... The fact patterns used as examples are intended to help group health plans and health insurance issuers identify and address important MHPAEA issues." [Also available: Preface to 2020 MHPAEA Self-Compliance Tool, and News Release.]

Tags: Health Plan Design

Editor's Pick Americans in 'Persistent Confusion' on Health Insurance Link to more items from this source
Oct. 22, 2020

"According to [a recent] survey ... a majority of Americans (62.8%) do not realize [ACA] plans cover those with pre-existing conditions ... Nearly nine out of ten Americans (87%) could not identify the correct timing of open enrollment for, which runs from Nov. 1 to Dec. 15 this year, and almost 44% of Americans did not believe plans sold on covered required benefits like pediatric care."

Tags: Health Plan Administration

Editor's Pick Annuity Settlements in the Context of Steeply Declining Interest Rates
October Three Consulting Link to more items from this source
Oct. 22, 2020

"Significant declines in interest rates over the past two years do ... lower VRPs for plans at the VRP headcount cap. For plans using the alternative method for calculating unfunded vested benefits (UVBs), headcount reductions via annuity settlements may generate a 'loss' -- that is, an increase in VRPs.... Sponsors will want to consider the effect of annuity settlements on minimum funding requirements -- particularly payments that may take the plan below 80% funding (on a HATFA basis), triggering benefit restrictions."

Tags: Funding of DB Plans  •  PBGC

Editor's Pick Long-Term Care Insurance: An Underappreciated Postemployment Benefit (PDF)
Benefits Quarterly, published by the International Society of Certified Employee Benefit Specialists [ISCEBS] Link to more items from this source
Oct. 20, 2020

11 pages. "Four out of five Americans have said that they want the option of buying long-term care insurance (LTCi) through an employer. Advantages can include premium discounts, streamlined underwriting and unisex rate structures. Challenges can include limited carrier options, high pre-miums and the possibility of medical underwriting.... [E]mployers will need effective strategies for communication and enrollment, including education campaigns, email communications, webinars, online enrollment, direct billing and the use of behavioral finance tools."

Tags: Health Plan Design

Editor's Pick PBGC Report: Benefit Provisions in Multiemployer Defined Benefit Pension Plans (PDF)
Pension Benefit Guaranty Corporation [PBGC] Link to more items from this source
Oct. 20, 2020

34 pages, Oct. 2020. "This supplement to PBGC's Databook provides a detailed study of the plan provisions available to active workers in multiemployer defined benefit pension plans based on data compiled from [2016] Form 5500 filings for 582 multiemployer defined benefit pension plans which, in aggregate, cover approximately 90% of the total universe of active workers covered by all multiemployer defined benefit plans.... This study analyzes benefit provisions ... by industry classification, by plan funding 'zone status' and by amount of current liability. The primary focus is on the structure and amount of the plans' main benefit accrual formula."

Tags: Multiemployer Plans

Editor's Pick 2020 Instructions for Forms 1094-C and 1095-C Contain the Most Substantial Changes in Years
Accord Link to more items from this source
[Guidance Overview]
Oct. 19, 2020

"For most employers the most significant change in the 2020 draft instructions compared to previous iteration is the plan start month box is now required.... Employers who decided to sponsor an ICHRA have a whole new set of rules to assist them in completing the Form 1095-C. Fortunately, most employers will not even need to concern themselves with all of the new ICHRA rules and reporting should be very similar to previous years."

Tags: Health Plan Administration

Editor's Pick PBGC Issues Maximum Monthly Guarantee Amounts
Pension Benefit Guaranty Corporation [PBGC] Link to more items from this source
[Official Guidance]
Oct. 19, 2020

As a result of the indexing rules provided by law, the guarantee limits for single-employer plans that fail in 2021 will be 3.81% higher than the limits that applied for 2020. The linked page includes a table showing the 2021 guarantee limits for various ages and payment forms. The guarantee limits for multiemployer plans are not indexed and therefore have not changed.

Tags: PBGC  •  Retirement Plan Administration

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