News Archive

"For interested plan sponsors and issuers, we now have a much clearer picture of the steps involved in long-term care distributions. The plan administrator's ability to rely on the statements by the issuer to support the distribution is especially helpful. [IRS Notice 2026-33] may generate interest in offering this new distribution option."  MORE >>

"A combination of stronger education and tools, along with accessibility to lifetime income options, could help workers better prepare for a successful retirement. Employees surveyed reported wanting 'structured, meaningful guidance' from employers, with almost all (94%) emphasizing that companies should provide resources on how to make retirement withdrawals. Nearly half (49%) even say it's the employer's responsibility to provide guidance."  MORE >>

Topics include: [1] Important terminology for reference on key topics; [2]  Stock purchase plan options and amendments; [3]  Asset purchase plan options and amendments; [4] CG/ASG transition period for coverage testing under IRC 410(b)(6)(C); [5] Comparing and unifying plan designs.  MORE >>

"This article summarizes the statutory provisions on qualified long-term care distributions and notes where Notice 2026-33 provides clarifying guidance for sponsors, plan administrators, and insurers."  MORE >>

"Most automatic enrollment plans do not currently allow participants to change their mind and receive their deferrals back within a set timeframe - but that may be changing as new plans are now mandated to have such a provision."  MORE >>

"Only 45% of retirees say a workplace retirement plan is an income source, compared with 83% of workers who expect one to be. The median Vanguard 401(k)-style balance for Americans 65 and older is about $95,000, or roughly $3,800 a year using the 4% rule. Many 401(k)s get rolled into IRAs by retirement, so retirees may still be using old workplace savings but under a different label."  MORE >>

"The proposed ERISA prudence safe harbor applies only to the selection of DIAs, not to brokerage windows, settlor plan design features, or ongoing monitoring obligations.... The proposal states that it is intended to be asset-neutral but is expressly aimed at 'democratizing access to alternative assets' in 401(k) and similar defined contribution plans ... Even if finalized, the DOL's proposed prudence safe harbor is expected to face litigation risk, including potential challenges to the rule itself and to fiduciaries' application of the six-factor framework, as well as separate claims alleging breaches of the duty of loyalty or prohibited transactions."  MORE >>

"In mid‑2025, 44% of US households owned IRAs. Traditional IRAs were the most common type of IRA owned (33% of US households), followed by Roth IRAs (28%) and employer-sponsored IRAs (4%).... All told, nearly three‑quarters of US households had retirement plans through work or IRAs; being later in the lifecycle of saving, 86% of near‑retiree households did.... In mid‑2025, 61% of traditional IRA -- owning households indicated that their traditional IRAs contained rollovers from employer-sponsored retirement plans.... Recent years show a slight upward trend in contribution activity, although fewer than one in five US households make contributions to IRAs."  MORE >>

"In response to a request for input on what regulatory projects should be in the IRS's 2026-2027 Priority Guidance Plan, the American Retirement Association (ARA) has submitted a detailed list it believes will help reduce regulatory burdens and improve the retirement system overall.... Anti-cutback relief for elimination of new SECURE 2.0 distribution types.... Long-term, part-time revisions and relief.... Electronic disclosures.... Guidance on MEPs and PEPs.... Excise taxes owed on late contributions."  MORE >>

"The planning question is not simply whether after-tax contributions are allowed. It is whether they are workable for the employer's workforce, payroll system, recordkeeper, and compliance profile. For some plans, especially those with broad employee interest and strong recordkeeping support, after-tax contributions can be a valuable savings feature. For other plans, particularly closely held businesses with low rank-and-file participation, they may create more frustration than benefit."  MORE >>

17 pages. "[ARA recommends] that the Department: [1] Provide additional context to clarify how the proposed rule aligns with the existing prudence regulation ... [2] Clarify the interaction of a fiduciary's plan menu strategy decision and a fiduciary's selection of a DIA ... [3] Further mitigate frivolous ERISA litigation by addressing monitoring in the final rule and more explicitly defining certain key concepts ... and [4] Refine certain provisions relating to the safe harbor[.]"  MORE >>

"Qualified long-term care distributions, established by the SECURE 2.0 Act, are plan distributions made after December 29, 2025, that satisfy specified criteria ... [IRS Notice 2026-33] explains that qualified long-term care distributions are considered to [1] satisfy the Code Section 401(k)(2)(B) distribution rules (and similar rules under Code Sections 403 and 457), [2] are not subject to the additional 10% tax on early distributions under Code Section 72(t), and [3] are not eligible rollover distributions."  MORE >>

"The SECURE 2.0 Act added this penalty exception, which is effective for distributions after December 29, 2025. Participants must provide a long-term care premium statement to the plan sponsor in order for the distribution to be qualified. The distribution will be qualified as long as the premium paid does not exceed the lesser of $2,600 (for 2026) or 10% of the participant's vested account balance."  MORE >>

"By now, many 401(k) plans have likely undergone the necessary administrative changes to manage this new requirement.... Despite best efforts, plan sponsors may still encounter errors where a higher-compensated employee's catch-up is withheld from their pay as traditional 401(k) rather than Roth 401(k). Fortunately, the IRS has provided options for plan sponsors to correct these errors and keep their plans compliant."  MORE >>

"Fiduciary oversight is an ongoing process, not a one-time event. Taking time each year to review plan operations, investments, fees, and participant engagement can help plan sponsors support employees’ retirement readiness while maintaining strong governance practices."  MORE >>

"Higher default contributions, broader auto‑increase adoption, periodic auto‑reenrollment, and emergency savings defaults can increase participation, reduce leakage, and improve adequacy. From a policy perspective, encouraging age‑based default contribution rates and increasing the pension‑linked emergency savings account (PLESA) cap could improve outcomes."  MORE >>

"[Notice 2026-33] stated that 'no distribution will be treated as a qualified long-term care distribution unless a long-term care premium statement with respect to the employee has been filed with the plan.'... As a safe harbor, plan administrators are explicitly permitted to rely on the carriers' long-term-care premium statement to verify that: an issuer disclosure was made to the Secretary of the Treasury by the provider of the long-term-care coverage; the insurance is certified; and the premium amounts are correct."  MORE >>

"Why timing matters: The successor plan rule and pre-closing 401(k) plan termination ... Buyer's post-closing options if the plan is not terminated before closing ... Practical issues and potential complications for buyers to consider: [1] Outstanding participant 401(k) plan loans ... [2] Recordkeeper requirements ... [3] Plan investment options with unique potential costs or timing considerations."  MORE >>

"[In] making a qualified long-term care distribution, [Notice 2026-33 provides that] the plan administrator can rely on the long-term care premium statement furnished by the issuer to the plan at the request of the participant.... [T]he Notice announces a limited extension just for this feature. The new amendment deadline for adding this distribution option is December 31, 2027 (collectively bargained and governmental plans still have their extended deadlines)."  MORE >>

"Section 401(a)(39)(E) of the Internal Revenue Code permits distributions from a defined contribution plan for the payment of certified long-term care insurance premiums if certain disclosure requirements are met, including that the issuer of the certified long-term care insurance must file an 'Issuer Disclosure' with the IRS. IRC Section 401(a)(39)(E)(iii) provides that a long-term care premium statement will be accepted by a defined contribution plan only if you (the issuer) file an Issuer Disclosure with the IRS describing the specific coverage life insurance product that is the subject of the long-term care premium statement. Use the procedures on this webpage to make an Issuer Disclosure only if you plan on filing a long-term care premium statement with a defined contribution plan with respect to a policyholder's request for qualified long-term care distributions."  MORE >>

22 pages. "This notice provides guidance on qualified long-term care distributions, as permitted under section 401(a)(39) of the Internal Revenue Code. In particular, the notice provides guidance to providers of certified long-term care insurance  relating to the disclosure and reporting requirements under sections 401(a)(39) and 6050Z. In addition, the notice provides guidance under sections 72(t)(2)(N) and 401(a)(39) to plan administrators making and individuals receiving qualified long-term care distributions, including setting forth safe harbors for plan administrators in making qualified long-term care distributions. This notice also extends the deadline for a plan sponsor of a defined contribution plan that is not a governmental plan (within the meaning of section 414(d)), a section 403(b) plan maintained by a public school, or an applicable collectively bargained plan, to amend its eligible retirement plan to permit qualified long-term care distributions."  MORE >>

"The buyer has three broad paths: terminate the plan before closing, continue it on a standalone basis post-closing, or eventually merge it into the buyer's own 401(k) plan.... Each path carries distinct legal, administrative, and cost implications.... [If] no affirmative decision is made, the default path is continuation ... The only practical path to later 'terminate' the plan is a merger into the buyer's controlled group 401(k) plan. This article outlines the key factors buyers should evaluate early in the transaction process to arrive at the right decision with confidence."  MORE >>

"Low tax brackets and a bonus senior deduction make 2026 a good year to consider a conversion. Early retirement years, when people have lower incomes, are often a good time for Roth conversions."  MORE >>

"Broader multi-asset portfolios with in-plan annuities surpassed $115 billion, an increase of 150% compared to two years ago ... While half of these assets are in managed accounts for 403(b) plans ... momentum is increasing for target-date strategies in 401(k) plans. Assets in target-date funds with annuities secured $42 billion as of March, up from $25 billion the year prior."  MORE >>

"In recent years, various stakeholders have expressed interest in expanding investment options in 401(k) plans to include alternative assets, such as private investments and digital assets. Proponents say that the benefits of incorporating these investments include the potential for higher investment returns and increased portfolio diversification. Opponents note the risky and speculative nature of these investments, the high and sometimes opaque nature of private equity fees, and concerns about the liquidity of these investments."  MORE >>