Retirement Analyst / Senior Retirement Analyst Montgomery County, MD Employee Retirement Plans Rockville MD
	Litigation Associate Robinson & Cole LLP Hartford CT

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Employee Severance Agreements and Section 409A Deferred Compensation: Withstanding Heightened IRS Scrutiny
February 11, 2020 WEBCAST
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[Guidance Overview]

Congress (Finally) Passes the SECURE Act

"Key changes include: Open Multiple Employer Plans (MEPs).... Part-time employee eligibility for 401(k) plans.... Required minimum distributions (RMDs).... Increased tax credits.... Safe harbor 401(k) enhancements.... An objective fiduciary safe harbor for the selection of a lifetime income provider ... [P]articipant lifetime income disclosures illustrating the monthly payments if the participant's account balance [were to be] used to provide lifetime income in an annuity."

Drinker Biddle

[Guidance Overview]

DOL Proposes Safe Harbor for Electronic Disclosure of ERISA Pension Documents

"The [DOL] may revise the proposal to specify how long documents must be maintained if they are not the sort of documents that are superseded, or may require websites to permanently archive documents because many recipients are not likely to access and save documents before they are removed from the website. The proposal also sets out certain technical requirements the documents posted to the website must meet, procedures for when electronic notification of the posted documents fails, as well as the requirement that the website have measures reasonably calculated to protect personal information."

Covington & Burling LLP

[Guidance Overview]

SECURE Act Makes Significant and Immediate Pension Law Changes (PDF)

"The most far-reaching pension reform legislation in 13 years was passed by Congress and is expected to be signed into law by President Trump today as part of the budget bill funding the federal government for the remainder of the fiscal year.... Of critical importance to plan sponsors: The effective dates in the original bill were left unchanged. As a result, many of the new law's provisions will become effective on January 1, 2020.... [M]ost plans will have until the end of the 2022 plan year to adopt conforming amendments."

Trucker Huss

A Bullet-Point Summary of the SECURE Act (PDF)

"The SECURE Act represents the most significant retirement plan legislation in more than a decade. ... [T]his legislation ... benefits both employers and employees, by providing administrative relief along with expanded retirement plan coverage and increased savings opportunities to improve retirement security."

Pentegra

Could Multiple Employer Plans Be a Game Changer for Retirement Security?

"Multiple-employer plans have finally been passed into law ... Open MEPs are an exciting policy change, but it is far from clear how they will work in practice. Their effectiveness in improving retirement-plan quality and their overall appeal depends on how this niche industry reacts. There's also the matter of how regulators nudge MEPs along, as they will have to balance concerns regarding the soundness and proper regulation of these plans with maintaining their appeal to the industry for use and promotion."

Morningstar

District Court Highlights Plan Sponsor QDRO Responsibilities

"The case is particularly instructive for plan administrators of defined benefit plans in ensuring compliance with a QDRO, in light of the generally greater complexity of defined benefit plans and their related benefit calculations ... In this case, even had the District Court reached the merits of Plaintiff's breach of fiduciary claim, Plaintiff would not have prevailed, because it was prudent for the plan to ask an actuary for its interpretation of the order, and to rely upon the actuary's analysis." [Amron v. Yardain Inc. Pension Plan, No. 18-11336 (S.D.N.Y. Dec. 5, 2019)]

The Wagner Law Group

UPenn Petitions Supreme Court to Review 403(b) Plan Case

"The university argues that the 3rd U.S. Circuit Court of Appeals failed to use Twombly's pleading rule.... According to the petition, the 2nd, 7th, 8th and 9th Circuits have all recognized that Twombly fully applies to these ERISA claims.... The university argues that other courts would have required more to state a plausible claim." [Sweda v. Univ. of Penn., No. 17-3244 (3d Cir. May 2, 2019; rehearing denied Jul. 19, 2019; cert pet. filed Dec. 2019)]

planadviser

Multiple Fiduciary Breaches Alleged in Cintas ERISA Challenge

"The plaintiffs ... allege that the defendants failed to utilize the lowest cost share class for many of the mutual funds within the plan, and failed to consider collective trusts, commingled accounts, or separate accounts as alternatives to the mutual funds in the plan. In addition, the plan fiduciaries are accused of overpaying for recordkeeping services." [Hawkins v. Cintas Corp., No. 19-1062 (S.D. Ohio complaint filed Dec. 13, 2019)]

PLANSPONSOR; free registration may be required

Possible Alternatives to the Stretch IRA

"A handful of estate planning strategies still exist that can potentially help families maximize their financial legacy. While none may fully match the lucrative tax-deferral benefits of the stretch IRA, all may offer a tax-friendly pathway to meeting similar goals -- such as generating income for kids and grandkids and leaving assets behind to support a favorite charity."

MassMutual

[Guidance Overview]

Year-End Challenges and Opportunities: Congress Passes SECURE Act, Cadillac Tax Repeal, and More

"The SECURE Act includes almost thirty provisions aimed at encouraging the adoption of employer-sponsored plans and lifetime income options, altering plan distribution rules, easing administrative requirements, improving certain types of defined benefit plans, and more.... [A]number of the provisions are effective with the New Year ... The Act also includes a number of other retirement and health and welfare provisions of interest to employers and service providers."

Groom Law Group

ERISA Class Actions Under Section 502(a)(2) (PDF)

"Courts in Georgia, New York, North Carolina, and South Carolina in the past months have provided some insights on certification of proposed classes with claims on behalf of a plan arising under ERISA Section 502(a)(2). While courts readily certify classes where the plaintiffs seek recovery on behalf of the plan in which the plaintiffs are participants, they do not uniformly grant certification without analysis."

Jackson Lewis P.C.

What Sport is Your Benefits Business Playing?

"With firms like Fidelity entering the benefits business, others like Zenefits and Gusto raising tens to hundreds of millions of dollars, and the national firms continuing their rapid pace of acquisitions, one must wonder whether the benefits game is changing in a bigger way.... The bar will get raised and raised again, in a way that the price to compete is more resources and more specialized skills.... This benefits game may no longer be a golf event where a single skilled player can compete. It may not even be a basketball or baseball game where 5 and 9 players are adequate. It may require the army of a professional football team with 53 highly skilled players."

Joe Markland

Increasing the 401(k) Service Requirement for Eligibility

"We are amending a plan to increase the eligibility from 3 months to a year of service. Employees who never completed a year of service but were previously eligible will only be allowed to continue as a participant if they have a balance in the plan on the amendment effective date. Our document does not restrict us from kicking participants out of the plan due to a plan amendment. Does anyone see an issue with amending the plan to only grandfather those with a balance?"

BenefitsLink Message Boards

Amendment to Increase Required Service Requirement for CB Accrual

"A small CB plan (~25 participants) currently requires 1 hour to benefit for accrual. They want to freeze for 2020. Obviously it is too late to issue a 204(h) notice by 12-31-19. Could they get around this by amending the plan to require 1000 hours for 2020, and then just make sure to freeze before 1000 hours are worked in 2020? I do understand they could just freeze ASAP and limit the 2020 accrual to be based on comp through, say, the first week of January (assuming it only takes a few days to confirm with them and get the 204(h) issued). But it'd be easier to just have no accruals for the year."

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Schwab Announces Launch of Schwab Intelligent Income™ to Modernize How Investors Can Pay Themselves From Their Portfolios
Charles Schwab Corporation

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Chronological Listing of Effective Dates for SECURE Act Provisions
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Text of IRS Notice 2020-03: Interim Guidance on Income Tax Withholding from Retirement and Annuity Distributions (PDF)
Internal Revenue Service [IRS]