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January 15, 2020 logo logo
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[Guidance Overview]

Highlights of the SECURE Act

"To avoid the administrative burden of tracking years with 500 hours' service, employers should consider permitting all employees to make 401(k) contributions upon hire.... Increased flexibility to adopt safe harbor plans is helpful, but the primary obstacle of employer cost remains.... Expect smaller employers to show increased interest in the availability of MEPs due to the cost savings and ease of administration offered by these arrangements."

Wilkins Finston Friedman Law Group LLP


ASC Webcast Series: Fundamentals of Qualified Retirement Plans

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[Guidance Overview]

Puerto Rico Department of the Treasury Announces 2020 Limits on Qualified Retirement Plans

"On December 28, 2019, the Puerto Rico Department of the Treasury issued Internal Revenue Circular Letter No. 19-17 announcing the applicable limits for Puerto Rico qualified retirement plans for 2020."


[Guidance Overview]

Editor's Pick The SECURE Act in 2020

"Many of the tasks assigned to them will be familiar to [pooled plan providers (PPPs)] from their experience with prototype plans, but others will not, such as adjudicating claims disputes, approving qualified domestic relations orders, and tracking credit for vesting service.... [T]he mandated assumptions [for disclosure of annuity estimates] may yield results so approximate as to be useless, if not seriously misleading.... [E]mployers [should] make sure that they track part-timers' hours in order to identify those who may have to be offered participation [starting in 2024].... [W]ithdrawals [for childbirth or adoption expenses] may be repaid to an IRA (or, in some cases, to the defined contribution plan from which they were taken), in which case they will be treated as having been rolled over (and therefore not subject to income tax)."

Steptoe & Johnson LLP

SECURE Act and Guaranteed Income, Part 2

"This article talks about the types of guaranteed retirement income products currently found in 401(k) plans.... Far and away the most common arrangement is a GMWB (guaranteed minimum withdrawal benefit) attached to the plan's TDFs.... Another approach is to accumulate interests in annuities along the way.... A third approach, which may be inside or outside of a plan, is an annuity platform, which offers a number of insurance companies and guaranteed products as distribution alternatives."

Justices Punt on Liability of Insiders for Mismanagement of Pension Plans That Invest in Employer Stock

"The court did repeat [a passage] from Dudenhoeffer about the likely relevance of the SEC's views (now available to the courts for the first time), but it went no further than that in advising the court of appeals whether it should entertain the new arguments, much less whether those arguments are meritorious." [Retirement Plans Committee of IBM v. Jander, No. 17-3518 (S. Ct. Jan. 14, 2020)]

Ronald Mann via SCOTUSblog

Supreme Court Declines to Rule on ERISA Breach of Fiduciary Duty Pleading Standard for ESOP Cases

"Justice Kagan opined that, as an initial matter, the Second Circuit may decline to consider the arguments raised by the petitioners and the government if it determines that they were not properly preserved.... Justice Gorsuch, on the other hand, stated that the Second Circuit should consider the merits of the petitioners' and the government's arguments, which, if not addressed, would 'only prove unavoidable later.' " [Retirement Plans Committee of IBM v. Jander, No. 17-3518 (S. Ct. Jan. 14, 2020)]


Second Circuit Pension Liability Ruling Is a Big Win for Employers

"The Second Circuit found that the retroactive selection of interest rate assumptions for withdrawal liability purposes (the position advocated by the district court) was inconsistent with Congress' stated intent, concluding that withdrawal liability interest rate assumptions do not 'remain open forever and subject to retroactive changes in later years.' " [The National Retirement Fund, et al. v. Metz Culinary Management, Inc., No. 17-1211 (2d Cir. Jan. 2, 2020)]

Jackson Lewis P.C.

Delaware Attorney General Settles Probe of 403(b) Provider

"Delaware's attorney general has settled an investigation of Horace Mann Educators Corp. and a former representative of the financial services company over practices in retirement plans for teachers. The settlement, which involves $500,000 in fines and the reimbursement of costs including annuity fees to as many as 157 educators, comes as the [SEC] and New York state regulators have launched investigations of companies in the 403(b) retirement-savings market."

The Wall Street Journal; subscription may be required

Text of Social Security Administration Form 8955-SSA 2-D Barcode Standards (PDF)

45 pages. "This document covers only the 2D barcode on ERISA Form 8955-SSA. The 2D barcode is intended to represent the information on the paper form. Barcodes for this form are generated from two sources: [1] The IRS Form 8955-SSA Fillable PDF produces a barcode after printing the form in Adobe. [2] The approved software vendors for Form 8955-SSA produce a barcode when printing their forms from the ir software packages." [Version 2.12, Jan. 2, 2020]

Internal Revenue Service [IRS]

Employees Should Know These Three 2020 Tax Numbers

"At the start of each year, key numbers in many tax-law provisions are adjusted for inflation.... Many of the adjustments are important for employees, their paychecks, and their basic tax planning for 2020.... [1] Social Security wage base ... [2] Income-tax brackets and withholding ... [3] Qualified retirement plans."



Bridging the Retirement Gap: Crack the Nest Egg Before Taking Social Security (PDF)

"Employers could provide estimates of each near retiree's Social Security benefits based on payroll data and offer to help workers get actual numbers from Social Security. Then, with the estimated or actual number in hand, employers can suggest that, upon retirement, the individual postpone his or her Social Security checks and instead begin withdrawing the same amount from his or her 401(k) account."

David E. Morse, via Benefits Law Journal

Benefits in General

[Guidance Overview]

DOL and PBGC Increase Civil Money Penalties for 2020, Effective January 15, 2020

"[A] table reflects the DOL's 2020 annual inflation adjustments to the civil money penalties for violations of certain requirements under ERISA, effective January 15, 2020."

Thomson Reuters Practical Law

Employee Benefits and Executive Compensation Topics to Address in the New Year

"[1] Addressing cybersecurity for benefit plans: what to do when it's all at risk ... [2] COBRA notice class action lawsuits offer a cautionary tale for sponsors ... [3] Plan distribution check is taxable even if uncashed ... [4] Balancing student loan repayments and retirement savings ... [5] Mitigating your company's equity plan risk."

Epstein Becker Green

Mandatory Arbitration for Benefit Plan Documents: Prudent or Problematic?

"Requiring mandatory individual arbitration for dispute resolution of all plan-related claims seems to be more efficient and cost-effective, though the plan sponsor and plan administrator should consider a number of factors to customize the dispute resolution provision for a particular plan ... The decision on how to design a particular arbitration provision may be driven by a number of factors, including the type of plan, the number of participants and the federal common law developed that applies to the plan, among others."

Barnes & Thornburg LLP via Lexology; free registration required

Selected Discussions
on the BenefitsLink Message Boards

401(k) Deferrals from Third Party Sick Pay

"Taxable third party sick/disability pay (e.g., where the premiums are employer paid or are treated as such because they are made pre-tax through a cafeteria plan) would be included in a W-2 definition of plan compensation. As a practical matter, how are deferrals on these amounts handled where the amounts are paid by the third party insurer directly to the participant? Do any insurers actually withhold deferrals and forward to plan sponsors for deposit in the plan?"

BenefitsLink Message Boards

Permanent Opt-Out Form

"Does anybody know of or have a template for a Permanent Opt-Out Form?"

BenefitsLink Message Boards

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Press Releases

Most Popular Items in the Previous Issue, Inc.
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(407) 644-4146

Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

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BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2020, Inc. All materials contained in this newsletter are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of, Inc., or in the case of third party materials, the owner of those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.

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