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March 18, 2020 logo logo
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Webcasts, Conferences

Update on MA Paid Family and Medical Leave
April 16, 2020 WEBCAST
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[Official Guidance]

Text of IRS Re-Opening of Comment Period on Musicians Pension Fund Application to Reduce Benefits (PDF)

"On January 17, 2020, the Department of the Treasury published a notice of availability and request for comments regarding an application to Treasury to reduce benefits under the American Federation of Musicians & Employers Pension Fund, in accordance with [MPRA]. The purpose of this notice is to reopen the comment period for the Fund's application and provide more time for interested parties to provide comments."

U.S. Department of the Treasury

[Sponsored] -- New Title -- PLAN CORRECTIONS eSOURCE

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Some Perspectives on Market Volatility for Corporate DB Plan Sponsors

"The recent market volatility is unlikely to change the near-term cash requirements for your pension plan. Why? [1] Funding (i.e., IRS) liabilities are not marked-to-market for most corporate DB sponsors.... [2] Funding rules also allow for actuarial asset values to be smoothed over a 24-month period.... [3] Contribution requirements are calculated only once a year on the actuarial valuation date, and so it is not daily or monthly volatility that matters as much as the level of yields and assets on that exact measurement date."


ETFs Are Passing the COVID-19 Crisis Test

"[E]ven with volatile prices and widening bid-ask spreads in stock and bond markets, trading of ETF shares has been orderly and has contributed to price discovery in the first weeks of March. In addition, net ETF share creations and redemptions, although varying by asset class, have been modest."

Investment Company Institute [ICI]

New Lawsuit Accuses Wells Fargo 401(k) Plan Fiduciaries of Self-Dealing

"[T]he plaintiff says the retirement plan committee defendants failed to satisfy threshold procedural norms needed for a non-conflicted fiduciary to satisfy its duties of loyalty and prudence under ERISA. According to the complaint, the committee defendants selected and retained Wells Fargo products over materially identical, yet cheaper, non-proprietary alternatives; selected Wells Fargo products that had no performance history that could form the basis of a fiduciary's objective decision-making process; and failed to remove proprietary funds despite sustained underperformance." [Becker v. Wells Fargo, No. 20-1803 (N.D. Cal. complaint filed Mar. 13, 2020)]

PLANSPONSOR; free registration may be required

Creating More Flexibility in Cash Balance Plan Contributions

"Although there are no set guidelines from the IRS as to how often a cash balance formula can be amended, a generally accepted rule of thumb is to limit it to no more than one change every three years.... You also have some flexibility in terms of when you deposit your contribution to the plan.... Combining that with the ability to amend your formula provides a bit of a cushion in the event that cash is tight.... [O]nly W-2 compensation paid to the shareholders is considered plan compensation.... [T]his nuance can provide added flexibility in that the company can adjust the allocation between W-2 and distributions."


Ensuring a Smooth Transition to Outsourced Pension Administration

"The effort and attention given during the conversion process can set the stage for proper and efficient administration in the future.... Gather and organize plan information  ... Be clear about your current challenges ... Be open to changing existing processes ... Actively participate in the process ... Share concerns as they are identified."

Milliman Retirement Town Hall

Auto-IRA Rollout Gradually Speeding Up

"Several states now require employers without a retirement plan to automatically enroll their workers in a state auto-IRA program, with workers allowed to opt out.... The results in Oregon show that, while the lag between registration and payroll submission is longer than initially anticipated, the rollout is getting faster over time. In addition, field visits by program staff -- particularly to employers that are very small or in the farming industry -- may help speed up the process."

Center for Retirement Research at Boston College

Retirement Plan Loans: Think Carefully Before You Borrow

"Although borrowing your own money sounds like a good deal, it may not be as cheap as you think. Here are some things to think about before taking a loan from your retirement plan account. [1] Fees ... [2] Opportunity cost ... [3] Pay tax twice ... [4] Reduced savings rates ... [5] Potential taxes and penalties ... [6] Loan defaults happen."


Retirement Savings in a Volatile Market

"A Roth IRA conversion done when the market is down is a bargain. Remember, your tax bill is based on the value of the traditional IRA assets at the time they are converted to a Roth IRA. Convert now when values are low and reap the benefits of tax-free earnings later when the market bounces back."

Slott Report


ARA Presses for Retirement Plan Relief in Coronavirus Stimulus Bill

"[T]he ARA has pressed for relief that would: [1] waive the Section 72(t) additional 10% penalty tax on early withdrawals from retirement plans for individuals who have a principal residence in a declared health emergency area and suffered economic loss; [2] permit individuals three years to repay distributions; [3] increase retirement plan loan limits to the lesser of $100,000 or 100% of the participant's vested account balance in a plan ... [4] allow individuals unable to repay loans to pay the income tax associated with a loan default over three years rather than all in the year of default; [5] allow individuals who borrowed from their plan and have a repayment due to delay their loan repayment for up to a year; [6] provide a wage credit for employee retention for employers impacted by the virus outbreak; [7] provide an automatic 60-day extension of tax-filing deadlines; and provide a temporary waiver for 2020 RMDs from DC plans and IRAs."

American Retirement Association [ARA]

Benefits in General

Editor's Pick Employee Benefits and Furloughs in the Era of COVID-19

"[K]ey employee benefits issues that employers will need to address as part of a furlough [are:] Health and Welfare Plans: [1] The implementation of an employee furlough does not necessarily mean that health coverage under an employer's group health plan will terminate.... [2] A furlough is not a COBRA qualifying event, unless it results in a loss of group health coverage.... [3] Depending on how long the furlough lasts, employers may need to consider how a furlough in 2020 may affect the determination of full-time employee status for health coverage in the 2021 plan year.... Retirement Plans: ... [1] [To] the extent that employees are not paid during a furlough, they will not be entitled to make pretax, Roth after-tax or traditional after-tax contributions to their retirement plan ... [2] A furlough does not necessarily constitute a severance from employment for retirement plan purposes.... [3] [M]any defined benefit pension plans will experience declines in funded status.... [4] [U]nless and until [IRS] relief is issued, all retirement plans deadlines will continue to apply[.]"

Ballard Spahr LLP

SECURE Act Provides a Tenfold Increase in Penalty for Late Filing of Retirement Plan Annual Report (Form 5500)

"Effective for returns required to be filed after December 31, 2019, the SECURE Act increased the Form 5500 penalty to $250 per day, not to exceed $150,000 for a late-filed form. In addition to the IRS penalty, the [DOL] may assess a civil penalty against a plan administrator in an amount not to exceed $1,100 per day for failure to timely file Form 5500.... Both the IRS and the DOL may waive the late filing penalty if the company can demonstrate that there is reasonable cause for failure to file."

Dickinson Wright

Selected Discussions
on the BenefitsLink Message Boards

When to Credit Year of Service If Gap Between End of Payroll Period and Payment Date Straddles Two Tax Years?

"Employer's payroll period ended 12/28/19 but payment not made until 1/5/20 in accordance with regular payroll procedures. Employee hits 1,000 hours during payroll period ending 12/28/19. Does the employer have to credit the time in 2019 or, because it was not paid until 2020, can the employer treat the hours for pay period ending on 12/28 as performed in 2020 based on the payment date?"

BenefitsLink Message Boards

Dental Layoffs Due to Coronavirus -- Causes a Partial Plan Termination?

"Just had a dentist call to say that he is following the ADA recommendation and basically shutting down for the next three weeks. Since his employees don't want to use their vacation days and prefer to collect unemployment, he is going to give them what they want and fire them (NY is waiving the usual one-week waiting period for unemployment benefits). He intends to rehire them all in about a month, but was concerned about what effect it might have on the plan. I know partial plan termination is partially facts and circumstances, so maybe this could be argued, but I'm thinking this might come into play if he lets go 7 and rehires 4 because business is slow to restart."

BenefitsLink Message Boards

Annual Pooled Account Statements (Now That the Markets Have 'Changed')

"For old school plans that have all accounts in a pooled trust, no participants can make elections, and they get one annual statement. As we send these out, I'm curious if others are sending out statements as related to the current (and quite large) decrease in market value. As it is, we intend to communicate to clients that we recommend a 3/31/2020 special allocation for new distributions, and we will need to communicate something to participants."

BenefitsLink Message Boards

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Press Releases

Upcoming Events About Retirement Plans or Executive Compensation

Mar. 19
Basics of Qualified Retirement Plans: Session 4
Mar. 19
Impact of COVID-19 on Your Retirement Plan
Multnomah Group
Mar. 19
The Importance of Prudently Monitoring Target Date Funds
Multnomah Group
Mar. 19
Best Practices For Changing Recordkeepers
Western Pension & Benefits Council - Orange County Chapter
Mar. 20
Preparing Your Workplace to Address Coronavirus
Vedder Price
Mar. 23
COVID-19 Updates for Employers: Employee Benefits and Compensation Issues
Ogletree Deakins
Mar. 24
Voluntary Fiduciary Correction Program
Employee Benefits Security Administration [EBSA], U.S. Department of Labor
Mar. 24
Form 5500 Series Update
NIPA [National Institute of Pension Administrators]
Mar. 25
IRS and PBGC Audits of Defined Benefit Plans
American Society of Enrolled Actuaries [ASEA]
Mar. 25
SECURE Act and Retirement Plan Administration: ERISA Compliance Issues for Plan Sponsors and Employers

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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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