Retirement Plans Newsletter

March 19, 2020

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Webcasts, Conferences

Navigating COVID-19 Issues
RECORDED
Faegre Drinker

Employee Stock Ownership Plan (ESOP) Basics
March 20, 2020 WEBCAST
Morgan Lewis

Merger, Divestiture and Acquisitions and Employee Benefits
March 24, 2020 WEBCAST
Wagner Law Group P.C.

Going Viral: COVID-19's Impact to Employee Benefits Plans
April 2, 2020 WEBCAST
Southeast Benefits Education Network [SBEN]

Plans in Times of COVID-19: Our FAQs
April 2, 2020 WEBCAST
ERISApedia.com

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[Official Guidance]

Text of CalPERS Circular Letter: Emergency Suspension of Work Hour Limitations for Retired Annuitants (PDF)

"Consistent with applicable federal law, and to ensure adequate state staffing to expedite emergency response and recovery, the work hour limitations for retired annuitants are suspended from the date the state of emergency was declared until the state of emergency is lifted.... Any hours worked by a retired annuitant to ensure adequate staffing during the state of emergency will not be counted toward the 960-hour limit for the fiscal year. Under this executive order, the 180-day break in service requirement under Government Code section 7522.56(f) is also suspended for retired annuitants hired to ensure adequate staffing during the state of emergency." [CalPERS Circular Letter 200-015-20, Mar. 18, 2020]

California Public Employees' Retirement System [CalPERS]

[Sponsored]

Comprehensive Directory of COVID-19 (Coronavirus) News for Employee Benefit Plans

Sponsored by BenefitsLink

Cumulative directory of: Official guidance issued by IRS, DOL, HHS and other federal agencies; Federal, state and local legislation;Analysis and explanations by law firms, consulting firms and others;Benefits-related items from popular news media and trade publications. Learn more


401(k) Plans During the COVID-19 Pandemic

"If an employer ... had not included a statement in this year's safe harbor notice that the employer was reserving the right to suspend or reduce safe harbor contributions, the employer will be required to rely upon the economic loss exception.... Workforce reductions, in the form of furloughs, and severance benefits raise planning issues with respect to participant loans.... Under the IRS safe harbor, hardship withdrawals may only be made for certain categories of enumerated expenses and, therefore, cannot be made solely as a result of a reduction of hours or a furlough."

Blank Rome LLP

Reducing or Suspending 401(k) Safe Harbor Contributions Mid-Year

"Under limited circumstances, and according to final Treasury Regulations, a sponsor of a 401(k) safe harbor plan may amend the plan during the current year to reduce or suspend the company's safe harbor contribution -- either the matching or nonelective contribution."

Retirement Learning Center, LLC

Interim Valuations in a Volatile Market: Important Considerations for Balance-Forward Retirement Plans

"The recent volatility in the financial markets has prompted increased attention to the possibility and appropriateness of daily valued defined contribution retirement plans performing interim valuations prior to making participant distributions.... Plan fiduciaries responsible for making decisions about plan valuations and distributions will want to review their plan documents carefully and consider the following with their legal counsel. [1] Plan documents ... [2] The anti-cutback rule  ... [3] Additional fiduciary considerations  ... [4] Participant communications  ... [5] Other actions to consider."

FIS Relius

Best Interest Standard of Care for Advisors, Part 28

"[A] dually registered advisor must consider all of the reasonably available account types offered by the broker-dealer and the RIA firm even if those two firms are not related. And, of course, the dually registered advisor must recommend the account type that is in the best interest of the investor."

FredReish.com

Supreme Court Defines 'Actual Knowledge' in DC Plan Suit

"Plan sponsors may wish to undergo a communications audit or redistribute important communication materials to participants to ensure they are informed about plan information. In addition, plan sponsors can work with their recordkeepers to document affirmative confirmations that participants have reviewed relevant plan information." [Intel Corp. Investment Policy Comm. v. Sulyma, No. 18-1116 (S. Ct. Feb. 26, 2020)]

Callan

Fidelity Wins Dismissal of ERISA Lawsuit Over 'Infrastructure Fees'

"Fidelity has won a dismissal of a class action brought by 401(k) plan participants over 'infrastructure fees' charged to third-party mutual funds on the company's investment platform. The plaintiffs alleged the company's imposition of the fees violates ERISA's fiduciary-duty rules. But the court dismissed all claims after finding Fidelity didn't act in a fiduciary capacity when setting the fees." [In re Fidelity ERISA Fee Litigation, No. 19-10335 (D. Mass. Feb. 14, 2020)]

Mercer

[Opinion]

The Immediate COVID-19 Retirement Fix Which Congress Missed in the Great Recession: Temporarily Suspend the 10% Early Distribution Penalty Tax

"[At] times like these, the impact of the auto-enroll efforts show their true value as there is some money there for those who would otherwise not have it but for auto-enroll. But the ugly side of things is also a reality, something that Congress avoided addressing during the Great Recession: those unemployed who must withdraw from their plan accounts just to survive will still be subject to the 10% early distribution penalty tax. As we learned in 2009 and 2010, this effect only becomes apparent come tax time, when it becomes due regardless of the application of the marginal rate or deductions."

Business of Benefits

[Opinion]

Empower Retirement Urges Congress to Enact Disaster Relief for Retirement Savers

"Empower Retirement is asking the U.S. Department of Treasury and the [IRS] for regulatory guidance and relief packages for Americans saving for retirement.... Empower is asking to allow: [1] Retirement plan participants to withdraw retirement savings early without a 10 percent tax. [2] Qualified disaster distributions in income over three years. [3] Withdrawals up to $100,000 from their qualified retirement plans with the income tax for the withdrawal spread out over three years."

Empower Retirement

Benefits in General

An Employee Has COVID-19. Now What Do I Do?

"The rule of thumb is that you can (and likely must) disclose that an employee has tested positive ... but you need to ensure that the disclosure does not share too much information.... Be very careful about how many people know the name of the ill individual and that each of them understands their obligation to keep information confidential.... Communication with the infected employee is critically important for many reasons including to offer support, to fully understand the link to the workplace and to protect other employees and your business."

Bond, Schoeneck & King

Editor's Pick Comprehensive Directory of COVID-19 (Coronavirus) News for Employee Benefit Plans

BenefitsLink presents a cumulative directory of

  • Official guidance issued by IRS, DOL, HHS and other federal agencies
  • Laws and bills from federal, state and local governments.
  • Analysis and explanations published online by law firms, consulting firms and others.
  • Benefits-related items from popular news media and trade publications.

Use the checkboxes and buttons at the top of the directory to narrow the view to either Retirement or Health & Welfare Plans, or to to one or more of the listed types of items.

This directory is updated each day as new items are added.

BenefitsLink

Selected Discussions
on the BenefitsLink Message Boards

Stop Making Discretionary Match Midyear Due to Layoffs and Downsizing?

"I assume with all the lay offs and business downsizing, clients will want to know if they can stop making their Discretionary Matches. I seem to remember there can be issues changing the discretionary match mid-year. Correct?"

BenefitsLink Message Boards

Here Come the Partial Plan Terminations

"So lots of partial plan terminations imminent or in progress,. We all agree that in this scenario, assuming it is a calendar year plan, anyone who terminates at any time in 2020 (and for any reason) must become 100% vested. Is that correct? Seems like now would be a good time for someone to challenge the IRS to repeal that dumb interpretation. Even if they solve the problem it will be too late."

BenefitsLink Message Boards

COVID 19 and Hardship Distributions

"I'm looking for confirmation on whether COVID-19 falls within the new disaster category of Safe Harbor hardships under the hardship final regs. While this pandemic is listed on the FEMA website for each state, it was declared an 'emergency' rather than a 'disaster.' Thoughts?"

BenefitsLink Message Boards

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Upcoming Events About Retirement Plans or Executive Compensation

Mar. 20
Webcast
Employee Stock Ownership Plan (ESOP) Basics
Morgan Lewis
Mar. 20
Webcast
Free
Preparing Your Workplace to Address Coronavirus
Vedder Price
Mar. 23
Webcast
Free
COVID-19 Updates for Employers: Employee Benefits and Compensation Issues
Ogletree Deakins
Mar. 24
Webcast
Free
Voluntary Fiduciary Correction Program
Employee Benefits Security Administration [EBSA], U.S. Department of Labor
Mar. 24
Webcast
Form 5500 Series Update
NIPA [National Institute of Pension Administrators]
Mar. 24
Webcast
Free
Merger, Divestiture and Acquisitions and Employee Benefits
Wagner Law Group P.C.
Mar. 25
Webcast
IRS and PBGC Audits of Defined Benefit Plans
American Society of Enrolled Actuaries [ASEA]
Mar. 25
Webcast
SECURE Act and Retirement Plan Administration: ERISA Compliance Issues for Plan Sponsors and Employers
Strafford
Mar. 26
Webcast
Free
Voluntary Fiduciary Correction Program
Employee Benefits Security Administration [EBSA], U.S. Department of Labor
Mar. 26
Webcast
Critical Challenges Facing Pension Withdrawal Liability
Lorman Education Services
Mar. 26
Webcast
Free
The Case for an Operational Review of Your 403(b) Plan
Strategic Benefit Services
Mar. 26
Webcast
Free
The SECURE Act's Impact on Estate Planning and Administration
Wagner Law Group P.C.
Mar. 26
Webcast
Free
SECURE Act: New Opportunities for Plan Sponsors and Participants
Williams Mullen

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BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2020 BenefitsLink.com, 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 BenefitsLink.com, 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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