Retirement Plans Newsletter

April 6, 2020

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Newly Posted
Webcasts, Conferences

Trends and Updates in ERISA: Critical Issues and Best Practices in Light of Recent Cases
April 7, 2020 WEBCAST
Knowledge Group

Managing Abandoned Plans: Issues For Service Providers Considering the DOL's QTA Program
April 7, 2020 WEBCAST
Groom Law Group

COVID-19 Stimulus Package - What Might Be the Impact?
April 9, 2020 WEBCAST
The Segal Group

Voluntary Fiduciary Correction Program
April 21, 2020 WEBCAST
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

Electronic Disclosures Made Easy
April 22, 2020 WEBCAST
American Society of Pension Professionals & Actuaries [ASPPA]

Living With Your MEP or PEP: Guidance, Prohibited Transactions, Compliance and Contracts
April 28, 2020 WEBCAST
Faegre Drinker

IRA Seminar
May 19, 2020 in IL
Ascensus

IRA Beneficiary Distributions - Part 2
May 19, 2020 WEBCAST
Ascensus

Structuring Management Carve-Out Plans for Privately Held Corporations: Mechanics, Tax Obstacles and Optimization
June 3, 2020 WEBCAST
Strafford

ERISA Plan Investment Committee Governance: Avoiding Breach of Fiduciary Duty Claims
June 10, 2020 WEBCAST
Strafford

►See All 139 Upcoming Webcasts and Conferences

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Discussions

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New Comments and Topics

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View Coronavirus (COVID-19) News and Resources
View Coronavirus (COVID-19) Webcasts

[Guidance Overview]

CARES Act Waiver of 2020 Required Minimum Distributions

"The CARES Act waives RMDs for 2020. Note that this waiver of RMDs for 2020 is not limited to those who are affected by COVID-19. This waiver of RMDs applies to [1] any account owner who is 72 or older in 2020, [2] any account owner who turned 70-1/2 in 2019, did not take his or her RMDs in 2019 and planned to take his or her delayed RMDs by April 1, 2020, and [3] all beneficiaries of inherited IRAs for decedents who died prior to 2020."

Bryan Cave Leighton Paisner LLP

COVID-19 Considerations: Midyear Reductions or Suspensions of Employer and Matching Contributions to 401(k) and Defined Contribution Plans

"An employer's ability to reduce, suspend, or defer these types of contributions is determined by plan type and terms and applicable law and guidance. Generally, it should be possible to make prospective changes to reduce an employer's contribution obligations. Doing so retroactively is more challenging. This post reviews the options for cost cutting available to employers under their defined contribution 401(k) and profit sharing plans."

Mintz

Answering Questions About COVID-19 and Your Non-Governmental 457(b) Plans (PDF)

"As a participant in a non-governmental 457(b) plan, can I cancel, reduce, or change my deferral election? ... Can I take a distribution from my plan due to COVID-19?  ... As a plan sponsor, can I reduce or remove the match or other employer contributions?  ... How do I handle employees on leave?"

Fulcrum Partners LLC

Reg BI and Form CRS: Firms Must Comply by June 30 But Examiners Will Apply a 'Good Faith Effort' Standard

"While the Chairman's statement acknowledged the challenges that firms are facing and the significant resources they are allocating in response to the COVID-19 outbreak, the SEC will not provide an extension.... [R]egulators may show some restraint in their examination of firms, at least in the initial post-June 30th period,,, This restraint, however, will be predicated on firms having made a 'good faith effort' to implement policies and procedures necessary to comply with Reg BI and Form CRS by the compliance date."

Wilmer Hale

March 2020 Pension Finance Update

"Tumbling stock markets dealt another blow to pension sponsors in March.... Plan A lost 3% in March, ending the quarter 13% lower than at the end of 2019, while Plan B slipped more than 1% and is now down more than 4% for the year."

October Three Consulting

[Sponsored]

SPARK Global Public Policy Forum -- June 23-24, Washington DC

Sponsored by SPARK

The retirement services industry's leading event: comprehensive agenda designed to meet the needs of 401(k) Plan Providers, Financial Advisors and Record Keepers -- focus on global retirement public policy and expansion of pension reform occurring worldwide. Learn more


Legal Concerns Put Shadow Over Push for Alternative Investments in DC Plans

"The recent pandemic-induced market volatility could make the concept of adding alternative assets to defined contribution plan lineups more attractive for sponsors, but litigation concerns persist[.]"

Pensions & Investments

How the Coronavirus Could Permanently Cut Near-Retirees' Social Security

"Assuming a 15 percent decline in the Social Security Administration's measure of economywide average wages in 2020, a middle-income worker born in 1960 could have his annual Social Security benefits in retirement reduced by around 13 percent, with losses over the retirement period in excess of $70,000. Methods of addressing this problem are discussed, including both ad hoc adjustments applying only to affected cohorts, and also permanent changes to the benefit formula to prevent similar benefit 'notches' from occurring in the future."

Pension Research Council, The Wharton School of The University of Pennsylvania

Multiemployer Defined Benefit (DB) Pension Plans: A Primer (PDF)

33 pages. "10% to 15% of participants are in plans that are projected to become insolvent in the next 20 years.... In its FY2018 Projections Report, PBGC indicated that the multiemployer insurance program is highly likely to become insolvent by 2025 and will be unable to pay 100% of participants' benefits at the guaranteed level." [R43305, updated Apr. 3, 2020]

Congressional Research Service [CRS]

Benefits in General

D.C. Circuit Holds That Participant Who Signed Release Could Not Assert ERISA Fiduciary Breach Claims on Behalf of Her Retirement Plan

"While many employers incorporate 'one-size-fits-all' release language into their agreements, when dealing with prospective ERISA claims, it is important to carefully review any applicable release language to ensure that it is both enforceable and sufficiently broad to cover ERISA fiduciary breach claims and other statutory claims.... [This article provides a list of items] employers should consider when evaluating their release agreements[.]" [Stanley v. George Washington Univ., No. 19-7079 (D.C. Cir. March 24, 2020)]

Mayer Brown

[Opinion]

U.S. Chamber of Commerce Letter to Treasury, IRS, DOL, and PBGC on Benefit Plan Reporting Requirements

"Because of the current financial and staffing constraints, we request, among other items, that [1] the Agencies delay employee benefit plan reporting and disclosure to the full extent allowed by law; [2] provide for good faith compliance; and [3] allow employers additional time to comply with specific notice requirements."

U.S. Chamber of Commerce

Executive Compensation
and Nonqualified Plans

Non-Qualified Plans and the Coronavirus

"This article provides timely information [about] ... [1] how participants may access their nonqualified plan accounts, [2] whether deferrals may be suspended, and [3] how to manage the plan in response to other human resources decisions including reductions in pay, changes to bonus programs, and temporary changes in an employee's status with the employer."

Newport Group

Selected Discussions
on the BenefitsLink Message Boards

'Coronavirus-Related Distributions' -- Limited to In-Service? Extends to Terminated Participants?

"I've seen the newly permissible CARES Act 'coronavirus-related distribution' referred to as a new form of 'in-service' distribution (or some variant thereof). It pretty clearly seems to apply to in-service distributions, but I don"t see anything that would limit a coronavirus-related distribution to in-service.

In other words, if a 50-year-old participant terminated two years ago with a $200,000 401(k) balance, does anything prevent them from taking a $100,000 distribution (assuming they are affected by the virus, etc.) and taking advantage of the favorable tax treatment of this new distribution type?"

BenefitsLink Message Boards

Stopping Matching Contributions -- Regular or SH -- Notice Required?

"In light of COVID-19's effects on a lot of small businesses, what kind of notice (30 day) is the employer required to give to participants if the employer wants to stop matching contributions for the rest of the year? Can this be done with a safe harbor match? I think so, but then the plan would seem to need to pass ADP testing, correct? Did the CARES Act give any guidance in this area?"

BenefitsLink Message Boards

Effect of Loan Payments Delay: Here's What I Figure an Amortization Schedule Would Look Like

"I have attached my amortization schedule. If someone has a different take on how this works, could you let me know?"

BenefitsLink Message Boards

1099-R Code for CARES Act Withdrawal

"What 1099-R code should be used for a coronavirus related withdrawal for a participant under 59-1/2? Can we use code 2 so they are not subject to penalty, or should we use code 1 and let them sort it out when they do their tax return?"

BenefitsLink Message Boards

CARES Act Loan Provisions -- Optional?

"I have read several commentaries saying that the increased loan maximum for 'qualified individuals' is an optional change, but that the loan repayment provision is mandatory. Agree?"

BenefitsLink Message Boards

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Press Releases

BCM Wealth Management Certified for Fiduciary Excellence
Centre for Fiduciary Excellence [CEFEX]

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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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