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April 9, 2020 logo logo
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[Official Guidance]

Text of OPM Notice: Civil Service Retirement System; Present Value Factors

"[OPM] is providing notice of adjusted present value factors applicable to retirees under the Civil Service Retirement System (CSRS) who elect to provide survivor annuity benefits to a spouse based on post-retirement marriage; to retiring employees who elect the alternative form of annuity, owe certain redeposits based on refunds of contributions for service ending before March 1, 1991, or elect to credit certain service with nonappropriated fund instrumentalities; or, for individuals with certain types of retirement coverage errors who can elect to receive credit for service by taking an actuarial reduction under the provisions of the Federal Erroneous Retirement Coverage Correction Act."

Office of Personnel Management [OPM]

[Official Guidance]

Text of OPM Notice: Federal Employees' Retirement System; Present Value Factors

"[OPM] is providing notice of adjusted present value factors applicable to retirees who elect to provide survivor annuity benefits to a spouse based on post-retirement marriage, and to retiring employees who elect the alternative form of annuity or elect to credit certain service with nonappropriated fund instrumentalities."

Office of Personnel Management [OPM]

[Official Guidance]

Text of OPM Notice: Federal Employees' Retirement System; Normal Cost Percentages

"[OPM] is providing notice of revised normal cost percentages for employees covered by the Federal Employees' Retirement System (FERS) Act of 1986."

Office of Personnel Management [OPM]

[Guidance Overview]

Editor's Pick CARES Act Provides Funding Relief for Single-Employer Defined Benefit Pension Plans

"The funding relief has two parts. The first is the delay of the due date for any minimum required contribution. The second is the ability to elect to use the prior year's AFTAP.... There is some uncertainty as to how the interest adjustment interacts with the normal rules for adjusting the minimum required contribution.... The ability to use the AFTAP for the last plan year ending before January 1, 2020, for a plan year including calendar year 2020 has its own set of questions."


[Guidance Overview]

Editor's Pick SECURE, CARES Acts Change Rules on Required Minimum Distributions

"Some employers might not want to adopt the SECURE Act's changes -- for instance, if the employer's plan provides very generous actuarial increases for participants who work after age 65. These employers should be able to retain their plans' existing provisions.... IRS will need to update the 401(a)(9) regulations for the SECURE Act's changes. But if the existing 401(a)(9) regulations are a guide, then employers presumably have the same flexibility to use a 70-1/2 triggering age, despite the SECURE Act's changes."



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Sponsors Face Quandary in How to Help Participants -- Allowing Loans and Withdrawals Could 'Lock In' Investment Losses

"[T]here's no easy answer to the question of whether plan sponsors should adopt the new rules ... [A]ny change would require communication and analysis of participant demographics.... [T]he loosening of restrictions, which comes amid a calamitous market decline will make it virtually impossible for participants who withdraw funds to recover their losses."

Pensions & Investments

Before You Adopt Those COVID-19 Loan and Distribution Provisions ...

"[A]t least one large recordkeeper told their plan sponsors that they had just five days to opt out, or the recordkeeper would adopt the new provisions for them! Some other recordkeepers have followed suit by providing deadlines for decisions that are less than two weeks from the enactment of the legislation.... it is important to understand that recordkeepers will not be the ones on the hook for any hasty decisions that are made in this regard -- that liability will rest squarely on the shoulders of the plan fiduciaries.... Here are some things to consider[.]"

Cammack Retirement Group

COVID-19: Emerging Collection Issues for Multiemployer Plans

"Trustees should not act in haste in responding to the COVID-19 crisis and make sure any actions they take are properly documented. A fiduciary's role in an emergency situation is to provide relief to signatory employers to help them get through this crisis so that they can ultimately make their contributions."

International Foundation of Employee Benefit Plans [IFEBP]

How Do the RMD Rules Under the SECURE Act Affect Financial Statement Audits?

"The simple shift in the RMD age from 70-1/2 to 72 will not change the audit procedures performed, but the change in timing gives us an opportunity to revisit a plan sponsor's administrative responsibilities, the implications of operational failures, the correction options available, and the guidance we still need regarding transitional relief available to those who complied with the old rules after the SECURE Act had already become effective."

Belfint Lyons Shuman

Editor's Pick Corporate Pensions in Turbulent Economic Times: An Overview of Key Issues and Options for DB Plan Sponsors

"This article is intended to make plan sponsors aware of the most common reporting and regulatory issues that arise in an economic downturn and summarize the options for addressing serious pension funding challenges. We also discuss the recently passed pension funding relief and possible future changes to the funding rules under [ERISA] and the Internal Revenue Code[.]"

Groom Law Group

Near-Retirement Target-Date Investors Show Signs of Stress

"Investors in target-date mutual funds that are close to retirement pulled a net $9.4 billion in March as the coronavirus drawdown accelerated during the month. Investors further from retirement stayed the course. The net outflows from 2020 target-date funds equaled roughly 4% of assets. That's a much faster rate than the redemption of 2015 target-date funds in the first quarter of 2015."


Executive Compensation
and Nonqualified Plans

A Framework for Discretion Within Executive Incentive Plans (PDF)

"[O]utstanding cycles of budget-based incentive compensation programs, both short- and long-term in nature, did not contemplate this broad economic downturn. As such, the formulaic aspect of these incentive programs in many cases is likely to pay well below target or miss threshold objectives required for any payout ... Discretion within executive incentive plans has historically been avoided or relegated to a small percentage of the total [and] has carried a negative connotation ... A framework to assist with discretion regarding 2020 results will be helpful to avoid arbitrary and confusing outcomes."


Selected Discussions
on the BenefitsLink Message Boards

CARES Act Eligibility Question -- Participant's Spouse Is Furloughed or Has Cutback in Hours

"Has it been established that if a spouse gets furloughed/loses hours a participant falls under the 'adverse financial consequences' to determine eligibility for the in-service distribution/loan under the CARES Act?"

BenefitsLink Message Boards

CARES Act Distributions -- Effect on Top Heavy Calculation, Especially for Recontributions

"Curious as to how others will treat the new distributions for top heavy testing purposes. The main concern is the ability for participants to contribute the funds back into a plan. If the money isn't paid back, I assume it'd just be treated like other in-service distributions. If the money is recontributed though, would these funds be ignored? Or would the balance associated with it be included in the top heavy balance (and then you'd probably have to back out the in-service so it's not double counted)?"

BenefitsLink Message Boards

RMD from IRA Taken in January -- Can Put It Back?

"I have a client who took his RMD in January 2020 for 2020 from his IRA. Due to CARES, can he put it back in the IRA now? It's been more than 60 days since he took the RMD."

BenefitsLink Message Boards

3 Year Ratable Taxes on COVID-19 Distribution -- What Happens If Recontributed?

"CARES Act says tax is ratable over three years. Let's say a participant pays back the distribution in year 3. What happens to the tax paid?"

BenefitsLink Message Boards

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Press Releases

Most Popular Items in the Previous Issue

Retirement Contributions and the Paycheck Protection Program
American Retirement Association [ARA], Inc.
1298 Minnesota Avenue, Suite H
Winter Park, Florida 32789
(407) 644-4146

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

Article submission: Online form, or email to

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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