Retirement Plans Newsletter

April 22, 2020 logo logo
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Webcasts, Conferences

Making Investment Decisions in a Time of Uncertainty
April 28, 2020 WEBCAST
International Foundation of Employee Benefit Plans [IFEBP]

Derrin's Fireside Chat: We CARES
April 29, 2020 WEBCAST

What to Know: An Overview of the SECURE Act and CARES Act
April 29, 2020 WEBCAST

Managing Through the Crisis: Implications of the CARES and SECURE Acts
May 6, 2020 WEBCAST
Defined Contribution Institutional Investment Association [DCIIA]

CARES Act: Employee Benefits Provisions, DOL Guidance, Relief for Sponsors of Certain Plans and Pensions
June 17, 2020 WEBCAST

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View Coronavirus (COVID-19) News and Resources

[Guidance Overview]

Editor's Pick Considerations for Obtaining Spousal Consent at a (Remote) Social Distance

"The 'physical presence' requirements set out by the IRS were designed to protect spouses from fraud and duress when waiving the QJSA and QOSA. Robust video witnessing and [remote online notarization (RON)] procedures further these objectives while allowing continued plan administration (and benefit commencements) despite social distancing requirements. Plan document provisions mandating physical presence requirements are not insurmountable."

Morgan Lewis


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How to (Safely) Notarize Retirement Plan Consents During the COVID-19 Crisis

"While the IRS has not yet issued an exception to the physical presence requirement, plan sponsors may be taking the position that utilizing relaxed state laws governing attestation and notarization is reasonable in the current climate... [T]his position is reasonable in the absence of IRS guidance, although [the authors] recommend that plan sponsors [1] prepare and follow a written remote notarization procedure that complies with any temporary requirements under the laws of the applicable state(s), and [2] revisit the process if/when the IRS provides additional guidance."

Morris, Manning & Martin, LLP

Editor's Pick Review COVID-19 Distribution and Loan Forms Carefully

"Plans that allow loans may be required to permit participants with qualifying COVID-19 related circumstances to delay loan repayments with due dates occurring between March 27, 2020, and Dec. 31, 2020, for one year. Increasing loan limits from $50,000 to $100,000 for participants with qualifying COVID-19 related circumstances is optional. Allowing distributions of up to $100,000 to participants with qualifying COVID-19 related circumstances is optional. Different TPAs have taken different interpretations of these provisions."

Porter Wright Morris & Arthur LLP

DOL E-Disclosure Rule is Submitted to OMB

"During the current COVID-19 crisis, a number of plans have expressed concerns about how to communicate with participants about market volatility and plan changes, especially where many are now expressing concerns about health risks associated with paper mailings. DOL's rule should not only modernize DOL's electronic disclosure standards, but also address communication concerns specifically raised by the current health crisis."

Groom Law Group

Does Traditional ERISA Fiduciary Liability Insurance Adequately Protect Retirement Plan Sponsors from COVID-Related Cyber Liability?

"It is arguable that never before have plan participants been flocking to this extent to their retirement plan accounts and remotely initiating various elective directions to plan custodians. This new reality has set the stage for emerging areas of cyber liability. There are a number of helpful tips for employers sponsoring retirement plans in times of pandemic."


ERISA Actuarial Assumptions Litigation Nears End of First Phase

"Of the 11 cases that have been filed, three are still in the first phase (motions to dismiss pending or expected to be filed soon), one has settled, and the rest have entered the second phase (discovery and summary judgment underway, but no rulings on summary judgment yet).... [T]he cases are not moving through the litigation phases in unison. However, as the first phase approaches conclusion, we can take an early look at the scoreboard and draw certain conclusions."

Thompson Hine LLP, via Lexology; free registration may be required

Compensation of Self-Employed Participants for Purposes of Qualified Retirement Plans

"Some of the more common issues that occur in reporting earned income for retirement plan purposes ... include: [1] Failing to net guaranteed payments with the partner's or LLC member's share of the distributive income or loss. [2] Failing to report the net income from all related entities that participate in the retirement plan.... [3] Failing to have related businesses as determined under IRC Secs. 414(b), (c), and (m) adopt the retirement plan so that earned income from all businesses is considered for the plan."


Employers Start to Suspend Their 401(k) Match

"The question is how quickly employers will resume their 401(k) match. An analysis of the 2008-09 suspensions showed the main motivator was liquidity constraints in the face of a recession and a banking crisis. The picture is quite different this time around."

Prof. Alicia H. Munnell, via MarketWatch

Estimated Cost of Retiree Pension Risk Transfer Rose in March

"During March, the estimated cost to transfer retiree pension risk to an insurer rose ... from 105.2% of a plan's total liabilities to 105.7% of those liabilities.... March's increase is the result of discount rates increasing 80 basis points, compared to a 71 basis point rise for annuity purchase rates, so that the relative cost of annuities climbed slightly."

Milliman Retirement Town Hall

Editor's Pick COVID-19 Crisis Creates a Perfect Opportunity for Roth IRA Conversions

"[D]oing a conversion will trigger a bigger federal income tax bill for the conversion year, and maybe a bigger state income tax bill too. Despite the conversion tax hit, right now might be the best-ever time to convert a traditional IRA into a Roth IRA. Here are three reasons why."


Social Security Combined Trust Funds Projection Remains the Same, Trustees Say

"Projections in [the 2020 OASDI Trustees Report] do not reflect the potential effects of the COVID-19 pandemic... The combined asset reserves of the Old-Age and Survivors Insurance and Disability Insurance (OASI and DI) Trust Funds are projected to become depleted in 2035, the same as projected last year, with 79 percent of benefits payable at that time.... The asset reserves of the combined OASI and DI Trust Funds increased by $2.5 billion in 2019 to a total of $2.897 trillion. The total annual cost of the program is projected to exceed total annual income, for the first time since 1982, in 2021 and remain higher throughout the 75-year projection period.... The year when the combined trust fund reserves are projected to become depleted, if Congress does not act before then, is 2035--the same as last year’s projection."

U.S. Social Security Administration [SSA]


Crisis Mandates School Districts Fix 403(b) Now

"Thanks to the The CARES Act teachers affected by COVID-19 may withdraw up to $100,000 from their 403(b) account and avoid the federal 10% early withdrawal penalty. Most who exercise this provision will be subject to vendor surrender charges of up to 12% and in some cases even higher. This will not be the case in 401(k) plans. This is just one more glaring example of how bad K-12 403(b) plans are."



Rescue the Rescuers: Pension Reform Is No-Brainer for Next Pandemic Response Legislation

"Those most at risk of losing benefits in these multiemployer plans are the very same workers who are risking their lives to protect us in this time of crisis.... If Congress does not act, many of these workers and retirees stand to lose as much as half of their pensions, or more. Tens of thousands have already had their benefits cut. Lawmakers should not abandon these American heroes in their time of need."

Pension Rights Center

Benefits in General

[Official Guidance]

Text of DOL Notice: EBSA Participant Assistance Program Customer Survey

"This survey will collect customer satisfaction data for a sample of private citizens who call into the participant assistance program to ask about their private sector employer provided benefits such as pensions, retirement savings, and health benefits. Three types of callers will be queried: [1] Those who need benefit claim assistance; [2] Those who have a valid benefit claim; and [3] Those who have an invalid benefit claim.... The results of the survey will be analyzed to provide actionable data that could be used to improve program performance."

Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

Selected Discussions
on the BenefitsLink Message Boards

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Handling Fee Disclosure Prior to Implementing Plan Loans

"I've got a plan that wants to be nice and add loans until 9/23/20 as part of the CARES options. Loans were never offered in the plan before. The plan sponsor would like to pass the costs of the loans on to the participants. Functionally, do we add the loan provision dated 30 days from now, giving out the notice today that starts the fee disclosure clock?"

BenefitsLink Message Boards

Foreign Entity Would Like to Serve as Plan Trustee

"I have a client who is Australian, but lives in Manhattan. He has 2 US citizens working for him here, and would like to establish a 401k plan for them. We're having a difficult time finding a platform for this type of client from a trustee perspective. Does anyone know what investment platform would allow for such a foreign entity to be able to obtain approval to act as the plan's trustee?"

BenefitsLink Message Boards

Plan Audit Relief for 2019?

"Has anyone seen anything about plan audit relief? I have a client that cannot afford their plan audit right now. Restaurant group. I haven't seen anything yet. May tell them to work with their auditors for some relief."

BenefitsLink Message Boards

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Press Releases

Nominations Now Open: Plan Sponsor Excellence & Innovation Awards
Defined Contribution Institutional Investment Association [DCIIA]

Most Popular Items in the Previous Issue

CARES Act: What Plan Sponsors Should Know (PDF)
Ilene Ferenczy, for CUNA Mutual Retirement Solutions, 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

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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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