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Newly Posted
Webcasts, Conferences

A Foreseeable Issue: Emergency Distributions of Deferred Compensation
Eversheds Sutherland

COVID-19 / CARES Act Plan Document and Administration Issues
April 23, 2020 WEBCAST

Minimum Coverage Testing Case Studies
May 13, 2020 WEBCAST
American Society of Pension Professionals & Actuaries [ASPPA]

Retirement Planning After the SECURE Act and CARES Act
May 14, 2020 WEBCAST
Bloomberg BNA

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

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View Coronavirus (COVID-19) News and Resources

[Guidance Overview]

No COVID-19 Deadline Extension for Annual Funding Notice Due April 29

"Although the CARES Act allows the [DOL] to delay the [annual funding notice (AFN)] distribution deadline, the DOL has failed to do so.... [T]he April 29, 2020, distribution deadline still applies."

Warner Norcross & Judd LLP

[Guidance Overview]

Technical Amendments Act Affects Puerto Rico Retirement Plans, IRAs, Individual Retirement Annuities and Educational Contribution Accounts

"This summary specifically addresses provisions under the PR Code related to Puerto Rico Retirement Plans, IRAs, individual retirement annuities and educational contribution accounts. Unless otherwise stated, the amendments become effective as of April 17, 2020, when Act 40 was approved.... Retirement plan distributions to Puerto Rico non-residents ... Withholding tax on retirement plan distributions and participant loan rules ... Filing deadline of informative returns regarding IRAs, individual retirement annuities, and educational contribution accounts."

McConnell Valdes

Understanding the Impact on Defined Contribution Plans of Employees Furloughed Due to COVID-19

"Employers will need to be vigilant when monitoring outstanding participant loans to ensure that any delinquencies are addressed promptly.... [T]he expanded availability of participant loans and hardship distributions under the CARES Act likely will create additional administrative work for employers where furloughed employees are involved.... If no hours of service accrue, it may impact vesting as well as eligibility requirements for plan participation or contribution allocations."

Milliman Retirement Town Hall

Federal District Court Refuses to Dismiss Pension Withdrawal Liability Suit

"At stake in this ruling is the question of whether refusal to provide information to help a multiemployer pension fund determine withdrawal liability for one of its members constitutes a default, therefore making the full withdrawal liability payment immediately payable." [The National Retirement Fund v. InterContinental Hotels Group Resources, LLC, No. 19-8018 (S.D.N.Y. Apr. 21, 2020)]


Liberty Mutual Sued by 401(k) Plan Participants

"[T]he suit alleges that the insurance giant and its plan's administrators 'allowed unreasonable expenses to be charged to participants for administration of the plan and for managed account services, and retained poorly performing investments that similarly situated fiduciaries removed from their plans' -- actions which [allegedly] caused plan participants to suffer significant financial losses, including nearly $33 million in losses since April 2014[.]" [Ahmed v. Liberty Mutual Group, Inc., No. 20-30056 (D. Mass. complaint filed Apr. 10, 2020)]

Schlichter Bogard & Denton

Bridging the Gap Between Accumulation and Decumulation for Participants (PDF)

"Participants approaching retirement age are inundated with information and even 'advice' from sources outside their plan, but the quality of this information and advice can be uneven, misguided, or ill-informed. Plan sponsors can position themselves as a reputable resource and guide. If plan sponsors want to maintain retirees in plan, they should not keep it a secret. It's crucial that they engage with participants early and often."

T. Rowe Price

Impact of CARES on Volunteer First Responder 457(e)(11) LOSAP Plans

"[A Length of Service Awards program (LOSAP) acts] as a sort of gratuitous payment arrangement which local fire districts adopt under either state or local laws the deferral of a payment of up to $6,000 per year for volunteers providing fire fighting and prevention services, emergency medical services, and ambulance services.... The CARES Act does not allow the tax on LOSAP distributions to be spread over three years, like it does for the tax on distributions from other kinds of retirement plans. There is also no ability for the firefighter to repay the amount of those distributions back to the plan, as the CARES Act allows to be done for other types of retirement plans."

Business of Benefits

Social Security Retirement Earnings Test (RET): Earnings Exemption for COVID-19-Related Work Response (PDF)

"In response to the coronavirus (COVID-19) outbreak, some state and local officials have called on retired healthcare workers to return to work ... If those retired workers are receiving Social Security benefits and are under the Social Security full retirement age, the Retirement Earnings Test (RET) may reduce their Social Security benefits ... [T]he Health Care Worker and First Responder Social Security Beneficiaries Choice Act (HR 6428) has proposed to exempt the earnings of individuals employed in the healthcare workforce or as a first responder in 2020 from the RET." [IN11352, Apr. 22, 2020]

Congressional Research Service [CRS]

Sen. McConnell Rules Out Federal Money for State Pensions

" 'There's not going to be any desire on the Republican side to bail out state pensions by borrowing money from future generations,' Mr. McConnell. 'We'll certainly insist that anything we'd borrow to send down to the states is not spent on solving problems that they created for themselves over the years with their pension program.' "

Pensions & Investments


The Retirement Plan Industry's Troubling Framework

"If an insurance company (or other kind of recordkeeper, for that matter) and their employees happen to educate, inform, or help participants, that's fine and wonderful, but it's merely a byproduct of the sole reason for the existence of an insurance company (or other like entity), which is to sell, sell, sell.... [That's] the nature of the business model and regulatory framework that governs the retirement plan industry in which they operate.... It also helped to explain why, when my RIA came on board, I found that 45% of the plan's assets were held in the previous insurance company recordkeeper's stable-value fund."

W. Scott Simon, in Morningstar


Critics Cite the Market Downturn Among Reasons to Gut Public Pensions

"We know pensions provide immediate and long-term fiscal stability to their recipients while providing a much-needed economic boost to communities.... However, pension opponents are taking advantage of the economic downturn to peddle false and misleading narratives about public pension funds. [The authors] highlight three recent articles featuring these arguments and why they don't have merit."

National Public Pension Coalition

Benefits in General

[Guidance Overview]

IRS Extends Filing Deadlines for Employee Benefit Plans

"Form 5500 filings for plan years that ended in September, October or November 2019, as well as Form 5500 deadlines falling between April 1 and July 15, 2020, as a result of a previously filed extension request are now due July 15, 2020."

Faegre Drinker

Executive Compensation
and Nonqualified Plans

Stock Options and Valuations: Tax Focus

"This article discusses the tax consequences of Restricted Stock (RS), Incentive Stock Options (ISO) and Nonqualified stock options (NQO). In addition to the tax consequences for employees, there are tax and accounting implications for the company.... [G]enerally, when the employee recognizes ordinary compensation income, the company will have a deduction for compensation income, and a charge to accounting income as well."

Fox Rothschild LLP

Selected Discussions
on the BenefitsLink Message Boards

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CRD from Our Plan for Participant's Layoff from Subsequent Employer

"A former participant left our client for non-COVID-19 related reasons. She then started working for another company. The other company just laid her off. Can she now seek a distribution from our client's plan because she's been laid off from the other company?"

BenefitsLink Message Boards

Apply Forfeitures in 2020 to Employer Contribution for 2019?

"Profit sharing plan. Forfeitures can pay expenses or be used to reduce employer's contribution. Forfeitures are NOT reallocated. Participant terminates in 2020, receives full distribution, so forfeiture occurs during 2020, for the 2020 plan year. Can this forfeiture be used to reduce the 2019 plan year profit sharing contribution deposit that is made in 2020? Looking out at the snow blowing by the window is freezing my brain."

BenefitsLink Message Boards

Can Safe Harbor Contributions Be Stopped for HCEs?

"Due to current economic hardships, plan sponsor would like to refrain from making safe harbor contributions for the HCEs (all are family member-owners) for the prior plan year. Is this possible? They'd also like to stop current year safe harbor contributions for themselves."

BenefitsLink Message Boards

SECURE Act -- Annuity Portability

"The SECURE Act allows employees with 401(k) annuities the opportunity to preserve the annuity if the plan sponsor changes providers or eliminates the option altogether. Employees can do a direct transfer to an IRA or another plan that accepts the annuity. Or, it can do an in-kind distribution. The first option would be tax-free, but what about the second?"

BenefitsLink Message Boards

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Press Releases

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Review COVID-19 Distribution and Loan Forms Carefully
Porter Wright Morris & Arthur LLP, 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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