Retirement Plans Newsletter

April 24, 2020

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Innovative Investment Strategies for Volatile Times
April 28, 2020 WEBCAST
River and Mercantile Solutions

Impact of the Economic Downturn on Single Employer Defined Benefit Pension Plans
May 7, 2020 WEBCAST
Wagner Law Group P.C.

CARES Act Legislative Update for Retirement Plans and Health & Welfare Plans
May 14, 2020 WEBCAST
TRI-AD

Key Findings of the 30th Annual Retirement Confidence Survey
May 19, 2020 WEBCAST
EBRI [Employee Benefit Research Institute]

Emerging Cybersecurity Risks as a Result of COVID-19
May 21, 2020 WEBCAST
Western Pension & Benefits Council - Orange County Chapter

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View Coronavirus (COVID-19) News and Resources

[Guidance Overview]

Must-Know Rules for COVID-19 RMD Waivers Under the CARES Act

"[1] 2020 RMDs waived for both owner and beneficiary accounts ... [2] It's a split decision for 2019 RMDs ... [3] No first RMD by 2019 means no impact by RMD waiver ... [4] Amounts that are made non-RMDs by the CARES act are eligible for rollover ... [5] The one-per-year IRA rollover rule can be overcome ... [6] The 60-day period can be waived ... [7] RMDs from beneficiary accounts may not be rolled over ... [8] The 5-year rule is extended to 6 years."

Appleby Retirement Dictionary

[Guidance Overview]

DOL's Proposed Rule on Electronic Disclosure Safe Harbors (PDF)

"The proposed regulation would allow electronic disclosure to be the default delivery method for individuals if the following requirements are met: [1] The individual provides an electronic address to receive disclosures; [2] The administrator provides an initial paper notice before electronic disclosure begins; [3] The administrator provides a timely notice of Internet availability for each disclosure; [4] The availability notice is delivered appropriately; and [5] The internet site meets certain requirements."

Poyner Spruill, LLP, via Journal of Pension Benefits

[Guidance Overview]

Editor's Pick Another Year-End Tax Act Brings Changes for Plan Sponsors (and Their Service Providers) (PDF)

17 pages. "This column includes a summary of the key provisions for defined benefit and defined contribution plans from the Further Consolidated Appropriations Act of 2020 [which was signed into law on Dec. 20, 2019]. Notably, a number of the provisions are effective January 1, 2020, providing an opportunity to take advantage of these provisions in the near term, or otherwise require system changes to be made to comply with any mandatory changes."

Elizabeth Thomas Dold and Ilene H. Ferenczy, via Journal of Pension Benefits

Cutting Costs in a COVID-19 World: Reducing or Suspending Company Contributions to a 401(k) or 403(b) Plan

"As a result of the reduction or suspension of safe harbor contributions, the plan will be subject to the ADP/ACP tests for the entire plan year in which the suspension occurred.... Although a plan with a non-safe harbor matching contribution formula is not exempt from the ADP/ACP nondiscrimination testing requirements, it is important to be aware that a suspension or reduction in contributions can impact testing.... [A] reduction or suspension of company contributions may impact a company's ability to rely on the coverage transition rule commonly applied after acquisitions."

Faegre Drinker

COVID-19 Crimps, But Does Not Cripple Confidence -- Particularly If You Have a 401(k)

"The percentages of workers and retirees confident in their ability to live comfortably in retirement has not changed much since the start of the COVID-19 pandemic, but there are some caveats.... [W]orkers' continued confidence is likely reflecting the view that current conditions will pass before jeopardizing their long-term financial security.... Not surprisingly, workers' confidence in March was highly correlated with changes or expected changes in employment status."

National Association of Plan Advisors [NAPA]

Q1 2020 Retirement Analysis: Retirement Savers 'Stayed the Course' Despite Economic Crisis (PDF)

"The average 401(k) balance [in Q1 2020] was $91,400, down 19% from the record high of $112,300 in Q4 2019, but still higher than Q1 2010 balance of $71,500. The average IRA balance was $98,900, a 14% decrease from last quarter but higher than the Q1 2010 balance of $66,200. The average 403(b)/tax exempt account balance was $75,700, down 19% from last quarter but still above the average balance of $50,000 in Q1 2010.... Contributions to retirement accounts remained steady with some investors increasing their savings rate in the quarter."

Fidelity

Benefits in General

[Guidance Overview]

Description of the Tax Provisions of the CARES Act

112 pages. "For each provision, this document includes a description of present law, a description of the provision, and the effective date. Unless otherwise noted, the description of present law with respect to each provision describes the law in effect immediately before enactment of the provision and does not reflect changes to the law made by the enacting legislation or by subsequent legislation." [JCX-12R-20, Apr. 23, 2020]

Joint Committee on Taxation [JCT], U.S. Congress

Preston Rutledge to Step Down as EBSA Head

"Preston Rutledge is stepping down next month from his post as assistant Secretary of Labor for [EBSA]. An official [DOL] announcement has not yet been made and the reason for his departure or his next move could not immediately be learned."

Pensions & Investments

Benefits Considerations When Mass Hiring During COVID-19 Crisis

"There are industries experiencing massive hiring, with that comes careful considerations for onboarding employees. They need to be onboarded quickly and efficiently, and you need to ensure your benefits offering doesn’t get lost in the shuffle."

Tango Health

Executive Compensation
and Nonqualified Plans

Considerations for Nonqualified Deferred Compensation Plans Amid the Current Crisis (PDF)

"Under the current situation, many employers have decided to reduce pay temporarily, accompanied with the promise from the employer to make up for the compensation reduction later. This type of agreement might actually be a nonqualified deferred compensation plan subject to all of the 409A requirements -- including penalties for noncompliance."

Cowden Associates, Inc.

Editor's Pick The COVID-19 Test for Compensation Committees

"The current economic environment caused by the COVID-19 pandemic, with enormous uncertainty and significant daily and weekly changes in a company's cash flow and stock price, has created new and unprecedented challenges in balancing key executives' compensation with the long-term goals and priorities of the company. A Compensation Committee has at its disposal a number of different ways to offer key executives compensation in order to maintain a balance that will lead to the best result for the company and its shareholders, but will also provide appropriate incentives and retention tools to retain and motivate key executives in the current environment."

Morgan Lewis

Selected Discussions
on the BenefitsLink Message Boards

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Entity in Controlled Group Wants to Revoke Safe Harbor

"A controlled group is made up of two entities that participate in a single plan. One of the entities would like to revoke Safe Harbor mid-year. All the HCEs are in the entity that wants to revoke Safe Harbor. Can do?"

BenefitsLink Message Boards

Circular 230 Ethics -- Prior TPA Wants Fee for Copying Certain Documents

"We have recently taken over a plan from another TPA. Client cannot find certain documents. The prior TPA is charging him a fee to copy the documents from the TPA's file. Can it ethically do that?"

BenefitsLink Message Boards

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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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