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View Coronavirus (COVID-19) News and Resources

[Guidance Overview]

IRS Issue Snapshot: 403(b) Plans -- Catch-Up Contributions

"Audit Tips: [1] Review the Forms W-2 to determine if any employee has exceeded the basic IRC Section 402(g) limit. This indicates that the employee made catch-up contributions. [2] Determine if the plan document permits the age 50 catch-up or the special 403(b) catch-up contributions. For plans that permit both types, make sure the contributions are applied to the limits in the proper order. [3] Verify that the qualified organization keeps the records necessary to calculate the special 403(b) catch-up and that the calculations are accurate."

Internal Revenue Service [IRS]

[Guidance Overview]

IRS Posts Initial Guidance for Coronavirus-Related Loans and Distributions Under the CARES Act

"The Q&As confirm that each of the distribution and loan provisions are optional for employers to adopt (or not adopt)....IRS intends to issue formal guidance regarding the CARES Act distribution and loan provisions in the near future, [and] anticipates that the guidance will generally apply the principles set forth in [Notice 2005-92] regarding the Katrina Emergency Tax Relief Act of 2005 (KETRA)."

Spencer Fane

[Guidance Overview]

New IRS Guidance Answers Important CARES Act Questions for Retirement Plans

"[1] When in doubt, follow the KETRA playbook.... [2] Participants may self-certify that they are eligible, but there is a price to pay for misrepresentations.... [3] CRDs and CARES Act Loans are optional.... [4] The IRS 'anticipates' that plans will accept repayment of CRDs, but acceptance of repayments is not necessarily required.... [5] Additional restrictions apply for pension plans.... [6] More to come on how to report CRDs."


Suspending 401(k) Match Raises Compliance Issues (PDF)

"This article identifies a number of technical compliance issues for employers to consider before reducing or suspending a 401(k) match, including ERISA's anti-cutback protections, the [ADP] and [ACP] safe harbor requirements, and the Internal Revenue Code's $285,000 cap on plan compensation."


What Retirement Plan Filings and Records Must We Keep?

"[It is] important that you maintain copies of all Forms 8955-SSA filed for your plan.... [T]he number of individuals who may be filing for social security benefits is likely to increase.... [E]nsuring you have the necessary backups to document which of your former participants are or are not entitled to additional benefits is that much more important."



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Guidelines for Communicating Penetration Test Results (PDF)

"Penetration tests are used to highlight vulnerabilities in a system and expose areas of a potential weakness. For this reason, record keepers must maintain a level of secrecy and privacy about these test results to continue to secure client data and assets. Conversely, the industry recognizes a client’s need to know that the vendors they rely upon to protect their employees’ benefits are secure and well protected. The intent of these guidelines is to establish a base of communication between record keepers and their clients for how best to use penetration tests for those shared goals."

The SPARK Institute

Lawsuit Alleges Excessive Fees in Multiple Employer Plan

"McCaffree Financial Corp., a participating employer in the ADP TotalSource Retirement Savings Plan, has filed an excessive fee lawsuit on behalf of the plan and a class of similarly situated participating employers against ADP, ADP TotalSource Group, the plan's administrative committee and its members, and NFP Retirement, the plan's investment adviser....As of December 31, 2018, the plan had 114,254 participants with account balances and assets totaling more than $4.44 billion, placing it in the top 0.1% of all 401(k) plans by plan size." [McCaffree Financial Corp. v. ADP, No. 20-5492 (D.N.J. complaint filed May 4, 2020)]

PLANSPONSOR; free registration may be required

2020 Corporate Pension Funding Study

"The year-end 2019 funded ratio for the Milliman 100 companies settled at 87.5%, a slight improvement from the year-end 2018 funded ratio of 87.1%.... However, due to a matching 11% growth in both assets and liabilities, the funding deficit grew by $17 billion, ending the year at $232 billion."


Investment Company Factbook (60th Edition, 2020) (PDF)

329 pages. "This year's Fact Book ... has nearly 200 charts and tables ... [ICI has] added chapters devoted to the worldwide fund industry, ETFs, closed-end funds, characteristics and behavior of fund investors, and the vast market for retirement-related products."

Investment Company Institute [ICI]

How COVID-19 Has Financially Impacted Americans: April Update

"Only 48% of respondents said they were saving for retirement prior to the COVID-19 outbreak in the United States (i.e., mid-March). Of those who had been, nearly one-quarter stopped putting money toward retirement since the outbreak and an additional 20% are still saving, but saving less than they were before."


Benefits in General

[Guidance Overview]

Editor's Pick IRS Proposes Rules on UBIT Changes Affecting Benefit Plan Investors

"A significant uncertainty in this area has been whether each investment held by a plan is a separate 'trade or business' (such that a plan must calculate its UBIT for each individual investment) or whether a plan can consider all investments of the same 'type' as a single trade or business (such that a plan can calculate its UBIT across all of these investments in the aggregate, netting gains and losses on the whole). [IRS Notice 2018-67] provided a variety of approaches that plans may apply to simplify the impact of this change. The Proposed UBIT Regulations retain many of the concepts included in the Notice but with some significant modifications."

Groom Law Group

Selected Discussions
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Coronavirus-Related Distribution in Form of Annuity from a DB or Money Purchase Plan

"The CARES Act allows special tax relief for 2020 distributions up to $100,000 by a 'qualified individual' from a defined benefit plan, as long as the distribution is not made earlier than an otherwise-permitted distribution event. But the special tax relief implies that a lump sum will be taken. How would the $100,000 limit and special tax relief apply to an in-service annuity payment from a DB plan (or even a money purchase pension plan)?"

BenefitsLink Message Boards

Coronavirus-Related Distributions May Cost Less

"Several writers in BenefitsLink discussions have mentioned an idea that a plan provision for a coronavirus-related distribution might be unnecessary if the participant who would take it is severed from employment or otherwise entitled to a distribution. But here's one further reason why a classification might matter. Some recordkeepers are waiving a processing fee for a coronavirus-related distribution, but not for a normal distribution."

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Press Releases

Most Popular Items in the Previous Issue

IRS Provides CARES Act Questions and Answers
Wilkins Finston Friedman Law Group 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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