Retirement Plans Newsletter

May 15, 2020

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8 Ideas You Haven't Heard to Change Your Retirement Plan for the Better
May 19, 2020 WEBCAST
University Conference Services

State Sponsored Retirement Savings Plans
May 20, 2020 WEBCAST
National Institute on Retirement Security

Poke the Bear: Changing the Way We Engage Plan Participants
May 21, 2020 WEBCAST
University Conference Services

Employee Benefits Tax Lunch Series
May 27, 2020 WEBCAST
Employee Benefits Committee of the D.C. Bar Taxation Community

►See All 133 Upcoming Webcasts and Conferences

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View Coronavirus (COVID-19) News and Resources

New Mexico Enacts Retirement Savings Plan and Marketplace (PDF)

"New Mexico is the latest state to dive into the retirement pool for private-sector and nonprofit employers, enacting legislation to create both a state-run savings program and a retirement marketplace.... The marketplace must begin operating by July 1, 2021, with a six-month delay for the savings program."

Mercer

How Companies Can Boost Benefits for Rank-and-File Employees

"In light of COVID-19, many people anticipate a new normal.... [E]mployers may want to consider new ways of demonstrating appreciation of their extraordinary and valued rank-and-file employees, who have given and been through so much. One way to do this is to adopt an NHCE reward and compensation plan."

Hall Benefits Law

Proposed Tax-Exempt Entity Rules Bring Relief for Retirement Plan Investments

"Proposed rules on on tax-exempt entity unrelated business taxable income bring some welcome relief to most retirement plan investments. Under the proposed rules, ... tax-qualified retirement plans that are engaging in typical passive investment partnership activities won't be subject to separate reporting requirements created by the 2017 tax law."

Eversheds Sutherland, via Bloomberg

CARES Act Required Minimum Distribution Rules: Helping Clients Deal with the Issues

"For a plan sponsor client, the discussion would center on whether or not it wants to adopt the RMD relief administratively. For a plan participant client, the discussion could center on whether he wants to take a distribution equal to the RMD amount in any case because he needs the money ... For an IRA client, the discussion would likely be the same, whether he needs the money or took an RMD not realizing it was not required and now would like to roll it over."

Faegre Drinker

CARES Act Provision May Help ESOP Companies

"[An] ESOP sponsor can postpone all required minimum distributions that are scheduled to be made in 2020, and postpone all required beginning dates that would occur in 2020 by one year, i.e., until April 1, 2021. Adopting this CARES Act provision would offer some relief to ESOP sponsors with respect to their repurchase obligation[.]"

Morgan Lewis

Developing a Strategy for Moving from Pension to 401(k) Benefits

"Budgeting for next year's cost of employer-provided benefits can seem daunting, especially when an organization sponsors both a defined benefit pension plan and a 401(k) defined contribution plan. Is it time to consider moving away from the defined benefit pension plan to avoid the volatility and risk? If so, plan sponsors should develop a well-thought-out process for analyzing the alternatives and impact to both employer costs and participant benefits. The overall strategy and objectives should be reviewed."

Findley

SECURE Act's Increase in RMD to Age 72 May Lead to Avoidance of Net Investment Income Tax

"[W]hen considered in conjunction with the increase to age 72 for requiring RMDs, [the updated IRS mortality tables] could mean a reduction in income taxes since the payout period increases, thereby decreasing the distribution amount. The lowering of a taxpayer's modified adjusted gross income (MAGI) may help avoid the net investment income tax of 3.8% as well as taxes on Social Security benefits and Medicare premium surcharges."

Hall Benefits Law

[Opinion]

ARA Letter to IRS Requesting Improvements in Interim Amendment Process for Pre-Approved Plans (PDF)

"The Treasury/IRS should adopt an interim amendment approach for Section 401(a) pre-approved and Section 403(b) pre-approved plans that is identical (or similar to) that taken for plan amendments for Section 401(a) individually designed plans. That is, interim amendments for all pre-approved plans will not be required until the end of the second calendar year that begins after the issuance of the Required Amendments List in which the change in qualification requirements appears."

American Retirement Association [ARA]

Executive Compensation
and Nonqualified Plans

Finding the Proper Balance of Legal and Consulting Advice for Compensation Committees

"[1] Making room for advisors inside and outside the boardroom.... [2] Going beyond benchmarking and peer group practice.... [3] Advance modeling of disclosures."

Pillsbury Winthrop Shaw Pittman LLP

Selected Discussions
on the BenefitsLink Message Boards

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'FFCRA Sick Pay' Not Being Counted for Deferrals

"The plan uses W-2 definition of compensation. The sponsor noticed that their payroll company was not applying the deferral election for those who elected a percentage of compensation to be deferred against what was being coded as 'FFCRA EE Sick' pay on their paychecks (so it was being calculated from 'regular wages' only). The plan sponsor asked the payroll company, and the response was to double-check the plan because 'by default' FFCRA wages aren't included. I don't know what payroll company they're using, but what can they be thinking?"

BenefitsLink Message Boards

Timing of Notice of Annuity Information

"Doing a DB plan termination. Of the 40 participants with a lump sum greater than $5,000, two selected an annuity. We had everything set for June 1 lump sum distributions but the plan sponsor is only now dealing with the annuity purchase. Am I correct that, because the Notice of Annuity Information is just now going to be provided, they cannot pay the lump sums until the 45 day advance notice requirement is met?"

BenefitsLink Message Boards

Repayment of Roth IRA Distributions Within 3 Years

"Does the CARES Act allow a 'qualified individual' to repay 2020 Roth IRA distributions within 3 years? The law says that only CRDs that are eligible for rollover under section 408(d)(3) can be repaid, and it doesn't look like that section covers Roth IRA rollovers."

BenefitsLink Message Boards

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Is Now the Time for a Roth Conversion?
Cammack Retirement Group

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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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