Retirement Plans Newsletter

May 21, 2020

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Employee Benefit Plans - 2020 Plan Sponsor Update
May 27, 2020 WEBCAST
PwC

Ethical Considerations for Employee Benefit Plan Lawyers
June 4, 2020 WEBCAST
American Bar Association Joint Committee on Employee Benefits [JCEB]

ERISA Litigation Update
June 4, 2020 WEBCAST
American Bar Association Joint Committee on Employee Benefits [JCEB]

Time to Futureproof Retirement: A new approach for a new decade -- What can pensions do now?
June 11, 2020 WEBCAST
Pensions & Investments

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View Coronavirus (COVID-19) News and Resources

[Official Guidance]

Text of DOL Fact Sheet: Electronic Disclosure Safe Harbor for Retirement Plans

"The final rule establishes a new, voluntary safe harbor for retirement plan administrators who want to use electronic media, as a default, to furnish covered documents to covered individuals, rather than sending potentially large volumes of paper documents through the mail.... The safe harbor is limited to retirement plan disclosures.... Covered individuals can request paper copies of specific documents, or globally opt out of electronic delivery entirely, at any time, free of charge.... Covered individuals must be furnished an initial notification, on paper, that the way they currently receive retirement plan disclosures (e.g., paper delivery in the US mail) is changing.... Covered individuals generally must be furnished a notice of internet availability (NOIA) each time a new covered document is made available for review on the internet website.... Covered documents must remain on an internet website until superseded by a subsequent version, but in no event for less than one year.... Plan administrators must ensure that the electronic delivery system is designed to alert them if a participant's electronic address is invalid or inoperable.... When someone leaves their job, the plan administrator must take steps to ensure the continued accuracy and operability of the person's employer-provided electronic address."

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

[Sponsored]

Thorough analysis of important aspects of the FFCRA and CARES Act

Sponsored by Wolters Kluwer

Understand & respond to the new rules & requirements this legislation brings. Families First Act and CARES Act, Selected Provisions: LEA provides numerous features designed to help you locate and understand the changes made by these Acts. Learn More. Learn more


[Official Guidance]

IRS Comment Request for Form 5307: Application for Determination for Adopters of Modified Volume Submitter Plans

"There are no changes being made to this form at this time.... Comments are invited on: [1] Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information has practical utility; [2] the accuracy of the agency's estimate of the burden of the collection of information; [3] ways to enhance the quality, utility, and clarity of the information to be collected; [4] ways to minimize the burden of the collection of information on or other forms of information technology; and [5] estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information."

Internal Revenue Service [IRS]

[Guidance Overview]

Editor's Pick Guide to ERISA Individual Prohibited Transaction Exemptions (PDF)

132 pages. "From 1996-2019, the [DOL] granted more than 1,200 individual exemptions from the ERISA prohibited transaction rules.... This guide summarizes and collects individual prohibited transaction exemption practice during that period."

Eversheds Sutherland

[Guidance Overview]

The SECURE Act Lifetime Income Provisions

"The [SECURE] Act ... contains provisions that seek to expand access to lifetime income within retirement plans. The Act seeks to educate individuals on the projected income they could receive from their retirement savings. It also has provisions that should encourage plan sponsors to offer in-plan annuity options by providing a safe harbor for the selection of an annuity provider, as well as expanded portability of the annuity contracts."

Multnomah Group

How Plan Sponsors Can Enhance Retirement Plan Value Amid Coronavirus Impact

"[1] Focus on plan management.... [2] Consider participant circumstances.... [3] Offer diversified investments.... [4] Encourage continued participation."

CBIZ

[Sponsored]

SPARK/DCIIA Summer Policy Series

Sponsored by SPARK and DCIIA

Live virtual event, every Wednesday, July 15 to August 19. Domestic and global topics; general and breakout sessions (live broadcast), exhibitor hall and virtual networking happy hours. Replay on demand. Free to SPARK and DCIIA members. Learn more! Learn more


COVID-19 Pandemic Sheds Light on Questionable Retirement Plan Features

"[T]he QJSA is not a requirement for many plan types, and retaining it makes little sense if it can be avoided ... Despite [the CARES Act] changes, providing participants with flexibility for loan repayment at employment termination is far preferable.... Even in a non-pandemic environment, it seems prudent for a retirement plan to be written, if possible, so that the plan sponsor has the flexibility to modify/suspend contributions at its discretion."

Cammack Retirement Group

Survival of the Thrifty: Small Businesses and Retirement Plans

"One new opportunity to trim expenses may be available to some businesses that sponsor or are contemplating offering a 401(k) or other retirement savings plan. With the start of the new year, it's now easier than ever for small businesses to join or form Pooled Employer Plans (PEPs) -- sometimes referred to as Multiple Employer Plans (MEPs) -- to reduce the costs of providing a retirement savings plan."

MassMutual

SPARK Applauds DOL Final Regs on E-Delivery

"The SPARK Institute's research found that: [1] A switch to default electronic delivery would produce between $250 and $450 million in annual aggregate savings that would accrue directly to individual retirement plan participants ... [2] 99% of retirement plan participants have internet access and 88% use the internet on a daily basis. [3] Driven by electronic delivery nudges and engagement with online tools, final account balances for retirement plan participants could increase by 63% with modest increases in their deferral rates.... [4] Electronic delivery provides a better guarantee of actual receipt of information, helping address missing participants and strengthening cybersecurity to prevent online account fraud."

The SPARK Institute

Fiduciary Update, May 2020

"[This article] provides perspective on monitoring appointed plan fiduciaries with an example of the diligent processes that saved one such fiduciary from liability. [It] also takes a look at the latest on cybersecurity allegations."

CAPTRUST

IRS May Be Increasing Focus on Catch-Up Contributions in 403(b) and 457(b) Plans

"Recent announcements from the IRS indicate the potential for increased audits of section 403(b) and 457(b) plans, specifically relating to catch-up contributions under such plans. The IRS recently published an issue snapshot discussing the rules for catch-up contributions under 403(b) plans and released Publication 5313, containing the Fiscal Year 2020 Program Letter for the Tax Exempt & Government Entities division, which provides for a focus on such contributions."

Groom Law Group

Annuity Purchase Update: May 2020 Interest Rates

"The strong equity market returns of 2019 were set back by poor performance in the first quarter of 2020, but April 2020 gains reversed the downward 2020 trend. The average duration 7 annuity purchase interest rates decreased by five basis points and average duration 15 rates decreased by 35 basis points since last month. This decrease in rates led to corresponding increases in annuity purchase prices of 0.36% for Annuity Plan 1 and 5.72% for Annuity Plan 2."

October Three Consulting

Market Decline Worsens the Outlook for Public Plans (PDF)

"If markets remain at their current levels until June, most state and local pension plans will end fiscal year 2020 with negative annual investment returns, reduced asset values, lower funded ratios, and higher actuarial costs.... [T]his outcome represents a serious step backwards in public plans' progress over the past decade. This brief will estimate the immediate impact of the drop in asset values on plan finances for 2020 and take a look at the potential longer-term impact -- especially for those plans that were already severely underfunded."

Center for State & Local Government Excellence

Funding Relief May Be Coming for Pension Plan Sponsors

"While the current version of the [HEROES Act] does not have bipartisan support, it nonetheless offers plan sponsors a preview of the relief that may make its way into law in the not too distant future.... [1] All shortfall amortization bases and corresponding shortfall amortization installments for all plan years beginning before January 1, 2020 would be reduced to zero. [2] All new shortfall bases would be amortized over 15 years rather than the seven years prescribed under the current law.... [3] The 25-year average interest rate corridor for minimum funding would initially narrow to 5% from the current 10% ... The 5% corridor would remain in place through 2025 and would widen starting in 2026 through 2030."

River and Mercantile Solutions

Selected Discussions
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Husband/Wife Companies -- Controlled Group?

"We have a client (California corporation) whose employees are only his wife and himself. They are real estate dealers. Wife owns 100% of a second company whose employees provide services for the husband's company. They were told by their accountant that in this way the employees wouldn't have to be covered by the plan. Is this a controlled group? I believe California is a community property state and therefore each would be attributed direct ownership of the other's company. Would this also be an affiliated service group?"

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Most Popular Items in the Previous Issue

Text of DOL Final Regs: Default Electronic Disclosure by Employee Pension Benefit Plans under ERISA
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

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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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