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[Guidance Overview]

Notice 2020-42 Provides Temporary Relief for Witnessing Spousal Consents

"IRS Notice 2020-42 ... provides temporary relief from the physical presence requirement for calendar year 2020 (retroactive to January 1). Specifically, the physical presence of a notary or witness for spousal consent is not required during this period if certain rules are satisfied. In the case of the notary, this will apply to any consent witnessed by a notary of a state that permits remote electronic notarization. The execution by the notary would have to be through a live audio-video conference meeting the state's requirements for remote notarization, as well as the normal regulatory requirements for electronic signature."



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[Guidance Overview]

DOL Guidance on Private Equity Adds Flexibility for Defined Contribution Plans

"[Information Letter 2020-06-03] first confirms that ERISA does not prohibit plan fiduciaries from making available an allocation to private equity as part of a DC plan investment option.... [The DOL] acknowledges this type of fund could be structured in multiple ways ... The Department clarified, however, that the guidance does not address vehicles that would allow a participant to investment in private equity directly, and that such investments present distinct legal and operations issues."

Groom Law Group

[Guidance Overview]

Thank You Steve Jobs: Just Click 'Send'! DOL Releases Final E-Disclosure Regs

"[P]lan sponsors and administrators will need to monitor any 'bounce-backs' and take reasonable steps to cure the problem or communicate with such individual by paper communication (as if that individual opted-out of electronic delivery). While this will require sponsors and administrators to maintain a separate list of individuals who need to receive plan communications on paper, the expectation is that such a list will be short (and perhaps primarily limited to former employees)."


[Guidance Overview]

Finally Final -- DOL Issues Regs for E-Delivery of Retirement Plan Disclosures

"Who is covered by the additional safe harbor? ... What documents are covered? ... What is a 'notice of internet availability'? ... When does the notice of internet availability need to be provided? ... What does the notice of internet availability need to include? ... What guidelines do plan administrators need to follow in providing web access? ... What if the electronic disclosure is made through email? ... What other systems must plan administrators have in place?"

Seyfarth Shaw LLP

[Guidance Overview]

IRS Gives Retirement Plans More Pandemic Relief (PDF)

"IRS Notice 2020-35 extends until July 15 the deadline for certain retirement plan filings and other actions normally due from March 30 through July 14. The deadline extension expands the agency's earlier pandemic relief in Notice 2020-23. The new guidance also formalizes IRS's extension of the initial 403(b) plan remedial amendment period (RAP) until June 30 and the second RAP for preapproved [DB] plans until July 31."



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PBGC OIG Semiannual Report to Congress (PDF)

48 pages. "During the period October 1, 2019 through March 31, 2020, [PBGC]: [1] Closed 37 recommendations and issued 26 new recommendations.... [2] Issued the following reports: Audit of the [PBGC's] Fiscal Year 2019 and 2018 Financial Statements ... Audit of [PBGC's] Reclassified Financial Schedules for Fiscal Year 2019.... Vulnerability Assessment and Penetration Testing Report Fiscal Year 2019.... Audit of PBGC's FY 2019 Compliance with the Federal Information Security Modernization Act ... PBGC's Agreed-Upon Procedures for Contract Closeout ... Risk Advisory -- Additional Measures to Address Fraud Vulnerabilities in Benefits Administration.... Summary and Analysis of PBGC's FISMA Performance and Update on Remediation Efforts ... [and] [3] Continued work on [PBGC's] Deceased Participants Program."

Office of Inspector General, Pension Benefit Guaranty Corporation [PBGC]

What You Need to Tell Participants and Beneficiaries About the SECURE Act

"Changes to how participants can access their savings ... Changes to eligibility and enrollment ... Changes to disclosures ... [A]ny retirement plan changes are an opportunity to inform participants, reiterate the value of your plan, and inspire people to take action to improve their retirement readiness."

Segal Benz

Editor's Pick DB Pension Issues Expected in the Next Wave of Bankruptcies (PDF)

"In the last recession, corporate bankruptcy filings spiked, to about 60,000 per year in 2008-2010 ... In some cases, the pensions rode through bankruptcy and were continued by the reorganized company. In others, however, the pension plan was terminated, or the debtor withdrew from the plan, and the resulting claims were resolved in the bankruptcy."

The Wagner Law Group, via AIRA Journal

S&P 1500 Pension Funded Status Increased in May

"The estimated aggregate funding level of pension plans sponsored by S&P 1500 companies increased by 1 percent in May 2020 to 81 percent as a result of an increase in equity markets which offset a decrease in discount rates. As of May 31, 2020, the estimated aggregate deficit of $476 billion USD decreased by $14 billion USD as compared to $490 billion measured at the end of April[.]"


Second Circuit Hears Oral Argument on Challenge to Reg BI

"Despite this pending legal challenge and brokerage firms' strained resources due to the pandemic and quarantining, SEC Chairman Jay Clayton said on April 2, 2020, in a public statement that the June 30, 2020, compliance deadline for Reg BI would remain. At the oral argument, counsel for a group of investment advisers argued that ... Congress required the SEC to 'harmonize' the investment adviser and broker-dealer regulatory regimes. Further, they argued that Congress intended for the SEC to extend the fiduciary duty imposed on investment advisers to broker-dealers, but the SEC failed to do so. Eight states represented by the New York attorney general's office at the argument joined in by advocating the view that Reg BI was contrary to law and exceeded the SEC's authority."

Faegre Drinker

Retirement Security for Women Amid COVID-19 (PDF)

27 pages. "One in four women (25 percent) say their confidence in their ability to retire comfortably has declined in light of the coronavirus pandemic, compared with 21 percent of men.... Amid the COVID-19 pandemic, only 19 percent of women are 'very' confident that they will be able to fully retire with a comfortable lifestyle, which is significantly lower than the 28 percent of men who are 'very' confident.... Fifty-six percent of women and 60 percent of men have experienced impacts to their own employment situation as a result of the coronavirus pandemic."

Transamerica Center for Retirement Studies

'Take Stock' of Your ESOP Distribution Policy

"As the committee weighs the timing of ESOP benefits, one of the guiding factors should be based on your company's overall goals and objectives.... The ESOP distribution policy establishes the method of payment for the benefit: lump-sum, installments or alternative options based on the participant's account balance.... The ESOP distribution policy should also define the form of payment -- cash, stock or a combination."


Benefits in General

[Guidance Overview]

IRS Provides Welcome Deadline Relief for Savings Arrangement Reporting, Limited Additional Extensions

"Deadlines for providing [information returns for IRAs, health savings accounts (HSAs), Archer medical savings accounts (MSAs), and Coverdell education savings accounts (ESAs)] to the IRS and to account owners had previously been extended ... through July 15, 2020 ... The deadline for annual contributions to these accounts was also extended to July 15, 2020. This presented custodial organizations and service providers to these accounts with the dilemma of reporting contributions that could be received as late as the deadline for their reporting. Notice 2020-35 now provides a six-week window after the July 15, 2020, contribution deadlines in which organizations can prepare and provide these information returns to the IRS and to account owners."



More Stability for Employee Benefit Programs Would Help Get America 'Back to Business'

"[M]ore must be done to better protect the health and financial security of the tens of millions of people served by the employer-sponsored benefits system. Similarly, some measures have either been put into place or proposed that would impede the operation of benefit programs.... [This paper provides] brief descriptions of the Council's outstanding legislative and regulatory priorities relating to health, retirement and paid [leave] programs."

American Benefits Council

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

IRS Memorandum Provides Guidance on Income Inclusion, FICA, and Income Tax Withholding for Stock-Settled Equity Awards

"The IRS recently issued Generic Legal Advice Memorandum No. AM 2020-004 (the 'GLAM') to address when income from nonqualified stock options, stock-settled stock appreciation rights, and stock-settled restricted stock units is [1] includable in an employee's gross income, [2] subject to FICA taxes, and [3] subject to federal income tax withholding. In addition, the GLAM provides a discussion of the deposit rules for FICA and income tax withholdings that have been withheld with respect to such equity awards[.]"

Haynes and Boone, LLP

ESPPs Offer Special Benefits in Down and Volatile Markets

"Companies have well-established choices for handling employee stock option grants in which the market price of the company's stock is cheaper than the option exercise price, temporarily making the options worthless. But how do falling stock prices affect other forms of equity compensation?"

Bruce Brumberg, JD, via Forbes

Selected Discussions
on the BenefitsLink Message Boards

► It's easy to sign up and participate in discussions! Post answers, ask questions, create custom feeds and views. Join your peers (and potential referral sources or customers)—there is no charge.

Matches Doesn't Start Until Elective Deferrals Reach 3%

"Plan has a 25% match on deferrals but the first 3% aren't matched. I should know this, but I've never worked with such a formula. Participants not deferring 3% would still count as benefitting for 410(b) and also count in ACP test, right? I think to test for BRF also. If so, do I include those who do not contribute anything as non-benefitting?"

BenefitsLink Message Boards

CARES Act Optional for Currently Terminating Plan?

"Having trouble understanding Coronaviris Related Distributions in a currently terminating plan. Is it the sponsor's option to allow distributions as part of a termination to be CRD's? If a notice of termination has been sent can the sponsor still opt to allow CRD's?"

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Press Releases

OneDigital Acquires California Creative Benefits
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Most Popular Items in the Previous Issue

DC Tricycle Restatements Are About to Begin
Ferenczy Benefits Law Center, 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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