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Newly Posted
Webcasts, Conferences

Getting It Right - Know Your Fiduciary Responsibilities: Retirement and Health Plan Sponsors - Day 1
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

Getting It Right - Know Your Fiduciary Responsibilities: Retirement and Health Plan Sponsors - Day 2
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

Getting It Right - Know Your Fiduciary Responsibilities: Retirement and Health Plan Sponsors - Day 3
July 14, 2020 WEBCAST
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

Pandemic Pandemonium - Navigating the New COVID-19 Retirement Plan Rules
July 28, 2020 WEBCAST
National Tax-Deferred Savings Association [NTSA]

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[Official Guidance]

Text of IRS Notice 2020-52: COVID-19 Relief and Other Guidance on Mid-Year Reductions or Suspensions of Contributions to Safe Harbor Section 401(k) and Section 401(m) Plans (PDF)

"If a plan amendment that reduces or suspends safe harbor matching contributions or safe harbor nonelective contributions during a plan year is adopted between March 13, 2020, and August 31, 2020, then the plan will not be treated as failing to satisfy the requirement ... that the employer either [1] is operating at an economic loss ... for the plan year, or [2] has included in the plan's safe harbor notice ... for the plan year a statement that (a) the plan may be amended during the plan year to reduce or suspend the safe harbor contributions and (b) the reduction or suspension will not apply until at least 30 days after all eligible employees are provided notice of the reduction or suspension....

"If a plan amendment that reduces or suspends safe harbor nonelective contributions during a plan year is adopted between March 13, 2020, and August 31, 2020, then the plan will not be treated as failing to satisfy the requirements of Section 1.401(k)-3(g)(1)(ii) or Section 1.401(m)-3(h)(1)(ii) merely because a supplemental notice is not provided to eligible employees at least 30 days before the reduction or suspension of safe harbor nonelective contributions is effective, provided that [1] the supplemental notice is provided to eligible employees no later than August 31, 2020, and [2] the plan amendment that reduces or suspends safe harbor nonelective contributions is adopted no later than the effective date of the reduction or suspension of safe harbor nonelective contributions....

"Sections III and IV of this notice apply on similar terms to Section 403(b) plans that apply the Section 401(m) safe harbor rules pursuant to Section 403(b)(12)."

Internal Revenue Service [IRS]


SPARK/DCIIA Summer Policy Series

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

Sponsored by SPARK and DCIIA

[Official Guidance]

2018 Instructions for IRS Form 8606: Nondeductible IRAs (PDF)

Rev. July 2020. "What's New: Tax relief for qualified 2018 disaster distributions. Recent legislation provides special rules that may apply to your 2018 return if you received a distribution from your IRA or other retirement plan and you suffered an economic loss as a result of a major disaster that occurred in 2018. These qualified disaster distributions are described in the 2018 Form 8915-C, Qualified 2018 Disaster Retirement Plan Distributions and Repayments, and its instructions. Special rules may also apply to your 2018 return if you received a distribution to purchase or construct a main home in a 2018 disaster area, but that home was not purchased or constructed because of the 2018 disaster."

Internal Revenue Service [IRS]

[Guidance Overview]

DOL Proposes Rule to Severely Restrict ESG Considerations in Selecting ERISA Plan Investments

"Asset managers seeking to offer their funds to plan fiduciaries should consider whether their ESG-related marketing or disclosure may make it harder for plans to select their products. This is true for any fund that features a discussion of ESG considerations as part of the investment process, even if the fund is not a so-called 'ESG fund.' Managers may wish to revise their marketing and disclosure materials to more clearly and directly describe the material pecuniary benefits that ESG factors offer to investors in a fund, or they may wish to more clearly indicate how ESG factors are factored into the fund's investment decisions."

Ropes & Gray LLP

[Guidance Overview]

IRS Provides Guidance on Required Minimum Distributions Under the CARES Act and SECURE Act

"Although the 2020 RMD waiver under the CARES Act does not apply to defined benefit plans, Notice 2020-51 does address transition relief in connection with the SECURE Act's increase in the required beginning date ... Defined contribution plan sponsors should review the sample plan amendment provided in the Notice and consider the options regarding direct rollover choices for distributions in 2020. Plan administrators should also consider any necessary participant communications regarding elections on receiving RMDs."

Thomson Reuters Practical Law

[Guidance Overview]

IRS Notice Adds to Guidance on Waiver of 2020 Required Minimum Distributions

"The timing of the 2020 RMD waiver was problematic for those who had already taken distributions in 2020 that they believed were required; especially multiple periodic distributions, or beneficiary distributions. In several tangible ways, Notice 2020-51 has come to their rescue."


[Guidance Overview]

eDisclosures: Initial Notice and Notice of Internet Availability

"The entire purpose of the [Notice of Internet Availability (NOIA)] is to inform covered individuals each time a new covered document is available for their review on an 'internet website.' The document must be provided on its own and should be delivered electronically. There is some nuance to the timing and specific content that must be included with each NOIA[.]"


[Guidance Overview]

IRS Releases New Guidance for Distributions and Loans from Retirement Plans Under CARES Act

"Hardship distributions are generally not eligible for rollover treatment, but Notice 2020-50 provides that if a distribution meets the necessary requirements of a coronavirus-related distribution, then, unless it is related to a nonqualified deferred compensation plan, the distribution is not treated as made on account of hardship and any portion of the distribution is permitted to be recontributed to an eligible retirement plan accepting recontributions of coronavirus-related distributions."

Morgan Lewis

State of Retirement Savings: June 2020

"From March to May, [small business plans with 25 or fewer savers] stopped contributions (including both employer and saver contributions) to their retirement plan at 5 times the rate of businesses with over 100 savers.... 7.5% of employers that had decreased their match in or after March had returned to their previous matching levels by the end of May.... 93.1% of retirement savers made no change to their savings rates[.]"


Supreme Court Requires Concrete Injury to Sue a DB Pension Plan (PDF)

"Given that the Court did not attach the funded/underfunded status of the plan to its standing analysis, this concrete injury requirement of the plaintiffs should be applicable to many of the ERISA class actions being filed in recent years, including against defined contribution plans. The higher constitutional standing standard should also apply to governmental and other types of plan in which the statutory standing rests under state law and not ERISA." [Thole v. U.S. Bank N.A., No. 17-1712 (S. Ct. Jun. 1, 2020)]

Euclid Specialty

Second Circuit Backs SEC in Reg BI Challenge

"Just hours ahead of its scheduled implementation, a federal court has sanctioned the legitimacy of Reg BI. More specifically, the three-judge panel of the 2nd U.S. Circuit Court of Appeals (with one judge concurring in part and dissenting in part) ruled that Section 913(f) of the Dodd-Frank Act authorizes Regulation Best Interest, and Regulation Best Interest is not arbitrary and capricious." [XY Planning Network, LLC v. SEC, No. 19-2886 (2d Cir. Jun. 26, 2020)]

American Retirement Association [ARA]

Private Equity Is Coming for the $6 Trillion 401(k) Market

"The Trump administration has cracked open the door for private equity funds to get into 401(k) workplace retirement plans. There's roughly $5.6 trillion in such accounts, and the prospect of capturing even a sliver of it has the industry abuzz. A more complicated question is whether ordinary investors will really want their money going into buyout funds."

Bloomberg; subscription may be required

Portfolio Delegation and 401(k) Plan Participant Responses to COVID-19

"[The authors] analyze the behavior of 401(k) plan participants during the first quarter of 2020, when COVID-19 generated historic volatility, large negative returns, and significant unemployment. Only 2.1% of participants invested in TDFs made any changes to their portfolios, with even lower rates of change among those defaulted into robo-advised managed accounts, suggesting that delegation can decrease the likelihood of portfolio mistakes by less sophisticated participants."

National Bureau of Economic Research [NBER]


Editor's Pick The 403(b)ill of Rights

"[1] School districts must offer access to at least one quality, low-cost vendor.... [2] Anyone selling K-12 403(b) product must sign a Fiduciary Pledge ... [3] Unions must cease accepting 'donations' or any other financial support from financial institutions that sell 403(b) products to their members.... [4] Vendors must supply a clear breakdown of all fees.... [5] Employers must provide objective plan information and 403(b) education to employees, especially new hires.... [6] Plans should contain a manageable number of quality vendors.... [7] Benefits administrators must possess 403(b) training and knowledge.... [8] Sales agents must be banned from K-12 campuses.... [9] The 403(b) plan should be known as just that: the 403(b) plan.... [10] Every school employee should have access to a quality, low-cost 457(b) plan."


Executive Compensation
and Nonqualified Plans

[Guidance Overview]

IRS Proposal on Excess Compensation for Not-For-Profits

"The proposed regulations largely follow guidance issued in late 2018. Several exceptions in the proposed regulations are intended to address concerns that initial guidance on Internal Revenue Code Section 4960 could cause people with limited involvement in an organization to trigger the excise tax."

Moss Adams LLP

Selected Discussions
on the BenefitsLink Message Boards

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Mandatory Cash-Out Amount -- Determination of $1,000 Limit

"The plan document specifies that the $1,000 limit for mandatory cash-outs and $5,000 limit for mandatory rollovers. What if the participant has about $1,020 in the account and the distribution processing fee is $50 (so the amount after the fee is $970). Would a direct distribution or a rollover be processed?"

BenefitsLink Message Boards

Employee Contributions Made to Wrong Plan

"Employer has two plans. HCEs are supposed to participate in the 403(b) plan. NHCEs are supposed to participate in the 401(k) plan. Each year, HCE or NHCE status is determined for the following year, and the person is supposed to be put into the correct plan accordingly. However, errors have been made in some instances, in both directions. Thus, for example, HCEs have contributed to the 401(k) plan, and NHCEs have contributed to the 403(b) plan. Obviously, this violates the terms of both plans. Does anyone have any experience as to the corrections IRS might be willing to accept in these circumstances?"

BenefitsLink Message Boards

W-2 Compensation -- Effect of Child Support Deductions

"I'm working on a PSP that uses W-2 compensation with no exclusions. I have the payroll report and W-2s for all employees. One employee had child support payments deducted from payroll. The payroll report shows his gross compensation of $5,000 and child support payments of $1,000. His W-2 reports $4,000 taxable income in Box 1. I thought it should be $5,000 because the garnishment is post-tax, not pre-tax. Do you agree?"

BenefitsLink Message Boards

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Press Releases

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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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