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[Official Guidance]

Defined Benefit and Cash Balance Plan Listing of Required Modifications (LRM) and Information Package (PDF)

190 pages; Aug. 7, 2020. "This information package contains samples of plan provisions that have been found to satisfy certain requirements of the Internal Revenue Code, taking into account changes in the plan qualification requirements, regulations, revenue rulings, and other guidance in the 2020 Cumulative List of Changes in Plan Qualification Requirements [set forth in Notice 2020-14]. Such language may or may not be acceptable in different plans depending on the context in which used." [Also available: redlined version]

Internal Revenue Service [IRS]


ASC -- The Preferred Document Provider in the Industry

It's not too late to enroll for ASC's Cycle 3 Plan Documents! Learn about Restatements, Cycle 3 plan options and more from the preferred document provider in the industry. Get More Info Learn more

Sponsored by ASC

[Official Guidance]

IRS Employee Plans News: Additional Instructions for ESOPs and DB Plans Regarding 3rd Cycle Submissions (PDF)

Aug. 10, 2020. This issue includes specific instructions for 3rd Cycle submissions: [1] completing Form 5307 for ESOPs, and [2] completing submissions for pre-approved DB plans. The 3rd cycle submission window opens August 1, 2020.

Internal Revenue Service [IRS]

[Guidance Overview]

CARES Act Relief for Single-Employer DB Plans

"Notice 2020-61 advises actuaries how to determine the interest charges for the delayed payment and how to complete Schedule SB of Form 5500. It clarifies that the relief applies not only to the minimum required contribution but also to contributions in excess of the minimum if made on or before January 1, 2021, and explains how to account for such payments. The Notice also confirms that the relief does not extend the timing for contributions to be deductible for the preceding tax year."


[Guidance Overview]

Upcoming Deadline iconIRS Expands Participants' Ability to Reverse 2020 Required Minimum Distributions (PDF)

"The IRS has now announced that any defined contribution plan participants who received RMDs in 2020 -- including RMDs paid in January 2020 or later -- may recontribute these RMDs to a tax-qualified plan or IRA by an extended deadline of August 31, 2020.... These recontributions are permitted only if the qualified plan accepts incoming rollover contributions by participants."

Roberts & Holland LLP

[Guidance Overview]

If It Ain't Broke, Fix It as Needed: The DOL's Revised Fiduciary Rule and Exemptions Proposal (PDF)

"The Proposed Class Exemption represents a significant development in the retirement space, as it balances the financial interests of both retirement investors and financial institutions and investment professionals. For plan participants, the DOL has acknowledged and prioritized their financial interests in the context of rollovers to IRAs. For financial institutions, the DOL not only reemphasized the continued standing of the five-part test, but also clarified its application to rollover recommendations, in some ways marking a shift from its past views."

Groom Law Group, via Bloomberg Tax


Plan Advisor Checklist: Identifying the Best Retirement Plan Prospects

Retirement plan prospecting can be difficult. Successful advisors are targeted and focused on bringing new ideas to clients and prospects. Use this checklist to define your target audience, identify meaningful opportunities and communicate your value. Learn more

Sponsored by October Three

[Guidance Overview]

Comparing the Standards of Conduct: Broker-Dealers vs. Investment Advisers

"The SEC's standard of conduct for broker-dealers under Regulation Best Interest (Reg BI) became effective on June 30, 2020. While registered investment advisers (RIAs) always have been subject to a best interest standard of conduct, the SEC's clarification of that standard in its Interpretation Regarding Standard of Conduct for Investment Advisers (the RIA Interpretation) has been in effect since July 12, 2019. There are similarities in these two standards, but there are significant differences as well."

Faegre Drinker

IRS Updates Model Rollover Notice

"The IRS model 402(f) notices provide a safe harbor for employers. As in prior model notices, the IRS allows employers to customize the model 402(f) notice by removing provisions not applicable to their plan or to add information about their plan that might be helpful, as long as consistent with the disclosures required under Code Section 402(f)."

Nelson Mullins

Another All-Time Low Discount Rate Causes Corporate Pension Funded Ratio to Plummet in July

"Despite robust investment returns, July's PFI funded status worsened by $68 billion due to a 39 basis point drop in the monthly discount rate, from 2.65% in June to 2.26% for July.... The projected benefit obligation (PBO) for the Milliman 100 PFI rose to $2.047 trillion, the first time the PBO for these plans has crossed the $2 trillion threshold.... The funded ratio for these plans dropped from 83.5% as of June 30 to 81.1% at July's end."


Editor's PickDOL Asks RIAs Chilling Questions About Use of ESG Products

"The EBSA enforcement letter sent to RIAs requests every investment and fiduciary policy, procedure, minutes of meetings, communications, performance data and audit, and even names of addresses of anyone who had input on firms' ESG investment decisions."

Financial Advisor

The Impact of the CARES Act on 401(k) Plans

"A little more than half of plan sponsors (51%) feel, at least to some extent, that they would benefit from guidance from their DC plan's recordkeeper in understanding how CARES may affect their plan.... Nearly 4 in 10 (38%) do not plan to implement the expanded withdrawal capability or the increased loan capability. Another one fifth (19%) are unsure at this point, leaving 43% who do plan to amend their plans to offer at least one withdrawal update enabled by CARES."


Steady Contributions Combined with Market Performance Lead to Double-Digit Rebound Across Retirement Account Balances

"[In Q2, the] average IRA balance was $111,500, a 13% increase from last quarter and slightly higher than the average balance of $110,400 a year ago. The average 401(k) balance increased to $104,400 in Q2, a 14% increase from Q1 but down 2% from a year ago. The average 403(b) account balance increased to $91,100, an increase of 17% from last quarter and up 3% from a year ago.... More than three quarters (76%) of workers received an employer contribution in Q2, with the average employer contribution reaching $1,080."


Illinois Federal Court Dismisses ERISA Claims Against 401(k) Fiduciaries Over Fees and Investment Options

"The Seventh Circuit remains a difficult jurisdiction for plaintiffs seeking to file bare-bones, conclusory ERISA claims against 401(k) fiduciaries. [This case] highlights the importance of selecting a prudent overall mix of options for participants. [It] also rejects the one-size-fits-all pleading approach to choosing retail investment classes over institutional classes, selecting passive instead of active options and including funds from only one or two of the allegedly best investment managers." [Martin v. CareerBuilder, No. 19-6463 (N.D. Ill. Jul. 1, 2020)]

McDermott Will & Emery

Benefits in General

[Guidance Overview]

A Chronology of COVID-19 Relief for ERISA Plans

"This chronology traces the major ongoing relief provided by legislation, regulatory action, and other agency guidance ... through August 10, 2020."

Verrill Dana LLP

Benefits Litigation to Watch for Post-Pandemic

"When the coronavirus pandemic subsides, employers can expect a spike in litigation over employee retirement plan investments, notices to laid-off workers about benefit rights, and companies' handling of retirement and health plans after furloughs or layoffs. Lawsuits over employee stock ownership plan transactions and benefit claim denials are also expected to tick up[.]"

Holland & Knight, via Law360

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

IRS Provides Employees Opportunity to Cancel Non-Qualified Deferral Elections Through Self-Certification

"Code Section 409A permits the cancellation of non-qualified plan deferral elections following a 401(k) plan hardship distribution.... CARES Act distributions may be based solely on self-certification by the participant. Effectively then, a participant could elect a $1 CARES Act distribution by self-certifying that COVID-19 adversely impacted the participant and in doing so, cancel potentially significant remaining non-qualified plan deferrals."



American Benefits Council Comment Letter to IRS Regarding Tax on Excess Tax-Exempt Organization Executive Compensation

"The Council's members strongly support the inclusion of the limited hours and nonexempt funds exceptions in the final regulations ... [T]hey [1] reflect congressional intent regarding the scope of the application of the new excise tax and [2] will provide appropriate relief to employers with respect to the concerns the Council raised in its previous comments."

American Benefits Council

Selected Discussions
on the BenefitsLink Message Boards

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CRD Allowed in Addition to RMD?

"Small DB plan -- just husband and wife. Husband is age 73, so has been taking RMDs. The annual annuity date is April 1, so husband already has withdrawn his 2020 RMD. Now both husband and wife each want to withdraw $100,000 as CRDs. Permitted?"

BenefitsLink Message Boards

Small Corrections under EPCRS -- Use the DOL Lost Interest Calculator?

"I'm trying to find something in EPCRS that says that in certain situations, when it's impractical, one is allowed to use the DOL Lost Interest Calculator to adjust a corrective allocation for gains. I routinely see attorney-drafted VCP applications take this approach and I've never seen it questioned. If we're depositing a $100 into someone's account, we don't want to charge the client $250 in fees."

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View COVID-19 News and Resources, Inc.
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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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