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[Guidance Overview]

Upcoming Deadline iconIRS and PBGC Guidance on Single-Employer DB Plan Funding Relief Under the CARES Act

"[A]lthough contributions can continue to be made until January 1, 2021, the PBGC guidance takes the position that a contribution must be made before the premium due date for it to be considered when calculating the variable rate premium. This means that, for calendar year plans, any contributions made after the October 15, 2020 premium due date will not affect calculation of the 2020 variable-rate premium amount."

Groom Law Group

[Guidance Overview]

IRS Provides Guidance on 2020 Waiver of Retirement Plan Required Minimum Distributions

"Individuals who receive an RMD in 2020 or one or more payments that include a 2020 RMD that would be treated as part of a series of substantially equal periodic payments may rollover such distribution to an employer's retirement plan ... or to an IRA. The deadline to roll over any such distribution ... will not be before August 31, 2020 even if the distribution was made as early as January 2020.... The deadline for a beneficiary making an election for the use of either the five-year rule or the life expectancy rule in determining an RMD ... is extended one year to December 31, 2021 if the deadline is otherwise December 31, 2020. There is no similar extension if death occurs in 2020."

Frost Brown Todd LLC

Fourth Circuit Ruling Supports ERISA Stock-Drop Plaintiffs

"The underlying lawsuit alleges that [the Gannett fiduciaries'] decision to concentrate plan investments in Tegna Inc. common stock was a breach of their fiduciary duties under ERISA. The plaintiffs claim these alleged breaches caused approximately $135 million in losses.... Helping to explain the break with the post-Dudenhoeffer tradition of courts rejecting similar stock-drop suits, the majority opinion in this matter seems to draw a distinction based on the fact that Gannett Co. and Tegna Inc. are two different companies." [Quatrone v. Gannett Co, Inc., No. 19-1212 (4th Cir. Aug. 11, 2020)]


Estee Lauder and Costco Targeted in 401(k) Lawsuit Surge

"Estee Lauder and Costco are now among a growing number of companies facing overwhelming backlash from employees, consumers and lawmakers for these alleged offenses. But these billion dollar plans aren't the only ones being targeted by lawsuits; they are slowly starting to trickle down to small and medium sized 401(k) plans as well."


Annuity Purchase Update: August 2020 Interest Rates

"Year-to-Date annuity purchase prices have been volatile and are currently higher for both Annuity Plan 1 and Annuity Plan 2. Annuity purchase prices relative to GAAP PBO liabilities have also been volatile but are currently in line with historical expectations. This past month annuity purchase prices rose 0.29% for Annuity Plan 1 and 3.69% for Annuity Plan 2."

October Three Consulting


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

GAO Report: Retirement Security -- Older Women Report Facing a Financially Uncertain Future

"In all 14 focus groups GAO held with older women, women described some level of anxiety about financial security in retirement. Many expressed concerns about the future of Social Security and Medicare benefits, and the costs of health care and housing. Women in the groups also cited a range of experiences that hindered their retirement security, such as divorce or leaving the workforce before they planned to. Women in all 14 focus groups said their lack of personal finance education negatively affected their ability to plan for retirement." [GAO-20-435, published Jul. 14, 2020, released Aug. 13, 2020]

U.S. Government Accountability Office [GAO]

IRA Withdrawal Patterns in Times of Crisis

"Both the share of households reporting IRA withdrawals and the average percentage of their account balances withdrawn went up between 2008 and 2010 for IRA owners ages 50-70, suggesting that during market downturns, households are more likely to withdraw too much, too fast from their IRAs. For households ages 71 and older who were subject to RMDs, the 2008 market downturn did not appear to have increased the share withdrawing from their IRAs. However, it did result in increased average withdrawals relative to account balances for those taking withdrawals in excess of the RMD."

Employee Benefit Research Institute [EBRI]


Addressing Retirement Plan Loan Defaults: A Recommended Path and Concerns About One Proposed Approach

"The proposal categorically approves all plan loan insurance programs as being prudent under ERISA. This does not make sense.... There is no need for the proposal. Loan insurance programs are permissible under present law.... According to proponents of the proposal, [1] plan interest rates are generally between 4.25% and 5.25%, and [2] the very narrow loan insurance covered by the proposal adds an additional 1.5% and 3.0% of the original loan amount."

American Benefits Council


Pension Rights Center Comment Letter to EBSA on Proposal for Improving Investment Advice for Workers and Retirees (PDF)

"[These] comments primarily address three concerns: [1] the provision in the proposed exemption that would allow financial advisers to give advice so long as the adviser meets a vague, non-fiduciary standard of acting in the best interests of the participant; [2] the proposed exemption's failure to condition the exemption's availability to advisers of IRA owners on the adviser's consent to be sued; and ... [3]] the rush to push through this exemption to final form without addressing related fiduciary issues and ... without permitting adequate time to prepare comments that thoroughly explore those issues."

Pension Rights Center


Paying Off Unfunded Pension Liabilities Will Be a Low Priority After COVID-19

"In the next couple of years, states -- which must balance their budgets every year -- will face the tradeoff of deep cuts in education and health care and further layoffs, on the one hand, and funding their pensions on the other. Most observers would probably agree that pension funding could be postponed. More fundamentally, the standard recommendation that sponsors need to eliminate all their unfunded liability over 30 years is increasingly being called into question."

Alicia H. Munnell, via MarketWatch

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

New Guidance for Tax-Exempt Organizations: Proposed Section 4960 Regs

"These rules affect many tax-exempt organizations and, in certain circumstances, entities that are treated as related to those organizations. The policy objective behind the imposition of this excise tax is to level the playing field since parallel rules and taxes that apply to taxable entities have been in place for many years."

Davis Malm, via Massachusetts Society of CPAs

Selected Discussions
on the BenefitsLink Message Boards

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Late 401(k) Deposit During Blackout Period

"401k plan is going into blackout and cannot process a deposit until after blackout is over. Therefore one payroll will be a week late. Will that deposit be considered late, or is there a facts and circumstances component to this? My thought: late is late. But I've come across differing opinions out there, so I'm curious to see what others thing. I have a feeling the DOL would agree with me."

BenefitsLink Message Boards

2020 Deadline for Staring a 3% Nonelective Safe Harbor Plan

"With the new SECURE Act provisions for 3% non-elective plans, is a new 3% safe harbor non-elective plan still required to be adopted by October 1 (assuming a calendar year end)?"

BenefitsLink Message Boards

When Can COVID Distributions Be Ended?

"Manufacturing client added COVID withdrawals to their 401k plan but only up to $3,500 of the participant's vested balance. Employees have been back to work full-time for months. (Furloughs were very brief.) Can the employer put an 'end date' on these withdrawals if participants are properly notified?"

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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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