Retirement Plans Newsletter

August 25, 2020 logo logo
Get Health & Welfare News   ·   Get Message Boards Digest   ·   Past Issues   ·   Search

Job Openings

View job as Retirement Plan Coordinator for Hefren-Tillotson Retirement Plan Coordinator

Pittsburgh PA

View job as Client Relations Manager for Alliance Benefit Group of Houston, Inc. Client Relations Manager

Alliance Benefit Group of Houston, Inc.
Houston TX

►View More Jobs

►Post a Job

Get Job Alerts

Newly Posted
Webcasts, Conferences


New Topics on the BenefitsLink Message Boards

New Comments and Topics

All Topics, Grouped by Forum

This Newsletter:
Subscribe Now

BenefitsLink Health & Welfare Plans Newsletter:
Subscribe Now

Message Boards Digest:
Subscribe Now

[Official Guidance]

IRS Employee Plans News: Determination Letter Requests for Amended Statutory Hybrid Plans (PDF)

"[A]pplicants that submit applications by August 31, 2020, that are not complete may supplement their applications through the end of 2020. An application submitted by the August 31, 2020, deadline will need to contain, at a minimum, the following documents: [1] Form 5300, Application for Determination of Employee Benefit Plan; [2] Form 8717, User Fee for Employee Plan Determination Letter Request, with appropriate user fee; and [3] Form 8821, Tax Information Authorization, or Form 2848, Power of Attorney, if applicable.... IRS will send an Application Identification Sheet for additional documents and information.... [I]nclude the Application Identification Sheet with any further submissions so that any documents or information sent after the initial submission can be associated with the initial determination letter application.... EP Determinations will not review a hybrid plan determination letter application described above for completeness until at least January 1, 2021." Icon to read more

Internal Revenue Service [IRS]

[Official Guidance]

Text of PBGC Final Regs: Procedures for PBGC Guidance Documents

11 pages. "This final rule adds to the Code of Federal Regulations a new 29 CFR part 4908, which implements the requirements of Executive Order (EO) 13891, 'Promoting the Rule of Law Through Improved Agency Guidance Documents.' EO 13891 requires agencies to set forth processes and procedures for issuing guidance documents.... The final rule provides the following procedures: [1] Guidance documents will include specified information, including a statement that a guidance document does not bind the public, and will be posted [in a 'Guidance Document Database' on the PBGC website]. [2] Significant guidance documents will have a 30-day public notice and comment period, be reviewed by the Office of Management and Budget (OMB), and meet other requirements. [3] Members of the public may request withdrawal or modification of a guidance document." Icon to read more

Pension Benefit Guaranty Corporation [PBGC]

[Guidance Overview]

IRS and PBGC Provide Guidance on CARES Act Relief for Funding of Single Employer DB Plans

"The guidance confirms that the extended January 1, 2021 deadline for required funding contributions does not affect the deadline for deductibility of contributions, nor Form 5500 reporting requirements ... The guidance also specifies the manner in which the election to use the 2019 AFTAP is made, and confirms that for a non-calendar year plan, the election can be made for the plan year that ends in calendar year 2020, as well as separately for the plan year beginning in calendar year 2020.Icon to read more

The Wagner Law Group

Upcoming Deadline iconDeadline for Returning RMDs to Retirement Accounts is Approaching Fast

"If you miss the August 31 deadline, the money you took out of a traditional IRA, 401(k) plan, or other retirement account will be taxable income for 2020." Icon to read more


2021 COLA: A Raise Likely for Social Security Recipients After All

"Summer rebounds in [gasoline, travel, and car insurance], as well as increases for in-demand items like used cars, meat and haircuts, have put the consumer price index back on a more normal trajectory ... The Kiplinger Letter is now forecasting a 1.2% increase in the 2021 COLA, which should be welcome news to retirees and others who receive Social Security benefits." Icon to read more


Rolling Stone Magazine Slams Recent DOL Retirement Plan Rules

"It says a lot about how far Boomers have come that their proverbial bible, Rolling Stone, is focused less on sex, drugs and rock and roll, and more on retirement savings. The publication that Jann built is out with a piece on the looting of the American retirement system by Wall Street fat cats -- evergreen adversaries that provide a constant and convenient foil." Icon to read more

401(k) Specialist

Fiduciary Issues and Coronavirus: What You Should Know

"Fallout from previous recessions demonstrated, for example, the folly of requiring (perhaps even overencouraging) participants to invest heavily in company stock. And participants who are surprised that their chosen fund was not immune to market drops may come looking for accountability. So how can you protect the plan and its fiduciaries, whatever the economic climate?" Icon to read more

The Retirement Advantage


Do 401(k) Plans Still Make Sense?

"Over the decades, the 401(k) structure has become less attractive, due to eroding tax benefits and reduced levels of investment income. Despite [one author's] assertion, 401(k) plans do continue to make sense for investors -- but will employees continue to view them as valuable?" Icon to read more

John Rekenthaler, in Morningstar


Turning 401(k) Plans Into Lifetime Investments

"Once investors have been told how much income their accounts can generate, they may begin to think of their 401(k) accounts not solely as lump sums during their working years, but also as retirement paychecks. Perhaps they will keep their accounts for life.... [T]he DOL's decision to use a retirement age of 67 is not without merit. But it does yield an unrealistically high annuity rate for most newly minted retirees, as the median retirement age is 62. Defaulting to that age rather than 67 would cut projected monthly income by about 15%." Icon to read more

John Rekenthaler, in Morningstar


American Academy of Actuaries Comment Letter to IRS on Proposed Form Relating to the Annual Certification for Multiemployer DB Plans (PDF)

"We agree with the agency's estimate of the burden of 45 minutes per plan to complete the form.... We do not believe the proposed form would enhance quality given the very limited information collected. However, the utility and clarity may be enhanced given the ease of use with the electronic submission, which should reduce the possibility of data entry error." Icon to read more

American Academy of Actuaries

Benefits in General

[Official Guidance]

IRS Provides Tax Relief for Victims of Iowa Derecho; Extends Oct. 15, Other Upcoming Deadlines to Dec. 15

"The IRS is offering this relief to any area designated by [FEMA] as qualifying for individual assistance. Currently this includes Linn County in Iowa, but taxpayers in localities added later to the disaster area will automatically receive the same filing and payment relief.... The tax relief postpones various tax filing and payment deadlines that occurred starting on Aug. 10, 2020.... [A]ffected individuals and businesses will have until Dec. 15, 2020, to file returns and pay any taxes that were originally due during this period." Icon to read more

Internal Revenue Service [IRS]

[Official Guidance]

IRS Provides Tax Relief for Victims of California Wildfires; Oct. 15 Deadline, Other Dates Extended to Dec. 15

"The IRS is offering this relief to any area designated by [FEMA] as qualifying for individual assistance. Currently this includes Lake, Monterey, Napa, San Mateo, Santa Cruz, Solano, Sonoma and Yolo counties in California, but taxpayers in localities added later to the disaster area will automatically receive the same filing and payment relief.... The tax relief postpones various tax filing and payment deadlines that occurred starting on Aug.14, 2020.... [A]ffected individuals and businesses will have until Dec. 15, 2020, to file returns and pay any taxes that were originally due during this period." Icon to read more

Internal Revenue Service [IRS]

Ninth Circuit: No ERISA Attorney Fees for Administrative Proceedings Involving Fiduciary Breach Claims

"Having succeeded on his administrative claim, the participant sued the claims administrator under ERISA Section 502(a)(3) alleging that it breached ERISA's fiduciary duties of prudence and loyalty ... [T]he participant sought an order surcharging the claims administrator for ... the ERISA attorney's fees he incurred to internally appeal the administrator's decision.... [T]he Ninth Circuit held that ERISA Section 502(a)(3) does not authorize attorney's fees incurred by a participant in an administrative appeal of the ERISA claims process." [Castillo v. Metropolitan Life Ins. Co., No. 19-56093 (9th Cir. Aug. 17, 2020)] Icon to read more

Thomson Reuters Practical Law

Executive Compensation
and Nonqualified Plans

Time for a Checkup for Your Equity Incentive Plan?

"[1] Review your share reserve to confirm that the plan has a sufficient number of shares remaining for future awards.... [2] [C]onfirm whether the plan has an expiration date.... [3] [R]eview plan documents to determine whether repricing is permitted ... [4] [R]eview the [performance] metrics to determine if they are still reasonable and sufficiently motivating to executives.... [5] Double-check plan/corporate governance and documentation requirements." Icon to read more

Foley & Lardner LLP

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.

Controlled Group Compensation: Sole Prop Loss and S-Corp in Same Year

"Have a client that is a sole prop, but added an S-corp at the beginning of the year (calendar year 2019; sole prop was left open through 2019) and the employees were transferred to the S-corp as of 1/1/19. It's a controlled group, and the S-corp adopted the plan 1/1/19. The sole prop (which has only the owner, no employees) is booking a bunch of losses, so the net comp is going to be about -$5K, and the owner's S-corp W-2 is going to be $100K. What's the best way to determine the owner's compensation? Is it $100K? $95K? Something else?" Icon to read more

BenefitsLink Message Boards

Excluding Phantom Stock Distributions for Purposes of Safe Harbor Match Calculations

"Client uses a 'Phantom Stock Program.' This type of program does not involve an actual exchange of equity, but does result in periodic payments which coordinate with actual dividends paid to actual stock holders. These payment are processed through payroll, and are shown on W-2 as taxable income (payroll taxation applies). These monies are paid only to a select group of HCE. The question is, can these monies be excluded for purposes of 401(k) Safe Harbor Match calculations? Would such exclusion violate the requirement to use Total Compensation under a 401(k) Safe Harbor Plan?" Icon to read more

BenefitsLink Message Boards

Getting a Matching Contribution from Multiple Employers under a MEP

"The plan is a multiple employer plan with 2 employers. The employers are related, BUT not enough to be a control group or ASG (attorney has already opined on this). One person owns 99% of company A which is a partnership and a small % of company B, which is a Corporation. He receives compensation from both entities. Both entities offer a basic safe harbor match, no other employer contributions. Can this person split his deferrals between the 2 entities and get a full match from each entity?" Icon to read more

BenefitsLink Message Boards

► Subscribe to the BenefitsLink Message Boards Digest -- a free daily email of all new discussions (not just the selected few shown above). View a sample issue.

Press Releases

401(k) Day Campaign Takes on Beneficiary Designations
PSCA [Plan Sponsor Council of America]

Most Popular Items in the Previous Issue

Massive Settlement Struck in 401(k) Excessive Fee Suit
American Retirement Association [ARA]

View COVID-19 News and Resources, 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

Article submission: Online form, or email to

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.

Links to web sites other than and are offered as a service to our readers; we were not involved in their production and are not responsible for their content.

Unsubscribe  |   Change Email Address  |   Privacy Policy