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[Guidance Overview]

Upcoming Deadline iconIRS Lets Incomplete Determination Letter Applications for Statutory Hybrid Plans Slide Until December 31

"If a plan sponsor is interested in applying for a determination letter for an individually designed statutory hybrid plan and is unable to gather all the necessary documentation by the upcoming August 31, 2020 deadline, they should consider filing an 'incomplete' application as soon as possible. Doing this will allow them additional time until December 31, 2020 to submit the remaining information." Icon to read more



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]

CARES Contributions and DB Plan Wonkiness

"[T]he PBGC actually allows for receivable contributions until their premium filing deadline of October 15. Since receivable contributions after September 15 have been impossible under ERISA funding law until now, however, the deadline for PBGC purposes was also effectively September 15.... [T]he CARES Act makes it possible for employers to make 2019 receivable contributions until January 1, 2021. This immediately triggered the wonky question, 'How will the contribution extension under the CARES Act affect 2020 PBGC premiums?' " Icon to read more

The Principal Blog

[Guidance Overview]

DOL Releases Interim Final Rule on Lifetime Income Illustrations

"The QJSA annuity illustration must be provided regardless of the participant's marital status. The interest rate that must be used to convert the account balance into a single life annuity and QJSA is the 10-year constant maturity Treasury securities yield rate for the first business day of the last month of the period to which the benefit statement relates. As of August 14, 2020, the required interest rate is 0.71%." Icon to read more


[Guidance Overview]

Retirement Plan Sponsors Must Soon Provide Annual Lifetime Income Illustrations

"The linchpin of the new rules is the establishment of basic assumptions that plan administrators may use to calculate the monthly payment illustrations of participants' account balances as SLAs and QJSAs. If the [specified] standard set of assumptions are used for the annual illustrations, the plan sponsors are protected from claims from participants related to the illustrations." Icon to read more

Nexsen Pruet

District Court Agrees Colgate-Palmolive Miscalculated Cash Balance Benefit Payments

"[T]he plaintiffs claimed that the use of the [pre-retirement mortality discount] violates ERISA's and the IRC's actuarial equivalence rules. [The judge] noted that the defendants did not oppose the plaintiffs' arguments regarding this error in their opposition brief, so 'summary judgment is granted on this ground alone.' " [McCutcheon v. Colgate-Palmolive Co., No. 16-4170 (S.D.N.Y. Aug. 24, 2020)] Icon to read more


Is Participant Data a Retirement Plan Asset?

"Retirement plan sponsors should gain an understanding of how their plan's recordkeeper may be using data from their plan, and work with them to control its usage. Recordkeepers should not have free reign, particularly if the data is being used to market services ... that may compete with the plan sponsor's own benefits. However, prohibiting the use of participant data for all non-retirement plan purposes may not be ideal." Icon to read more

Cammack Retirement Group

Your Definition of Compensation Isn't in the ERISA Dictionary? We've Got a Fix for That.

"There is no bright line test, but the IRS has stated that the percentage of compensation includible for the HCEs cannot exceed the NHCE percentage by more than a 'de minimis' amount. What exactly does that mean? In practice, this has typically meant the difference between the two cannot exceed three percentage points (in favor of the HCEs). That said, it's important to look at the reasonableness of the exclusions and proceed conservatively when it comes to the compensation ratio test since there are no set standards on which to rely." Icon to read more


Defining ESG: Clarifying the Myths and Facts (PDF)

"With efforts underway by the [DOL] and other government agencies to address ESG investing in pension plans and other investment products, ... the investment strategy remains ambiguous and lacks a standardized definition. This paper seeks to shed light on these ambiguities. The definition and background of ESG will be examined, the variations in ESG definitions across firms will be identified, case studies on two ESG funds will be analyzed, and a recommendation for more formal definitions will be made." Icon to read more

Institute for Pension Fund Integrity [IPFI]

Exceptional Usefulness and Quality iconGenerational Views on Financial Advice, Investing, and Retirement (PDF)

10 pages. "Only one in ten millennials have canceled or postponed contributing to a retirement account because of COVID-19.... [M]ore than six in ten millennials (61%) plan to retire before age 65 and 22% plan to retire before age 60 ... The majority of millennials have never received professional financial advice, but nearly half say COVID-19 has increased their interest in obtaining it, far more likely than Gen X (31%) or young boomers (26%)." Icon to read more


Benefits in General

Ninth Circuit Rejects Request for Attorney's Fees in ERISA Administrative Appeal

"The court noted that the word 'action', as used in ERISA's fee-shifting provisions, 'generally designates only proceedings in court, not administrative proceedings.' The Ninth Circuit also concluded that awarding the plaintiff attorney's fees in the instant case would result in a rule under which the availability of attorney's fees for an administrative appeal would turn on whether the claimant characterized their claim as either a denial-of-benefits claim under ERISA 502(a)(1)(B) or a fiduciary breach claim under 502(a)(3)." [Castillo v. Metropolitan Life Ins. Co., No. 19-56093 (9th Cir. Aug. 17, 2020)] Icon to read more

The Wagner Law Group

Exceptional Usefulness and Quality iconReopening and Rehiring During the COVID-19 Pandemic -- Critical Employee Benefits and Executive Compensation Considerations

Topics include: [1] Ensure eligibility determinations under retirement and health & welfare plans are correctly implemented. [2] Qualified retirement plans: automatic enrollment; loans. [3] Equity incentive plans. [4] Health & welfare plans: rehire after less than 13-week absence; rehire after 13-week absence; furloughed employees; determination of full-time status. [5] New rules for cafeteria plan elections. [6] How to appropriately report furloughed and laid-off workers to IRS on Forms 1094-C and 1095-C. [7] Impact of new COBRA rules for returning workers. [8] Avoiding 409A penalty taxes in connection with an arrangement that includes separation from service provisions. [9] Necessary retirement, health and welfare plan amendments. Icon to read more


ERISA Advisory Council to Meet September 17

"[T]he 201st open meeting of the [ERISA Advisory Council] will be held via a teleconference on Thursday, September 17, and Friday, September 18, 2020.... The purpose of the open meeting is for Advisory Council members to hear testimony from invited witnesses and to receive an update from [EBSA]. The Advisory Council will study the following topics: [1] Considerations for recognizing and addressing participants with diminished capacity, and [2] Examining top hat plan participation and reporting." Icon to read more

Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

New Rules for Excise Tax on Executive Compensation Paid by Tax-Exempt Organizations

"[C]larifications in these proposed regulations [include]: [1] A foreign organization that, for its taxable year, receives substantially all of its support (other than gross investment income) from the date of its creation from sources outside of the United States is not an ATEO. [2] Amounts includible in gross income as compensation under IRC Sec. 7872 and related regulations are included in remuneration for purposes of computing the excess compensation." Icon to read more


Selected Discussions
on the BenefitsLink Message Boards

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Missed RMD; Entire Balance Rolled Out of Plan

"A participant rolled over his entire balance to an IRA in 2019 without taking his RMD prior to the rollover. He will be taking the RMD now because it was just discovered. Is the only course of action to remedy the missed RMD by filing through VCP?" Icon to read more

BenefitsLink Message Boards

Still on the Lookout for MEPs/PEPs

"Anything going on out there for these plans? I keep hearing 'they're coming!' -- I would expect the Empowers and John Hancocks, etc. to be the ones leading the charge, but I don't hear anything." Icon to read more

BenefitsLink Message Boards

Merging ESOP Into Existing 401(k) Plan for C Corp

"What are the pros and cons of merging an ESOP (with half the shares unallocated) into an existing 401k, compared to a termination of the ESOP?" Icon to read more

BenefitsLink Message Boards

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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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