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[Guidance Overview]

IRS Releases Guidance on Loan Offset Rollovers

"While 'regular' plan loan offset amounts still exist, the TCJA created a new term: qualified plan loan offset (QPLO) ... [which occurs] only upon plan termination or severance from employment.... The IRS provides a test in the proposed regulations that is designed to help plan administrators to identify QPLOs after a severance from employment.... [P]lan administrators must not report an offset as a QPLO if the offset occurs more than 12 months after the participant's severance from employment." Icon to read more


[Guidance Overview]

Exceptional Usefulness and Quality iconNew DOL Rule Proposal Risks Chilling Proxy Voting and Shareholder Engagement

"While the proposal allows the fiduciary to determine the 'appropriate investment horizon,' it raises the prospect that long-term benefits, which may not be readily quantifiable today, could be afforded less weight.... [T]he proposal suggests that the costs the issuer incurs as a result of the voting and engagement are effectively costs to the plan (the idea being, apparently, that any cost to the company's bottom line necessarily diminishes the value of the plan's investment)." Icon to read more

Stradley Ronon

Federal Courts Continue to Dismiss ERISA Stock-Drop Claims

"When the Supreme Court granted certiorari in Jander, many ERISA lawyers expected the Court to clarify how a plaintiff could satisfy the Dudenhoeffer standard while still preventing meritless stock-drop claims.... Although the Supreme Court did not provide clarity, the lower federal courts have continued the trend of dismissing nearly all ERISA stock-drop cases at the pleadings stage. In four recent decisions involving ESOPs ... federal courts rejected arguments based on Jander and held that the plaintiffs failed to meet the Dudenhoeffer pleading standard. These decisions may be a harbinger of what is to come[.]" Icon to read more

Faegre Drinker

Deadlines for 401(k) Plan Adoption -- Including SECURE Act Changes

"In general, the first year of a new safe harbor 401(k) plan must be at least 3 months long ... That means the deadline for employers to adopt a new [calendar-year-based safe harbor] plan is October 1.... The SECURE Act extended the deadline for employers to adopt a new traditional 401(k) plan from the last day of the tax year until the due date of that year's tax return. That means the deadline for employers to adopt a new [calendar-year-based] plan will depend upon their tax status ... Replacing [a SIMPLE IRA] with a safe harbor or traditional 401(k) plan takes some planning ... [A chart provides various] 2020 and 2021 deadlines for [calendar-year-based] plans." Icon to
read more

Employee Fiduciary

Simple Nudge Gets More People to Start Retirement Nest Egg

"[P]eople are more likely to sign up for an employer-sponsored savings plan when urged to begin contributing a specific percentage of their income. The mere suggestion of a contribution amount -- and not the amount itself -- led to a 26% increase in the likelihood that a service member would enroll in the military's version of a 401(k).... The results also suggest that having to choose whether to contribute 3%, 4%, or 6% of a paycheck can be too much for some people." Icon to read more

Government Executive


Virtual SPARK Forum -- Nov. 4-6

The retirement services industry's leading event for top 401(k) Plan providers, advisors, consultants, administrators & recordkeeping professionals. Join the Virtual SPARK Forum, gain expert insights and strategies to solve your most pressing challenges. Learn more

Sponsored by SPARK

50 Essential Retirement Statistics for 2020

Recent statistics on: [1] Retirement demographics: Retirement age, Global retirement statistics, Women and retirement, Retirement and race. [2] Retirement finances: Savings, Social Security. [3] Life in retirement: Work, Spending, Housing. Icon to read more

Getting Into the ESG Disclosure, Rating and Ranking Game

"Because disclosure is largely voluntary, the sustainability ecosystem is made up of [1] organizations that provide different sets of disclosure frameworks and standards for ESG self-reporting and [2] organizations that rate and rank company ESG efforts by aggregating publicly-available data, sometimes confirming findings with organizations and sometimes not." Icon to read more

Seyfarth Shaw LLP

Falling Nearly 50 Percent, U.S. Single-Premium Pension Buy-Out Sales Total $2.3 Billion in the Second Quarter 2020

"There were 72 contracts sold in the second quarter 2020, down 35% from the 112 contracts sold in the second quarter of 2019.... Year-to-date buy-out sales totaled $6.7 billion, down 25% compared with the $8.9 billion recorded in the first half of 2019.... There were no single premium buy-in sales reported in the second quarter. The overall group annuity risk transfer sales were $2.4 billion for the quarter, 54% lower than prior year." Icon to read more


Isolating IRA Basis for Tax Efficient Roth IRA Conversions

"Despite the intricacies of reporting Roth conversions from Traditional IRAs with pre- and post-tax funding, converting Traditional IRA accounts can make sense ... Since IRA-to-plan rollovers are restricted to pre-tax dollars, such rollovers can essentially serve to reduce the pre-tax balance of a Traditional IRA, maximizing the after-tax balance available for the Roth conversion. Importantly, rolling funds back into an IRA from an employer plan, after completing a Roth conversion, should not be done until after the calendar year in which the Roth conversion was carried out, as doing so would result in the basis of the rollover to be included in the converted amount." Icon to read more

Nerd's Eye View

FAS87 ASC715 Discount Rates and Moody's Rates, August 31, 2020

An unofficial monthly report of the Moody's Daily Long-term Corporate Bond Yield Averages and Moody's Daily Treasury Yield Averages (used as benchmarks by some corporate pension plans). Icon to read more

David Rigby, via BenefitsLink Message Boards


DOL Issues Disappointing Lifetime Income Disclosure Guidance

"[The authors'] recommendations regarding DOL guidance regarding [lifetime income stream equivalent (LISE)] calculation and disclosure [include]: [1] Modifying the current DOL Life Income Calculator to make it more robust; [2] Directing participants in the model disclosure to the more robust DOL calculator so they can model alternative assumptions; and [3] Expressing LISE amounts in inflation-indexed (real dollar) lifetime payments so they could be added without adjustment to anticipated Social Security benefits.... [T]he DOL interim final rule contains none of the above items." Icon to read more

Ken Steiner, FSA Retired


DOL Seeks to Limit the Scope of Employee Benefit Plan Proxy Voting

"The Institute for Pension Fund Integrity applauds the Department's effort to address the systemic issue of undue influence of proxy advisory firms in shareholder voting, and while the scope of this proposed regulation is limited to ERISA-backed pension funds, we believe that it serves as a key step toward much-needed reforms." Icon to read more

Institute for Pension Fund Integrity [IPFI]

Benefits in General

[Official Guidance]

Text of IRS Request for Comments on Proposed Changes to 2021 Form 5500

The IRS is soliciting comments concerning proposed changes to the 2021 Form 5500 and Instructions, to implement requirements of the SECURE Act.  Comment deadline is 60 days after publication in the Federal Register (scheduled for September 3, 2020). Icon to read more

Internal Revenue Service [IRS]

Executive Compensation
and Nonqualified Plans

Total CEO Pay in U.S. Companies Rose by 5.5% for 2019

"[T]otal earned pay for S&P 1500 CEOs increased 5.5% at the median in 2019, a sharp drop from a 13.7% jump in the previous year. The increase marks the smallest rise since a 2.2% increase in 2016. The drop was primarily felt by small- and mid-cap companies. While S&P 500 CEOs saw a 13.1% increase at the median, total pay for S&P 600 and S&P 400 CEOs grew just 4.8% and 0.2%, respectively." Icon to read more

Willis Towers Watson

Press Releases

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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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