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Retirement Plans Newsletter September 2, 2020 |
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Newly Posted Recordkeeping Vendor Searches: More than Just Fees
Total Compensation Strategies Attracting and Retaining Employees
Retirement Readiness Starts with Financial Wellbeing: A Strategic Approach for Building Your Financial Well-Being Program
Annual Benefits Forum - Charting a Course for Recovery for Employers and Employees
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Discussions |
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This Newsletter:
BenefitsLink Health & Welfare Plans Newsletter:
Message Boards Digest:
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[Guidance Overview]
"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." Ascensus |
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[Guidance Overview]
"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)." Stradley Ronon |
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"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[.]" Faegre Drinker |
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"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." Employee Fiduciary |
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"[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." Government Executive |
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[Sponsored]
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.
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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. Annuity.org |
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"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." Seyfarth Shaw LLP |
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"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." LIMRA |
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"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." Nerd's Eye View |
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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). David Rigby, via BenefitsLink Message Boards |
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[Opinion]
"[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." Ken Steiner, FSA Retired |
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[Opinion]
"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." Institute for Pension Fund Integrity [IPFI] |
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Benefits in General |
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[Official Guidance]
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). Internal Revenue Service [IRS] |
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Executive Compensation |
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"[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." Willis Towers Watson |
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Press Releases |
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Security Health Plan Introduces New Plan Option for Wisconsin Employers
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DWC - The 401(k) Experts Announces Jamelle Moody as Principal
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FINRA Sanctions Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC More Than $2 Million for Supervisory Violations Related to Variable Annuity Switches
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Most Popular Items in the Previous Issue |
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To Purge, or Not to Purge, That Is the Question
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Traditional and Roth Individual Retirement Accounts (IRAs): A Primer (PDF)
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Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
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Article submission: Online form
BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2020 BenefitsLink.com, 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 BenefitsLink.com, 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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