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[Guidance Overview]

PBGC Takes a U-Turn on CARES Act Contribution Delay

"The agency will now let sponsors amend their 2020 PBGC premium filings to reflect all contributions made by the CARES Act's extended contribution deadline -- even contributions made after the premium filing due date -- and request a refund of any excess variable-rate premium." Icon to read more



ASC Provides Unparalleled Support for Your Defined Benefit System

With support from 3 in-house actuaries, & integration with other ASC Systems, the DB System includes Plan Design, Funding, Compliance, ASC-715 & Participant Termination features and more. Increase your efficiency -- learn more nowLearn more

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[Guidance Overview]

Rehiring Employees by End of 2020 Could Prevent Partial Plan Terminations

"The IRS's response provides some reassurance for employers who rehire employees by the end of 2020 that they will decrease their risk of incurring a partial termination. However, employers should be aware that rehiring employees in 2020 will not preclude a future IRS determination of a partial termination. The IRS does not address the possibility that the applicable period may extend past 2020, particularly if the employer has a series of COVID-19 terminations of employment, which would affect the calculation of the turnover rate." Icon to read

Faegre Drinker

[Guidance Overview]

DOL Guidance on Lifetime Income Illustrations: Coloring Within the Lines

"[P]roviding a lifetime income illustration to a younger person based on their current account balance and assuming that they are age 67 at the time they receive the disclosure is a very challenging prospect and may not provide much useful information. Providing lifetime income illustrations based upon both a current and a projected account balance may collectively provide more useful information, particularly for younger participants. As a result, some commenters are likely to press the DOL for changes that include a lifetime income stream based upon a projected account balance." Icon to read more

Frost Brown Todd LLC

[Guidance Overview]

Exceptional Usefulness and Quality iconNew 401(k) Coverage Rules for Long-Term, Part-Time Workers

"The new rules under the SECURE Act ... ramp up between 2021 and 2024. However, some employer action is already required ... [This article] walks you through the new rules, including those contained in IRS Notice 2020-68 ... If inclusion of your long-term, part-time workers will push your existing plan over the 100 participant threshold, you might give thought to separating them out in a separate plan, such that both of your plans will be under the audit threshold." Icon to read more

E is for ERISA

[Guidance Overview]

Long-Term Part-Time Employee 401(k) Elective Deferrals

"[Notice 2020-68] clarifies that all years of service, even years before 2021, must be considered for determining a long-term part-time employee's vesting in any employer contributions allocated to that participant's account.... Many employers were counting on only having to track part-time employee service on a going-forward basis after Jan. 1, 2021. However, this vesting service requirement likely adds a significant administrative burden on employers." Icon to read more

Kushner & Company


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]

IRS Issues Guidance on SECURE and Bipartisan American Miners Acts

"The SECURE Act generally provides that amendments for its changes aren't due before the last day of the first plan year beginning on or after Jan. 1, 2022 (or a later date prescribed by IRS). For governmental and certain collectively bargained plans, amendments aren't due before the last day of the first plan year beginning on or after Jan. 1, 2024. [Notice 2020-68] clarifies that the same deadlines apply to both discretionary and required SECURE Act amendments and to amendments for the Miners Act." Icon to read more


[Guidance Overview]

DOL Creates Path for 401(k) Plans to Offer Private Equity Investment Options

"The DOL's guidance is subject to several limitations that plan sponsors and firms should consider when evaluating and selecting investment options for 401(k) plans. [Information Letter 2020-06-03] does not allow 401(k) plan participants to directly invest in private equity funds on a stand-alone basis.... Plan sponsors must also provide participants with sufficient information to make informed investment decisions with regard to investment options available under the plan, which may be more difficult to do for private equity investments." Icon to read more

McDermott Will & Emery, via Lexology; free registration required

Impact of COVID-19 on Pension Plan Actuarial Experience and Assumptions, Including Mortality (PDF)

"The effects of the pandemic on the economy, on workforce patterns, and on plan sponsors’ budgets are likely to be far more financially significant to most pension plans, at least in the near term, than the effect on mortality. There is expected to be wide variance among the plans themselves, regardless of whether they are private sector, multiemployer, or public plans." Icon to read more

American Academy of Actuaries

Mutual of Omaha to Settle ERISA Case for $6.7 Million

"Mutual of Omaha Insurance Co. has agreed to pay $6.7 million to settle ERISA complaints by participants in two company 401(k) plans that fiduciaries favored some proprietary products over other investment options and charged extra fees for non-proprietary funds in the investment lineups.... The preliminary settlement agreement said more than 7,000 participants had account balances at the end of 2018." Icon to read more

Pensions & Investments

Judge Rejects Petition to Throw Out AutoZone ERISA Lawsuit

"The participants ... [argued] that AutoZone fiduciaries violated ERISA by retaining GoalMaker, an asset allocation service ... which allegedly steered participants' investments into high-cost investment options.... The judge ruled that plaintiffs had provided enough information to allow the complaint to go to trial regarding the use of GoalMaker; the retention of a stable value fund; the use of actively managed mutual funds and separate accounts; the fiduciaries' methodology for selecting investment share classes; and the comparing of record keeping fees to benchmarks." [Miller v. AutoZone, Inc., No. 19-2779 (W.D. Tenn. Sep. 18, 2020)] Icon to read more

Pensions & Investments

Benefits in General

[Official Guidance]

IRS Announces Tax Relief for Hurricane Sally Victims

"Victims of Hurricane Sally that took place on Sept. 14 now have until Jan. 15, 2021, to file various individual and business tax returns and make tax payments ... Individuals and households who reside or have a business in Baldwin, Escambia, and Mobile counties qualify for tax relief.... [C]ertain deadlines falling on or after Sept. 14, 2020, and before Jan. 15, 2021, are postponed through Jan. 15, 2021." Icon to read more

Internal Revenue Service [IRS]

Executive Compensation
and Nonqualified Plans

Exceptional Usefulness and Quality iconPossible Options for Participant Relief Under Section 409A Plans in the Time of Coronavirus

"In general, Code section 409A provides participants with a limited ability to access deferred compensation in the event of an unforeseeable emergency, and also offers employers (but not participants) some discretion to cancel future deferral elections (but not distribute benefits) in certain circumstances. However, it is important that employers understand the limits of these rules before taking action." Icon to read more

Groom Law Group

Selected Discussions
on the BenefitsLink Message Boards

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ADP Test Refund Going to Automatic Non-Deductible Contribution Bucket?

"A client doesn't like failing the ADP test and making refunds to the owner of the business. They won't adopt a Safe Harbor contribution formula. Instead, they want to know if an ADP test refund can automatically become a non-deductible contribution and remain in the plan instead of being refunded to the owner. Does anyone have some insight on this?" Icon to read more

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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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