Commissioner, Tax Exempt and Government Entities Division Internal Revenue Service [IRS] Telecommute / Washington DC
	Retirement Operations Manager The Trust Company of Tennessee Telecommute / Knoxville TN

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ERISA: A Case Study and Deep Dive Into Compliance
October 7, 2020 WEBCAST
Archer

Year-End Checklist for Your Retirement Plan: 2020
October 22, 2020 WEBCAST
Faegre Drinker

2020 Fiduciary Summit
October 29, 2020 WEBCAST
Pensionmark

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[Official Guidance]

Text of IRS Final Regs: Income Tax Withholding on Certain Periodic Retirement and Annuity Payments Under Section 3405(a) (PDF)

"This document sets forth a final regulation that provides rules for Federal income tax withholding on certain periodic retirement and annuity payments to implement an amendment made by the Tax Cuts and Jobs Act. This regulation affects payors of certain periodic payments, plan administrators that are required to withhold on such payments, and payees who receive such payments.... This regulation is effective [on the date of publication in the Federal Register].... [T]his Treasury decision adopts the proposed regulation as final with no modifications[.]" 

Internal Revenue Service [IRS]

[Sponsored]

ERISApedia.com Announces 8th Edition of Who's the Employer (WTE)

S. Derrin Watson JD, releases 8th Edition, WTE. Over 30% NEW material. Dozens of new examples. Full explanations of how employer and employee status impact testing. Improved organization-easy to find answers. sales@erisapedia.com or 612-605-2266 

[Guidance Overview]

IRS Issues Final Regs on Income Tax Withholding on Certain Periodic Retirement and Annuity Payments

"Prior to the Tax Cuts and Jobs Act (TCJA), if no withholding certificate was in effect for a taxpayer's periodic payments, the amount to be withheld from the payments was determined by treating the taxpayer as a married individual claiming three withholding exemptions. The TCJA amended this rule to provide that the rate of withholding on periodic payments when no withholding certificate is in effect (the default rate of withholding) would instead be determined under rules prescribed by the Secretary of the Treasury. The final regulation issued [on September 28, 2020] provides guidance for 2021 and future calendar years." 

Internal Revenue Service [IRS]

[Guidance Overview]

PBGC's Updated Lump-Sum Methodology Will Affect Few Plans

"The updated PBGC methodology will affect single-employer plans terminating in a distress or involuntary termination. It could also affect ongoing plans that provide: [1] A lump sum based on whichever provides a higher lump sum, the PBGC assumptions or the Code lump-sum rates. [2] Other optional forms of payment that use the PBGC assumptions as the applicable actuarial assumptions for conversion from the normal form of payment." 

Segal

[Guidance Overview]

PBGC Allows Amendment to Premium Filing to Reflect Later Contributions

"Under the new guidance, contributions may be included in plan assets for calculating the variable rate premium if received by January 1, 2021. However, the premium filing may not anticipate future contributions. Instead, plans will be able to amend the premium filing to revise the originally reported asset value once all prior year contributions have been made, and receive a refund of the previously calculated premium." 

Graydon

[Guidance Overview]

SECURE Act Leaves Questions About Distributions for Birth, Adoption

"QBOADs are limited to $5,000 per individual for each birth or adoption.... Is the $5,000 limit indexed? It doesn't seem to be.... Although the statute isn't clear, Notice 2020-68 confirms that the $5,000 limit applies per child.... The statute doesn't appear to require any justification for the distribution beyond the birth or adoption.... Must plans accept repayment? ... Does an employee face any deadline for repayment? ... What if the employee terminates employment after taking the QBOAD? ... Can the repayment include interest?" 

Mercer

[Sponsored]

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. 

Schlichter Sanctioned for 'Reckless' Litigation

"Determining that the decision to pursue litigation was 'objectively reckless,' a federal judge has sanctioned the law firm of Schlichter Bogard & Denton with a fine of (up to) $1.5 million.... The suit -- which was dismissed in August -- was ... brought by participants in plans that had chosen Empower as recordkeeper, and investment options from Great-West and other fund complexes from which participants could choose.... Great-West Capital Management LLC and Empower Retirement (its affiliate plan administrator) requested the sanction, following an 11-day bench trial earlier this year where the plaintiffs failed to produce 'any legally cognizable evidence' of damages." [Obeslo v. Great-West Capital Mgmt. LLC, No. 16-230 (D. Colo. dismissed Aug. 7, 2020; sanction order Sep. 28, 2020)] 

American Retirement Association [ARA]

Judge Tosses Second Class Action Against Trader Joe's

"A federal judge in Los Angeles dismissed another class action filed against Trader Joe's Co. and other related parties that alleged a series of ERISA violations in managing the grocery store chain's $1.7 billion 401(k) plan.... [Judge] Anderson dismissed a similar ERISA suit against Trader Joe's ... in April, a case he cited numerous times throughout [this latest] decision." [Kong v. Trader Joe's Co., No. 20-5790 (C.D. Cal. Sep. 24, 2020)] 

Pensions & Investments

EBSA Income Projections Too 'Prescriptive', Some Say

"EBSA's proposed approach has proven to be controversial. Though the vast majority of comments so far ... support the EBSA's goal, there is growing consensus among industry practitioners that the prescribed approach is too simplistic. Comments on the proposed framework are due to the EBSA by 11:59 p.m. EST on November 17." 

PLANSPONSOR; free registration may be required

403(b) Retirement Plan Fee Litigation: September 2020 Update

"For the first time in nearly two years, a new lawsuit was filed against a university (University of Miami). Four new healthcare lawsuits were filed, two against Sutter Health of California, and one each against Mercy Health of Illinois and MedStar Health of Maryland ... The 8th Circuit Court of Appeals overturned a trial court's dismissal of one of the two claims in the Washington University in St. Louis case, while affirming the dismissal of a second claim." 

Cammack Retirement Group

Making Sense of ESG Investing

"The recent outperformance of ESG strategies and current social and economic concerns have emphasized the need for investors to consider ESG-related risks in their portfolios and affirmed ESG as a mainstream investment strategy." 

Cammack Retirement Group

2020 Global Retirement Index

87 pages. "COVID-19 obviously poses significant risks to today's retirees, as mortality rates from the disease disproportionately skew to older individuals. But policy actions taken to address the economic ramifications of the pandemic present long-term risk to retirement security, and interest rates are one of the greatest pressures. Between January and July 2020 alone, central bankers around the world implemented 173 rate cuts.... Along with rates, [this] examination of the risks looks at the current economic pressures on retirement savings, the uncertainty presented by record levels of public debt, the physical and financial risks of climate change, and the long-term impact of income inequality." 

Natixis Investment Managers

Making 403(b) Lemonade When Your Investment Choices Are Lemons

"[Here is a list of] the 104 school districts and three community colleges lacking at least one quality 403(b) vendor choice ... [including the] number of employees ... based on information in the National Center for Education Statistics database." 

403bwise

Rising Pension Costs Likely to Consume 90% of Tax Hike for One California City

"[T]he city's payments to the California Public Employment Retirement System (CalPERS) will reach $25.2 million in 2025. That is double the $12.4 million Manteca was projected to pay into CalPERS in the fiscal year that ended June 30. ... The significance of that increase is underscored by the fact last year's budget saw an increase of $1,013,160 in property taxes -- the single biggest source of general fund revenue. That mean 90 percent of all new property tax revenue went to covering the city's pension obligations." 

Manteca / Ripon Bulletin

[Opinion]

DOL 'Best Interest' Proposal Not Aligned With Federal, State Rules

"While the proposed class exemption is based on the SEC's Regulation Best Interest, it does not 'align' with the NAIC standard due to material differences in insurance regulation. Further, and even more troubling, the DOL's new guidance reinterpreting the definition of a 'fiduciary' under the traditional five-part test as discussed below, results in the application of ERISA fiduciary status and standards to rollover recommendations not previously considered fiduciary advice. The combination of these two would subject some insurance sales transactions to fiduciary status Congress never intended, and to an exemption process that simply does not fit." 

James F. Jorden, Esq. in Bloomberg Law

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Set Up a Qualifying Safe Harbor Plan by October 1 with Nonelective Contributions Not Effective Until November 1?

"Can I set up a new profit sharing-only plan effective 10/1/2020, and then have the 401(k) and Safe Harbor Nonelective Contributions not be effective until 11/1/2020? This would ensure that my plan year is at least 3 months long. I believe the answer is no, but many articles say "the plan year still must be at least 3 months" without being any more specific. Really the same old requirement that CODA must be effective for 3 months still applies. Although the SECURE Act amends the tax code, it's the regs that include the 3 month minimum." 

BenefitsLink Message Boards

Reporting a Missed DB Plan Contribution

"I have a client with a DB plan who has decided to delay their contribution until 1/1/2021. Because there is an unpaid minimum contribution on line 11a, how would I answer line 11b about the reporting of missed contributions to the PBGC?" 

BenefitsLink Message Boards

409A Alternate Payment Amounts

"I'm hoping to get input on an atypical nonqualified plan design. The amount of the payment would differ based on which event triggers the payment. Termination (for any reason), death, or disability would result in a payment of the participant's account plus a specified and reasonable rate of interest. But a change in control would result in a payment of the participant's account plus a rate of return based on the increase/decrease of the employer's stock over the period of the employee's participation in the plan." 

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Press Releases

Jason Del Grande Joins Lockton to Build and Scale its Business in Northern California
Lockton

SEC Staff to Host October 26 Roundtable on Regulation Best Interest and Form CRS
Securities and Exchange Commission [SEC]

Empower Retirement and Fifth Third Bolster Service to Retirement Plan Clients With Acquisition Agreement
Empower Retirement

Molina Healthcare to Acquire Affinity Health Plan
Molina Healthcare

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