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[Official Guidance]

2020 IRS Form 4972: Tax on Lump-Sum Distributions (From Qualified Plans of Participants Born Before January 2, 1936) (PDF)

"Use Form 4972 to figure the tax on a qualified lump-sum distribution ... you received in 2020 using the 20% capital gain election, the 10-year tax option, or both. These are special formulas used to figure a separate tax on the distribution that may result in a smaller tax than if you reported the taxable amount of the distribution as ordinary income." Icon to read more

Internal Revenue Service [IRS]

[Guidance Overview]

PBGC Provides Temporary Flexibility for Variable-Rate Premium Calculations

"Under the PBGC's new guidance, the deadline to receive 'prior year contributions' that are taken into account is extended to January 1, 2021 for premium filings due on or after March 1, 2020 and before January 1, 2021. Importantly, the PBGC's guidance does not extend the deadline for premium filings, and filings cannot reflect contributions that have not been made. Plan sponsors that want to take advantage of the guidance must instead amend their filings by February 1, 2021 to revise the variable-rate premium calculation data after the eligible 'prior year contributions' are paid to the plan." Icon to read more


[Guidance Overview]

High Risk Issue iconIRA Custodian Not Telling IRA Owner About the 60-Day Rollover Rule Is Not a Valid Excuse for Missing the 60-Day Rollover Deadline

"PLR 202033008 provides valuable lessons and insight into the operational and compliance requirements of IRAs, which include the following: When it comes to IRAs, much of the responsibility for compliance with rollover rules rests with the IRA owner. The IRS is strict about applying the rollover rules; and waivers are granted under narrowly defined exceptions.... IRA owners should seek IRA advice from trained IRA professionals.... [In] addition to the unfavourable ruling which requires the amount to be included in income, the IRA owner is out of pocket for $10,000 plus any fees paid to the professional whose service was engaged to assist with requesting the PLR." Icon to read more

Appleby Retirement Consulting Inc.

[Guidance Overview]

IRS PLR Provides Lesson About the Importance of Updating Addresses for Retirement Accounts

"Neither the [custodian's] resignation letter nor the 1099-R issued for the distribution was forwarded to Tyrone's new address. As a result, Tyrone was not aware of the distribution until he received a CP2000 notice from the IRS.... The IRS's fee and other expenses incurred for requesting the PLR might be worth it, as it provides an assurance that the IRS would not later disqualify the rollover, as long as all other rollover requirements are satisfied. But this could have been avoided, if Tyrone had notified Custodian-D that he had moved and instructed them to update his address of record." [PLR 202023007Icon to read more

Appleby Retirement Consulting Inc.

[Guidance Overview]

Exceptional Usefulness and Quality iconComparing the DOL Proposal for Investment Advice Fiduciaries to the Broker-Dealer and RIA Standards of Conduct

The linked article includes a chart that compares the SEC's standard of conduct for broker-dealers under Regulation Best Interest (Reg BI) with the SEC's Interpretation Regarding Standard of Conduct for Investment Advisers (the RIA Interpretation), and the DOL's proposed prohibited transaction exemption, which includes in the preamble an expanded interpretation of who qualifies as an investment advice fiduciary under ERISA and the Internal Revenue Code. Icon to read more

Faegre Drinker


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

[Guidance Overview]

Upcoming Deadline iconPuerto Rico-Qualified Retirement Plans: 2020 Year-End Amendments Deadline Coming Soon

"[If] during 2020, a Puerto Rico-qualified plan allowed participants to receive in-service hardship withdrawals on account of either the COVID-19 pandemic or the earthquakes that affected the island at the beginning of the year (collectively, 'disaster-relief distributions' or 'DRDs'), the official plan document must be amended accordingly by December 31, 2020." Icon to read more

Ogletree Deakins

[Guidance Overview]

GASB Aims to Mitigate Costs of Fiduciary Activities Standard

"The new standard intends to reduce the financial-reporting complexities and ease the overall implementation costs of GASB 84, Fiduciary Activities -- specifically when evaluating defined contribution pension and defined contribution post-employment benefit plans ... Implementation of GASB 97 is expected to minimize the number of DC plans that meet the criteria for reporting as a fiduciary component unit within a sponsoring government's annual financial report." Icon to read more

Moss Adams LLP

Supreme Court Weighs Tackling Northwestern 403(b) Fee Case

"The U.S. Supreme Court asked the acting U.S. solicitor general for an opinion in an ERISA fee fight case before the justices decide if they will hear the complaint involving two 403(b) plans run by Northwestern University, Evanston, Illinois. Participants in the two plans petitioned the Supreme Court on June 19 after having lost at both the federal District Court and federal appeals court levels in their allegations that the university and its fiduciaries violated ERISA guidelines in managing the plans." [Hughes v. Northwestern Univ., No. 18-2569 (7th Cir. Mar. 25, 2020; cert. pet. filed Jun. 19, 2020)] Icon to read more

Pensions & Investments

Abbott Escapes Retirement Plan Cybersecurity Suit

"A federal judge found Abbott defendants were not fiduciaries with regard to the alleged acts, but claims against Abbott's retirement plan recordkeeper were allowed to stand." [Bartnett v. Abbott Laboratories, No. 20-2127 (N.D. Ill. Oct. 2, 2020)] Icon to read more


Recovering Retirements and Making Sense of Employer-Provided Retirement Benefits in a Changing World (PDF)

12 pages. "As employers execute their Return-to-Work plans and re-open their businesses, they will have numerous compliance issues ... Plan sponsors will re-group and determine how their programs can be enhanced or re-designed in response to the near-term workforce changes.... This article seeks to identify key considerations for the long-view with regard to defined contribution retirement plans and the related programs which will enable employees to more effectively save for their retirement years." Icon to read more

Epstein Becker Green

ERISA's Statute of Limitations for Breach of Fiduciary Duty Claims Post-Intel: What Protections for Plan Fiduciaries Remain? (PDF)

"[It] is difficult to envision a circumstance, other than where the plaintiff unequivocally admits he or she received, read and understood the relevant documentation, where a claim on summary judgment will be found time-barred based on the actual knowledge standard.... [However, to] the extent plaintiffs must show they were aware of, read and understand the disclosures upon which they base their claim, such inquires may pose barriers to class certification." [Intel Corp. Investment Policy Comm. v. Sulyma, No. 18-1116 (S. Ct. Feb. 26, 2020)] Icon to read more

Jenner & Block, via Employee Relations Law Journal

An Innovative Approach to Employee Education for 401(k) Plan Sponsors and Fiduciaries

"In order to better learn what you need to know; you must teach it to someone else.... Consider how this might signal a paradigm shift in the way plan sponsors and fiduciaries provide financial literacy education to 401k plan participants. Imagine if that education trains employees to teach the concept of retirement saving to another person. The objective, though, isn't necessarily to successfully teach that other person, but to infuse the lesson upon the employee doing the teaching." Icon to read more

Fiduciary News; free registration required

IRS Provides New 457(b) Resource Guides

"The resource guide and correction of excesses guidance look to be a very useful tools. They not only link to the statute and each of the regs, they also link to the IRS Manual sections on 457(b) plans. They do have their limitations (such as providing no guidance on how one corrects failures in a tax-exempt's 457(b) plan), but it should be a permanent part of the practitioner's research tool list." Icon to read more

Business of Benefits


DOL Publishes Comments Received on Proposed Regs for Pooled Plan Provider Registration

EBSA has begun posting comments on the proposed Registration Requirements for Pooled Plan Providers published on September 1, 2020. As of Oct. 6, 20 comments have been posted. The comment period ended on October 1. Icon to read more

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


The Wagner Law Group Asks DOL for Cybersecurity Guidance

"A number of legal questions remain unanswered and there is an acute need for comprehensive guidance from the DOL. These questions include: [1] what is the specific personal and/or confidential participant information that must be safeguarded by plan fiduciaries; [2] what standard of care applies to the protection of participant personal information; [3] what is the plan administrator's responsibility with respect to disclosing to participants the unauthorized appropriation of participant information; and [4] whether state cybersecurity, privacy, consumer protection or other laws are pre-empted by ERISA.Icon to read more

The Wagner Law Group


So This Is 457 Heaven

"Teachers have long enjoyed the ability to contribute to both the 403(b) and the 457(b).... In K-12 circles the 403(b) is more widely available, and maybe more widely understood. That's a big maybe given the total lack of objective retirement plan information provided to school employees. Nevertheless, there is a strong case to be made that the 457(b) is superior to the 403(b)." Icon to read more


Benefits in General

[Guidance Overview]

DOL Proposes to Simplify Worker Classification Test Under FLSA

"The proposed rule would relax the parameters for determining independent contractor status under the FLSA, so employers and business lobbies will likely welcome the new test. However, different standards may apply for identifying independent contractors under other laws[.]" Icon to read more


Cybersecurity More Effective If Regularly Reinforced

"[R]esearchers who studied 409 employees found that they were able to identify which emails were legitimate and which were phishing immediately after a security awareness and education program was conducted, and even four months after. But after half a year had elapsed, that was not the case.... The researchers then developed 'reminder measures' to refresh employees' knowledge and awareness.... [T]he interactive reminder measure and the one entailing a video were the most effective[.]" Icon to read more

American Retirement Association [ARA]

Press Releases

DOL Obtains Consent Order and Judgment to Restore $6,545,454 to Union Short Term Disability Fund
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

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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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