Retirement Plans Newsletter

October 15, 2020

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Webcasts, Conferences

Key Considerations For Successful Remote Plan Governance
October 27, 2020 WEBCAST
American Bar Association Joint Committee on Employee Benefits [JCEB]

IRA Reporting
November 10, 2020 WEBCAST
Ascensus

Employee Benefits and Covid-19: Options for Employers and Employees
December 16, 2020 WEBCAST
Bloomberg

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[Official Guidance]

PBGC Releases 2021 Premium Rates

PBGC has determined the premium rates applicable for 2021 plan years in accordance with the indexing rules of ERISA § 4006. Icon to read more

Pension Benefit Guaranty Corporation [PBGC]

[Sponsored]

ERISApedia.com – Who is Answering Your ERISA Questions?

Noted author and speaker S. Derrin Watson, J.D. is answering questions in our Ask the Author service. Get your answers from Derrin in four business hours or less. Contact us at: sales@erisapedia.com or 612-605-2266 Learn more

Sponsored by Burrmont Compliance Labs LLC


The To-Do List for 401(k) Plans: 2020-2021 Edition

"The problem of late deferrals ... Compensation issues ... Review your plan expenses ... Understand there is an uptick in 401(k) litigation and plan oversight ... Be careful about share classes, revenue sharing, and proprietary funds ... Review your plan document ... Get your plan reviewed." Icon to read more

Ary Rosenbaum, via JD Supra

Should Retirement Plan Sponsors Be Limiting Plan Loans?

"Loans are preferable to plan distributions ... Choosing a retirement plan loan is often a better alternative to borrowing in the commercial marketplace ... The chances are that if an individual has a number of outstanding loans, they have a lot of retirement savings as well ... Taking these points into consideration may lead a plan sponsor to be less restrictive in limiting the number of outstanding loans for a participant. However, the degree to which flexibility should be permitted may vary from plan to plan." Icon to read more

Cammack Retirement Group

Reliance Trust, Insperity Reach Deal on 401(k) Excessive Fee, Self-Dealing Suit

"The plaintiffs argued in their complaint that the defendants selected untested proprietary funds as investment options for the plan and retained those funds despite their poor performance, which benefited defendants at the expense of participants. The plaintiffs also claimed that defendants breached their fiduciary duties by selecting Insperity Retirement Services, a subsidiary of Insperity, as the plan's recordkeeper, paying it excessive administrative expenses, and failing to monitor and control the amount of those administrative expenses." [Pledger v. Reliance Trust Co., No. 15-4444 (N.D. Ga. settlement agreement filed Oct. 12, 2020)] Icon to read more

planadviser

How Aging Financial Advisers Could Hurt the 401(k) Industry

"The average U.S. financial adviser is 52 years old, with 37% expected to retire over the next 10 years ... Less than 10% of advisers are under 35, with a third between 55 and 64. Who will replace them?" Icon to read more

Fred Barstein, via RPA Convergence

[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. Learn more

Sponsored by SPARK


Policy Options for Multiemployer Defined Benefit Pension Plans

34 pages. "Many policy options have been discussed ... by policymakers and stakeholders. Not all options directly address the solvency of financially distressed multiemployer plans or PBGC ... The options include: [1] assistance for financially troubled multiemployer plans with subsidized loans or partitions; [2] changes to the maximum benefit limit imposed on plans when they receive PBGC financial assistance; [3] changes to PBGC's premium structure; [4] stricter funding rules; and [5] alternative pension plan designs." [R45311 updated Oct. 14, 2020] Icon to read more

Congressional Research Service [CRS]

Most Boomer Investors Are Confident About Their Retirement Despite Pandemic and Market Uncertainties

"[M]ore than 80 percent of both those who have retired and those who are soon-to-retire are satisfied or confident their lifestyle will be everything that they envision.... 84 percent anticipate their quality of life in retirement will be better than that of their parents and 80 percent believe their quality of life in retirement will be better than that of their children.... [N]early two-thirds (65 percent) said they would rather spend their money in retirement than leave an inheritance for their children." Icon to read more

Charles Schwab

[Opinion]

SPARK Institute Comment Letter to IRS on Rollover Rules for Qualified Plan Loan Offset Amounts (PDF)

"While the proposal's bright line 12-month rule is a helpful approach to determining whether a plan loan offset is a QPLO, ... recordkeepers may not currently have sufficient information to track this period for purposes of Form 1099-R reporting. [SPARK recommends] the Agencies consider an alternative bright line rule under which a plan loan offset is a QPLO if the offset occurs by the end of the calendar year following the calendar year in which the employee has a severance from employment.... [A] delay in the effective date, or good faith relief for Form 1099-R reporting, is needed." Icon to read more

The SPARK Institute

[Opinion]

SPARK Comment Letter to EBSA on Proposed Regs for Proxy Voting and Shareholder Rights (PDF)

"[SPARK is] concerned that the Proxy Voting Proposal will add significant cost and untenable requirements to a fiduciary's management of plan assets with little accompanying benefit to participants, and may even produce results that are contrary to the Department's goals." Icon to read more

The SPARK Institute

[Opinion]

Joint Letter to IRS Supporting Permanent Extension of Remote Notarization Rules (PDF)

"To protect participants (especially at-risk retirees), many plan sponsors and their service providers implemented remote notarization quickly after the relief was provided. Remote notarization has proven successful, is popular with participants, and is quickly gaining broad acceptance in states. Accordingly, we believe it is appropriate to make the guidance in Notice 2020-42 permanent." Icon to read more

The SPARK Institute and 16 other employer and industry organizations

[Opinion]

Suggested Revisions to the DOL Shareholder Proposal

"[It] is advisable for the DOL to revise the proposal to be consistent with ERISA, and the DOL historical and current policy of permitting ERISA fiduciaries to engage in investor activism, if such activism does not reduce the plan's expected economic performance. The effect on the expected economic performance is determined for the appropriate investment horizon. The effect takes into account the actions of the fiduciary with respect to other portfolio companies of the plan, and the actions of other shareholders in the portfolio company." Icon to read more

Law Offices of Albert Feuer, via SSRN

Benefits in General

Make Sure Your ERISA Plan Properly Designates Fiduciary Duties to Claims Administrators

"[1] Follow the fiduciary designation process set out in the Plan; [2] know that a general delegation of fiduciary duties is not enough; [3] be able to establish that the delegation applies to the specific claim at issue." [Hampton v. National Union Fire Ins. Co. of Pittsburgh, No. 18-6725 (N.D. Ill. Oct. 7, 2020)] Icon to read more

Lane Powell PC

Executive Compensation
and Nonqualified Plans

Nonqualified Deferred Compensation Plans Offer Benefits — and Risks

"From an employer's perspective, NQDC plans are attractive because they can be limited to highly compensated employees and they avoid the cost of compliance with ERISA's reporting and administrative requirements. However, unlike contributions to qualified plans, deferred compensation is not deductible by the employer until it is paid.... The biggest disadvantage of NQDC plans for participants is that deferred compensation is subject to the claims of the employer's creditors and could be lost in the event of bankruptcy or insolvency." Icon to read more

ORBA

Selected Discussions
on the BenefitsLink Message Boards

► It's easy to sign up and participate in discussions! Post answers, ask questions, create custom feeds and views. Join your peers (and potential referral sources or customers)—there is no charge.

Who Gets the SAR?

"Giving out the SAR today for the 2019 plan year. Who gets it? All current eligibles as of today and former employees with a balance as of today? New participants in 2020 will get it. All current eligibles as of 12/31/19 and former employees with a balance as of today? New participants in 2020 do not get it. As I understand it, former employees with no account balance at the time of distribution of the SAR do not get it." Icon to read more

BenefitsLink Message Boards

5500 Has No Audit Report But 'We're Working On It'

"I've seen auditors attach to the 5500 as the audit report a letter that basically says 'Hey. we're working on the audit.' The benefit of this approach (which is what I don't like about it) is the filing will be accepted without error. I think it's a little disingenuous. Although it looks like you're 'doing the right thing' by disclosing the fact that you are working on the audit, it has the effect of hiding the fact that you haven't done the audit. Do others recommend in favor of or against this approach?" Icon to read more

BenefitsLink Message Boards

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Press Releases

Most Popular Items in the Previous Issue

Déjà Vu! Didn’t We Just Finish Restatements? (PDF)
Ferenczy Benefits Law Center via Plan Consultant

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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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