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[Guidance Overview]

401(k) Plan Sponsors Need to Start Tracking Hours for Part-Time Employees

"Unless the plan allows for immediate eligibility, the SECURE Act requires that the plan administrator track employee hours to determine eligibility to participate in the plan.... [T]he SECURE Act does not mention the elapsed time method; therefore, it appears for now that plan sponsors that impose a service-based eligibility requirement on their employees will have to keep track of actual hours of service beginning January 1, 2021, at least for their part-time employees." Icon to read more

Ogletree Deakins

[Guidance Overview]

SECURE Act’s 401(k) Plan Eligibility and Vesting Rules for Long-Term, Part-Time Employees

"Employees who become eligible solely under the new rule only have to be provided with the opportunity to make elective deferrals; they may continue to be excluded from eligibility for other types of employer contributions made to the 401(k) plan ... An employer may elect to exclude employees who become eligible solely under the new rule for purposes of nondiscrimination and coverage testing, and in applying the top-heavy minimum benefit and vesting requirements." Icon to read more

Verrill Dana LLP

Supreme Court Asks Solicitor General to Weigh in on Plan Reformation as Equitable Remedy

"The U.S. Supreme Court has asked the solicitor general's opinion about a 14-year-old case in which PricewaterhouseCoopers is contesting an adverse ruling by a New York federal appeals court about calculations for the company's cash balance plan. Former participants in the plan sued in 2006, saying PwC violated ERISA by incorrectly calculating lump-sum payments taken by participants before August 2006 when ERISA was amended." [Laurent v. PricewaterhouseCoopers LLP, No. 18-487 (2d Cir. Dec. 23, 2019; cert. pet. filed Jul. 10, 2020)] Icon to read more

Pensions & Investments

2021 Social Security and PBGC Amounts, with Projected Covered Compensation (PDF)

"Social Security benefits payable in 2021 will increase by 1.3% ... The [PBGC] has released inflation-indexed premium amounts for next year and the maximum guaranteed benefit for single-employer pension plans.... IRS has yet to issue 2021 covered compensation, but Mercer has projected those figures, using the published taxable wage base." Icon to read more


Eleventh Circuit Holds NFL Retirement Plan Abused its Discretion by Failing to Consider Evidence and Combined Effects of Plaintiff’s Impairments

"Although the court found that the Board did not err in interpreting and applying the Plan's disability definition which only required that a player be able to work in any occupation earning up to $30,000 per year, it found that the Board did err in evaluating Plaintiff's medical information. The court reasoned that the Board claimed it had reviewed Plaintiff's entire file, however, the minutes of the Board's meeting did not include all medical records submitted, nor did the decision letter discuss evidence submitted by Plaintiff." [Mickell v. Bert Bell/Pete Rozelle NFL Players Retirement Plan, No. 19-10651 (11th Cir. Oct. 15, 2020; unpub.)] Icon to read more

Kantor & Kantor


Auditor management comments? Time for an ERISA compliance review?

We listen. We understand employee benefit issues. We can review your plan’s procedures and data from multiple sources including payroll, HR and recordkeeper. We have done it for others. We can do it for you. We are independent. Talk to us. Learn more

Sponsored by ERISA diagnostics, Inc.

The Role of Actuarial Audits in Performing Due Diligence (PDF)

"This article discusses actuarial audits as a due diligence tool for plan trustees to help manage retirement plan risk. High quality actuarial work can do much to ensure the long-term financial strength of a retirement plan. Similarly, low quality actuarial work, when left undiscovered, can undermine a plan’s financial security in a relatively short time period." Icon to read more


Proposed Legislation Would Let 403(b)s Use PEPs

"The first PEPs would be able to launch next year and would be open to 401(k) plans operated by for-profit organizations. While plan providers are eager for what they anticipate will be a large amount of business in that area, 403(b)s could represent an even greater opportunity." Icon to read more

InvestmentNews; subscription may be required

Financial Wellness and Retirement Readiness in the Healthcare Sector

"Forty-six percent of healthcare workers report that their overall financial condition has worsened since the onset of COVID-19; 27% of these expect further worsening over the next year. Twenty-three percent of retirement savers have decreased the amount they are saving, with 7% stopping saving completely. On the other hand, 14% have increased the amount they are saving. Twenty-nine percent have become less confident that they are saving an adequate amount for retirement." Icon to read more

TIAA Institute

Benefits in General

ERISA/Cybersecurity Considerations in the COVID Age

"[The Plan] Committee must ensure that technical, physical, and administrative safeguards are in place and are designed to protect the confidentiality, integrity, availability, and resiliency of plan assets, and that such safeguards meet the Committee's legal obligations and industry standards.... A key factor in understanding potential liability will be determined by how the Committee responds to and manages any cyber-attack if, as, and when one occurs." Icon to read more

Foley & Lardner LLP

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

Deferred Comp Trap for Publicly Traded Companies: Action Required by December 31, 2020

"The TCJA expanded the definition of 'publically traded' to include companies not traditionally considered publically traded, so it's important for an employer to reassess whether it's now subject to Section 162(m).... If a plan includes [a mandatory delay] provision, then the plan should be amended no later than December 31, 2020." Icon to read more

Warner Norcross & Judd LLP

Compensation Clawbacks: Trends and Lessons Learned

"This article summarizes trends in clawback policies and some lessons that can be learned from the growing body of experience with them. For companies that are considering adopting or updating clawback policies, these trends and experiences may help to guide their design decisions." Icon to read more

Foley & Lardner LLP

Selected Discussions
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Things That Make You Go Hmmm...

"So my mind starting twisting around in circles over this question. A solo 401(k) plan is exempt from ERISA and therefore presumably exempt from the new "Long-Term Part Time" employee rules. Or is it? Because if it is not exempt from those rules, there are an awful lot of solo 401k plans that will no longer be solo 401k plans. And that would really make me go Hmmm.... Anyone know what the story is?" Icon to read more

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David Rhett Baker, J.D., Editor and Publisher
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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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