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[Guidance Overview]
"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."
Ogletree Deakins
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[Guidance Overview]
"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."
Verrill Dana LLP
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"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)]
Pensions & Investments
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"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."
Mercer
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"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.)]
Kantor & Kantor
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"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."
GRS
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"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."
InvestmentNews; subscription may be required
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"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."
TIAA Institute
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Benefits in General
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"[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."
Foley & Lardner LLP
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Executive Compensation and Nonqualified Plans
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[Guidance Overview]
"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."
Warner Norcross & Judd LLP
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"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."
Foley & Lardner LLP
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Selected Discussions on the BenefitsLink Message Boards
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"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?"
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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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