Retirement Plans Newsletter

October 29, 2020

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[Official Guidance]

Treasury Department Notice of Multiemployer Pension Plan Application to Reduce Benefits: Carpenters Pension Trust Fund-Detroit and Vicinity Pension Fund

"The Board of Trustees of the Carpenters Pension Trust Fund -- Detroit & Vicinity Pension Fund, a multiemployer pension plan, has submitted an application to reduce benefits under the plan in accordance with [MPRA]. The purpose of this notice is to announce that the application ... has been published on the website of the Department of the Treasury, and to request public comments on the application from interested parties, including participants and beneficiaries, employee organizations, and contributing employers[.]" Icon to read more

U.S. Department of the Treasury

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[Official Guidance]

Treasury Department Notice of Multiemployer Pension Plan Application to Reduce Benefits: Arizona Bricklayers’ Pension Trust Fund

"The Board of Trustees of the Arizona Bricklayers' Pension Trust Fund, a multiemployer pension plan, has submitted an application to reduce benefits under the plan in accordance with [MPRA]. The purpose of this notice is to announce that the application ... has been published on the website of the Department of the Treasury, and to request public comments on the application from interested parties, including participants and beneficiaries, employee organizations, and contributing employers[.]" Icon to read more

U.S. Department of the Treasury

[Guidance Overview]

Proposed DOL Rule to Help Define 'Employee' vs. 'Independent Contractor'

"The DOL's proposed rule applies in the context of the FLSA.... For retirement plans and employee benefit plans covered by ERISA Title I, the term 'employee' is defined as 'any individual employed by the employer.' And because ERISA uses the same circular definition that the FLSA contains, the practical definition for ERISA purposes has also been determined by the courts.... To the extent that these rules provide a clear, practical method for evaluating the employer-employee relationship, they may help courts to apply a common law standard more consistently." Icon to read more

Ascensus

Improving Next Year’s Form 5500 Process

"Take control of the audit process ... Get a handle on the number of plans ... Keep the lines of communication with auditors open." Icon to read more

Cammack Retirement Group

COVID-19 and Retirement Plan Fiduciary Obligations

"Given the likelihood of continued market volatility, review the investment options to consider whether they remain prudent in the current financial environment.... In an environment of continuing market volatility, it may be prudent to increase the frequency of plan investment reviews and request more frequent input from plan investment advisors ... Continue to document all fiduciary decisions to continue or change the investment line-up and rationale for the decisions made.... [H]ave ongoing communication with plan participants.... [T]he risk of data breach and fraud activity is substantially increased." Icon to read more

Vandeventer Black LLP

[Sponsored]

Plan Advisor Checklist: Identifying the Best Retirement Plan Prospects

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More DC Plans Are Using OCIOs

"Plan sponsors say they are looking to create an institutional-quality investment lineup because they lack the internal expertise to do so and to reduce their fiduciary risk.... [O]nly 15% of DC sponsors are using an [outsourced chief investment officer (OCIO)] manager, but that this jumps to 24% for mid-sized plans." Icon to read more

planadviser

Retirees Maintain Savings and Investment Plans in Short Term, Cautious About 2021 Economic Outlook

"[T]he percentage of retirees who report they are happier in retirement decreased from first quarter Principal research conducted before the pandemic (from 51% to 41%). Retirees share that they struggle with imagining their life in retirement and are unsure how they'll spend their time -- citing not being able to travel (61%) or see family (58%) and planning for health care and long-term care costs (44%)." Icon to read more

Principal Financial Group

TSP Catch-Up Contribution Change Coming Soon

"Beginning on Jan. 1, 2021, ... [federal] employees eligible for catch-up contributions can set one contribution rate, and when they hit the annual limit, the TSP will automatically start funneling the rest of their contributions for the year into catch-up contributions." Icon to read more

Government Executive

[Opinion]

The Current State of Retirement Security

"[1] Most Americans don't have anything saved for retirement.... [2] A higher cost of living and student loans make it difficult for workers to save for retirement.... [3] The rise of 401(k)s has been a disaster for workers' retirement security.... [4] The gender pay gap persists in retirement.... [5] Many older workers continue working because they can't afford to retire." Icon to read more

National Public Pension Coalition

Benefits in General

Exceptional Usefulness and Quality iconCan We Destroy the Paper Records for Our ERISA Plans and Retain Our Records in Electronic Form?

"While requirements vary somewhat from agency to agency and some special rules may apply, those imposed by the DOL for the use of electronic recordkeeping [include]: ... [1] The electronic records must be maintained in reasonable order in a safe and accessible place, and in a manner in which they can be easily inspected, examined, and reproduced.... [2] The electronic recordkeeping system must have reasonable controls to ensure the confidentiality, integrity, accuracy, authenticity, and reliability of the electronic records, and adequate records of the management practices for the electronic system must be established and implemented." Icon to read more

Thomson Reuters / EBIA

DOL to Issue Guidance, Ramp Up Investigations on Cybersecurity

"The [DOL] is working on a guidance package addressing cybersecurity issues as they relate to plan sponsors and third-party providers ... Tim Hauser, Deputy Assistant Secretary for National Office Operations at [EBSA], also indicated that he expects to see more focus in the department's investigations on the adequacy of various cybersecurity programs, especially for large plans in terms of making sure the providers they hire are observing good cybersecurity practices." Icon to read more

American Retirement Association [ARA]

Executive Compensation
and Nonqualified Plans

NQDC Participants Affected by 2021 Limits for Qualified Retirement Plans

"The contribution limits of qualified plans are the major reason for the existence of nonqualified plans ... The changes in limits from 2020 to 2021 are slight. If you've already maxed out your qualified plan contributions for 2020, you will probably do the same in 2021, so you will need NQDC plans to defer any salary and bonus increases you expect in 2021." Icon to read more

myStockOptions.com

Selected Discussions
on the BenefitsLink Message Boards

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Top Heavy Contribution Subject to Coverage Testing?

"Are Top Heavy contributions subject to coverage if that's the only employer contribution?" Icon to read more

BenefitsLink Message Boards

Reporting a Distribution from a Rabbi Trust

"I know the general Rabbi Trust template (and many others, based on it that I have seen from trust companies) says the trustee will make all distributions to participants and report/withhold. Others say (and in my experience this is what the sponsors often do, regardless of the trust terms) the sponsor may pay the benefits directly and request reimbursement from the trust; in that situation, sponsors usually cite the inability of their payroll systems to accurately record a direct payment from the trustee for W-2 reporting. If the trust makes the payment directly, though, what exactly do they report to the IRS, and how does that information get reconciled with the sponsor's payroll system?" Icon to read more

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SECURE Act 2.0 Introduced in the House
American Retirement Association [ARA]

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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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