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Retirement Plans Newsletter November 9, 2020 |
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Newly Posted Post-Election Outlook for Benefits Policy & Executive Compensation
New Fiduciary Investment Duties under ERISA Affecting ESG Investments and Proxy Voting
De-Risk Your DC Plan: Address Risks to your Organization and Plan
2020 Year End and Late Breaking Developments: What You Need to Know for 2021
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Discussions |
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This Newsletter:
BenefitsLink Health & Welfare Plans Newsletter:
Message Boards Digest:
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[Guidance Overview]
"Plans sponsors should: [1] Take some time to review their current plan and consider any beneficial plan design changes that can be implemented during this process. [2] Be aware of changes to pre-approved plan documents that could affect administration ... [3] Carefully review all documents, including the new draft SPD ... [4] Communicate clearly with the document vendor regarding changes. [5] Be mindful of, and responsive to, deadlines set by the document vendor. [6] Have legal counsel review the documents prior to finalization." Boutwell Fay LLP |
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[Guidance Overview]
"While the IRS had issued interim testing relief ... for certain defined benefit plans that had closed to new participants through a plan amendment adopted before December 13, 2013, that relief was fairly limited in scope. The SECURE Act has provided additional relief from several of the nondiscrimination and testing rules that would otherwise apply where a group of individuals' benefit accruals under defined benefit plans have been limited. However, strict requirements apply[.]" Patterson Belknap Webb & Tyler LLP |
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"[C]ourts largely agree that ... an ERISA action is typically not subject to ajury trial. However, one circuit court (and several district courts) have permitted jury trials in instances where the litigants seek legal relief (as opposed to equitable relief) such as personal liability for losses." Cohen Milstein, via Bloomberg Law |
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"A recent DOL enforcement report indicates that DOL recoveries increased by 310% from fiscal 2016 to fiscal 2020.... Plan sponsor fiduciaries who take a do-it-yourself approach to plan investments face huge potential exposure for underperforming investments and excessive plan fees. If you are a plan sponsor fiduciary who is losing sleep over all of this, it may be time to consider outsourcing your investment responsibilities to an investment manager or outsourced chief investment officer (OCIO)." Cohen & Buckmann, P.C. |
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"Over the period from May 2018 through October 2020, three separate whistleblowers filed complaints with the [SEC] alleging that major financial intermediaries which provide custodial, recordkeeping, and trustee services to 401ks and pensions are short-changing their retirement plan clients." Forbes |
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"RMDs are waived for 2020, and RMDs for 2021 will be calculated under the current tables. The IRS revised the current tables, which have been in effect since 2002, to reflect the fact that Americans are now living longer. Last November, the IRS issued proposed regulations that were supposed to go into effect for 2021. However, because the final regulations were issued so late in 2020, the IRS delayed the new tables another year to give custodians and record keepers enough time to implement them." Slott Report |
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"Just 19% of plan sponsors interested in an annuity buyout with a specific timeframe in mind reported that the pandemic has decreased or delayed the likelihood of transacting ... A vast majority (81%) said there had either been no change in plans due to COVID-19 (27%), or that the pandemic has actually increased or accelerated the likelihood they would transact (55%)." MetLife |
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"Rev. Rul. 2020-23 now provides that 403(b) retirement plans funded through individual or group 403(b)(7) custodial accounts can be terminated through the distribution of individual custodial accounts. The guidance establishes that, if a distributed custodial account continues to comply with certain requirements, no portion of the distributed custodial account is includible in gross income until such amounts are actually paid out of the account to a participant or beneficiary." planadviser |
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"For the first time in the more than 20-year history of the Alight Solutions 401(k) Index™, an entire month saw net trading flows move to fixed income. In October, 401(k) investors made consistent and steady trades from equities to fixed income, and there were also seven days of above-normal trading activity -- the most since March." Alight Solutions |
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"When it comes to options, a company's provider determines what 401(k) mutual funds are available. So if one of the best-performing funds isn't included in your plan, try to find a comparable substitute. Here are 10 of the top funds to include in your 401(k)." U.S. News & World Report |
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Selected Discussions |
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► 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. |
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"If an individual provides services to an entity as a subcontractor, and then transitions to unequivocal employees status, perceiver(s) may ruminate as to whether the service provided while a subcontractor forms part of the reckoning of eligiblity to enter the entity's plan. Perhaps one must treat the individual as completely de novo." BenefitsLink Message Boards |
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"Participant turned 70-1/2 in 2014 and had a required beginning date of April 1, 2015. She died April 4, 2015, 3 days after her RBD, without taking any RMDs. An RMD should also have been made for 2015, the year of the participant's death, but was not. The participant's account remains completely undistributed because no one was paying attention to it until now, and there is a designated beneficiary. Can the entire account be paid to the designated beneficiary or must the RMD amounts for the 2014 and/or 2015 distribution calendar years be paid to the participant's estate? If the estate, any idea of how, if at all, to adjust for earnings, etc.? Also, it has been suggested that the 2014 and 2015 RMDs be paid to the estate and leave the estate to file Form 5329 and ask for abatement of penalties with respect to those amounts. But we also have missed RMDs for
2016-2019." BenefitsLink Message Boards |
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"On a call with a huge recordkeeper (TIAA) who is taking the position that participants who elected a loan payment deferral don;t have to make any payments for a full year. I personally read the law to say that payments due in January are NOT extended. I think its nuts that not everyone is on the same page on that... I think there is near universal agreement on that but I assume TIAA paid a "pretty good" ERISA attorney to advise them on that policy..." BenefitsLink Message Boards |
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Press Releases |
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DATAIR adds Text Alert Option to the FlexPlus System
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Most Popular Items in the Previous Issue |
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DOL Shifts Focus from ESG to Pecuniary Factors in Final Rule
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Managed Accounts: What to Consider When Selecting a QDIA (PDF)
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BenefitsLink.com, Inc.
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Lois Baker, J.D., President
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 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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