Retirement Plans Newsletter

November 9, 2020

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View job as Retirement Plan Administrator for The Finway Group Retirement Plan Administrator

The Finway Group
Telecommute / West Des Moines IA / CO / IL / IN / KS / MI / MN / MO / ND / OH / SD / WI

View job as Defined Contribution Account Manager for Nova 401(k) Associates Defined Contribution Account Manager

Nova 401(k) Associates
Telecommute / Houston TX / Dallas TX / Scottsdale AZ

View job as Senior Defined Contribution Account Manager for Nova 401(k) Associates Senior Defined Contribution Account Manager

Nova 401(k) Associates
Telecommute / Houston TX / Dallas TX / Scottsdale AZ

View job as 401(k) Plan Administrator for Duncan Financial Group, LLC 401(k) Plan Administrator

Duncan Financial Group, LLC
Telecommute / Irwin PA

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[Guidance Overview]

Restatement Period Opens for Pre-Approved Defined Contribution Plans (PDF)

"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." Icon to read more

Boutwell Fay LLP

[Guidance Overview]

Nondiscrimination Testing Relief for Frozen or Closed DB Plans and Changes to Permissible In-Service Distribution Ages for DB and Money Purchase Plans (PDF)

"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[.]" Icon to read more

Patterson Belknap Webb & Tyler LLP

The Right to Jury Trial in ERISA Actions (PDF)

"[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." Icon to read more

Cohen Milstein, via Bloomberg Law

Why Fiduciaries Should Consider Outsourcing Plan Investment Responsibility

"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)." Icon to read more

Cohen & Buckmann, P.C.

SEC Whistleblowers Say 401(k)s and Pensions Are Cheated Out of Billions in Mutual Fund Payments

"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." Icon to read more

Forbes

IRS Issues New RMD Tables for 2022

"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." Icon to read more

Slott Report

Most Plan Sponsors Not Expecting Delays in Future Pension Buy-Out Activity Due to COVID-19 (PDF)

"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%)." Icon to read more

MetLife

IRS Simplifies Certain 403(b) Plan Terminations

"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." Icon to read more

planadviser

Alight Solutions 401(k) Index: October 2020 Observations

"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." Icon to read more

Alight Solutions

Ten Best-Performing 401(k) Funds

"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)." Icon to read more

U.S. News & World Report

Selected Discussions
on the BenefitsLink Message Boards

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Hours of Service Reckoning Situation: Subcontractors/Independent Contractors Transition(s) to Unequivocal Employee Status

"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." Icon to read more

BenefitsLink Message Boards

Whose RMDs Are These?

"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." Icon to read more

BenefitsLink Message Boards

CARES Act Loan Suspension

"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..." Icon to read more

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Press Releases

DATAIR adds Text Alert Option to the FlexPlus System
DATAIR Employee Benefit Systems, Inc.

Most Popular Items in the Previous Issue

Managed Accounts: What to Consider When Selecting a QDIA (PDF)
Defined Contribution Institutional Investment Association [DCIIA]

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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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