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November 17, 2020 logo logo
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[Official Guidance]

Text of Updated PBGC Technical Update 20-2: Extended Due Date for Inclusion of Prior Year Contributions

Revised Nov. 16, 2020, to conform with IRS Notice 2020-82. "For premium filings due on or after March 1, 2020 and before January 1, 2021, the date by which prior year contributions must be received by the plan to be included in plan assets under Section 4006.4(c) of PBGC's premium rates regulation is extended to January 4, 2021. Because of this relief, the discounted value of a 'prior year contribution' received after the premium is filed and on or before January 4, 2021, may be included in the asset value used to determine the variable-rate premium. Thus, if such a contribution is made, the premium filing may be amended to revise the originally reported asset value and resulting variable-rate premium." [Also see COVID-19-Related Single-Employer Plan Sponsors and Administrators FAQs, updated Nov. 16, 2020] Icon to read more

Pension Benefit Guaranty Corporation [PBGC]


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[Official Guidance]

Text of IRS Notice 2020-81: Weighted Average Interest Rates, Yield Curves, and Segment Rates for November 2020 (PDF)

"This notice provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates used under Section 417(e)(3), and the 24-month average segment rates under Section 430(h)(2) ... In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under Section 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate under Section 431(c)(6)(E)(ii)(I)." Icon to read more

Internal Revenue Service [IRS]

[Guidance Overview]

DOL Opines That Foreign Criminal Convictions Are Not Fatal Under QPAM Exemption

"[The DOL's] Office of the Solicitor of Labor issued to [SIFMA] an opinion letter in response to SIFMA's ... request for guidance regarding the impact of foreign criminal convictions on asset managers' reliance on Prohibited Transaction Class Exemption 84-14 (the 'QPAM Exemption'). Citing the underlying text of the QPAM Exemption, ERISA Section 411, and relevant Supreme Court decisions regarding statutory interpretation, the DOL affirmed that, in its view, a conviction under foreign law is not a disqualifying event under the QPAM Exemption." Icon to read more

Groom Law Group

Supreme Court Ends Puerto Rico Bondholders’ Bid for Pension Assets

"The U.S. Supreme Court ... declined to review an appeals court ruling against a group of Puerto Rico bondholders seeking pension assets and a share of future revenue." [In re The Financial Oversight & Mgmt. Bd. for Puerto Rico, Nos. 19-1699, 19-1700 (1st Cir. Jan. 30, 2020; cert. pet. denied Nov. 16, 2020)] Icon to read more

Pensions & Investments

How Do Furloughed Employees Impact Our Plan at Year-End?

"As a general rule, furloughed employees are not considered to be terminated from employment. In essence, they are active employees who aren't 'on the schedule.' However, there are some states that apply timeframes after which a furloughed employee is deemed to be terminated if he or she has not yet returned to work.... There are four [retirement plan issues]: [1] Crediting service for eligibility and vesting, [2] Eligibility for a company contribution, [3] Coverage testing; and [4] Partial plan termination determinations.Icon to read more


Market Rotation Presents Opportunity for Urgent Retirement Saver Education

"[Many advisors] see ... the beginning of the long-anticipated rotation from growth to value... It's important right now for 401k plan sponsors to urge their service providers to educate employees about the nature of market rotations and how they can impact their portfolios in the short and long term.... An understanding of the implications of rotation is even more critical for retirement savers who are just getting started. They may be making their investment decisions on that infamous 'past performance' the SEC talks about. Actually, it's a behavioral anomaly known as 'recency' and it's been the bane of investors for generations." Icon to read more

Fiduciary News; free registration required

403(b) Plan Issues When Bringing Back Laid Off or Furloughed Employees

"[1] Service crediting ... [2] Employer contributions ... [3] Employee contributions ... [4] Plan distributions." Icon to read more

PLANSPONSOR; free registration may be required

Steps to Rebuilding Your Retirement Plan Savings

"[M]ore than 27 percent of those working or recently unemployed [have] taken a withdrawal from their retirement savings accounts this year ... [N]early 1 in 5 Americans are contributing less to their retirement account now than before the COVID-19 crisis began.... [C]onsider the following steps: [1] Take advantage of relaxed repayment rules. [2] Put your payments on autopilot. [3] Reduce expenses to free up savings. [4] Supplement your income." Icon to read more


Exceptional Usefulness and Quality iconBuilding Better Retirement Systems in the Wake of the Global Pandemic

"In the wake of the global pandemic known as COVID-19, retirees, along with those hoping to retire someday, have been shocked into a new awareness of the need for better risk management tools to handle longevity and aging. This paper offers an assessment of the status quo prior to the spread of the coronavirus, evaluates how retirement systems are faring in the wake of the shock ... [and examines] insurance and financial market products that may render retirement systems more resilient for the world's aging population. Finally, potential roles for policymakers are evaluated." Icon to read more

Olivia S. Mitchell, via SSRN


American Benefits Council Comment Letter to EBSA on Pension Benefit Statements -- Lifetime Income Illustrations

"[The] narrow scope [of the language limiting liability] could be viewed as inferring that the provision of additional lifetime income estimates or illustrations and related tools would be inconsistent with meeting one's fiduciary duty....  [T]he simplified nature of the calculations will not produce estimates that are sufficiently accurate so as to be relevant to participants, [and] some of the assumptions set forth in the interim final rule exacerbate this concern ... [T]he required lifetime income disclosures do not include an estimation of or otherwise account for the impact of future contributions and future earnings on a participant's ultimate account balance at retirement." Icon to read more

American Benefits Council


DOL Has Issued a Finalized Rule on ESG Investing in ERISA Pension Plans

"These actions by the [DOL] further codify the most basic tenet of fiduciary duty: investment decisions should be governed by considering risk and returns, not any outside political agenda.... This modernization of ERISA will ensure that pension investment strategies remain focused on fiduciary duty and the best risk adjusted return." Icon to read more

Institute for Pension Fund Integrity [IPFI]

Selected Discussions
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Deadline for Depositing After-Tax Employee Contributions under LLC's 401(k) Plan

"We have a 401k plan that allows for after-tax employee contributions. The plan sponsor is an LLC that is taxed as a sole prop. Can the owner deposit the after-tax contributions up until his tax return due date, or does he need to deposit those by 12/31?" Icon to read more

BenefitsLink Message Boards

Due Date for Deposit of 401(k) Deferrals -- Plan Has Over 100 Plan Participants

"For plans with less than 100 people, I know the DOL requires contributions to be deposited within 7 business days of being withheld from payroll. I have a multiple employer plan with more than 100 participants, although no single employer has more than 100 employees in the plan. What's the deadline? Any safe harbor date?" Icon to read more

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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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