Retirement Plans Newsletter

December 17, 2020

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[Official Guidance]

PBGC Regulatory Agenda, Fall 2020

Proposed Rules

  • Valuation Assumptions and Methods: Interest and Mortality Assumptions for Asset Allocation in Single-Employer Plans and Mass Withdrawal Liability Determination in Multiemployer Plans
  • Multiemployer Plan Guaranteed Benefits
  • Examination and Copying of [PBGC] Records
  • Improvements to Rules on Recoupment of Benefit Overpayments
  • Penalties for Failure to Provide Certain Notices or Other Material Information

Final Rules

  • Benefit Payments and Allocation of Assets
  • Methods for Computing Withdrawal Liability
  • Adjustment of Civil Penalties
 Icon to read more

Pension Benefit Guaranty Corporation [PBGC]

[Sponsored]

‘Tis the Season to Save on Employee Benefits E-Learning Courses

Make your education and professional development a priority in the new year. Whether you’re working remotely or back in the office, e-learning courses are the online training solution that fit into your busy schedule. Learn more

Sponsored by International Foundation of Employee Benefit Plans [IFEBP]


[Guidance Overview]

DOL Finalizes Regs Imposing New Obligations for Plan Sponsors and Asset Managers in Connection with Proxy Voting and Other Exercises of Shareholder Rights by ERISA Plans

"Together with the ESG rule the agency finalized at the end of October, this latest rulemaking reinforces the principle that financial factors impacting plans and their participants and beneficiaries should be the only considerations driving fiduciary decision-making. While the final rule moves away from the prescriptive approach the agency proposed in September in favor of a more principles-based design, it still imposes new mandates that will likely have the practical effect of discouraging both proxy voting by ERISA plan fiduciaries as well as the use of proxy advisers and other service providers to assist them with exercising their shareholder rights. The final rule also imposes additional obligations on asset managers who manage ERISA plan assets." Icon to read more

Ropes & Gray LLP

[Guidance Overview]

DOL Finalizes Fiduciary Investment Advice PTE 2020-02

"PTE 2020-02 makes some notable changes from the proposal, including: [1] Requiring written disclosures to retirement investors about the reasons that a rollover recommendation was in their best interest. [2] Limiting the recordkeeping requirements to allow only the DOL and Treasury Department access to a financial institution's records. Under the proposal, plan fiduciaries and other retirements investors would have received access to the records. [3] The addition of a self-correction option for certain violations of the exemption. [4] That certification of the retrospective review can be made by any senior executive officer, as defined in the exemption, rather than the chief executive officer." Icon to read more

Thomson Reuters Practical Law

Calendar of Key Dates and Deadlines for 401(k) Plans (PDF)

"[This document provides] a list of the most common recurring plan events and filing deadlines for a 401(k) plan operating on a calendar year basis. Your plan may have additional requirements[.]Icon to read more

Pensionmark

Required Retirement Plan Participant Disclosures (PDF)

"Plan sponsors are required to provide certain disclosure documents and notices to plan participants (including terminated participants & alternate payees with a balance). [This] chart is designed to help you understand and meet these requirements." Icon to read more

Pensionmark

Why Are Retirement Plan Administrative Policies Important?

"The administrative policy and procedures should be an objective set of rules by which the plan is administered and decisions are made. They also help establish the legitimacy of management action by ensuring the application of retirement committee rules and ensure that decisions are made in an objective, fair, and consistent manner. Finally, they help ensure that the people making these decisions are held accountable for decisions that may deviate from the procedures and the best interest of the participants." Icon to read more

Retirement Management Services, LLC

Retirement Planning for Gig Workers

"[S]elf-employed individuals can and should take steps to ensure their retirement security ... [1] Assess insurance coverage ... [2] Bulk up emergency/short-term reserves ... [3] Fund a basic IRA ... [4] Find a way to save more for retirement ... [5] Invest with an eye toward your human capital." Icon to read more

Morningstar

Retirement Plan Trends to Watch in 2021

"[1] Pooled Employer Plans (PEPs) ... [2] Annuities ... [3] Paperless plan administration ... [3] Automatic everything ... [4] Virtual (almost) everything ... [5] Expanded retirement plan coverage ... [6] Fewer required minimum distributions (RMDs) ... [7] 403(b) flat dollar per-head recordkeeper pricing ... [8] Recordkeeper consolidation." Icon to read more

Cammack Retirement Group

Another Record Year for Retirement Savings

"More than 90% of eligible employees have an account balance, and most (87.3%) of those made contributions in 2019.... Roth contributions are now permitted in three-fourths of plans, up from 69.1 percent in 2018.... Eighty percent of plans offered a target-date fund in their menu, up from 68.6 percent in 2018.... Forty percent of plans now offer a professionally managed investment alternative to participants, up from 36.3 percent in 2018.... Nearly 60 percent of plans now offer plan access via mobile technology, up from 47.5 percent in 2018." Icon to read more

Plan Sponsor Council of America [PSCA]

Retirement Assets Total $33.1 Trillion in Third Quarter 2020

"Assets in individual retirement accounts (IRAs) totaled $11.3 trillion at the end of the third quarter of 2020, an increase of 5.1 percent from the end of the second quarter of 2020. Defined contribution (DC) plan assets were $9.3 trillion at the end of the third quarter, up 4.4 percent from June 30, 2020." Icon to read more

Investment Company Institute [ICI]

How Much Will Your Retirement Taxes Be?

"Households with income in the top 20 percent have nearly $770,000, on average, in retirement savings and other financial assets -- their taxes equal 11 percent of their total retirement income. However, limiting the households to the top 5 percent of the income distribution, the tax rate increases to 16 percent -- and the top 1 percent pays 23 percent. These estimates assume retirees start pulling money out of their taxable 401(k) and IRA accounts when the IRS' required minimum distributions (RMDs) kick in at age 70-1/2 -- this age will increase to 72 next year. The tax rates were very similar under alternate scenarios that assume retirees either start withdrawing savings prior to the RMD or buy an immediate annuity with a survivor's benefit." Icon to read more

Squared Away Blog, by the Center for Retirement Research at Boston College

General Electric Transfers $1.7 Billion in Pension Liabilities to Athene

"As part of the transfer, Athene will provide payments to roughly 70,000 plan participants receiving less than $360 per month ... This transaction follows GE announcement earlier this month that it had voluntarily prefunded $2.5 billion of estimated minimum ERISA GE Pension Plan funding requirements for 2021, 2022 and into 2023." Icon to read more

Pensions & Investments

Public Agency 457(b) Plans Require Ongoing Attention and Maintenance

"Recordkeepers and third party administrators are not paid to be proactive and to look for potential problems.... Plan administrators need to be proactive in collecting, and having participants update, beneficiary designations.... When issues arise regarding the interpretation of the plan document, a proactive plan administrator will work toward having the problematic provisions of the plan amended or clarified so that the issue does not come up again.... If faced with a plan structure that lends itself to excess deferrals, a proactive plan administrator can and should proactively monitor deferrals during the year so the situation can be easily corrected in the current year -- not more awkwardly in the next tax year." Icon to read more

Best Best & Krieger LLP

[Opinion]

Will 2021 Be the Year of Financial Wellness?

"[F]inancial wellness is one of the most heavily marketed initiatives in industry -- up there with PEPs and annuities/retirement income solutions. Unfortunately, history has shown us that these initiatives do not always live up to their hype.... Why employee financial independence is likely in 2021: A desirable outcome ... Employee focus on finances ... technology is there ... Why It may not happen: Lack of auto-enrollment ... Privacy issues ... Employer motivation." Icon to read more

Cammack Retirement Group

Benefits in General

[Official Guidance]

DOL Regulatory Agenda, Fall 2020 (Employee Benefit Items)

Proposed Rules (EBSA)

  • Revisions to Streamline Reporting on the Form 5500 ("Reforming the Form 5500")

Final Rules (EBSA)

  • Pension Benefit Statements -- Lifetime Income Illustrations
  • Adoption of Amended and Restated Voluntary Fiduciary Correction Program
  • Additional Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency

Prerule Stage (WHD): The Family and Medical Leave Act of 1993 Icon to read more

U.S. Department of Labor [DOL]

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Most Popular Items in the Previous Issue

DOL Unwraps New Fiduciary Standard as a PTE
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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