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December 23, 2020 logo logo
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[Official Guidance]

Text of IRS Notice 2021-03: Extension of Temporary Relief from the Physical Presence Requirement for Spousal Consents Under Qualified Retirement Plans (PDF)

"In response to the continuing public health emergency caused by the [COVID-19] pandemic, and the related social distancing that has been implemented, this notice extends from January 1, 2021, through June 30, 2021, the temporary relief provided in Notice 2020-42 ... from the physical presence requirement ... for participant elections required to be witnessed by a plan representative or a notary public, including spousal consent required under Section 417 of the Internal Revenue Code,and solicits comments with respect to the relief." Icon to read more

Internal Revenue Service [IRS]


ASC CE Webcast: Basics of 401(k) Plans Series for 2021

If you are new to the qualified retirement plan field or need a refresher on the rules applicable to 401(k) plans, then you won't want to miss this series with industry expert and ERISA attorney, John Griffin, J.D., LL.M. Register now! Learn more

Sponsored by ASC

[Official Guidance]

Text of Instructions for 2020 IRS Form 5330: Return of Excise Taxes Related to Employee Benefit Plans (PDF)

14 pages, Dec. 11, 2020. "What's New: [1] Tax on multiemployer plans in endangered or critical status. Schedule F, line 2b, requires the number of days included in the period beginning the first day following the close of the 240-day period and ending on the day the rehabilitation plan is adopted.... [2] Tax on prohibited transactions (section 4975). The instructions for Schedule C note that a section 403(b) tax sheltered annuity plan is not subject to the section 4975 excise tax." Icon to read more

Internal Revenue Service [IRS]

[Guidance Overview]

DOL Issues Final Fiduciary Exemption with New Commentary

"The Release gives rise to at least three broad important considerations: [1] Change in administration, impacts to effective date and scheduled revocation of FAB 2018-02.... [2] DOL's interpretation of five-part test and impact on rollovers.... [3] The conditions of the final exemption." Icon to read more

Dechert LLP

[Guidance Overview]

DOL Releases Final Fiduciary Advice Prohibited Transaction Exemption

"The PTE is primarily targeted at financial institutions. But the new rule -- via its reinterpretation of the 1975 fiduciary advice regulation -- is generally intended to in many cases make, e.g., call center operators affiliated with financial institutions, 'advice fiduciaries.' This will likely require plan fiduciaries to monitor those advice fiduciaries' compliance with the PTE. Sponsors will want to review the extent and scope of that monitoring obligation with their counsel and discuss with their providers how they intend to comply with the reinterpreted five-part test and the PTE." Icon to read more

October Three Consulting

[Guidance Overview]

DOL Issues Final Proxy Voting Rule

"The Final Rule reiterates the Department's long-held view that when voting (or not voting) proxies, plan fiduciaries must consider the economic significance of the issue on the plan's investment. But it explicitly rejects the broader set of considerations that it had previously articulated in Interpretative Bulletin 2016-01." Icon to read more

Groom Law Group

[Guidance Overview]

Plan Fiduciaries: You Have No Right to Vote

"[T]he final regulations specify a plan fiduciary is not required to (and, should not) vote every proxy. Rather, when deciding whether to vote proxies and when actually exercising such rights, the plan fiduciary must act solely in accordance with the economic interest of the plan and consider any costs involved (including costs of research).... [T]he plan fiduciary cannot absolve itself of all fiduciary responsibility related to proxy voting merely by delegating such authority to a third party." Icon to read more

Winstead PC

[Guidance Overview]

An Outline of Important Provisions in the SECURE ACT (PDF)

"[K]ey provisions [of the SECURE Act] become effective in 2021: ... [1] Plans with eligibility provisions that exclude part-time employees must now expand eligibility for 401(k) contributions to include those employees; if they are credited with 500 hours of service in at least 3 years.... [2] Participants (and their spouse) who give birth to, or adopt a child are eligible to withdraw $5,000 on a tax-favored basis from their IRAs or retirement plans.... [3] The age at which RMDs must commence has been increased from age 70½ to 72.... [4] Significant new tax credits were created to encourage the establishment of new plans as well as the addition of Automatic Enrollment (effective in 2020)." Icon to read more


Exceptional Usefulness and Quality iconIT Controls and Considerations for the Plan Sponsor -- from a Plan Auditor's Perspective

"Plan Sponsors who want to develop a solid cybersecurity policy should include a requirement to annually obtain SOC-2 reports from their key service providers to the Plan.... A robust cybersecurity policy should include requirements for the Plan Sponsor to evaluate and document the IT policies and controls at key service providers to the Plan Sponsor.... [A] Plan Sponsor's cybersecurity policy needs to include a cybersecurity incident response plan.... Ask employees to periodically review their 401k account for unexpected activity." Icon to read more

Bradley J. Bartells, CPA, via LinkedIn

Annuity Purchase Update: December 2020 Interest Rates

"Year-to-Date annuity purchase prices have been volatile and are now higher for both Annuity Plan 1 and Annuity Plan 2. Annuity purchase prices relative to GAAP PBO liabilities have also been volatile but are now in line with historical expectations. This past month annuity purchase prices declined 0.29% for Annuity Plan 1 and 0.17% for Annuity Plan 2. Plan funded status has generally declined for pension plans in 2020 and PBGC premiums will increase next year." Icon to read more

October Three Consulting

Could the COVID Relief Bill Stall Out?

"The COVID-19 relief bill may not get President Trump's signature after all -- with implications for retirement plan sponsors.... While he did not directly threaten to veto the bill, [the President's] call to raise the relief to $2,000 for individuals ($4,000 for couples) raised the specter of that action. While considering the margins of passage (92-6 in the Senate and 359-53 in the House) an outright veto might not withstand the two-thirds vote in each chamber. However, that has also raised the possibility of what's called a 'pocket' veto, which could not be overturned. " Icon to read more

American Retirement Association [ARA]

Benefits in General

Exceptional Usefulness and Quality iconCongress Approves Additional COVID Relief as Part of Government Funding Package

"The legislation extends to money purchase pension plans the option to permit coronavirus-related distributions (CRDs) ... Employers will be provided relief from partial plan terminations that could result from a reduction in workforce due to the COVID-19 pandemic.... Temporary special rules for health FSAs and dependent care FSAs ... Preventing surprise medical bills ... The legislation provides limited non-COVID-related disaster relief for certain federal disasters declared on or after January 1, 2020, and ending 60 days after enactment of this bill.... A CARES Act provision that permitted employers to provide student loan repayment benefits of up to $5,250 to employees on a tax-free basis has been extended to December 31, 2025." [Editor's note: As of Dec. 23, the bill has not yet become law; it's future is uncertain.] Icon to read more


Year-End Appropriations and COVID-19 Relief Legislation Includes Many Employee Benefit Plan Provisions

"Congress has passed year-end appropriations legislation that includes a variety of provisions affecting employer-sponsored benefit plans -- some relating to the COVID-19 public health emergency and others with broader applicability.... [1] FSA relief.... [2] Surprise medical billing.... [3] Disaster relief.... [4] Student loan repayments.... [5] Partial termination relief.... [6] Meal deductions.... [7] Mental health parity expansion.... [8] Deductible medical expenses." [Editor's note: As of Dec. 23, the bill has not yet become law; it's future is uncertain.] Icon to read more

Thomson Reuters / EBIA

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

Follow Up on the Final Regs Under Revised Section 162(m)

"The final regulations [1] clarify that the company's right to recover [clawback] compensation does not affect the determination of the amount of compensation the company has a written binding contract to pay under applicable law as of November 2, 2017, regardless of whether the company actually exercises its discretion to recover any compensation in the event the condition arises in the future.... [2] provide that, if a company extends the exercise period of a grandfathered option or SAR, the extension will not adversely affect the grandfather treatment as long as the extension complies with Treas. Section 1.409A-1(b)(5)(v)(C)(1).... [3] include several 'Special Applicability Dates,' " Icon to read more

Winston & Strawn LLP

Selected Discussions
on the BenefitsLink Message Boards

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SIMPLE IRA Improperly Omitted Former Employees -- What to Do?

"Are there any legal loopholes that an employer can use to not pay former employees for a SIMPLE IRA plan that was not administered properly (at all)?" Icon to read more

BenefitsLink Message Boards

Amend Non-Safe Harbor Plan to Allow In-Plan Roth Rollovers by Year-End?

"Is it possible to amend a 401(k) plan with a non-elective safe-harbor to add In-plan Roth Rollovers before the end of the year?" Icon to read more

BenefitsLink Message Boards

Tax Reporting of Investment Earnings for Employer-Held Assets Used to Informally 'Fund' a 409A/NQDC Plan

"A client wants to set up a funded 409A Top-Hat/SERP Plan for executives with participant direction. As I look for a provider that offers this, I wonder about any tax reporting requirements. The funds remain an asset of the employer until distribution and are in an investment account. Do the investment earnings on that account need to be reported because they have increased the value of the employer's assets? Or is there an exemption for a 409A plan?" Icon to read more

BenefitsLink Message Boards

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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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