Retirement Plans Newsletter

January 4, 2021 logo logo
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[Guidance Overview]

Stimulus Redux: What It Means for Retirement Plans

"The Act's bright line rule [for partial terminations] should be helpful to plan sponsors who experienced high turnover, furloughs and layoffs ... in 2020 due to the COVID-19 pandemic.... The disaster relief provisions ... are reminiscent of distribution and loan relief issued for prior disasters, including the relief provided recently under the CARES Act, which made it easier for certain individuals to access retirement plan money in light of the coronavirus pandemic.... The Act may be welcome relief for pension plans that are using surplus assets to offset retiree welfare costs." Icon to read more

Seyfarth Shaw LLP

[Guidance Overview]

Presence Not Required: IRS Extends Remote Signature Procedures for Qualified Plans

"For a participant election witnessed by a notary public, the physical presence requirement is deemed satisfied with remote notarization using live audio-video technology that satisfies certain requirements. For a participant or spousal election witnessed by a plan representative, the physical presence requirement is deemed satisfied if an audio-video system is used that satisfies [specified requirements.]" Icon to read more

ERISA Benefits Law, PLLC

[Guidance Overview]

Retirement Plan Provisions in the New COVID-19 Relief Acts

"A retirement plan will not be treated as having a 'partial termination' during any plan year that includes the period beginning on March 13, 2020, and ending on March 31, 2021, if the number of active participants on March 31, 2021, is at least 80% of the number of active participants on March 13, 2020.... Plan sponsors may be able to meet the March 31, 2021, threshold by increasing plan participation in ways beyond just hiring or rehiring employees, such as through expanding eligibility to part-time employees or other excluded classes." Icon to read more


2020 Annual Report of the Participant and Plan Sponsor Advocate (PDF)

21 pages. "Some of the concerns discussed in this Report, such as breakdowns in processes and procedures, have been satisfactorily resolved through diligent efforts by PBGC ... However, there are still certain areas which require immediate action by PBGC, such as the management of aging cases and the use of a cost-benefit analysis in longstanding matters where dollars expended by the agency far exceed the value of the benefit or the amount of recovery.... In addition to describing participant and plan sponsor activities, this Report discusses the Office of the Advocate's latest initiative, the Pension Plan Registry Project. The Project seeks to create a tool which will allow participants to search for information about the genealogy and history of a pension plan." Icon to read more

Pension Benefit Guaranty Corporation [PBGC]

When You May Need to Fire Your 401(k) Advisor

"The advisor's fee is unreasonable ... They don't regularly communicate with the plan sponsor ... They ignore plan participants ... Giving awful plan provider referrals ... The advisor made a mistake and won't admit it." Icon to read more

Ary Rosenbaum, via JD Supra

FAS87 ASC715 Discount Rates and Moody's Rates, December 31, 2020

An unofficial monthly report of the Moody's Daily Long-term Corporate Bond Yield Averages and Moody's Daily Treasury Yield Averages (used as benchmarks by some corporate pension plans). Icon to read more

David Rigby, via BenefitsLink Message Boards


Public Pension Plans Must Adopt Rules for Long-Term Sustainability

"There are two things that must happen before we have a sustainable, fiscally responsible public pension system: [1] Provide for some pension benefit flexibility by allowing, at a minimum, that prospective pension benefit accruals for all participants can be reduced if funded status falls below a statutorily defined level. [2] Establish rules that force plans to make changes that keep or attain that defined funding level." Icon to read more

Marin Independent Journal

Selected Discussions
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DB Plan Terminated in 2020 But Some Distribution Checks Not Yet Deposited as Rollovers

"We're terminating a defined benefit plan, the checks are written to the rollover institutions, all sent prior to 12/31/20. It is my understanding that the plan cannot be closed and a final Form 5500 prepared until either IRAs have been established or the participant cashes a check and the 20% withholding has been paid. So, 1099s can only be prepared for 2020 only if the plan funds were deposited into IRAs or cashed their checks in 2020; if done in January, 2021 has to be a 2021 1099R. Correct?" Icon to read more

BenefitsLink Message Boards

Consequences of Failure to Fund of a Safe Harbor Match True-Up

"If a plan funds the match on a per payroll period, but the 'computation/determination' period is annual per document, we calculate a 'true up' calculation. The clients now owes additional 2019 SH match. What happens if this amount is not funded by 12/31/2020? I can only find reference to it must be funded, but no real answer as to what if not funded." Icon to read more

BenefitsLink Message Boards

Use Tax Assessor's Figure for Valuing Real Estate in a Retirement Plan?

"Is it permissible to use a county or city tax assessment value for retirement plan purposes? This would apply to any plan as far as annually reporting plan asset values on a 5500. For a defined benefit plan, it would also affect the minimum and maximum required contribution amounts each year. It would also be a factor in valuing distributions in kind and be especially important as to whether 415 is complied with for lump sum distributions which include real estate." Icon to read more

BenefitsLink Message Boards

Trust Named as Beneficiary -- Pay RMDs Directly to Persons Named in the Trust Agreement?

"We had a participant die a number of years ago -- large balance -- who named a trust as beneficiary. It is a "see-through" trust, so we've been spreading the payments over the two beneficiaries' (grandchildren) lifetimes. We've been making payments to the trust, which then in turn pays the beneficiaries. Do you think we can just start paying the beneficiary directly?" Icon to read more

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Press Releases

Most Popular Items in the Previous Issue

2021 ERISA Plan Compliance Calendar (PDF)
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Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2021, 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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