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Retirement Plans Newsletter January 8, 2021 |
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Newly Posted Getting the Most for Your Money: Auditing Your Employee Benefits Program
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Discussions |
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This Newsletter:
BenefitsLink Health & Welfare Plans Newsletter:
Message Boards Digest:
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[Official Guidance]
94 pages. "This document updates Rev. Proc. 2020-4 ... relating to the types of advice the IRS provides to taxpayers on issues under the jurisdiction of the Commissioner, Tax Exempt and Government Entities Division, Employee Plans Rulings and Agreements, and the procedures that apply to requests for determination letters and private letter rulings." Internal Revenue Service [IRS] |
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[Guidance Overview]
"Rev. Proc. 2021-4 includes the following changes ... [1] Section 6.02 has been revised to provide that Form 5310 may be submitted electronically beginning on April 16, 2021, and must be submitted electronically as of August 1, 2021.... [2] Section 12B.01 has been revised to provide that there will be no adoption period for pre-approved defined benefit plans regarding the third six-year remedial amendment cycle in 2021.... [3] Section 13.03 has been revised to add information concerning applications for employee stock ownership plans (ESOPs) submitted on Form 5307." Thomson Reuters Practical Law |
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[Guidance Overview]
"From a substantive standpoint, the rule compels fiduciaries to only exercise shareholder rights, including proxy voting, if they are undertaken solely in accordance with the economic interests of the plan and its participants and beneficiaries.... The costs of proxy voting and other shareholder rights must also be considered, as they too affect the economic interest of the plan.... The rest of the rule is more process-oriented, which speaks to how fiduciaries can satisfy these substantive obligations in practice." Stradley Ronon |
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[Guidance Overview]
26 pages. "At the end of FY2020, PBGC had a total deficit of $48.2 billion, which consisted of a $15.5 billion surplus from the single-employer program and a $63.7 billion deficit from the multiemployer program. PBGC's single-employer program has been on the [GAO's] list of high-risk government programs since 2003. PBGC's multiemployer program was added in 2009. PBGC projects the financial position of the single-employer program is likely to continue to improve, but the financial position of the multiemployer program is expected to worsen considerably over the next 10 years." [Report 95-118, updated Jan. 8, 2021; also An Overview of the [PBGC], IF10492, Jan. 8, 2021] Congressional Research Service [CRS] |
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"[This 6-page] chart provides an explanation of key plan events and the deadline for each for Section 401(a) and 401(k) defined contribution plans with a plan year ending December 31, 2021. Off-calendar year plans should adjust the deadlines accordingly based on the time frames described in the chart." ING |
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"Although obtaining documentation to substantiate a hardship is not, in itself, difficult, missing hardship backup is one of the most common operational errors [found] during financial statement audits. The reason is that every party involved thinks someone else is responsible for obtaining the backup, so nobody does it." Belfint Lyons Shuman |
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"Insurance company fixed (or general) accounts and stable value funds are prevalent across defined contribution retirement plans. Stable value funds often account for a large portion of a plan's total assets, particularly in governmental retirement plans where they commonly account for 20-40% or more. But, is that a sound and rational choice for most investors? What role should stable value play for a person saving and investing for retirement?" Retirement Plan Advisors [RPA] |
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28 pages. "Some lawmakers have called for increasing the Social Security retirement age in response to the system's projected financial imbalance, citing gains in life expectancy for the population overall. Other lawmakers, however, express concern that increasing the retirement age would disproportionately affect certain groups within the population, citing differences in life expectancy by socioeconomic groups. Differential gains in life expectancy are important in the context of Social Security because the actuarial adjustments for claiming benefits before or after the full retirement age are based on average life expectancy. " [Report R44670, updated Jan. 8, 2021] Congressional Research Service [CRS] |
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Press Releases |
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Most Popular Items in the Previous Issue |
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Plan Sponsors Face a Tough Year for Compliance (PDF)
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2021 Reporting and Disclosure Guide for Benefit Plans
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Text of PBGC Final Regs: Methods for Computing Withdrawal Liability Under the Multiemployer Pension Reform Act
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