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Cherry Bekaert LLP
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Telecommute / Houston TX / Dallas TX / Scottsdale AZ

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[Guidance Overview]

Appropriations Act Includes Several Provisions Applicable to Qualified Retirement Plans

"[1] Relief from partial plan termination rules ... [2] Money purchase plan coronavirus related distributions ... [3] Relief for overfunded pensions with a current 420(f) election ... [4] Limited relief regarding in-service distributions for certain building trade multiemployer plans ... [5] Disaster provisions ... [6] Qualified disaster distributions ... [7] Recontributions of hardship withdrawals for purchase or construction of home ... [8] Plan loan provisions." Icon to read more

Reinhart Boerner Van Deuren s.c.

[Guidance Overview]

DOL Issues Final Investment Advice Prohibited Transaction Exemption

"Under [PTE 2020-02], plan fiduciaries are required to meet impartial conduct standards, provide certain disclosures, conduct annual reviews, maintain policies and procedures, and keep records. However, the PTE relaxes proposed restrictions on fiduciary compensation to allow fiduciaries to be compensated for advice to rollover assets from a retirement plan to an [IRA] and to engage in principal transactions that previously were not permitted." Icon to read more

Ice Miller LLP

[Guidance Overview]

DOL’s Final Rule on Investment Duties of ERISA Fiduciaries and Its Impact on Retirement Plan ESG Investing

"The Final Rule clarifies that ERISA's duty of loyalty, which requires a fiduciary to act solely in the interest of plan participants and beneficiaries for the exclusive purpose of providing benefits and defraying expenses, applies to the evaluation of investments and investment courses of action. The Final Rule therefore states that the duty of loyalty forbids ERISA fiduciaries from sacrificing investment returns or taking additional risks to promote non-pecuniary goals. Thus, ERISA fiduciaries may not select ESG investments to promote any goal other than ensuring financial benefits for plan participants." Icon to read more

Epstein Becker Green, via National Law Review

[Guidance Overview]

New COVID-19 Stimulus Law Does Not Extend CARES Act CRD Relief

"The new law does include retirement plan tax breaks for non-COVID-19 disaster declarations, like fires or hurricanes. Those breaks are the same breaks Congress provided in prior disaster relief legislation and in the CARES Act for CRDs.... The legislation also includes the same relief for plan loans made on account of a covered disaster that we saw in prior legislation.... [N]one of this relief applies to COVID-related distributions or loans taken in 2021. The new law also does not extend the waiver of required minimum distributions (RMDs) into 2021." Icon to read more

Slott Report

Corporate Pensions End 2020 with Funded Ratio of 88.2%

"Plan assets outperformed expectations, posting an annual return of 11.72% and a gain of $125 billion. But record-low discount rates resulted in plan liabilities increasing as well, by $175 billion during 2020. As of December 31, the Milliman 100 discount rate had fallen 74 basis points, from 3.20% at the end of 2019 to 2.46% a year later." Icon to read more


How Conservative Is Your Financial Advisor’s Calculated Spending Budget?

"[This article reviews] example calculations ... in Michael Kitces' and Derek Tharp's January 6 post, Why 50% Probability Of Success Is Actually A Viable Monte Carlo Retirement Projection.... [The authors] compare results using [their] Actuarial Budget Calculator (ABC) with results from the Kitces' Monte Carlo model to gauge how conservative their model results are. In summary, their model is less conservative (more aggressive) than the ABC with default assumptions, in that it produces higher initial total spending budgets." Icon to read more

Ken Steiner, FSA Retired

Benefits in General

[Guidance Overview]

DOL Publishes Final Rule on Independent Contractor Classification

"The DOL's new rule seeks to streamline the fact-intensive determination of independent contractor status. The rule: [1] revises the 'economic reality' test, which has long been used by the DOL to distinguish FLSA-covered employees from independent contractors, to specify how the factors should be weighed; [2] clarifies that determining economic dependence turns on whether a worker is in business for himself or herself or is economically dependent on an employer for work; [3] modifies the DOL's approach to what it means to be part of an integrated production process; and [4] provides that the parties' actual practice is more relevant than what is contracted for or theoretically possible." Icon to read more

Ballard Spahr LLP

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401(k) for Remaining Members of Controlled Group After One Member Leaves -- Any 'Successor Plan' Issues?

"Three companies were members of a controlled group, with employees from all three entities participating in the 401(k) plan. The company that set up the plan was sold in a 100% stock sale, effective 12/31. The buyer requested the plan be terminated effective 12/30 and the board of directors passed a resolution to that effect. The remaining two companies of the controlled group want to set up a new 401(k) plan with the same structure as the prior plan but only for the employees of the two remaining entities. Does this trigger any successor plan issues?" Icon to read more

BenefitsLink Message Boards

Correcting Deferrals Made by Ineligible Employee

"Client's payroll department allowed an employee to defer into the plan prior to meeting eligibility. The trustee doesn't want to let in the participant early, so I need to distribute the deferrals. The correction method seems to be returning the deferrals adjusted for gains or loss. I've read that sometimes it's done using EPCRS but sometimes using 402(g). Which is correct?" Icon to read more

BenefitsLink Message Boards

Spinoff from an Open MEP Is Continuation of an 'Existing Plan'?

"When the client severs its relationship with a MEP provider and wants to set up its own plan, should that plan be a 'restatement' of the existing plan, or the establishment of a new plan? Is such a spinoff from a MEP treated as a continuation of an existing plan?" Icon to read more

BenefitsLink Message Boards

Understanding EBARs

"I'm a TPA for very small clients. I'd like to understand in detail how new comparability works. Any good resources?" Icon to read more

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Press Releases

ARA Announces Senior Management Leadership Changes
American Retirement Association [ARA]

Most Popular Items in the Previous Issue

IRS Updates the Determination Letter Program
Thomson Reuters Practical Law

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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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