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January 20, 2021 logo logo
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[Guidance Overview]

Exceptional Usefulness and Quality and Usefulness iconDOL Guidance on Missing Participants Is No Longer Missing

"This is an area that has been the subject of a focused DOL enforcement program over the last few years, but plan fiduciaries have long sought clearer guidance on the obligations in this area. While the new guidance lacks the force of regulation, it provides guideposts and clarity (at least as to the DOL's position) in some particularly vexing areas." Icon to read more

Morgan Lewis

[Guidance Overview]

Missing Retirement Plan Participants? DOL Says You Should Follow These Best Practices

"[T]he DOL expects that plan administrators will track participants with stale contact information, keep a record of mail that has been returned, and account for checks that are uncashed.... As further suggested by the DOL, when a plan (or just its assets) is acquired in connection with a corporate transaction, the buyer should require the seller to provide records of missing participants and any search efforts that have been taken.... Plan administrators should update any applicable policies and, in some cases, plan documents to include these additional search steps." Icon to read more


[Guidance Overview]

Retirement Plan Provisions in the Consolidated Appropriations Act of 2021

"[1] Provides for qualified disaster distributions, increased loan limits, and delayed loan repayments for those individuals in qualified disaster areas, but specifically excludes from these provisions disaster declarations that are only COVID-19-related. [2] Does not extend the coronavirus related distributions and loan relief provided under the CARES Act." Icon to read more

Ice Miller LLP

[Guidance Overview]

PBGC Final Rule Allows Simplified Withdrawal Liability Calculations Applicable to Benefit Reductions, Benefit Suspensions and Contributions

"[T]he methods are simpler ways for plans to: [1] Disregard reductions of adjustable benefits and suspensions of nonforfeitable benefits in determining the plan's unfunded vested benefits for purposes of calculating withdrawal liability; [2] Disregard certain contribution increases if the plan is using the presumptive, modified presumptive, or rolling-5 method for purposes of determining the allocation of unfunded vested benefits to an employer; and [3] Disregard certain contribution increases for purposes of determining an employer's annual withdrawal liability payment." Icon to read more

Faegre Drinker

Text of First Circuit Opinion: Wife Not Entitled to Portion of Husband's 401(k) Plan That Government Had Garnished (PDF)

"Shilo Abell does not challenge the government's authority to garnish her husband's account in this appeal. Rather, she renews her claim that Massachusetts law gives her a vested legal interest in Edward Abell's 401(k) account. She also argues for the first time on appeal that the contingent death benefit in the plan gives her some current interest in the account. Her remaining arguments rely on this initial premise that she has a current vested legal interest in the 401(k) account under Massachusetts divorce law and/or under the terms of the 401(k) plan itself. Because we reject both of these arguments we do not reach her other claims. Nor do we reach any broader argument as to [ERISA], the Mandatory Victim Restitution Act (MVRA), or preemption." [U.S. v. Abell, No. 20-1120 (1st Cir. Jan. 15, 2021)] Icon to read more

U.S. Court of Appeals for the First Circuit

2020 Unprecedented, Yet More of the Same for DB Plans

"High quality corporate bond rates used to value pension liabilities dropped about 70 basis points for the year, which increases the liabilities of a typical pension plan by seven to 12 percent. Combined with growth due to interest, the return on liabilities for many pension plans exceeded 15 percent for the year, easily keeping pace with the asset side of the ledger. The overall result is oddly familiar for such an unprecedented year. It turned out to be just an extension of The Decade That Was as DB investors struggled to keep pace as dropping rate tailwinds pushed their liabilities down the track." Icon to read more

The Principal Blog

North Dakota Best Interest Rule Passes Key House Committee

"North Dakota is the latest state to pursue a best-interest standard based on a model law put forth by the National Association of Insurance Commissioners.... A coalition of eight trade associations representing different groups within financial services sent a letter in support of the North Dakota bill and urging the full state legislature to adopt it." Icon to read more

Exceptional Usefulness and Quality iconHow Social Security Benefits Are Calculated

29 pages. "The computation process involves three main steps: [1] First, a summarized measure of lifetime Social Security-covered earnings is computed ... called the average indexed monthly earnings (AIME). [2] Second, a progressive benefit formula is applied to the AIME to compute the primary insurance amount (PIA).... [3] Third, an adjustment may be made based on the age at which a beneficiary chooses to begin receiving benefits." [R46658 Jan. 19, 2021] Icon to read more

Congressional Research Service [CRS]


401(k) PEPs Showing 'Upmarket Surprise'

"While the simplicity and 'turnkey' approach will be attractive to smaller firms when compared to a SIMPLE or SEP program, ... the greater opportunity will be for those plans who are a bit further upmarket. An employer with 150 employees and $5,000,000 who has struggled through the economic impact of 2020 may be looking to outsource not only liabilities but also operational efficiencies. Pooled Plan Providers will likely establish Pooled Employer Plans to address different market sectors. Icon to read more

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Benefits in General

[Guidance Overview]

IRS Proposed Rules Address Automatic Postponement of Tax Deadlines During Federally Declared Disasters

"Despite the mandatory 60-day postponement provision, Treasury makes clear in its proposed regulations that it would continue to exercise a good deal of discretion in the disaster context -- particularly as to defining the scope of time-sensitive acts to be postponed for individuals (and in some cases, the government itself)." Icon to read more

Thomson Reuters Practical Law

Selected Discussions
on the BenefitsLink Message Boards

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What Fees Can Be Paid from the Assets of This Overfunded DB Plan?

"Dealing with an overfunded defined benefit plan (DBP). Plan covers only the owner and spouse and not covered by PBGC. Client asked me whether he can pay various administration and investment-related fees from plans assets." Icon to read more

BenefitsLink Message Boards

What's the Best 'Integration Level' for a Plain, Integrated Profit-Sharing Plan?

"The free, online 'Inte-Greater' application will determine the integration level that provides the greatest share of the contributions for one or more 'favored' employees. A bit clumsy on the input end, and no way to save the data, but maybe fun to tinker with." Icon to read more

BenefitsLink Message Boards

Amending Cash Balance Contribution Credits Annually -- 'Definitely Determinable' Problem? 402(g) Problem?

"We took over a cash balance plan that is a C-corp but they have a large group of doctor/owners. Historically the doctors review their plan annually and request an amendment to adjust the doctors' contribution credits. Our actuary is concerned that this series or pattern of amendments changing the benefit structure violates the definitely determinable benefit rule. He feels the plan should only be amended every 3-4 years. The other concern is that these desired allocations could be construed as a CODA and will exceed the 402g limit." Icon to read more

BenefitsLink Message Boards

Terminate a NQDC without Distribution of All Assets? Freeze It?

"We have a NQDC plan and the Plan Sponsor wants to terminate it because no employees are funding to it any further. There is one participant remaining with contributions invested in an annuity. Participant doesn't want to take a distribution, so there is no request to accelerate the payout. Can the plan be terminated with an account balance remaining in the plan, or must the assets be distributed upon plan termination?" Icon to read more

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Press Releases

DCIIA Announces Launch of Plan Sponsor Institute
Defined Contribution Institutional Investment Association [DCIIA]

Most Popular Items in the Previous Issue

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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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