Retirement Plans Newsletter

January 21, 2021

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[Official Guidance]

Treasury Department Notice of Multiemployer Pension Plan Application to Reduce Benefits: American Federation of Musicians & Employers Pension Fund, Second Application

"The Board of Trustees of the American Federation of Musicians & Employers Pension Fund, a multiemployer pension plan, has submitted an application to reduce benefits under the plan in accordance with [MPRA]. The purpose of this notice is to announce that the application ... has been published on the website of the Department of the Treasury, and to request public comments on the application[.]" Icon to read more

U.S. Department of the Treasury

[Guidance Overview]

White House Halts Pending Regs, Requests Delay in Effective Date of Published Regs That Have Not Yet Become Effective

"In a Jan. 20 memo, White House Chief of Staff Ron Klain instructed the heads of executive departments and agencies to place a hold on all recently issued rules and regulations.... With respect to rules that have been sent to the Office of the Federal Register but not published, the memo advises agency heads to immediately withdraw them pending review and approval. And with respect to rules that have been published in the Federal Register or that have been issued in any manner, but have not taken effect, Klain advises that department heads should consider postponing the rules' effective dates for 60 days." Icon to read more

American Retirement Association [ARA]

[Guidance Overview]

Exceptional Usefulness and Quality iconUnlocking the Process: Guide to ERISA Individual Prohibited Transaction Exemptions (PDF)

132 pages. "[This] guide to individual prohibited transaction exemptions collects and indexes more than 1,200 individual exemptions ... The guide has been updated to account for 2020 activity.... It categorizes the exemptions first by counter-party then transaction-type, allowing readers to easily identify individual exemptions relevant to their situation. Included in the guide is an overview of the individual exemption process, as well as an examination of individual exemption statistics, such as historical data and most frequent categories of exemptions." Icon to read more

Eversheds Sutherland

[Guidance Overview]

Where Have You Gone, Joe Participant? Best Practices and Warnings from the DOL

"Although the focus of the Release was on defined benefit plans, the red flags that the DOL highlighted apply to all plans ... Warning flags include: [1] More than a small number of missing or nonresponsive participants; [2] Systemic errors that cause missed pay status due to required minimum distributions or death benefits; [3] Inadequate procedures for identifying and locating missing participants and beneficiaries; [4] Inadequate procedures for notifying terminated vested participants nearing normal retirement age of the right to commence payment of benefits; [5] Inadequate procedures for contacting terminated vested participants who are approaching the start of required minimum distributions; [6] Inadequate procedures for addressing uncashed distribution checks; and [7] Absence of procedures for handling undeliverable mail and/or emails." Icon to read more

Ferenczy Benefits Law Center

[Guidance Overview]

Exceptional Usefulness and Quality iconIRS Provides SECURE Act Guidance on Traditional and QACA Safe Harbor Plans

"While more than half of [Notice 2020-86] deals with a variety of specific notice issues, the following items are the most relevant. [1] The 15 percent cap on QACA default deferrals ... [2] Notice requirements ... [3] Amendment requirements ... [4] Contribution deductibility." Icon to read more

Ascensus

[Guidance Overview]

PBGC Finalizes Rules for Simplified Withdrawal Liability Calculations

"The final regulations [1] codify the simplified approach for excluding adjustable benefit cuts from withdrawal liability assessments that is contained in Technical Update 10-3.... [2] provide a simplified framework for excluding benefit suspensions from withdrawal liability assessments during the 10-year period following the implementation of the suspensions.... [3] provide simplified methods that ... disregard contribution increases required by funding improvement or rehabilitation plans that go into effect after December 31, 2014 for the purpose of calculating withdrawal liability." Icon to read more

Groom Law Group

[Guidance Overview]

DOL Regs Confirm Fiduciaries Need Not Vote on Every Proxy Proposal But Must Limit Voting Decisions to Economic Interests

"In deciding whether and how to vote proxies or exercise other shareholder rights, the fiduciary must: [1] Act solely in the economic interest of the plan and its participants and beneficiaries.... [2] Consider the costs involved.... [3] Not subordinate participants' and beneficiaries' interests in retirement income or financial benefits to any non-pecuniary objective, nor promote non-pecuniary benefits or goals.... [4] Evaluate material facts that form the basis for any particular proxy vote or exercise of rights.... [5] Maintain records.... [6] Exercise prudence and diligence in selecting and monitoring advisors and service providers who assist with proxy voting or exercising other shareholder rights." Icon to read more

The Wagner Law Group

Definition of Compensation When Safe Harbor Match Eliminated Mid-Year

"The company is a safe harbor 401(k) match plan and they pay the match in a lump sum after the plan year. The company amended the plan to remove the safe harbor matching contribution mid-year. What definition of compensation should the plan use to determine the amount of match to make -- full year or partial year?" Icon to read more

Retirement Learning Center, LLC

A Close Look at ERISA 403(b) Plans, 2017 (PDF)

68 pages. "ERISA 403(b) plan assets account for more than half of estimated total 403(b) plan assets. This report analyzes 403(b) plans covered by ERISA that also filed Form 5500 Schedule H ... About half of ERISA 403(b) plan participants are in hospital plans, which held 37 percent of ERISA 403(b) plan assets in plan year 2017. Another 23 percent of ERISA 403(b) plan participants were in educational services, holding nearly half (46 percent) of ERISA 403(b) plan assets.... Among large ERISA 403(b) plans with employer contributions in 2017, 26 percent had automatic employer contributions, 58 percent had simple matches, and 8 percent had both of these features.... Overall, 54 percent of large ERISA 403(b) plans had participant loans outstanding, and about three-quarters of participants were in those plans in 2017." Icon to read more

Investment Company Institute [ICI]

Measuring Financial Wellness Programs (PDF)

"Employee surveys and internal information gathered prior to launch establish a baseline. To fully assess the return on investment metrics tailored to the goals of the Financial Wellness program must be established and performance against those metrics measured periodically. The baseline metrics of employee engagement can help employers determine if the program is appropriately delivered and which features of the program are most widely used by the various employee demographics." Icon to read more

Retirement Advisor Council

Benefits in General

[Guidance Overview]

Exceptional Usefulness and Quality iconConsolidated Appropriations Act, 2021: Understanding the Health & Welfare and Retirement Provisions (PDF)

110 presentation slides. Topics: [1] Permitted changes to health FSAs and dependent care FSAs. [2] No Surprises Act. [3] Transparency. [4] Qualified disaster-related relief provisions. [5] New COVID-19 pandemic-related relief provisions. Icon to read more

Trucker Huss

Executive Compensation
and Nonqualified Plans

Upcoming Deadline iconUpcoming Incentive Stock Options and Employee Stock Purchase Plan Reporting and Disclosure Requirements

"For the exercise of the ISO or the transfer of ESPP shares that occurred in 2020, companies must provide written information statements to participants (which may include the actual Form 3921 or 3922) not later than February 1, and they must file the Form 3921 or 3922 with the IRS not later than March 1, or, if the information returns are being filed electronically, not later than March 31. Failure to provide an information statement or file an information return will result in penalties assessed by the IRS." Icon to read more

Sidley Austin LLP

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How Social Security Benefits Are Calculated
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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 BenefitsLink.com, 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 BenefitsLink.com, 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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