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Retirement Plans Newsletter January 26, 2021 |
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Newly Posted New Relief for Employee Benefit Plans - What's in the Consolidated Appropriations Act?
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Discussions |
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This Newsletter:
BenefitsLink Health & Welfare Plans Newsletter:
Message Boards Digest:
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[Guidance Overview]
"EBSA outlined best practices that it has found 'effective at minimizing and mitigating the problem of missing or nonresponsive participants' ... [P]lan administrators should review and determine how best to supplement their existing practices.... [If] audited a plan will be well-served if the plan administrator can point to the documented implementation of many of these best practices." Proskauer |
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[Sponsored]
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[Guidance Overview]
"Use of the PBGC Missing Participants Program does not relieve plan fiduciaries from the duty to diligently search for missing participants and beneficiaries before assets are distributed.... Plan fiduciaries must otherwise comply with the requirements of the DOL safe harbor (although the required notices must be revised to reflect the transfer of the account to the PBGC, and to include the program's website and consumer contact number).... The PBGC's fees may be paid from the transferred accounts, unless prohibited by the plan document ... Plan fiduciaries may transfer accounts to the PBGC if the participant or beneficiary previously elected a lump sum but failed to cash the check prior to its 'cash-by' date " Proskauer |
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[Guidance Overview]
"Holders of tax-deferred retirement assets must weigh and balance significant owner-facing risks against a clear set of state-facing compliance requirements and risks (exposure to interest and penalty assessments when assets are not escheated or not timely escheated).... [T]he easiest answer may not be the one that properly balances the competing concerns." Bloomberg Law |
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[Guidance Overview]
"[IRS Notice 2020-86] provides guidance on the rules that apply to safe harbor plans that were changed by the [SECURE Act]. The guidance covers the increase in automatic contributions permitted under a qualified automatic contribution arrangement (or 'QACA') safe harbor plan, safe harbor notice requirement changes, and issues related to the retroactive adoption of safe harbor status." Seyfarth |
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"This 2021 Compliance Calendar highlights critical compliance deadlines for defined benefit retirement plans. While all major dates are included, some may only apply to particular plans and there may be additional deadlines for specific plans that are not covered here. Be sure to consult counsel familiar with your unique retirement plan." Cammack Retirement Group |
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"Changing RMD rules would likely have a negligible impact on tax revenue, while increasing flexibility for retirement savers. Raising (or eliminating) the RMD age has little effect on individuals' financial behaviors while they are still working. At retirement, the impact of raising the RMD age depends on whether the retiree wishes to bequeath wealth to someone else. For households without a bequest motive, the chance that a retiree would elect to withdraw less than the RMD is relatively low (between 2% and 4% depending on educational level). For households with a bequest motive, the probabilities are higher and vary between 6% and 12%." TIAA Institute |
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12 pages. "Key findings: [1] Provider choice leads to increased 403(b) participation, due to greater familiarity and higher engagement with participant's plan. [2] Better financial outcomes, such as higher annual contributions and higher median account balances, are linked to provider choice. [3] The presence of a 403(b) financial professional combined with provider choice results in even greater financial outcomes. [4] Industry best practices may improve processes for seamlessly managing multiple-provider 403(b) plans." Equitable |
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"[T]he bill would narrow the current 10% interest rate corridor to 5%, effective retroactively to 2020, and delay the phaseout of the 5% corridor from 2021 until 2026.... [A] 5% floor would apply to 25-year interest rate averages to provide protection from extreme interest rate movements. The bill also calls for amortizing all funding shortfalls over 15 years, rather than seven years.... The bill would expand the [PBGC's] authority to partition troubled multiemployer pension plans and increase the number of plans eligible for partition, while streamlining the application process through 2024." Mercer |
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"Portman [has long been] viewed by many retirement planning professionals as one of their top advocates in Congress ... Portman has not only held a leading position on the powerful Senate Finance Committee for many years -- including formerly being chairman of the Subcommittee on Social Security, Pensions and Family Policy -- he has been one of the main advocates of several popular pieces of retirement reform legislation supported by industry trade groups." PLANSPONSOR; free registration may be required |
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[Opinion]
"If you are to look at the existing closed 401k market (this would be primarily business associations and other affiliated groups), it's possible to conclude PEPs can achieve both similar cost savings and enhanced value offering. This comes when the pool increases the number of participating employers and employees ... The potential reduction of significant fiduciary liability comes about because the existing plan sponsor is essentially handing off the bulk of the duties to a new plan sponsor -- the PPP.... delegating the retirement plan to a PEP gives company executives one less thing to worry about." Fiduciary News; free registration required |
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Benefits in General |
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[Guidance Overview]
"[The CAA] includes many benefits and tax provisions affecting employers, group health plan sponsors, health benefits brokers and health insurance issuers. Some provisions are currently effective, while others begin on future dates. This Compliance Overview summarizes the employee benefits provisions relating to tax-favored accounts, surprise medical billing, health plan transparency and mental health parity. It also includes various tax credits, exclusions and deductions that may be of interest to employers, along with a brief discussion of key retirement plan provisions." Cowden Associates, Inc. |
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"Total monetary recoveries increased for the fifth year in a row, due to another year of historically high recoveries from EBSA's civil enforcement actions.... In FY 2020, 59 criminal investigations were closed with guilty pleas or convictions -- down from FY 2019's total of 80 -- representing the second year in a row where there was a decrease in the rate of results when compared to the increased total number of investigations closed[.]" Eversheds Sutherland |
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"March 2021 will mark a year since the majority of U.S. employees had to switch to a remote work environment due to the COVID-19 pandemic.... [T]here is a disconnect between employers and employees when it comes to what the return to work may look like post-pandemic. Both agree that there will be some kind of hybrid model, where employees split their time between the home and office ... However, how often employees will work remotely is disputed between the two groups." PwC |
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Executive Compensation |
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[Guidance Overview]
"The Final Regulations are largely unchanged from the proposed regulations issued in June 2020 ... providing only minor clarifications and some adjustments intended to ease compliance by taxpayers and falling short of wholesale interpretive changes that had been proposed by practitioners and tax-exempt organizations." Ropes & Gray LLP |
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Selected Discussions |
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► It's easy to sign up and participate in discussions! Post answers, ask questions, create custom feeds and views. Join your peers (and potential referral sources or customers)—there is no charge. |
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"If a deferral-only plan wants to use a non-safe harbor definition of compensation for deferral purposes, such as excluding commissions, I believe there is no discrimination issue when the plan passes ADP testing using a definition of compensation that satisfies 414(s). The question is, are there any restrictions in the Code or regs (cites appreciated) for how compensation may be defined for deferral purposes -- with regard to reasonableness or nondiscrimination and so forth?" BenefitsLink Message Boards |
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"I been doing some research on e-signatures, and came across a method of identifying that an individual is who they say they are: https://www.docusign.com/products/identify -- which sounds awfully important, especially when some terminated employee comes back 10 years later for his or her money, having moved 3 times, etc. Anyone ever used something like this?" BenefitsLink Message Boards |
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"See the attached. I'm very happy with this. Every time rule of parity would come up I would research for an hour. I finally wrote this down. Let me know what you think! I would incorporate suggestions and reshare." BenefitsLink Message Boards |
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► Subscribe to the BenefitsLink Message Boards Digest -- a free daily email of all new discussions (not just the selected few shown above). View a sample issue. |
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Press Releases |
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Lori Kiess, QKA Named Director of Retirement Services
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Barclay Damon Welcomes Alexandra Lugo
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Robinson+Cole Continues Growth in Philadelphia
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New Tax-Advantaged Health Insurance Plan Offers Cost-Effective Workforce Strategy
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Most Popular Items in the Previous Issue |
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Biden Administration to Review Rules for Employee Health and Retirement Plans
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BenefitsLink.com, Inc.
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(407) 644-4146
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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