[Guidance Overview]
"[A chart] shows DOL's maximum penalties relevant to single-employer defined benefit (DB) and defined contribution (DC) plans for 2021 and 2020. The increases apply to penalties assessed after Jan. 15, 2021, for violations occurring after Nov. 2, 2015.... PBGC's 2021 maximum penalty under ERISA Section 4071 for single-employer DB plans is $2,259 a day (up from $2,233 in 2020) for each day a filing, notice or other information is overdue. The higher rate applies to penalties assessed after Jan. 13.... The $2,259 per day maximum penalty potentially could apply to virtually any late PBGC information or premium filing for a single-employer plan[.]"
Mercer
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[Guidance Overview]
"Although the E-Delivery Rule promises to expand greatly the use of electronic delivery, retirement plans still retain a fiduciary duty to protect participants' personal information from cybertheft. Thus, retirement plans taking advantage of the new rule may face increased exposure to ERISA fiduciary breach claims alleging inadequate cybersecurity measures."
Fred Reish, Bruce Ashton and Stephen Pennartz, via American Retirement Association [ARA]
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"Sponsors typically interact with DOL on these issues in the context of an audit. Obviously, demonstration that a sponsor has taken DOL's suggestions, e.g., in its description of best practices, seriously will help in the audit process. But sponsors may find some of DOL's suggestions impractical or may have developed more effective ways of tracking participants."
October Three Consulting
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"[T]he basic steps of an ERISA RFP: [1] Identify good candidates.... [2] Develop your proposal request.... [3] Set a schedule.... [4] Review responses.... [5] Make your choice.... [6] Coordinate with other providers.... Make periodic RFPs part of your prudent process."
Cohen & Buckmann, P.C.
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"March 31, 2021 ... is the date set under ... the Consolidated Appropriations Act, 2021 as the snapshot date on which a partial plan termination may be avoided through rehires that restore earlier plan participation levels. Specifically, a plan will not be treated as having experienced a partial plan termination if on March 31, 2021, the number of active plan participants is at least 80 percent of the number covered by the plan on March 13, 2020[.]"
E is for ERISA
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"Dates are applicable to plans and companies that follow a December 31 plan/tax year-end date. Dates will vary for plans and companies that follow different year-end dates."
Definiti
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"DOL eclipses ESG investing: fiduciaries must use only pecuniary considerations for all investment selection ... 401(k) plan fees and investments challenges continue ... Hedge funds in target date funds ... Smaller 401(k) plan's one-year limit for filing suit prevails ... Smaller 401(k) plan fiduciaries win fees case ... Profit-sharing plan asset allocation decision costs plan fiduciaries $17.5 million."
CAPTRUST
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"Sponsors flocked to complete annuity purchases in the fourth quarter of 2020.... [I]nsurance company participation was limited as a result of resource constraints from the influx of market activity. This further demonstrated the need to begin the annuity purchase process as early as possible to secure insurer availability. December 2020 was a strong month for pension plans. Equity markets performed well and funding status improved. Annuity purchase prices increased slightly."
October Three Consulting
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17 pages. "The windfall elimination provision (WEP) is a modified benefit formula that reduces the Social Security benefits of certain retired or disabled workers who are also entitled to pension benefits based on earnings from jobs that were not covered by Social Security and thus not subject to the Social Security payroll tax.... WEP's supporters argue that the formula is a reasonable means to prevent overgenerous payments and unintended benefits to people who have earnings not covered by Social Security and receive pensions from noncovered work. Opponents argue that the provision substantially reduces a benefit that workers may have included in their retirement plans, and it reduces benefits disproportionately for lower-earning households." [Report 98-35, updated Feb. 1, 2021]
Congressional Research Service [CRS]
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"The Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) are two separate provisions that reduce regular Social Security benefits for workers and their eligible family members if the worker receives (or is entitled to) a pension based on earnings from employment not covered by Social Security." [In Focus IF10203, updated Feb. 1, 2021]
Congressional Research Service [CRS]
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[Opinion]
"Although ubiquitous within the financial services industry, Monte Carlo analysis is likely an ineffective tool that wastes resources and distracts most investors from the essence of the problem.... Monte Carlo is wildly inaccurate in its predictions of how long a retiree's savings are likely to last and employs a methodology that is the opposite of what retirees want. Eliminating it from conversations should lead to safer, simpler, and more-personalized retirement-income portfolios for investors and help advisors create a brand of original thinking."
James Sandidge, via SSRN
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[Opinion]
"[The authors] agree with Mr. Sandidge's concerns regarding Monte Carlo models typically used by financial advisors.... [A] planning approach, utilizing basic actuarial principles and processes (including periodic stress testing) and Liability Driven Investing principles can be a more effective retirement planning tool than Monte Carlo models and can lead to better financial decisions."
Ken Steiner, FSA Retired
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Selected Discussions on the BenefitsLink Message Boards
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"2019 plan fails the ADP test. They correct it with refunds in August 2020. The Form 5330 tax is $1,050 and was paid. Then, in January 2021, they realize that some HCE comp was lower than in had been used in the testing. With the new numbers, the plan passes. What happens to that $1,050 excise tax? The plan didn't really need to be corrected. Can they ask for a refund?"
BenefitsLink Message Boards
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"Given the DOL/IRS May 2020 guidance (85 FR 26351) extending the deadline under ERISA/IRC by which a participant can file an appeal under a retirement plan during the COVID-19 emergency, by what date does a participant have to file an appeal? 60 days after an announced end of the COVID-19 emergency?"
BenefitsLink Message Boards
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"I know the IRS has said that we could use either '1' or '2' for Box 7. Just curious what the majority of people have been doing? Also, I assume we mark the entire distribution as taxable?"
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