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Retirement Plans Newsletter

March 19, 2021

3 Jobs Today

 

[Guidance Overview]

ARPA's Effect on Pension Funding

"Plan sponsors have the option of electing to change the amortization period to 15 and reducing prior bases and shortfall amortization installments to zero to as early as the plan year beginning after December 31, 2018 ... The text of the law suggests that plan sponsors would only be permitted a one-time election to accelerate the timing of the new requirements."  MORE >>

ASC

[Guidance Overview]

American Rescue Plan Act Provides Funding Relief for DB Plans

"[S]everely declining interest rates have caused pension liabilities and contribution requirements to sky rocket.... ARPA-21 attempts to soften these impacts ... by temporarily raising the interest rates for plan funding requirements and spreading the payments for liabilities over a longer period of time."  MORE >>

CBIZ

[Guidance Overview]

ARPA Hands 30 Years of Relief to Underfunded Multiemployer Plans

"[T]he Act permits the PBGC to limit applications during the first two years of the program to certain multiemployer plans with larger and/or more imminent needs ... Applications for financial assistance should be available in the next few months, as the Act requires the PBGC to issue guidance within 120 days of enactment[.]"  MORE >>

Snell & Wilmer

Annuity Purchase Update: March 2021 Interest Rates

"[If] plan sponsors continue to contribute only their minimum required contributions, PBGC premiums will increase substantially.... Purchasing annuities for even a subset of plan participants would allow for plan sponsors to lock in the recent gains from increased interest rates and funding status."  MORE >>

October Three Consulting

Effects of Retirement Age Increases and Mortality Adjustments on Social Security

"Raising the full retirement age (FRA) alone would reduce Social Security retirement benefits across-the-board relative to current law ... Applying a cohort-based mortality adjustment designed to offset increasing differential mortality would increase lifetime benefits and lower poverty rates for some groups compared to solely raising the FRA."  MORE >>

U.S. Social Security Administration [SSA]

Structuring Your Retirement Portfolio for Your Income Needs

"Set aside one year of cash ... Create a short-term reserve ... Invest the rest of your portfolio ... Adapt your strategy over time."  MORE >>

Charles Schwab

[Opinion]

It's Time to Revisit Social Security's Early and Delayed Claiming Formulas

"The current formula traces its roots to the mid-1950s, with tweaks along the way. Over the years, the underlying actuarial factors have changed. Interest rates have fallen and life expectancy has risen -- the latter, much more so for high earners."  MORE >>

Morningstar

Benefits in General

[Guidance Overview]

The World According to ARP: Key Employee Benefits Changes

"Plan sponsors will need to track all assistance-eligible individuals receiving the COBRA subsidy and related amounts in order to take advantage of the employer tax credit for the cost of such COBRA premiums.... Single-employer pension plan sponsors should consult with their actuaries to determine the effect that the new pension funding stabilization rules will have on the sponsor's funding obligations, including the effect on annual funding notices."  MORE >>

Sidley Austin LLP

Employee Benefits Jobs

View job as Regulatory Support Associate
for Transamerica

Regulatory Support Associate

Transamerica

Telecommute / MA / NY

View job as Retirement Compliance Consultant
for Transamerica

Retirement Compliance Consultant

Transamerica

Telecommute / IA / MA / OH

View job as Defined Benefit Implementation Consultant
for Intac Actuarial Services, Inc., part of FuturePlan by Ascensus

Defined Benefit Implementation Consultant

Intac Actuarial Services, Inc., part of FuturePlan by Ascensus

Telecommute

Selected New Discussions

Labor-Management Trust Agreement Under Labor Management Cooperation Act

"I represent a labor-management relations fund which is intended to comply with Section 302(c)(9) of the Labor-Management Relations Act, under an amendment adopted by the Labor-Management Cooperation Act of 1978. The DOL has consistently taken the position that since such funds provide neither a pension benefit nor a welfare benefit that they are not subject to ERISA. Ironically, there are a number of court cases in which such funds sue to recover delinquent contributions under ERISA Section 515 which have been accepted by the courts (presumably because the opposing party never raised the ERISA issue as a defense). Does anyone have a sample or specimen trust agreement that can be used for such an arrangement to the extent it is funded by employer contributions?"

BenefitsLink Message Boards

What's a Reasonable Deferral Deposit Deadline for This Small Plan?

"Not a 401k expert. I know of only 7 biz days as a safe harbor deposit dates for any deferrals. Looking at a plan where I am told that they only can make one deposit per month -- their explanation for 'administratively feasible' deposit. The owner travels a lot. The payroll is every 2 weeks. Is this reasonable? I don't think so. It's a small plan with 3 participants. 2 HCEs (owner and spouse) and one non-HCE."

BenefitsLink Message Boards

Press Releases

ICMA-RC Announces New Brand Name to Reflect Expanded Vision

ICMA-RC

The Health Plan and DisposeRx Partner to Increase Opioid Prevention Initiatives in West Virginia

The Health Plan

Webcasts and Conferences

R.I.P. ESG? Implications of Recent ERISA Guidance on ESG Investing

March 24, 2021 WEBCAST

Thompson Hine LLP

Last Issue's Most Popular Items

Fidelity to Exit HR/Payroll Business

planadviser

Single-Employer Pension Plan Funding Requirements Reduced

Cheiron

Americans' Views of State and Local Employee Retirement Plans (PDF)

National Institute on Retirement Security [NIRS]

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BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587.

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