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Retirement Plans Newsletter

April 15, 2021

5 Jobs Today


[Official Guidance]

Text of IRS Notice 2021-27: Weighted Average Interest Rates, Yield Curves, and Segment Rates for April 2021 (PDF)

"This notice provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates ... and the 24-month average segment rates ... [as well as] the interest rate on 30-year Treasury securities ... as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate ... In addition to providing these rates for current periods, this notice provides 24-month average segment rates for earlier periods for plan years beginning in 2020 and 2021 ... reflecting the modifications made by Section 9706(a) of [ARPA]."  MORE >>

Internal Revenue Service [IRS]

[Guidance Overview]

DOL Issues Cybersecurity Best Practices for ERISA-Covered Retirement Plans

"The essence of [this new] guidance: Responsible plan fiduciaries have an obligation to ensure proper mitigation of cybersecurity risks.' ... [T]hese best practices are not dissimilar to other, well-known frameworks designed to protect personal data."  MORE >>

Jackson Lewis P.C.

[Guidance Overview]

IRS Surprises with Apparent Explanation of the SECURE Act 10-Year Rule

"[A] recent revision of Publication 590-B [treats] the 10-year rule differently than ... the 5-year rule. The IRS strongly hinted that that the 10-year rule requires annual RMDs to be paid in years 1-9 and the remaining IRA funds to be paid out in year 10."  MORE >>

Slott Report

[Guidance Overview]

Rollovers, 'Regular Basis' Are Focus of DOL Fiduciary Guidance

"FAQ-7 [notes that] ... when the investment advice provider has been giving advice to the individual about investing in, purchasing, or selling securities or other financial instruments through tax-advantaged retirement vehicles ... the advice to roll assets out of the employee benefit plan IS part of an ongoing advice relationship that satisfies the regular basis prong."  MORE >>

American Retirement Association [ARA]

DOL: New Investment Advice Rule Does Not Include Right to Sue

"The DOL will be the entity ensuring that sellers meet the conditions to qualify for the Prohibited Transaction Exemption 2020-02.... The DOL has also clarified that PTE 84-24 covers sales to IRA owners and commissions paid to insurance intermediaries as well, ... as long as the client acknowledges a disclosure containing three points."  MORE >>

Multiple Employer Plans: Fiduciary Litigation Risk

"[I]ssues that are unique to MEP fiduciary litigation: [1] the identification of the responsible fiduciary and [2] comparability, e.g., the comparison of fees under any given MEP to the fees paid by other plans."  MORE >>

October Three Consulting

The Prudence of Adding Alternative Investments to Defined Contribution Plan Menus

Podcast with transcript. "The plaintiffs' core duty-of-prudence claims were based on allegations that these nontraditional investments underperformed and charged significantly higher fees than what the plaintiffs considered to be 'peer' or 'comparable' funds. However, Judge Koh rejected these allegations, explaining how simply labeling funds as 'peer' or 'comparable' is not sufficient." [Anderson v. Intel Corp. Investment Policy Comm., No. 19-4618 (N.D. Cal. Jan. 21, 2021)]  MORE >>

Ropes & Gray LLP

Text of Third Circuit Opinion: Government of Virgin Islands Not Obligated to Fund Employees' Pension Plan (PDF)

118 pages. "[The district court] determined that the consent judgment does not require the GVI to fund GERS for the delta between its assets and liabilities. We, too, find no anchor for this sweeping duty GERS seeks to impose on the GVI ... Even were we to cut that obligation on a rationale made of whole cloth, the system would remain insolvent. The citizens of the United States Virgin Islands -- population 106,405 -- simply cannot pay the necessary billions. The cure for GERS's chronic underfunding is not judicial but legislative[.]" [Government Employees Retirement System (GERS) of Virgin Islands v. Government of Virgin Islands (GVI), Nos. 20-1749, 20-1766 (3d Cir. Apr. 9, 2021)]  MORE >>

U.S. Court of Appeals for the Third Circuit

Improving Administrative Service Agreements for Public Agency Retirement Plans

"[M]any, if not most, recordkeepers are willing to negotiate certain provisions of their service agreements -- particularly if the prospective client is a larger plan in terms of total assets. Here is a brief list of contract issues or terms that should be considered."  MORE >>

Best Best & Krieger LLP

Priest Retirement Case Study: 'Plan of the Future' Ideas and Considerations (PDF)

"50 years is a long time to sponsor a plan without making changes along the way.... Recently, [the author and] the Archdiocese of Indianapolis ... looked at each and every benefit policy and discussed whether it still made sense in today's world. The culmination of the project was a formal retirement policy, new plan document and a communication program to alert all priests of the changes and the reasons behind them."  MORE >>


Benefits in General

[Official Guidance]

Text of IRS Notice 2021-28: Request for Public Recommendations on Items to be Included on the 2021-2022 Priority Guidance Plan (PDF)

"The Department of the Treasury and the [IRS] invite the public to submit recommendations for items to be included on the 2021-2022 Priority Guidance Plan.... Taxpayers should ... briefly describe the recommended guidance and explain the need for the guidance.... [T]axpayers may include an analysis of how the issue should be resolved."  MORE >>

Internal Revenue Service [IRS] and U.S. Department of the Treasury

Employee Benefits Jobs

View job as Benefits Associate
for Littler Mendelson, P.C. Benefits Associate

Littler Mendelson, P.C.

Philadelphia PA / Los Angeles CA / Kansas City MO / AK / AL / AR / AZ / CT / DC / DE / FL / GA / HI / IA / ID / IL / IN / KS / KY / LA / MA / MD / ME / MI / MN / MS / MT / NC / ND / NE / NH / NJ / NM / NV / NY / OH / OK / OR / RI / SC / SD / TN / TX / UT / VA / VT / WA / WI / WV / WY

View job as Benefits Associate
for Littler Mendelson, P.C.

View job as Retirement Plan Administrator
for Retirement Solutions Specialists Retirement Plan Administrator

Retirement Solutions Specialists

Telecommute / Jacksonville FL

View job as Defined Benefit Retirement Plan Analyst
for Trinity Pension Consultants, Inc. Defined Benefit Retirement Plan Analyst

Trinity Pension Consultants, Inc.

Akron OH

View job as Retirement Plan Administrator
for Nicholas Pension Consultants Retirement Plan Administrator

Nicholas Pension Consultants

Telecommute / Rancho Cordova CA / Corona CA

View job as Retirement Plan Benefits Administrator
for Compass Retirement Consulting Group Retirement Plan Benefits Administrator

Compass Retirement Consulting Group

Telecommute / Stratham NH / MA / ME

Selected New Discussions

401a4 Testing - Accrued-To-Date - Combo Plan

"Defined benefit and profit sharing combo. DB started 2015(HCE only) and PS started 2019. One non-HCE was already in the DB plan for 2018 - year of participation. Another non-HCE is only in the PS plan i.e. excluded for DB categorically. All 3 are participants in the PS plan effective 1/1/2019. DB was amended for HCE only during 2020 using A+B method (A x% of average comp for YOS starting 1/1/2020) and B is AB as of 12/31/2019 without wearaway - standard design. I usually use annual method but for 2020 wanted to look into accrued-to-date method. Assume all data is correct for all past years i.e. I have the correct salary history and the PS plan assets are all correct. Are there issues I need to watch out for the 401a4 testing? Thanks"

BenefitsLink Message Boards

Top Heavy and Safe Harbor

"Hi, This plan was not a safe harbor for 2020. For 2021, plan added a safe harbor match. The ADP test failed and one HCE has to take back $2000 of the $2500 she put in. The plan also is top heavy for 2021. Total plan assets are $7000. $5000 for the key and $2000 for the non-key. If she hadn't put that $2000 in then the plan would've been fine! Eligibility is 3 months of service making about 30 employees eligible. Their TH contribution for 2021 is going to be big ( for them). Any suggestions to lower the cost?"

BenefitsLink Message Boards

Calculating 401(k) Deferrals on Tip Income

"OK proposing on a plan where tip income is a large chunk of their pay. What do I need to know? I "always" use the w-2 definition of wages, so I should be able to easily identify the comp number at year-end. I think the biggest question I have is, if someone wants to contribute 4% of pay, how does that work? Does anyone have an article about tip income and a 401k plan?"

BenefitsLink Message Boards

Press Releases

WEX Signs Definitive Agreement to Acquire benefitexpress

WEX Health

Fiduciary Benchmarks Rebrands as Fiduciary Decisions and Optimizes Organizational Alignment

Fiduciary Decisions

John Hancock Retirement Expands Advice Program to All 401(k) Plans

John Hancock

Webcasts and Conferences
(Retirement Plans or Exec Comp)

ERISA’s Five-Part Investment Advice Test - The DOL Changes Course

April 21, 2021 WEBCAST

Thompson Hine LLP

Stock Compensation Bootcamp For Financial Advisors

April 29, 2021 WEBCAST

Washington Legislative Update

May 17, 2021 WEBCAST

International Foundation of Employee Benefit Plans [IFEBP]

Last Issue's Most Popular Items

Tips for Hiring a Service Provider with Strong Cybersecurity Practices (PDF)

Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

DOL Announces New Cybersecurity Guidance for Plan Sponsors, Plan Fiduciaries, Record-Keepers, Plan Participants

Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

Best Practices for Retirement Plan Service Provider Cybersecurity Programs (PDF)

Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

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

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