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Retirement Plans Newsletter

June 14, 2021

6 New Job Opportunities


[Official Guidance]

Text of PBGC Interest Rate Assumptions for Valuing Benefits in Single-Employer Plans, Third Quarter 2021

"The third quarter 2021 interest assumptions will be 2.13 percent for the first 25 years following the valuation date and 2.23 percent thereafter. In comparison with the interest assumptions in effect for the second quarter of 2021, these interest assumptions represent an increase of 5 years in the select period (the period during which the select rate (the initial rate) applies), an increase of 0.31 percent in the select rate, and an increase of 0.55 percent in the ultimate rate (the final rate)."  MORE >>

Pension Benefit Guaranty Corporation [PBGC]

Tenth Circuit Affirms District Court's Damages Calculation in 401(k) Breach of Fiduciary Duty Litigation

"The class's expert witness, Martin Schmidt, testified the class had incurred over $19 million in losses due to the breach, but the district court calculated damages of about $1.6 million ... The class appealed the district court's method for calculating damages and prejudgment interest, denial of injunctive relief, and judgment for Banner on the prohibited transaction claim. The Tenth Circuit affirmed the district court on each issue." [Ramos v. Banner Health, No. 20-1231 (10th Cir. June 11, 2021)]  MORE >>

Roberts Disability Law

Pandemic Causes One-Third of Americans to Rethink Retirement Date

"Among those feeling the most negative effects are women and pre-retirees. Even so, many Americans say the pandemic was a financial wake-up call that prompted them to rethink how they plan for their futures."  MORE >>


Abandoned Retirement Savings: Who and How Much?

"[In] 2017, 2.7% of 72.5 year-old account-holders in total abandoned $790 million; the median abandoned account held $5,400. Nearly all of these funds remain with plans and are not sent to state unclaimed property. Regression discontinuity estimates show that abandonment is 10 times higher in automatic rollover IRAs[.]"  MORE >>

Lucas Goodman, Anita Mukherjee, and Shanthi Ramnath, via SSRN

Mitigating Group Annuity Buyout Costs and Risks with Assets-In-Kind Transfers: A Mutually Beneficial Solution for Sponsors and Insurers (PDF)

"[This paper describes] key considerations when exploring a group annuity purchase, including the risks and financial impacts, and strategies available to manage them.... Not only does the asset transfer process expose the key stakeholders to risk, it frequently can result in significant additional costs to the employer, and to the insurer. The good news is these costs and risks are manageable, and, in some cases, avoidable."  MORE >>


Text of Enrolled Actuaries Pension Examination EA-1, Spring 2021 (PDF)

33 pages. Full text of May 12, 2021 exam with answers, published online by IRS.  MORE >>

American Society of Pension Professionals & Actuaries [ASPPA]; Joint Board for the Enrollment of Actuaries [JBEA]; Society of Actuaries

Text of Enrolled Actuaries Pension Examination EA-2, Segment L, Spring 2021 (PDF)

46 pages. Full text of May 12, 2021, exam with answers, published online by IRS.  MORE >>

American Society of Enrolled Actuaries [ASEA]; Joint Board for the Enrollment of Actuaries [JBEA]; Society of Actuaries

Target-Date Funds Led to 75% Decrease in 'Extreme' Equity Allocations

"[O]ver the last 15 years the increased adoption of target-date funds has led to a 75% decrease in 'extreme equity allocations' in target-date funds.... According to Vanguard, 96% of participants who had a target-date fund in their retirement account didn't make a single trade in 2020 in those accounts."  MORE >>

Motley Fool

Essentials for a Successful Retirement

"Retirement is the longest vacation you will ever take.... [Be] as specific as possible about what your lifestyle expenses will be as well as your general living expenses.... Successful retirees should not let the market dictate their happiness.... Taxes are something retirees seem to underestimate."  MORE >>


If You've Dipped Into Savings, Here's How to Get Your Retirement Account Back on Track

"If you withdrew or plan to withdraw tax-deferred savings as a result of financial hardship, you will need a strategy for getting your retirement plan back on track.... Consider recontributing some or all of the distributed funds within three years or increasing your contributions to make up for the lost time. Be sure to amend your tax return if you report distributions as taxable income and later return them to the account within the three-year period."  MORE >>



Cost-Efficiency and Correlation of Returns: The Often Overlooked Factors in Fiduciary Investing

"How many fiduciary investors bother to compare potential actively managed fund choices with a comparable index fund? How many fiduciary investors simply blindly follow whatever advice their adviser recommends, again because they do not know to properly evaluate the funds themselves? ... [It] should come as no surprise that studies have consistently found that the overwhelming majority of actively managed mutual funds are not cost-efficient."  MORE >>

The Prudent Investment Fiduciary Rules

Benefits in General

[Guidance Overview]

Cybersecurity and Related Legal Risks Come Home to ERISA Plans

"The upshot of the DOL's April 2021 cybersecurity tips and best practices is that it puts employers on notice that both the DOL takes this seriously and that plaintiffs could attempt to use this new guidance as a basis for fiduciary duty breach claims. Moreover, service providers can expect detailed questions on cybersecurity in RFPs and RFIs. Plan sponsors will seek more transparency, whereas service providers may be reluctant to divulge too much on their cybersecurity defenses to guard against inadvertently offering up the keys to the castle. The balance of the two will become market practice."  MORE >>

Stradley Ronon

[Guidance Overview]

DOL Provides Cybersecurity Guidance for ERISA Plans

"For health and welfare plan sponsors, the good news is that that in many cases, these practices are already a focus of their vendors, especially given legislation earlier this year designed to encourage HIPAA covered entities to adopt some security practices. [The] guidance, while retirement-plan focused, provides a good roadmap for all sponsors of plans (including those not covered by ERISA) to consider in evaluating their service providers as part of their fiduciary due diligence."  MORE >>

HUB International

[Guidance Overview]

IRS Finalizes Rules Addressing Automatic Postponement of Tax Deadlines During Federally Declared Disasters

"The final regulations adopt the proposed regulations without substantive changes but modify one of the examples regarding how to calculate the 60-day postponement period."  MORE >>

Thomson Reuters Practical Law

Does the Benefits Department Know What Management Is Doing?

"Optimally, employer management will consult with benefits staff prior to making business decisions, such as the acquisition or sale of a business entity, which may affect their employee benefit plans' terms or ability to comply with the law. If that is not possible, employers should inform benefits staff of decisions promptly after they are made, so benefits staff can take the steps necessary to implement the decision, keep the plans legally compliant, and protect the employer from potentially costly and disruptive liability."  MORE >>

Dickinson Wright

Executive Compensation and Nonqualified Plans

Non-Qualified Deferred Compensation Plans: Class Year or Account-Based?

"Account-based plans are generally viewed as simpler for participants to understand and manage. Account-based structures also fit well within the framework of IRC Section 409A, which focuses on proper administration of distributions. Class-year structures offer flexibility due to the greater number of sub-accounts created. However, this also produces more complexity for distribution management."  MORE >>

Fulcrum Partners LLC

Employee Benefits Jobs

View job as Director of 401(k) Implementation, Core
for Human Interest Director of 401(k) Implementation, Core

Human Interest

Telecommute / Mill Valley CA

View job as Director of 401(k) Implementation, Core
for Human Interest

View job as 401(k) Implementation Manager
for Human Interest 401(k) Implementation Manager

Human Interest

Telecommute / San Francisco CA

View job as 401(k) Implementation Manager
for Human Interest

View job as ERISA Legal Counsel
for Human Interest ERISA Legal Counsel

Human Interest

Telecommute / San Francisco CA

View job as Senior Compliance Analyst/Coordinator
for Empower Retirement Senior Compliance Analyst/Coordinator

Empower Retirement


View job as Trust Administrator
for Newport Trust Administrator


Los Angeles CA

View job as Senior 401(k) Qualified Plan Consultant
for Newport Senior 401(k) Qualified Plan Consultant


Orlando FL / Saint Petersburg FL / Miami FL / Charlotte NC / Dallas TX

Selected New Discussions

Uncertain About Form 8955-SSA Filing Requirements

"I'm no expert on 8955-SSA but I had a discussion with a TPA. Whenever there is a termination of a participant and the participant is not paid out by the end of the plan year following termination, I file Form 8955-SSA, regardless of plan type. Our discussion was about the 'deferred benefit,' which the TPA stated is only applicable when the benefit/account balance is not due until NRA, i.e., the plan does not pay benefits until NRA."

BenefitsLink Message Boards

Press Releases

Betterment's 401(k) Business Partners with Benefits Platform Lumity


Voya Enhances Retirement Plan Participant Website Experience

Voya Financial

Webcasts and Conferences
(Retirement Plans or Exec Comp)

Employee Benefits Briefing

June 15, 2021 WEBCAST

Nixon Peabody LLP

Retirement - New Angles and Variations on a Theme

September 1, 2021 WEBCAST

Conference of Consulting Actuaries

Last Issue's Most Popular Items

DOL Begins Its Cybersecurity Audit Initiative, and It's a Doozy

Morgan Lewis

Should My Money Stay or Go? Employer 401(k) vs. IRA Rollover


DOL Regulatory Agenda, Spring 2021, Including Employee Benefit Items

U.S. Department of Labor [DOL]

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

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