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Retirement Plans Newsletter

August 11, 2021

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[Guidance Overview]

IRS Issue Snapshot: 403(b) Plan – the Universal Availability Requirement

"A common error occurs when employees, working less than full-time, are automatically excluded from making elective deferrals under the 403(b) plan.... Issue Indicator: A 403(b) plan using the statutory exclusions under IRC Section 403(b)(12)(A)(ii). Audit Tips: [1] Review plan language for excluded employees. [2] Verify the plan provides an effective opportunity to participate for all non-excludible employees. [3] Review whether the plan may be eligible for transition relief under Notice 2018‑95."  MORE >>

Internal Revenue Service [IRS]

[Guidance Overview]

New PBGC Rule Provides Guidance – and More Questions – on Special Financial Assistance Program for Underfunded Multiemployer Pension Plans

"[T]he classification of Special Financial Assistance funds as plan assets and the utilization of mass withdrawal interest assumptions will likely offset, to some extent, the impact of each change on actual withdrawal liability assessment amounts. Even so, there is no guarantee that this will occur in all cases; and the rule introduces further uncertainty for employers regarding their potential withdrawal liability[.]"  MORE >>

Michael Best

Alert (High Risk Issue) icon 6th Circuit Rejects Bankruptcy Shield for Some 401(k) Contributions

"[A] three-judge panel of the U.S. 6th Circuit Court of Appeals upheld a Michigan federal district court's finding that unless individual debtors were already putting money toward retirement savings accounts in the six months before the bankruptcy, they cannot begin doing so after the bankruptcy is filed, as those funds must be set aside for creditors." [Penfound v. Ruskin, No. 19-2200 (6th Cir. Aug. 10, 2021)]  MORE >>


Embezzler’s 401(k) Tapped for Restitution

"A magistrate judge rejected Frank's core contention that ERISA bars the government's seizure of his 401(k) account, noting that the key question was 'whether the [Mandatory Victims Restitution Act's] directive mandating victim restitution trumps ERISA's robust protection of retirement funds'--concluding that it does. He also noted that that reading was consistent with the view of every court of appeals and district court to have considered the issue.... The district court accepted nearly all of the magistrate judge's findings ... The appellate court concurred[.]" [United States v. Frank, No. 20-6706 (4th Cir. Aug. 10, 21)]  MORE >>

American Retirement Association [ARA]

District Court Partially Dismisses ERISA 401(k) Fee and Performance Claims for Lack of Standing

"[T]he court rejected the notion that plaintiffs suing derivatively on behalf of a plan under ERISA Section 502(a)(2) automatically have standing. The court explained that a plaintiff must assert both a cause of action under ERISA and a constitutionally cognizable injury-in-fact. Since plaintiffs could not have suffered an injury from the alleged mismanagement of funds in which they did not invest, the court concluded that plaintiffs could not demonstrate the requisite injury." [In re Omnicom ERISA Litigation, No. 20-4141 (S.D.N.Y. Aug. 2, 2021)]  MORE >>


Managing Inflation Within Target Date Strategies

"[An] important strategic objective of the glidepath should be to mitigate the potentially negative impact rising inflation has on a portfolio.... [T]wo questions need to be answered in order to build an effective inflation-sensitive allocation: [1] When is it most appropriate to include an inflation-hedging allocation, and [2] what is the appropriate mix of asset classes to hedge inflation?"  MORE >>

State Street Global Advisors


Record Keeper Consolidation: Advisors, Claim Your Role

"[T]he demise of any record keeper, at any time, may prompt the plans sponsor to shop advisor services as well.... [Retirement plan advisers (RPAs)] need to claim their proper role as the retirement coach, the plan architect, the Chief Retirement Officer.... The RPA should stand as the ultimate resource and trusted advisor for the plan participants, not the record keeper, not a website. The record keeper is merely (but importantly) the proper tool for that particular client and their participants."  MORE >>


Employee Benefits Jobs

View job as Client Services Administrator
for HUB International New England, LLC Client Services Administrator

HUB International New England, LLC

Foxboro MA

Press Releases

Principal® Completes Integration of Wells Fargo Institutional Retirement Business

Principal Financial Group

HealthComp and Grand Rounds Health Partner to Expand Employer Access to the Industry’s Leading Healthcare Navigation Offering


Vitality Adds Apple Fitness+ to Gateway Flex, the First Pay-as-you-go Benefits Marketplace


Webcasts and Conferences
(Retirement Plans / Executive Compensation)

understanding the Role and Responsibilities of a Plan Fiduciary

August 24, 2021 WEBCAST

John Hancock

Cybersecurity Compliance + Indexing Myths - Virtual Double Header

August 24, 2021 WEBCAST

Pension Education Council of Atlanta [PECA]

ERISA Successor and Affiliate Liability in Asset Sales and Distressed Benefit Plans

September 22, 2021 WEBCAST


2021 BMC

September 25, 2021 in AZ

NIPA [National Institute of Pension Administrators]

HSAs - Beyond the Fundamentals

October 21, 2021 WEBCAST


Last Issue's Most Popular Items

The Executor's Guide to Retirement Plan Distributions: Income Taxes


Cybersecurity and Related Legal Risks Come Home to ERISA Plans (PDF)

Stradley Ronon, via Society of Financial Service Professionals

Best Interest Standard of Care for Advisors, Part 61 -- Interim Compliance with PTE 2020-02: The Impartial Conduct Standards

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

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