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Retirement Plans Newsletter

August 26, 2021

5 New Job Opportunities


[Guidance Overview]

IRS Issue Snapshot: Standard Terminations -- Underfunded Single-Employer Defined Benefit Plans

"Issue Indicators or Audit Tips: [1] Form 5310 Determination Letter applications: ... If the plan is underfunded, determine how the benefit liabilities under the plan will be satisfied. A majority owner may agree to forego receipt of all or part of his or her distribution.... Determine if the plan has an unpaid minimum required contribution for any plan year that is subject to an IRC Section 4971(a) excise tax.... [2] Examinations: ... Verify that the trust balance sheet accurately reflects the fair market value of all assets and liabilities.... If there is a funding deficiency, determine if the IRC Section 4971(a) tax has been paid.... Verify that all assets have been distributed from the plan's trust as soon as administratively feasible after the stated date of plan termination."  MORE >>

Internal Revenue Service [IRS]

Exceptional Usefulness and Quality icon GAO Report: 401(k) Retirement Plans: Many Participants Do Not Understand Fee Information, But DOL Could Take Additional Steps to Help Them

"DOL could take additional steps to help 401(k) plan participants improve their understanding and use of fee information, based on GAO survey responses and analysis.... [D]isclosures are not required to include certain information, such as fee benchmarks and ticker information ... that could be helpful for participants.... This report [1] assesses the extent to which 401(k) plan participants can understand and use fee information in disclosures; [2] describes disclosure practices used by selected countries to help retirement plan participants; and [3] examines any additional steps that DOL could take to advance participant understanding and use of fee information." [GAO-21-357, pub. Jul. 27, 2021, released Aug. 26, 2021]  MORE >>

U.S. Government Accountability Office [GAO]

Second Circuit Sends NYU Back to the Drawing Board

"The court also faulted the district court's rationale that prudent fiduciaries might chose retail over institutional shares because they offer greater liquidity. This argument, the Second Circuit found, goes to the merits, impermissibly requires plaintiffs to rule out every possible innocent explanation and runs counter the principle that the complaint must be construed in favor of the plaintiffs. The appellate court also cautioned against using as benchmarks other decisions about prudent cost ranges." [Sacerdote v. New York Univ., No. 18-2707 (2d Cir. Aug. 16, 2021)]  MORE >>

Kantor & Kantor

Most Retirees Wait Until RMDs to Tap Retirement Accounts

"[M]ost people aren't tapping their retirement accounts before their required withdrawals, and even then, they're only withdrawing the minimum. About 80% of the retirees studied didn't withdraw money from accounts before their required minimum distributions, and about 84% of those who reached RMD age took only the minimum amounts."  MORE >>

401(k) Specialist

Retirement Plan Sponsors Have Ultimate Responsibility for Operational Compliance

"Indemnification clauses in service provider contracts, PEPs and 3(16) administrators can reduce plan sponsors' fiduciary burden, but none offer complete protection[.]"  MORE >>

PLANSPONSOR; free registration may be required

Taco Bell Faces ERISA Suit Alleging Worker Misclassification

"The complaint asks the court to require Taco Bell/Yum to pay pension benefits with interest as well as to award compensatory damages for Alders' personal expenditures and disgorge gains from alleged payroll tax and workers' compensation fraud." [Alders v. YUM! Brands, Inc., No. 21-1191 (C.D. Cal. complaint filed Jul. 9, 2021)]  MORE >>

Hall Benefits Law

Executive Compensation and Nonqualified Plans

A Reminder of What IRS Examiners Will Look for Regarding NQDC Plans

"An updated audit technique guide discusses the doctrines of constructive receipt and economic benefit, as well as IRC Section 409A, to explain when NQDC deferrals are included in employees' income."  MORE >>

PLANSPONSOR; free registration may be required

Employee Benefits Jobs

View job as 401(k) Consultant/Account Manager
for TPS Group 401(k) Consultant/Account Manager

TPS Group


View job as 401(k) Consultant/Account Manager
for TPS Group

View job as Experienced Plan Consultant
for Randall & Hurley Inc Experienced Plan Consultant

Randall & Hurley Inc

Remote / Liberty Lake WA / Helena MT

View job as Experienced Pension Actuary
for Randall & Hurley Inc Experienced Pension Actuary

Randall & Hurley Inc

Remote / Liberty Lake WA

View job as Retirement Plan Consultant
for Definiti Retirement Plan Consultant


Remote / The Woodlands TX / AR / CA / FL / PA / WI

View job as Health Insurance Specialist
for Centers for Medicare & Medicaid Services [CMS] Health Insurance Specialist

Centers for Medicare & Medicaid Services [CMS]

Remote / Woodlawn MD

Selected New Discussions

Cash Balance Plan Wants to Change Rule for Crediting Interest

"A plan wants to amend its rule for crediting interest to folks taking a lump sum (before: pro rata credit up through payment date, after: no such partial year credit). Is that deemed a cutback even if done only prospectively on future distributions?"

BenefitsLink Message Boards

CARES Act Distributions Still Permitted?

"Can participants still take CARES Act distributions? I thought they expired in June 2021."

BenefitsLink Message Boards

One-Participant 401(k)/Cash Balance Combo

"I have a one-participant 401(k) plan that's looking to put in a Cash Balance Plan as well. If the owner makes $165k, the maximum profit sharing contribution would be 6%, correct? So they could do $19,500 in 401(k) + 6% of comp + $108k into Cash Balance (he's 42-years old)? Is there any way to get the contribution to the PS to be more than 6%?"

BenefitsLink Message Boards

Press Releases

Israel Goldowitz Recognized by Best Lawyers® as Washington, D.C. 2022 'Lawyer of the Year' in Employee Benefits (ERISA)

Wagner Law Group P.C.

Healthcare Bluebook Launches Prescription Drug Quality and Cost Navigation

Healthcare Bluebook

Last Issue's Most Popular Items

Best Practices for ERISA Fiduciary Responsibilities and Cybersecurity for Retirement Plans (PDF)

Mintz, via Thomson Reuters Practical Law

Retirement Plan Correction Solution Meltdown: Correcting Automatic Enrollment Failures

Ferenczy Benefits Law Center

IRS Expands and Updates Qualified Plans Correction Guidance

McDermott Will & Emery

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

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