[Official Guidance]

PBGC to Begin Accepting Applications for Special Financial Assistance Plans Approaching Insolvency

"On December 27, 2021, PBGC will begin accepting applications for any plan in priority group 2 that is expected to be insolvent within one year of the date the plan's application is filed. New SFA questions and answers provide information about the application date for priority group 2 plans."  MORE >>

Pension Benefit Guaranty Corporation [PBGC]

[Guidance Overview]

2021 Is the Last Opportunity to Override 5-Year Rule and Stretch Distributions for 401(k)s Inherited in 2019

"If you inherited a qualified plan account in 2019, the terms of the plan might default to the 5-year rule. In such cases, you are generally required to take action by December 31, 2020, to be eligible to take distributions over your life expectancy. However, the deadline was postponed to December 31, 2021."  MORE >>

Appleby Retirement Dictionary

District Court Enforces DOL Investigative Subpoena Against Plan Service Provider Concerning Alleged Cybersecurity Breaches

"Even after the DOL modified the requests to address some of Alight's concerns, Alight still asserted that the subpoena would require it to pull, review, and produce potentially tens of thousands of documents related to its ERISA business. Weighing the relevance of the requests against the burden on Alight, however, the Court found the balance favored the DOL." [Walsh v. Alight Solutions, LLC, No. 20-2138 (N.D. Ill. Oct. 28, 2021)]  MORE >>

Robinson & Cole LLP

IRA 'Checkbook Control' in the Crosshairs?

"[T]he U.S. Tax Court ... [held] that an individual who purchased American Eagle gold coins using her IRA received a de facto distribution of those coins when she took physical possession and stored them at home.... [T]he taxpayer did not buy the coins directly through her IRA, but using a separate bank account in the name of a 'checkbook LLC' created by and held by her IRA. In doing so, the court found that she had 'unfettered command' over the IRA assets, with no 'independent oversight' by the custodian, resulting in a deemed distribution of those assets." [McNulty v. Comm'r, No. 1377-19 (T.C. Memo Nov. 18, 2021)]  MORE >>

Groom Law Group

Which Plan Documents Must You Surrender If You Are Sued?

"[T]he judge noted that claimants do not have to request a document using its precise name if the request is sufficiently clear to give the plan administrator notice of the information the claimant seeks.... [But] the court found that even if the plaintiff had specifically requested the 1990 plan document, the plan would not have been obligated to produce it ... because the plan administrator used the 2017 plan document to administer the plan during the period relevant to this case, not the original 1990 one." [Theriot v. Building Trades United Pension Trust Fund, No. 20-30126 (5th Cir. Mar. 12, 2021)]  MORE >>

ORBA

Deadline Approaching for Hardship Distribution Amendments

"If an employer reinstated employer contributions during the 2021 plan year or otherwise modified the groups of participants eligible for contributions and/or the formula for determining those contributions, the plan may need to be amended by December 31, 2021, to reflect those changes. While certain employee benefit plan-related deadlines were extended in connection with the pandemic, the rule that requires discretionary amendments to be adopted by the last day of the plan year in which the amendments are to be effective has not been modified."  MORE >>

Bond, Schoeneck & King

MarylandSaves State-Run Retirement Program to Launch Next Summer

"Savers in the program will automatically have their assets converted into a monthly paycheck at retirement age unless they choose otherwise.... Employee participation is completely voluntary."  MORE >>

PLANSPONSOR; free registration may be required

The 2022 Retirement Landscape Takes Shape

"The U.S. faces a $4 trillion retirement savings gap heading in the new year, but both public and private solutions are coming online to help more people prepare adequately for life after work."  MORE >>

planadviser

Worker Participation in Employer-Sponsored Pensions: Data in Brief

"This report provides data on the percentage of U.S. workers who have access to and who participate in employer-sponsored pension plans.... Since the late 1980s and early 1990s, DC pension plans have been more common than DB pension plans.... Over 70% of all U.S. workers have access to employer-sponsored pensions, and 56% of U.S. workers participate in employer-sponsored pensions. Access and participation rates vary with various worker attributes." [R43439 updated Nov. 23, 2021]  MORE >>

Congressional Research Service [CRS]

How to Avoid the $10,000 Mistake Caused by Naming a Trust as the Beneficiary of a Roth IRA When Doing So Was Unwarranted

"In [a recent private letter ruling (PLR 202136004)] the IRS explained why they allowed the surviving spouse of a Roth IRA owner to roll over a distribution from an inherited Roth IRA when the surviving spouse was not the direct beneficiary of the Roth IRA.... The expenses, the time taken to apply for the PLR, and any angst experienced while waiting for the IRS's ruling, as well as the extra filing that the tax preparer will have to perform, could have been avoided if [the spouse] had been named as the beneficiary of the Roth IRA."  MORE >>

Appleby Retirement Dictionary

CRS Report: How Social Security Benefits Are Calculated

30 pages. "The computation process involves three main steps: [1] First, a summarized measure of lifetime Social Security-covered earnings is computed ... called the average indexed monthly earnings (AIME). [2] Second, a progressive benefit formula is applied to the AIME to compute the primary insurance amount (PIA).... [3] Third, an adjustment may be made based on the age at which a beneficiary chooses to begin receiving benefits." [R46658 updated Nov. 24, 2021]  MORE >>

Congressional Research Service [CRS]

CRS In Focus: Social Security -- Benefit Calculation Overview

"This In Focus provides an overview of the computation of Social Security benefits. The examples used throughout are for those of a hypothetical medium earner -- a worker who consistently earned at a medium level -- born in 1952 (the most recent year for which complete information on indexed earnings and program-specific factors are known). From 2015 through 2020, roughly 30% of workers retiring had career-average earnings at about the medium level." [IF11747, Nov. 24, 2021]  MORE >>

Congressional Research Service [CRS]

EBSA Restores Over $2.4 Billion to Employee Benefit Plans, Participants and Beneficiaries in FY 2021 (PDF)

"In FY 2021, EBSA closed 1,072 civil investigations with 741 of those cases (69%) resulting in monetary results for plans or other corrective action.... EBSA's enforcement program helped 16,024 terminated vested participants in defined benefit plans collect benefits of $1.548 billion owed to them.... In FY 2021, EBSA obtained 449 non-monetary corrections ... [including] removal of 6 fiduciaries, orders barring 34 individuals from acting as fiduciaries, court appointments of 16 independent fiduciaries, and 124 cases involving reforms of plan procedures, such as improved search procedures for missing participants."  MORE >>

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

House Version of 'Build Back Better' Act Includes Retirement Plan and Benefits Provisions

"Moving after-tax assets from eligible plans to a Roth IRA would be prohibited.... High-income individuals with large retirement balances could not contribute to an IRA.... Additional RMDs would be required for high-income individuals with large retirement balances.... Statute of limitations would increase to six years for IRA noncompliance.... Prohibited transaction provision would be added for certain IRA investments.... Four weeks of paid leave for all workers.... Fringe benefits for bicycle commuting."  MORE >>

Ascensus

[Guidance Overview]

2021 Year-End Tax Issues for Non-Qualified Plans (PDF)

"Payments due in 2021 and paid 'late' but prior to 2022 often are not 409A failures at all. Other same year issues can be corrected with minimal consequence. 2020 failures to defer or timely pay can be corrected with minimal consequence in 2021 as long as the participants were not 'insiders' ... 2019 failures to defer or timely pay (or 2020 failures involving insiders) can be corrected with reduced consequences in 2021."  MORE >>

Ivins, Phillips & Barker

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Switching to Top-Paid Group from Lookback Year for HCE Determination

"A calendar plan has 2 owner HCEs, one non-owner HCE and one non-HCE as participants. All but one owner HCE terminated in June 2021. Doing some testing for 2021. If I can switch to top-paid group, the testing will be OK. The question is, can the plan be amended now to make the non-owner HCE a non-HCE?"

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2022 Sandell Grant Program Now Accepting Submissions

Center for Retirement Research at Boston College

2022 Dissertation Fellowship Program Applications Now Open

Center for Retirement Research at Boston College

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Retirement Plan Legislation: Infrastructure Act, Build Back Better Act, and Proposed Retirement Improvement and Savings Enhancement Act

October Three Consulting

In Remembrance: Employee Benefits Attorney Jim Keightley (1942-2021)

Keightley & Ashner LLP

Should You Take an Extra Big RMD This Year?

Kiplinger