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Retirement Plans Newsletter

December 10, 2021

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[Guidance Overview]

The Not So SIMPLE Life: What to Do When You Get Too Big for a SIMPLE

"Savings Incentive Match Plans for Employees (SIMPLEs) are for small business owners with 100 or fewer eligible employees.... You are deemed to satisfy the 100-employee limitation in the two calendar years in which you first exceed 100 eligible employees.... Once the grace period is over, if you have more than 100 employees at the minimum earnings threshold, you must stop all employer and employee contributions to the SIMPLE."  MORE >>

Ferenczy Benefits Law Center

The Supreme Court Considers Defined Contribution Plans

"The primary issue before the court was specific: whether to overturn a 7th Circuit judgment that defined contribution plans that offer both acceptable and unacceptable investment offerings fulfill their fiduciary duties, because employees may freely choose the sound options while ignoring the duds.... That question may have been answered.... Most of the discussion, however, ranged elsewhere, and messily at that." [Hughes v. Northwestern Univ., No. 18-2569 (7th Cir. Mar. 25, 2020; oral arg. transcript Dec. 6, 2021)]  MORE >>

John Rekenthaler, via Morningstar

Supreme Court Considers the Right Balance in ERISA Excessive Fees Case

"The justices search for the proper balance between preventing plan misconduct and imposing too many burdens on plan fiduciaries.... Justices Sotomayor and Kagan propose a middle ground.... The Court is wary of excessive litigation.... The Court seems unlikely to dispose of the case on standing or the 'large menu' defense." [Hughes v. Northwestern Univ., No. 18-2569 (7th Cir. Mar. 25, 2020; oral arg. transcript Dec. 6, 2021)]  MORE >>

Baker Botts L.L.P.

Exceptional Usefulness and Quality icon IRS Updates Guidance for COVID-19-Related Bona Fide Rehires

"According to the IRS, a rehire due to COVID-19-related 'unforeseen circumstances' generally would not disqualify an individual's prior retirement from being considered a bona fide retirement under a defined benefit plan. However, the IRS cautioned that such a rehire cannot include any prearrangement to rehire the individual prior to the individual's retirement. Such a prearrangement still yields a retirement that is not 'bona fide.' "  MORE >>

McDermott Will & Emery

What Every Plan Sponsor Should Know About Collective Investment Trusts

"CITs are leveraging the idea of providing the plan participants an advantage for pooling their retirement assets. It allows the participants to get the same investment strategy at a lower cost, which could often be lower than the lowest available share class in a mutual fund counterpart."  MORE >>


Benefits in General

New ERISA Decisions Diverge on Federal Civil Procedure

"Over the past several months, there has been a flurry of federal appellate opinions questioning civil procedure norms in [ERISA] benefits litigation. A pair of brand new appellate decisions have also focused on the same issue, although not necessarily in a direction that harmonizes ERISA civil procedure with the Federal Rules of Civil Procedure." [Avenoso v. Reliance Standard Life Ins. Co., No. 21-1772 (8th Cir. Nov. 30, 2021); Noga v. Fulton Financial Corp. Employee Benefit Plan, No. 19-3855 (3d Cir. Nov. 26, 2021)]  MORE >>

DeBofsky Sherman Casciari Reynolds P.C.

Executive Compensation and Nonqualified Plans

Year-End Checklist for Stock Options, Restricted Stock, and ESPPs

"[1] Should you plan for tax-law changes by Congress? ... [2] Income-shifting and multi-year planning ... [3] Withholding may not cover taxes owed ... [4] Incentive stock options ... [5] Year-end planning for pre-IPO and IPO companies ... [6] Confirm dates for exercise and vesting: 2021 or 2022?"  MORE >>

Bruce Brumberg, via Forbes; subscription may be required

How to Defer and Diversify RSUs

Video with summary outline. "Evolution of stock compensation plan design ... Loss over control of the timing of taxation ... Regaining control over the timing of taxation ... Advantage of tax deferral upon vesting of RSUs ... Diversification of RSUs deferred ... Considerations and risk of deferring RSUs."  MORE >>

Executive Benefit Solutions

Employee Benefits Jobs

View job as Defined Contribution Account Manager (Part Time)
for Nova 401(k) Associates Defined Contribution Account Manager (Part Time)

Nova 401(k) Associates

Remote / Houston TX / Dallas TX / Scottsdale AZ

Selected New Discussions

Correction per Rev. Proc. 2021-30 That Affects Only the HCEs? [Answer or Comments Still Sought]

"Has anyone used self-correction under the new Rev. Proc. 2021-30 for a correction by plan amendment that only affects HCEs?"

BenefitsLink Message Boards

Claim for Pension Benefit from Now-Terminated Plan of a Company We Acquired

"An individual claims he's due a pension benefit from Company A, which was acquired by Company B. Later we acquired Company B. The plan was terminated before we purchased Company B. We don't have any pension plan records. What obligations do we have to the individual?"

BenefitsLink Message Boards

Successor Plan Problem When Starting New Plan Because Revenues Have Picked Up?

"Have a client who had to wind down his business, terminated the firm's PS/401(k) plan (5 people, if that matters) in 2020. Last distribution was made 2/19/2021 and a final form has been filed. This was not related to COVID. Business has started to come around. They would like to adopt a Profit Sharing Plan for 2021. Would this violate the Successor Plan rule?"

BenefitsLink Message Boards

Press Releases

Definiti Appoints New Chief Financial Officer

Definiti LLC

Last Issue's Most Popular Items

The SECURE Act, RMDs, and Beneficiaries -- Another Wrinkle

Natalie Choate, via Morningstar

What Happens to the Retirement Plan During a Merger or Acquisition?


IRS Reminder: Most Retirees Must Take Required Minimum Distributions by December 31

Internal Revenue Service [IRS]

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

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