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Retirement Plans Newsletter

March 2, 2022


[Official Guidance]

Text of IRS Publication 575: Pension and Annuity Income (For Use in Preparing 2021 Returns) (PDF)

51 pages; Feb. 28, 2022. "What's New: [1] Form 8915-F replaces Form 8915-E.... Form 8915-F is a forever form. Beginning in 2021, additional alphabetical Forms 8915 will not be issued.... [2] Certain taxpayers affected by a federally declared disaster that occurs after December 20, 2019, may be eligible for a mandatory 60-day extension for certain tax deadlines such as filing or paying income, excise, and employment taxes; and making contributions to a traditional IRA or Roth IRA."  MORE >>

Internal Revenue Service [IRS]

[Guidance Overview]

IRS Revamps Minimum Required Distribution Rules

"Despite changing the required beginning date age to 72, for defined benefit plans, the proposed regulations do not make changes to when actuarial increases must apply (that continues to be at age 70½) ... The new 10-year payment rule to beneficiaries will add more complexity to the minimum required distribution process for plans[.]"  MORE >>

Groom Law Group

The Impact of New IRS Proposed Regs on RMDs

"[T]he IRS's recent Proposed Regulations provide important insight and clarity on several aspects of the SECURE Act, of particular relevance to certain Non-Eligible Designated Beneficiaries and those with trusts."  MORE >>

Nerd's Eye View

Preparing Your Employee Benefit Plan Audit, Part 1: Census Reconciliation

"[T]he census should be created once the W-2s are completed to make sure any year-end adjustment or corrections have been captured in your payroll report. Another great approach is to add compensation-type fields to the census that align with your plan document provisions for the definition of compensation."  MORE >>


When the Retirement Clock Gets Wound Forward

"Many defined benefit plans allow or encourage early retirement by granting participants access to benefits prior to Social Security full retirement age.... Sponsors evaluating their defined contribution glide paths should account for the wealth and early retirement incentives provided by a defined benefit plan."  MORE >>

T. Rowe Price

Judge Nixes Citgo Bid to Throw Out Pension Lawsuit

"The plaintiffs ... contended that the use of a 1971 mortality table resulted in 'illegally reduced pension benefits' ... The alleged shortchanging affects people who retired before Jan. 1, 2018, the complaint said." [Urlaub v. Citgo Petroleum Corp., No. 21-4133 (N.D. Ill. Feb. 22, 2022)]  MORE >>

Pensions & Investments

401(k) Fiduciary Takeaways from a Jerry Schlichter Interview

"[A recent interview with attorney Jerry Schlichter] includes great insights about the drivers of 401(k) fiduciary liability.... [1] Apply a prudent expert standard when selecting 401(k) investments ... [2] SDBAs are a risky bet ... [3] Active funds can be tough to justify ... [4] 401(k) providers are looking for new revenue streams ... [5] Small 401(k)s aren't sued, but all can learn from lawsuits ... [6] ESG investments are fine, private equity not so much ... [7] The DOL needs to do more."  MORE >>

Employee Fiduciary

Push for U.S. Retirement Savings Plan Amplified by Court Move

"The U.S. Supreme Court declined to review a ruling from the U.S. Court of Appeals for the Ninth Circuit that found federal law doesn't preempt California's automatic-individual retirement account program. By denying the request for review ... the court green-lit a bifurcated U.S. retirement system whereby state-backed auto-IRAs can coexist alongside workplace plans regulated by [ERISA]." [Howard Jarvis Taxpayers Association v. California Secure Choice Ret. Savings Program, No. 20-15591 (9th Cir. May 6, 2021; cert. denied Feb. 28, 2022)]  MORE >>

Bloomberg Law

SFA Big Plan Bailout

"[On April 1] the PBGC Special Financial Assistance program for troubled multiemployer plans will open up to plans with over 350,000 participants. According to 5500 date there are three of those and here is an estimate of how much each could cost taxpayers."  MORE >>


FAS87 ASC715 Discount Rates and Moody's Rates, February 28, 2022

An unofficial monthly report of the Moody's Daily Long-term Corporate Bond Yield Averages and Moody's Daily Treasury Yield Averages (used as benchmarks by some corporate pension plans).  MORE >>

BenefitsLink Message Boards

Selected New Discussions

Adding a QACA Feature -- Does Automatic Deferral Percentage Apply to Current Participants Who've Affirmatively Declined Deferrals?

"Employer currently offers a 401(k) plan, no match. Vendor has recommended QACA for the 1/1/2023 plan year. When setting up the QACA, I know it's not possible to provide that the automatic deferral percentage does not apply to existing participants. If a participant is currently deferring 0% and there is a affirmative election showing they declined, does this mean the 3% QACA does not apply to this participant? The employer has about 40 employees currently not deferring, I'm trying to figure out whether the addition of the QACA means this group is swept up in the auto enrollment unless they make an affirmative election not to participate."

BenefitsLink Message Boards

Allocating In-Kind Distributions Among HCEs

"3 person plan, H/W owners and one NHCE. Owners retiring and business and plan closing. Client doesn't want to liquidate investments to transfer to IRA so are planning on doing in-kind rollover. NHCE is taking a rollover of cash to IRA. H/W owners only doing in-kind withdrawal. Does it have to be done as a percentage of each asset for each person? So, do H/W both have to get their percentage of each investment, or can they calculate the amount needed and move specific assets to one person? I'm inclined to say it needs to be a proportion of each investment, but then again, what does it matter as long as the correct amount is distributed to each because it's not the plan's concern what they invest in their IRA?"

BenefitsLink Message Boards

Top Heavy and Safe Harbor

"We have a plan that has a Safe Harbor NEC contribution. Prior to 1/1/2020, the pretax eligibility was 60 days, SHNEC 1 YOS. With those provisions, they lost their top heavy exemption. (of course they are top heavy) 1/1/2020, they change the eligibility for both pretax and SHNEC to 1 YOS. So we thought all would be good. However, they rehired a participant at the time of previous employment met the pretax eligibility. Upon rehire, they are now eligible for pretax, but still have not completed a YOS for the SH contribution. How does this impact their top heavy exemption? Does it still apply or since they have a participant not SH eligible does it not apply? Would they need to give her a TH contribution? If so since the plan excludes comp prior to eligibility, would they have to calculate the 3% on gross comp for those that became newly eligible in 2021?"

BenefitsLink Message Boards

Press Releases

Quantum Health Launches New Preferred Partners Program to Give Consumers a Better Healthcare Experience and Deliver Better Results for Employers

Quantum Health

Transamerica Bolsters Pooled Retirement Plan Offerings with the Acquisition of TAG Resources, LLC


PGIM Hires Michael Miller to Lead New DC Solutions Business


Webcasts and Conferences
(Retirement Plans / Executive Compensation)

A Reinvented Section 162(m): No Limits on the $1,000,000 Limit

March 30, 2022 WEBCAST

Worldwide Employee Benefits Network [WEB] - New York Chapter

Last Issue's Most Popular Items

Proposed RMD Regs: Initial Highlights


Benefit Plan Deadlines Extended (Again) Due to COVID-19


Issue Brief: Raising the Social Security Retirement Age (PDF)

American Academy of Actuaries

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

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