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Retirement Plans Newsletter

March 4, 2022

2 New Job Opportunities 2 New Job Opportunities


[Guidance Overview]

Upcoming Deadline icon How to Prepare Business Owners for the Approaching CalSavers Deadline

"If a business wants to comply with CalSavers, what does it need to do? ... How does a business prove it is exempt from CalSavers? ... How does a business count employees, for the 5 or more threshold? ... What are the consequences of noncompliance with CalSavers requirements? ... Does CalSavers apply to out-of-state employers? ... Does CalSavers apply to businesses located in California, with workers who perform services out of state? ... Can an employer be held liable over the costs, or outcome of CalSavers investments?"  MORE >>

E is for ERISA

ERISA Advisory Council Pulls Back the Curtain on Brokerage Windows

"Though the council considered several topics, its sole recommendation is for DOL to conduct additional fact-finding on 'brokerage window only' plans -- DC plans that offer one or more brokerage windows but no designated investment alternatives.... [T]hese findings may help alleviate concerns for plan fiduciaries currently offering -- or looking to offer -- a brokerage window by making the case for DOL to preserve the status quo."  MORE >>


ESG and Pensions: An International Perspective (PDF)

28 pages. "While there were some common themes, revealing a growing trend towards recognition of ESG factors in pensions generally, these international 'snapshots' also reveal that different countries are in very different places on their ESG and pensions journey."  MORE >>

Eversheds Sutherland

The Current State of U.S. Workplace Retirement Plan Coverage (PDF)

32 pages. "This paper describes a method for estimating current workplace retirement plan coverage rates by age, race and ethnicity, education, gender, employer size, and earnings levels across U.S. states using data from the Current Population Survey, IRS Statistics of Income, and Survey of Consumer Finances."  MORE >>

Pension Research Council, The Wharton School of The University of Pennsylvania

February 2022 Pension Finance Update

"Pensions saw mixed experience again in February, as higher interest rates and lower stock markets pushed pension assets and liabilities down last month. Both model plans ... were close to even on the month, with Plan A improving less than 1% while the more conservative Plan B held steady."  MORE >>

October Three Consulting

Getting Around the Stretch IRA Block: Another Plus for Roth Conversions

"To help their heirs dodge a big tax bill, many people are converting traditional IRAs to Roths.... The strategy isn't just generous; it may also be more tax efficient, especially if the conversions occur early in retirement.... Along with tax-free withdrawals, a Roth IRA has an added bonus for heirs: They can leave the funds in the account to grow tax-free for 10 years. Because of that, their inheritance could be even more substantial."  MORE >>


Understanding the Finances of Rural vs. Urban Americans

"Those living in rural areas were more likely to have their assets from businesses ... In contrast, urban individuals held more of their assets in their homes and retirement accounts as well as stocks and mutual funds. Rural Americans were more likely to own their home and a vehicle, while they were less likely to own a retirement account or stocks and mutual funds than were urban Americans."  MORE >>

Employee Benefit Research Institute [EBRI]

An Employer's Brief Overview of Annual Retirement Plan Compliance Requirements

"No matter what type of plan you have, or whether it's administered in-house or outsourced to a professional recordkeeper, consider conducting a proactive operational compliance review, or self-audit, to help your organization avoid added costs and liabilities in the future.... [C]reate a retirement plan compliance checklist. Include everything from documentation and benefit calculations to day-to-day administrative processes."  MORE >>

USI Consulting Group

Small 401(k) Plans Burdened by Disproportionate Plan Administration Fees

"On average, small-plan participants pay slightly more than double the fees of those who invest through the largest companies. The main issue is not fund expenses. Gone are the days when most small 401(k) plans held costly investments. Their current problems come instead from their administrative fees, which are 6 times higher than those paid by the largest plans."  MORE >>


Benefits in General

Correlated Mistakes in Retirement Saving and Health Insurance Choices

"One-third of employees overpay for health insurance each year by $1,700 and simultaneously make no voluntary retirement contributions. Over just a few years, these choices result in lost savings equal to 4% of the median net worth of families at retirement.... This finding suggests consumers could reallocate funds from health insurance to retirement saving without sacrificing consumption."  MORE >>

Pension Research Council, The Wharton School of The University of Pennsylvania

Executive Compensation and Nonqualified Plans

Planning Opportunities for Golden Parachute Payments in Light of Section 280G

"[T]here is a presumption under the Section 280G rules that certain payments (including equity grants) made in the 12-month period prior to a change in control are considered parachute payments under Section 280G. If a future transaction seems to be in the cards, companies may want to consider planning around the 12-month rule and taking other measures to reduce potential parachute payments in the hopes of avoiding a cleansing vote."  MORE >>

Holland & Hart LLP

Deferential Review Was Determinative in Severance Spat

"The Second Circuit's decision ultimately turned on a Plan term instructing the administrator to interpret the Plan in conformance with Internal Revenue Code Section 409A. Citing a regulation under 409A requiring that an employee be 'willing and able to continue performing services' in order to be involuntarily terminated, the Second Circuit concluded that the Plan administrator reasonably interpreted 'Layoff' to exclude a termination based on disability and affirmed the dismissal below." [Soto v. Disney Severance Pay Plan, No. 20-4081 (2d Cir. Feb. 16, 2022)]  MORE >>

Jackson Lewis P.C.

Employee Benefits Jobs

View job as Senior Compliance Analyst - Retirement Plans
for Newport Senior Compliance Analyst - Retirement Plans



View job as Compliance Specialist (Entry Level)
for Newport Compliance Specialist (Entry Level)



Selected New Discussions

Employee Terminated as W-2 and Rehired as 1099: 401-Chaos Ensues

"Combo plan, CB+DC. An HCE was employed in 2020 as a common-law employee (W-2 wages). Excluded from CB but included in the DC. I've learned that he terminated as an employee on 1/2/2021 and became a self-employed (1099) contractor for 2021. He had $0 in W-2 wages for 2021. But he made $26k in deferrals plus got a nonelective SH contribution on his behalf for 2021. How's he treated for purposes of coverage and non-discrimination testing? How is his deferral/SH to be corrected?"

BenefitsLink Message Boards

403(b) Universal Eligibility -- Is 'Regularly Scheduled for 20 Hours' Determined on an Annualized Basis?

"For Universal Eligibility, is regularly scheduled for 20 hours per week determined week by week, or is it an annualized test? In other words, if a 40 hour per week temp is hired for a one month engagement (less than 1,000 hours expectation) can they be excluded as being regularly scheduled for less than 20 hours per week, even though they will be 40 hours per week for one month?"

BenefitsLink Message Boards

Form 8955-SSA -- Still Being Filed by Small Plans?

"Many moons ago, we filed an 8955-SSA to show participants with balances in a retirement plan. These were typically un-locatable or non-responsive participants, and filing this form was THE alternative to a 100% withholding to the IRS. Does anyone file an 8955-SSA anymore? I only have small clients (fewer than 20 participants each), so this need does not arise often if ever. Also, is there a way to see what has been reported for a specific EIN (e.g., when taking over a plan from another TPA)?"

BenefitsLink Message Boards

Transitioning from Solo 401(k) to a Plan Covering Employees

"A small corporation wholly owned by a husband and wife has a bundled solo 401(k) plan. The plan uses a prototype document from a major financial company. The sponsor is about to hire its first employee and knows that the plan needs to change, which would require a new restated document and additional help with plan administration. The financial company says they only provide these services to clients with 20+ participants and that their minimum annual fee starts at $20,000. Yikes! Options?"

BenefitsLink Message Boards

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

Monday Morning for Markets

March 17, 2022 WEBCAST

Western Pension & Benefits Council

Getting It Right: Know Your Fiduciary Responsibilities, Day 2

March 24, 2022 WEBCAST

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

ERISA Litigation: What Have We Learned?

March 31, 2022 WEBCAST

McDermott Will & Emery LLP

Last Issue's Most Popular Items

IRS Issues New RMD Proposed Regs... and You Thought the Old Ones Were Confusing!

Ferenczy Benefits Law Center

IRS Issues New Pension Withholding Forms; Use Is Optional for 2022 (PDF)

Groom Law Group, via Taxes the Tax Magazine

401(k) Fee Litigation

Baker Botts L.L.P.

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

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