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Retirement Plans Newsletter

March 14, 2022

7 New Job Opportunities 7 New Job Opportunities


[Official Guidance]

Text of PBGC Interest Rate Assumptions for Valuing Benefits in Single-Employer Plans, Second Quarter 2022

"The second quarter 2022 interest assumptions will be 2.40 percent for the first 20 years following the valuation date and 2.12 percent thereafter. In comparison with the interest assumptions in effect for the first quarter of 2022, these interest assumptions represent no change in the select period (the period during which the select rate (the initial rate) applies), an increase of 0.03 percent in the select rate, and an increase of 0.09 percent in the ultimate rate (the final rate)."  MORE >>

Pension Benefit Guaranty Corporation [PBGC]

[Guidance Overview]

Alert (High Risk Issue) icon DOL Threatens to Investigate Fiduciaries Over Cryptocurrency in 401(k)s

"[Compliance Assistance Release 2022-01] implies that [DOL] will presume that fiduciaries making cryptocurrencies available have acted imprudently.... DOL seems to indicate that fiduciaries may have an obligation to prudently select and monitor cryptocurrencies offered through a bona fide brokerage window. This is important as the implications of DOL's position may extend beyond cryptocurrencies."  MORE >>

Groom Law Group

[Guidance Overview]

Bitcoin in Your 401(k)? DOL Cautions Fiduciaries About Cryptocurrency Risks

"Given the agency pronouncements and the executive order, it is very difficult to justify cryptocurrency as a prudent investment at this time.... The SEC has approved a cryptocurrency futures fund, but it has been asked to approve direct ETF cryptocurrency funds, and has not yet done so. If the SEC does approve some ETF cryptocurrency funds, they will have professional management and pooled investments, and there will be a formal trading platform. The DOL could also change its position on self-directed brokerage accounts. If either of these changes happens, or agencies begin to regulate the market, the legal and risk scenarios may change."  MORE >>

Cohen & Buckmann, P.C.

[Guidance Overview]

DOL Releases Cautionary Guidance on Crypto in Retirement Plans

"Any fiduciaries that make these investments available in their plans should expect questioning surrounding the prudent evaluation process that was deployed (hint -- it'll be difficult, if not impossible, to present a defensible case, especially in light of the latest guidance)."  MORE >>

Schneider Downs

[Guidance Overview]

Best Interest Standard of Care for Advisors, Part 84: Compliance with PTE 2020-02 -- Monitoring

"[F]rom the DOL's perspective, monitoring is not generally required. But, if a complex or risky investment is recommended to a retirement investor, and the retirement investor lacks the ability to monitor the investment without help, 'the advice fiduciary should clearly explain the need for monitoring to the investor when making the recommendation.' However, the investment professional and financial institution do not need to provide those monitoring services."  MORE >>

Tips for 401(k) Plan Sponsors on Preparing for Your Annual Audit -- from an Auditor's Perspective

"[1] Designate someone at the Plan Sponsor as being in-charge and responsible for the audit.... [2] Provide minutes from meetings plan oversight committee.... [3] Keep a summary list of key plan amendments and changes during the year.... [4] Provide your audit firm with a list of key subsequent events occurring after the end of the plan year.... [5] Were there any plan testing failures? ... [6] Has there been any correspondence from the [DOL] or IRS? ... [7] Have there been changes in key personnel working with the plan? ... [8] Were there any changes in the TPA, custodian, recordkeeper, or payroll provider during the year under audit?"  MORE >>

Bradley Bartells, CPA, via LinkedIn

One Actuarial Equivalence Lawsuit Bites the Dust, Another Lives to Fight Another Day

"[T]he court's reasoning in dismissing [the claims against Partners Healthcare] is unique as compared to courts that have dismissed other actuarial equivalence claims on different grounds ... Unlike the Partners ruling, the CITGO court stated that 'it cannot possibly be the case that ERISA's actuarial equivalence requirements allow the use of unreasonable mortality assumptions.' " [Belknap v. Partners Healthcare System, Inc., No. 19-11437 (D. Mass. Mar. 4, 2022); Urlaub v. Citgo Petroleum Corp., No. 21-4133 (N.D. Ill. Feb. 22, 2022)]  MORE >>

Groom Law Group

Sixth Circuit Upholds Pension Fund's Suspension of Benefits Due to Participant's Post-Retirement Work

"The court then found that the Pension Fund reasonably interpreted its terms to determine that Helgemo's post-retirement work fell within the same industry or the same trade or craft. The pension plan does not define 'industry,' but applying the [DOL's] definition of industry to mean 'the business activities of the types engaged in by any employers maintaining the plan,' it was reasonable for the Fund to find that both employers engaged in Great Lakes marine work or work in the maritime industry." [Helgemo v. Operating Engineers Loc. 324 Pension Fund, No. 21-2951 (6th Cir. Mar. 7, 2022; unpub.)]  MORE >>

Roberts Disability Law

2020 Asset Allocations in Fortune 1000 Pension Plans

"On average, frozen pension plans held above 56% of their assets in debt and cash investments versus less than 50% for sponsors of open plans.... [A]verage allocations to public equities declined by roughly 14 percentage points since 2009, while allocations to debt increased by almost 16%.... While larger plans allocated 9.5% to alternative investments, smaller plans only hold around 3.4% of their portfolios in these investment vehicles."  MORE >>

Willis Towers Watson

Market Volatility in Retirement: What If You Haven't Prepared?

"A four-year cushion should be enough to help you manage your risk in most bear markets.... [F]rom the 1960s through 2021, the average peak-to-peak recovery time for a diversified index of stocks in bear markets was about three and a half years.... Consider the following steps to minimize the impact of a down market on your retirement portfolio: [1] Know how much you can spend ... [2] Look for ways to reduce your spending ... [3] Look for other cash solutions ... [4] If you must tap your savings, be strategic."  MORE >>

Charles Schwab

Butch Lewis Act Working to Protect and Restore Pension Benefits

"The Road Carriers Local 707 Pension Plan in Hempstead, N.Y., ... which began cutting benefits after becoming insolvent in 2017, notified its members on February 24 that it had received the grant ... [PBGC] paid the plan more than $812 million, including interest.... More than 90 percent of the plan's retirees have been receiving reduced benefits since the plan became insolvent."  MORE >>

Pension Rights Center

Benefits in General

[Guidance Overview]

New Audit Rules for Employee Benefits Plans Take Effect

"[T]he plan sponsor must acknowledge responsibility to the auditor in writing for the administration of the plan ... [P]lan sponsors may need to spend more time preparing for and ensuring that they fully understand their responsibilities before an audit. Completion of Form 5500 also must occur earlier than in past years so that the auditor has adequate time to review it before the audit.... [T]he audit report is likely to be lengthier than in past years."  MORE >>

Hall Benefits Law

Employee Benefits Jobs

View job as ERISA/Employee Benefits Attorney
for Ulmer & Berne LLP ERISA/Employee Benefits Attorney

Ulmer & Berne LLP

Cleveland OH

View job as ERISA/Employee Benefits Attorney
for Ulmer & Berne LLP

View job as Benefit Consultant - Welfare and Pension Plans
for Savasta and Company, Inc. Benefit Consultant - Welfare and Pension Plans

Savasta and Company, Inc.

New York NY

View job as Benefit Consultant - Welfare and Pension Plans
for Savasta and Company, Inc.

View job as DB/DC Administrator
for Primark Benefits DB/DC Administrator

Primark Benefits

Remote / San Mateo CA

View job as DB/DC Administrator
for Primark Benefits

View job as Actuary - GS 14
for Pension Benefit Guaranty Corporation [PBGC] Actuary - GS 14

Pension Benefit Guaranty Corporation [PBGC]

Remote / Washington DC

View job as Actuary - GS 14
for Pension Benefit Guaranty Corporation [PBGC]

View job as Actuary - GS 15
for Pension Benefit Guaranty Corporation [PBGC] Actuary - GS 15

Pension Benefit Guaranty Corporation [PBGC]

Remote / Washington DC

View job as Actuary - GS 15
for Pension Benefit Guaranty Corporation [PBGC]

View job as Technical Advisor
for Centers for Medicare & Medicaid Services [CMS] Technical Advisor

Centers for Medicare & Medicaid Services [CMS]

Remote / Woodlawn MD

View job as Technical Advisor
for Centers for Medicare & Medicaid Services [CMS]

View job as Plan Administrator/ Consulting
for Associated Pension Consultants Plan Administrator/ Consulting

Associated Pension Consultants

Chico CA / Sacramento CA

View job as Plan Administrator/ Consulting
for Associated Pension Consultants

Selected New Discussions

Does the IRS Ever Challenge a Shareholder-Employee's Compensation for Being Too High?

"Mary is the 100% shareholder of an S corporation. Mary intends to sell her client list to a buyer. The deal obligates Mary to remain available and devote reasonable time and effort to help the buyer keep Mary's former clients. Each year, the corporation would receive enough money to pay Mary wages, perhaps up to the IRC Section 401(a)(17) limit, and pay pension funding and retirement contributions as generous as the actuary and third-party administrator design and advise as proper. Could the IRS argue that $305,000 is too big a paycheck for someone whose only work is a few calls to calm down a jittery former client and persuade them to stay with the buyer?"

BenefitsLink Message Boards

Named Beneficiary of Inherited IRA Refuses to Take Payment

"Seems an elder widower died, naming his son as 50% beneficiary of his IRA. Son and father were not talking, so son said he'd take nothing from his father, including the IRA. So the IRA is sitting at the custodian, who has notified son but son has ignored them and said he'd burn any check he's sent for the IRA balance. What will eventually happen to the IRA?"

BenefitsLink Message Boards

Lump Sum -- But When Is It Calculated?

"Participant age 67 retires and requests a lump sum (DB plan). The retirement and request was as of 1/1/22. If the lump sum is actually paid on March 14, 2022, does the plan calculate the lump sum as of 1/1/22 and also pay an amount of interest through 3/14/22?"

BenefitsLink Message Boards

Press Releases

Magellan Rx Management Achieves Perfect CMS Audit for Medicare Part D

Magellan Health

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

The Proposed RMD Rules: Feeling SECURE Yet?

April 7, 2022 WEBCAST

Last Issue's Most Popular Items

DOL Makes No Secret of Its Concerns About Crypto

Eversheds Sutherland

Mortality Table Pension Plan Litigation: Reasonableness Not Required

Faegre Drinker

Do Employers Need a CISO for ERISA Compliance?

Jackson Lewis P.C.

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

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