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Retirement Plans Newsletter

April 29, 2022

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[Official Guidance]

Text of IRS Publication 590-B: Distributions from Individual Retirement Arrangements (IRAs), for Use in Preparing 2021 Returns (PDF)

69 pages; Apr. 25, 2022. "What's New: ... [1] The life expectancy tables in Appendix B have been updated to reflect the new life expectancy and distribution period tables in the updated regulations in section 1.401(a)(9)-9 applicable to distribution calendar years beginning on or after January 1, 2022.... [2] Form 8915-F replaces Form 8915-E for reporting qualified 2020 disaster distributions and repayments of those distributions made in 2021 and 2022, as applicable.... [3] 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]

Proposed IRS Regs Clarify SECURE Act Changes to RMD Rules for Beneficiaries

"[This] overview focuses on one key set of changes: how RMDs are distributed to beneficiaries under defined contribution plans, such as 401(k) plans, profit sharing plans, and 403(b) plans. These changes include several new requirements that are often described as 'eliminating stretch RMDs.' "  MORE >>

Verrill Dana LLP

Labor Department Criticizes Fidelity’s Plan to Put Bitcoin on 401(k) Menu

"[Fidelity] said it planned to cap transfers and new contributions to its bitcoin offering at 20% of 401(k) account balances and payroll contributions. [Acting Assistant Secretary for EBSA Ali Khawar] said he and his colleagues have scheduled a conversation with Fidelity to discuss some of the concerns that were highlighted in the March 10 guidance. Among the department's specific concerns was the 20% figure ... Mr. Khawar said the [DOL] has similar concerns with an offering from ForUsAll Inc.[.]"  MORE >>

The Wall Street Journal; subscription may be required

SECURE 2.0 Could Mean Significant Changes to Retirement Savings Plans

"SECURE 2.0 updates some of the 2019 SECURE Act provisions and adds new provisions primarily aimed at incentivizing workers to save more for retirement.... Many of the SECURE 2.0 provisions could require significant changes to retirement plans.... The bill has strong bipartisan support in the Senate and could be approved as early as May."  MORE >>

Buck

2022 Retirement Savings Benchmarking Report

"The percentage of plans offering a match returned to pre-pandemic rates or higher. Average employee deferral rates have climbed steadily to an all-time high of 8.5% in 2021.... The percentage of participants with outstanding loans decreased from 20% in 2020 to 18.8% in 2021. Plan participation increased from 67% in 2020 to 68% in 2021."  MORE >>

T. Rowe Price

2022 Corporate Pension Funding Study

"An increase in discount rates of 32 basis points along with greater-than-expected investment returns of 8.4% helped the private single-employer DB plans of the Milliman 100 companies continue to reduce the multibillion-dollar pension deficits in 2021. The year-end 2021 funded ratio for the Milliman 100 companies settled at 96.3%, a large improvement from the year-end 2020 funded ratio of 88.1%."  MORE >>

Milliman

Bipartisan Bill Would Allow Plan Design Expenses to Be Paid from Plan Assets

"The Increasing Small Business Retirement Choices Act [S 4086], introduced April 26 by Sens. Jacky Rosen (D-NV) and Tim Scott (R-SC), would amend existing law to allow small business employers to use retirement plan funds to pay expenses associated with retirement plan design changes[.]"  MORE >>

National Tax-Deferred Savings Association [NTSA]

PBGC Approves Special Financial Assistance Application for Local 1482 Plan

"[PBGC] has approved the application submitted to the Special Financial Assistance (SFA) Program by the Retirement Plan of Local 1482 - Paint and Allied Products Manufacturers Retirement Fund (Local 1482 Plan). The plan, based in the New York Metropolitan area, covers 152 participants in the manufacturing industry. The Local 1482 Plan became insolvent in May 2019.... The plan will receive $11.4 million in SFA, including interest to the expected date of payment to the plan."  MORE >>

Pension Benefit Guaranty Corporation [PBGC]

PBGC Approves Special Financial Assistance Application for Trucking Employees Plan

"[PBGC] has approved the application submitted to the Special Financial Assistance (SFA) Program by the Trucking Employees of North Jersey Welfare Fund, Inc. Pension Plan. The plan, based in Union City, New Jersey, covers 6,121 participants in the transportation industry. The Trucking Employees Plan became insolvent in July 2021.... The plan will receive $673.1 million in SFA, including interest to the expected date of payment to the plan."  MORE >>

Pension Benefit Guaranty Corporation [PBGC]

PBGC Approves Special Financial Assistance Application for FELRA Pension Plan

"[PBGC] has approved the application submitted to the Special Financial Assistance (SFA) Program by the Food Employers Labor Relations Association and United Food and Commercial Workers Pension Plan. The FELRA Pension Plan, based in Landover, Maryland, covers 51,500 participants in the service industry. The plan will receive approximately $1.24 billion in special financial assistance, including interest to the expected date of payment to the plan. The plan was projected to run out of money in 2022."  MORE >>

Pension Benefit Guaranty Corporation [PBGC]

[Opinion]

Which Investments Don't Belong in 401(k) Plans?

"Assets that can't generate cash should not be in 401(k) plans.... Also inappropriate are investments that don't price daily.... Perhaps bitcoin will provide extra diversification, and private-equity funds extra returns. Perhaps. That is for the professionals to decide -- the portfolio managers who run the 401(k) industry's target-date funds. They, not employees, should be deciding what role that bitcoin might play in a portfolio[.]"  MORE >>

John Rekenthaler, via Morningstar

[Opinion]

Fidelity Shrewdly Side-Steps DOL's 401(k) Crypto Guidance -- and ERISA

"According to Fidelity's guidelines, participants can invest up to 20% of their 401(k) savings into bitcoin, but each employer will decide the exact percentage for the plan.... While the bitcoin option will be available for employers, ... each plan fiduciary will need to scrutinize the fund selection process carefully.... It's too early for legal battles over crypto assets, but give it time ... [Any] legal claims would likely be against the plan fiduciaries."  MORE >>

RIABiz

[Opinion]

Here's What Could Go Wrong with Fidelity Investments Adding Bitcoin to Your 401(k)

"[If] offering people the ability to invest in crypto boosts overall retirement savings, that's good.... Cryptocurrency isn't ready for prime time. It's unregulated. It doesn't provide protection for consumers. Consumer disclosure rules and regulations are limited or nonexistent.... The Consumers have reported losing more than $80 million to cryptocurrency investment scams[.]"  MORE >>

The Washington Post; subscription may be required

Benefits in General

Sixth Circuit: Arbitration of Fiduciary Breach Claim Cannot Be Compelled by Relying on Individual Employment Agreements

"The arbitration agreements -- to which only plaintiffs are bound -- did not compel arbitration of the Section 502(a)(2) fiduciary breach claims because the claims belong to the plan.... Plan participants cannot unilaterally bind the plan to an arbitration in the absence of an arbitration provision in the plan or some other manifestation of the plan's consent to arbitrate. In this case, nothing indicated that the plan consented to arbitration. The court rejected the employer's argument that it, being the plan sponsor, could consent to arbitration on its behalf." [Hawkins v. Cintas Corp., No. 21-3156 (6th Cir. Apr. 27, 2022)]  MORE >>

Miller Canfield

Employee Benefits Jobs

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Press Releases

Ascensus Appoints Three New Regional Vice Presidents

Ascensus

Tedone Joins Strategic to Lead Retirement Plan Division and Rochester Office

Strategic Financial Services, Inc.

MDsave Expands Footprint Into Colorado with Boulder Community Health

MDsave

Last Issue's Most Popular Items

Summary of House-Passed SECURE 2.0 Legislation (PDF)

Wage and Hour Division [WHD], U.S. Department of Labor [DOL]

Crypto 401(k) Warning Casts Shadow Over T. Rowe Price Settlement

Bloomberg Law

Risks of Cryptocurrencies in 401(k) Plans, from the Plan Auditor Perspective

Bradley Bartells, CPA, via LinkedIn

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

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