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Retirement Plans Newsletter

May 11, 2022

6 New Job Opportunities 6 New Job Opportunities


[Guidance Overview]

Digesting the New Proposed Exception to the 'One-Bad-Apple Rule' for MEPs and PEPs

"In late March 2022, the [IRS] withdrew regulations proposed in 2019 and issued new proposed regulations under Sections 413(c) and (e) of the Internal Revenue Code, which provide for an exception to Section 413's 'unified plan rule' -- commonly referred to as the 'one-bad-apple rule' -- for multiple employer and pooled employer plans.... Compliance with the new proposed regulations is deemed to be good faith compliance with Code Section 413(e) until final regulations are issued, which now provides plan administrators of MEPs and PEPs wishing to utilize the exception the ability to do so before the new proposed regulations are final."  MORE >>

Morgan Lewis

[Guidance Overview]

Guaranteed Lifetime Income: SECURE Act Provides Plan Fiduciaries with a Safe Path (PDF)

"[W]hen considering whether a plan should include lifetime income options, some plans want assurance that they may stop providing the benefit or feature at some point without violating the IRC. SECURE Act Section 109 addresses this concern[.]"  MORE >>

Groom Law Group, via planadviser

The Most Common 403(b) Plan Errors

"[1] Failure to operate the plan in accordance with its terms ... [2] Improper exclusion -- universal availability failure ... [3] Failure to follow applicable IRC limits: 402(g), 415, 401(a)(17), etc.... [4] Incorrect computation of the special 403(b) catch-up limit ... [5] Missed or insufficient required minimum distributions (RMDs)."  MORE >>

Belfint Lyons Shuman

Exceptional Usefulness and Quality icon Catch-Up Strategies for Late 403(b) Plan Savers

"This post describes two types of catch-up strategies: before retirement to increase total savings and after retirement to decrease the amount of savings required. All of these catch-up strategies involve trade-offs ... The post concludes with a brief research summary, three 'need to knows,' and six take-away action steps."  MORE >>


Communication Strategies to Make Lump Sum Windows More Effective

"What information should lump sum window communications include? ... What communication elements should you include in a successful lump sum communication campaign? ... What extra steps can you take to boost the response rate?"  MORE >>


Bill Seeks New Lump Sum Buyout Disclosures to Participants, DOL and PBGC

"[The Information Needed for Financial Options Risk Mitigation (INFORM) Act (S 4087)] would require pension plan sponsors offering terminated vested participants a lump-sum window to provide information to help them understand the financial trade-offs of choosing a lump sum over an annuity. The bill also would require a sponsor to report information about the lump-sum window to the [DOL] and the [PBGC] before and after offering the window."  MORE >>


A Step-By-Step Guide to Charting Your Path to DB Plan Termination

"The costs incurred due to terminating a pension plan are the biggest roadblock for many plan sponsors. For this reason, plan sponsors typically play 'wait and see,' waiting for interest rates to rise because that lowers the total cost of the termination.... Here are some important steps that will help avoid common pitfalls[.]"  MORE >>


What Special Accounting Events Occur When a Pension Plan Is Terminated?

"When deciding whether or not to terminate a pension plan, the plan sponsor should consider the accounting effects of settling the plan's obligations.... Settlements and curtailments [can] cause a large accounting expense all at once, because they require immediate inclusion of those amounts that were previously amortized over several years in an employer's annual pension expense.... [A]a plan sponsor may be able to accelerate the amortization of gains or losses before plan termination by employing a method that amortizes those amounts faster than the minimum approach required under FASB accounting rules."  MORE >>


Companies Race to Offload Pension Risk as Market Volatility Rises

"[One] firm anticipates that the first six months of 2022 will be the strongest first half of a year yet for PRT deals.... With increasing interest rates, rising levels of inflation, a potential recession, and geopolitical uncertainty, corporate plan sponsors now more than ever want to protect themselves from market downturns."  MORE >>

Institutional Investor

What Are Annuity Placements and Why Do I Keep Hearing About Pension Risk Transfers?

"When does an annuity placement make sense for my DB plan? ... What is the right time and economic environment for an annuity placement? ... What kind of preparation do I need for an annuity placement? ... How did the pandemic affect annuity placements and what can we expect in 2022?"  MORE >>


How Many Monte Carlo Simulations Are Enough?

"Contrary to popular belief, Monte Carlo simulation can actually be less conservative than historical simulation at levels commonly used in practice. And while current financial planning software generally provides an adequate number of Monte Carlo scenarios, the deviation from historical returns at particular spending risk levels provides some additional insight into why multiple perspectives may be useful for informing retirement income decisions."  MORE >>

Nerd's Eye View

Benefits in General

Steps to Take Before and During a Data Breach (PDF)

"Employee benefit plans are attractive targets for hackers because they possess a lot of sensitive information and may have access to money. They also use a variety of third-party service providers which may make them more susceptible to attacks.... This article will offer 12 steps you should take before and during a data breach to ensure the best possible outcome for your employees and benefit plan participants as well as the organization as a whole."  MORE >>

benefits magazine, a publication of the International Foundation of Employee Benefit Plans [IFEBP]

What Exactly Is Driving the Great Resignation?

"Panelists at EBRI's Spring Policy Forum discussed how various demographic groups tend to reenter the labor force, how workers are supporting themselves if they choose not to return and various other factors impacting labor force participation in 2022."  MORE >>


Executive Compensation and Nonqualified Plans

IRS Audits and the Nonqualified Deferred Compensation Plan

"The June 2021 publication of the new Audit Technique Guide was the first update the [IRS] has made to its nonqualified deferred compensation (NQDC) auditing guide since 2015.... [In] a post-pandemic environment, with many federal initiatives in need of funding, some experts have suggested that the publication of an updated auditing guide may indicate that the IRS is equipping its auditors to handle an expanded scope and frequency of NQDC audits."  MORE >>


Employee Benefits Jobs

View job as Cash Balance Retirement Account Administrator
          for Alerus Cash Balance Retirement Account Administrator


Remote / MI / MN / ND / NH

View job as Cash Balance Retirement Account Administrator
          for Alerus

View job as Retirement Account Administrator, Senior
          for Alerus Retirement Account Administrator, Senior



View job as Retirement Account Administrator, Senior
          for Alerus

View job as Retirement Plan Officer
          for Midland States Bank Retirement Plan Officer

Midland States Bank

Rockford IL / Elgin IL / Schaumburg IL / Arlington Heights IL / Chicago IL

View job as Retirement Plan Officer
          for Midland States Bank

View job as Experienced Benefits Attorney
          for Bredhoff & Kaiser, PLLC Experienced Benefits Attorney

Bredhoff & Kaiser, PLLC

Washington DC

View job as Actuary (Pathways Recent Graduate)
          for Pension Benefit Guaranty Corporation [PBGC] Actuary (Pathways Recent Graduate)

Pension Benefit Guaranty Corporation [PBGC]

Remote / Washington DC

View job as Actuary (Pathways Recent Graduate)
          for Pension Benefit Guaranty Corporation [PBGC]

View job as Employee Benefits Investigator
          for Employee Benefits Security Administration [EBSA] Employee Benefits Investigator

Employee Benefits Security Administration [EBSA]

Remote / Pasadena CA

View job as Employee Benefits Investigator
          for Employee Benefits Security Administration [EBSA]

Selected New Discussions

410(b)(6) Transition Period

"Company A acquires Company B in a stock acquisition. Employees of Company are immediately moved to Company A, Company B dissolves. Company A sponsors a retirement plan; the plan does contain provisions that employees acquired in a 410(b)(6) transaction are excluded through the transition period. Does the fact that employee were transferred to Company A negate the transition period in regards to those employees?"

BenefitsLink Message Boards

To Pass 401(a)(26), Make a Higher-Than-Required Allocation to a Particular Non-HCE?

"In order to pass 401(a)(26), can I give one particular non-highly fully employed participant a greater benefit even though it's not the stated formula in the plan?"

BenefitsLink Message Boards

Testing Compensation When Excluded Reimbursements Apply Only to Owners

"Plan definition of compensation excludes reimbursements, etc. The only participants that have a reduced compensation for 2021 are both owners, so I don't think there is any problem in terms of 414(s). For the purpose of 401(a)(4) testing (on a benefits basis), do I have the option of using total compensation as testing comp? In this circumstance that would create an advantage since it's only 2 HCE's that have plan comp less than total comp."

BenefitsLink Message Boards

Press Releases

Patriot Announces Exclusive Partnership with Vestwell, Offering Affordable Retirement Plans for American Businesses

Patriot Software, LLC

NFP Realigns Business Segments to Enhance Connectivity of Wealth Management and Retirement Plan Offerings

NFP Corp.

Last Issue's Most Popular Items

New Underwriting Standards May Make Retirement Committee Members More Vulnerable to Personal Liability (PDF)

Roland Criss, via Journal of Compensation and Benefits

Crypto and Digital Currencies Are Here to Stay: But Are They Welcome in Your 401(k)? (PDF)

Ballard Spahr LLP, via Bloomberg Tax Management Compensation Planning Journal

Key Considerations for DC Retirement Plan Committees Seeking Help


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

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