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Retirement Plans Newsletter

May 12, 2022

5 New Job Opportunities 5 New Job Opportunities


[Guidance Overview]

IRS Issue Snapshot: Calculation of Retirement Plan Compensation for Partnerships

"Earned Income is used to apply rules to plans covering self-employed individuals in the following plan areas: allocations, accruals, deductions, IRC Section 401(a)(4) nondiscrimination, and IRC Section 415 Limits. Earned Income is also relevant for purposes of computing the limit under IRC Section 401(a)(17). For purposes of applying some of these rules, adjustments specified in the IRC and Treas. Regulations are made to a self-employed individual's Earned Income."  MORE >>

Internal Revenue Service [IRS]

Must ERISA Actuarial Equivalence Be 'Reasonable'?

"Because the plain language of Section 1054(c)(3) does not contain a reasonableness requirement, Belknap argued that the term 'actuarial equivalent' either requires or implies a reasonableness standard. The court rejected this argument. The court emphasized that if Congress had intended Section 1054(c)(3) to require reasonableness assumptions or standards, it would have included the language as it had done in several other sections of ERISA." [Belknap v. Partners Healthcare System, Inc., No. 19-11437 (D. Mass. Mar. 4, 2022)]  MORE >>

Carlton Fields

Building a Lifetime Income Product

"Offering these programs through DC plans require the incorporation of unique elements of ERISA and the Tax Code, while addressing a wide panoply of state insurance law issues and some pretty serious securities laws issues. It also involves managing quite a collection of disclosure requirements, while attending to the structure and relationships related to Individual Retirement Annuities and Individual Retirement Accounts ... which may be necessary to make the benefits under these programs portable. Toss in ... a smattering of state trust and banking laws."  MORE >>

Business of Benefits

Senator Tuberville Introduces Financial Freedom Act

"On May 5, 2022, [Senator Tommy Tuberville] (R-AL) introduced the 'Financial Freedom Act of 2022' [S 4147]. The bill would push back on recent positions the [DOL] has taken with respect to, e.g., 'climate related financial risk,' private equity, and cryptocurrency investments, particularly in participant directed defined contribution plans."  MORE >>

October Three Consulting

Cryptocurrency: Kryptonite or Superpower?

"Investing in digital currency is not entirely secure due to the storage of the currency through digital wallets dependent on passcodes or in digital code stored in the cloud. The digital currency exchanges may be vulnerable to cyberattacks, cyberthieves and computer bugs. Digital currency is also highly volatile and can be impacted by a single tweet, political situation, news post, or world event."  MORE >>


The Pros and Cons of Keeping Assets in DC Plans (PDF)

"Making the decision to stay in or move out of the plan is complex and highly individual, which is why DCIIA compiled [this] list of pros and cons to help guide plan sponsors and participants alike. [This article also includes] tips for plan sponsors on how to encourage participants to remain invested as well as compiling a 'how to' partner with your recordkeeper."  MORE >>

Defined Contribution Institutional Investment Association [DCIIA]

A Closer Look at a Recent 403(b) Lawsuit and Its Settlement Terms

"This settlement with Washington University is remarkably similar to the settlements of other recent 403(b) lawsuits. These are now very common terms and precedent has been set not only with this case, but with several others preceding it including the Supreme Court case earlier this year of Hughes v. Northwestern University.... [P]lan sponsors can easily avoid these situations as the settlement terms can be viewed as a guide for best practices in fulfilling your role as a plan fiduciary."  MORE >>

Nick Verburgt, via LinkedIn

Options for Addressing Failed ADP Tests, with Pros and Cons for Each

"[1] Safe harbor plan design ... [2] Automatic enrollment ... [3] Class exclusions ... [4] Nonqualified deferred compensation plan."  MORE >>

Schneider Downs

Small Business Owners Remain Hesitant to Start a 401(k)

"Apparently long-standing misperceptions about access, matching and cost remain the top barriers to adoption ... [At] a time when many companies are boosting 401(k) benefits to attract and retain employees in a tight labor market, 74% of small businesses are still going without any plan at all."  MORE >>

American Retirement Association [ARA]

Most Pension Plans Don't Think Net Zero Is Possible

"Only 16 percent of pension plans have fully embedded the goal of producing net zero carbon emissions into their asset allocation process ... While 42 percent of the pension plans said they are in the implementation phase, only 28 percent have set interim targets. The result: Sixty percent of pension plans don't believe they will achieve the net zero target[.]"  MORE >>

Institutional Investor

2023 Social Security COLA Estimate Dips Slightly, Still Expected to See Highest Adjustment in 41 Years

"[T]he nonpartisan Senior Citizens League updated its 2023 COLA estimate to 8.6%, somewhat lower than last month's 8.9% estimate. The update came after the U.S. Bureau of Labor Statistics issued its latest consumer price index report."  MORE >>



The O'Reilly 'Excessive' Fee Case Is Based on False Recordkeeping Fees

"The simple fact remains that the Form 5500 'recordkeeping' fee number is a total compensation amount that includes transaction costs which are not related to the cost to perform recordkeeping services. It is total fees to the recordkeeper, and not the total recordkeeping costs.... This is not an isolated occurrence."  MORE >>

Euclid Specialty Managers

Executive Compensation and Nonqualified Plans

[Guidance Overview]

IRS Reverses Course on Treatment of Deferred Compensation Expense

"In a recently issued Chief Counsel Advice Memorandum, Generic Legal Advice Memorandum (GLAM) 2022-001, the IRS concluded that deferred compensation expense that is deductible in years subsequent to the enactment of the section 250 deduction for foreign-derived intangible income (FDII) but which relates to services provided in pre-FDII years should be allocated to FDII, even though FDII did not exist in the prior years to which the compensation relates. This position stands opposite to previous informal guidance issued by the IRS in the context of prior section 199, with the new GLAM stating that it 'reflects the reconsidered advice' of the IRS and that prior guidance from 2009 is obsolete."  MORE >>

Miller & Chevalier

Employee Benefits Jobs

View job as Compliance Specialist
          for Wespath Benefits and Investments Compliance Specialist

Wespath Benefits and Investments

Remote / Glenview IL

View job as Compliance Specialist
          for Wespath Benefits and Investments

View job as Defined Benefit Actuarial Administrator
          for Latitude Service Company Defined Benefit Actuarial Administrator

Latitude Service Company

Remote / Plymouth IN / Powell OH / Cincinnati OH / Mount Pleasant SC / Woodland Hills CA / Glendale AZ

View job as Defined Benefit Actuarial Administrator
          for Latitude Service Company

View job as Client Service Manager
          for July Business Services Client Service Manager

July Business Services


View job as Client Service Manager
          for July Business Services

View job as Senior Technical Advisor
          for Employee Benefits Security Administration [EBSA] Senior Technical Advisor

Employee Benefits Security Administration [EBSA]


View job as Senior Technical Advisor
          for Employee Benefits Security Administration [EBSA]

View job as Auditor (Healthcare)
          for Employee Benefits Security Administration [EBSA] Auditor (Healthcare)

Employee Benefits Security Administration [EBSA]

Remote / Covington KY

View job as Auditor (Healthcare)
          for Employee Benefits Security Administration [EBSA]

Selected New Discussions

Terminated Employees with No Vesting -- How to Handle for Cross-Testing Purposes

"I have a plan where all the NHCEs who are eligible for profit sharing have terminated and are 0% vested. I'm trying to max out the owner and his wife to their respective 415 limits via a profit sharing contribution using a new comparability formula which I can easily do; however, I have to give the employees a roughly 20% profit sharing contribution. I know I can't rely on NHCEs for general testing if they don't have some vesting. What are my options to make the employees somewhat vested so I can rely on them?"

BenefitsLink Message Boards

Amendment to Vesting -- Which Schedule Applies to a New Participant?

"We have a 401k/PS plan that provided 100% vesting for employer discretionary PS contributions. When we prepared the Cycle 3 restatement, we included a change in that vesting schedule making it 2-6 graded. The restatement was effective 1/1/2021 and the employer signed it 4/15/2021. Eligibility requirements are 1 Year of Service/age 21, and January 1 and July 1 entry dates. One employee hired 1/21/2020, so met eligibility at 1/21/2021 and entered the plan 7/1/2021. Does this participant need to be 100% vested following the pre-amendment provision, or is he subject to the amended graded schedule because he did not become a participant until after the later of the restatement's effective date or adoption date?"

BenefitsLink Message Boards

EPCRS -- Discrimination When Correcting for Mistakenly Missed Deferrals by HCEs?

"Where in EPCRS does it indicate that contributions made just for HCEs due to failures applicable to HCEs will not result in a nondiscrimination problem? An HCE's deferral election was not implemented. QNEC/match make-up not required. There must be something in EPCRS that says that if one corrects for an HCE then the correction does not create a nondiscrimination issue. Where is that?"

BenefitsLink Message Boards

Getting a J&S Waiver by Incarcerated Spouse of DB Plan Participant?

"A pension plan is terminating. One of the participants who has a distribution over $5,000, has to get a waiver of the J&S annuity from her spouse in order to get a lump sum distribution. Problem is: spouse is incarcerated and has been from the time they were married. How can she get his waiver, especially if she has not been in direct communication with him for years? Can she get some sort of court order that the marriage has been abandoned? Is there a precedent case for this?"

BenefitsLink Message Boards

Press Releases

Nicole Jimenez Strengthens Newfront's Growing Benefits Team


Webcasts and Conferences
(Retirement Plans / Executive Compensation)

One Bad Apple Rule Guidance for MEPs

June 1, 2022 WEBCAST

ASPPA [American Society of Pension Professionals & Actuaries]

Fred Reish and Ilene Ferenczy – Live and In-Person!!

June 9, 2022 in GA

Pension Education Council of Atlanta [PECA]

Participant Loans: The Fine Print

June 14, 2022 WEBCAST

ASPPA [American Society of Pension Professionals & Actuaries]

Employee Benefit Plans of Tax-Exempt and Governmental Employers 2022

October 13, 2022 in DC

ALI CLE [American Law Institute Continuing Legal Education]

Last Issue's Most Popular Items

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

Groom Law Group, via planadviser

What Exactly Is Driving the Great Resignation?


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

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

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

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