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Retirement Plans Newsletter

May 19, 2022

4 New Job Opportunities 4 New Job Opportunities


[Official Guidance]

Text of IRS Notice 2022-25: Weighted Average Interest Rates, Yield Curves, and Segment Rates for May 2022 (PDF)

"This notice provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates ... and the 24-month average segment rates ... [as well as] the interest rate on 30-year Treasury securities ... as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate[.]"  MORE >>

Internal Revenue Service [IRS]

[Guidance Overview]

A Closer Look at the Restrictions on Rehiring CalPERS Annuitants

"The California Public Employees' Retirement Law and Public Employees' Pension Reform Act of 2013 do outline exceptions to the general rule. It is through these exceptions that agencies have been able to hire retired annuitants. The two common exceptions are found in Government Code sections 21221(h) and 21224. However, when an agency is utilizing either one of these exceptions, it must be aware of the strict and complicated requirements[.]"  MORE >>

Liebert Cassidy Whitmore

NFP Named as Defendant in Parallel Molina Healthcare ERISA Suit

"The original lawsuit targeting Molina Healthcare directly says the defendants caused plan participants to invest in flexPATH's 'untested target-date funds,' which allegedly replaced 'established and well-performing target-date funds' previously offered to participants.... The new lawsuit almost completely mirrors the original compliant, though it is distinct in that it argues that NFP is also a fiduciary to the retirement plan in question, based on the nature of the advice it allegedly provided to the plan sponsor, and it should therefore face the court's scrutiny alongside the Molina defendants." [Mills v. NFP Retirement Inc., No. 22-994 (C.D. Cal complaint filed May 16, 2022)]  MORE >>


Keeping 401(k) Participants Out of the Lost and Found Box

"Depending upon the size of your company and staffing, it may be necessary for benefits, human resources, payroll, administrative services (e.g., mailroom services), and information technology personnel, along with the plan's record keeper, to ensure that former employees' contact information is current. Changes to contact information must be coordinated and shared throughout the company and to/from the plan's record keeper."  MORE >>

Foley & Lardner LLP

Forecast of 2023 IRS Limits for Qualified Plans

"Inflation in the 12 months ending April 30, 2022, was 8.3%. With only five months remaining for FFY 2022, the 2023 IRS limits could be the highest one-year increase, both in dollars and percentage, even if inflation transitions to a more reasonable 3.0% annually for the final five months."  MORE >>


Updated Implied Discount Rates for Single Premium Life Annuities

"[R]ecent increases in interest rates [have] increased the amount of monthly life annuity that may be purchased with a given premium amount and had increased implied interest rates (or rates of return) on life annuity purchases.... [I]mplied interest rates (rates of return) on [single premium immediate life annuities (SPIAs)] have increased since April 1, 2022.... [It] may still be wise to wait until the Federal Reserve has finished increasing the Federal Funds interest rate before actually purchasing an annuity."  MORE >>

Ken Steiner, FSA Retired

What Qualifies You to Be a Fiduciary?

"[1] Understand the Risk.... [2] Examine the Required Skill Sets.... [3] Manage for Process, Not Outcomes.... [4] Technical Skills Required for the Role.... [5] An Opportunity to Serve Others.... [6] Look Before You Leap."  MORE >>

Roland Criss

Retirement Savers 'Stay the Course' in Q1 2022, Despite Market Volatility

"Average retirement account balances decreased, but slightly less than market decline4 in Q1.... Significant growth in IRA accounts, especially among Millennials.... Total 401(k) savings rate reaches record level.... The majority of retirement savers did not make any changes to their allocation.... The percentage of workers with a 401(k) loan continued to decrease."  MORE >>


Inflation Is Impacting Short-Term Spending and Saving, But Retirement Savers Remain Confident in Their Plans

"65% of adults report that as a result of inflation, they are cutting back on short-term spending to stay on track with their long-term financial goals. One-in-four respondents report that their long-term financial strategy has not been impacted due to inflation and 72% of respondents still expect to retire at their desired age.... Millennials are making the most significant cuts, with their monthly emergency fund contributions falling by nearly $289."  MORE >>

New York Life

Self-Directed IRAs vs. Rollovers as Business Start-Ups

"From a practical standpoint, using retirement funds without the discount of taxes can be a viable alternative for those looking for capital to start a business. However, under the watchful eyes of the IRS, compliance is the key to ensuring success with this funding source."  MORE >>



Fidelity Freedom Funds Are 'Unsuitable' in One 'Excessive' Fee Lawsuit, But an 'Excellent' and More Prudent Alternative in Another

"On May 10, the Walcheske law firm sued WEC Energy Group Inc. alleging that the defined contribution plan fiduciaries imprudently chose the 'high risk and unsuitable' Fidelity Freedom active target-date funds for their plan participants. But on May 11, the Capozzi law firm sued Illinois Tool Works, Inc. for offering company-created target date funds, which was purportedly 'baffling given the number of excellent target date suites available on the market.' The 'excellent' alternatives that Illinois Tool Works fiduciaries should have chosen? The target-date funds offered by T. Rowe Price, American Funds, and Fidelity."  MORE >>

Euclid Specialty Managers

Executive Compensation and Nonqualified Plans

Tuning Up Stock Option Grant Practices

"If stock options are an important part of your incentive compensation programs, this may be a good time to review and tune up your stock option grant practices. Here are some thoughts on best practices for both privately held and publicly traded companies: [1] Timing of grants and setting the exercise price ... [2] Required approvals ... [3] Other checklist items."  MORE >>

Foley & Lardner LLP

Employee Benefits Jobs

View job as Retirement Plan Administrator
          for Hessel & Associates, LLC Retirement Plan Administrator

Hessel & Associates, LLC

Remote / IL

View job as Retirement Plan Administrator
          for Hessel & Associates, LLC

View job as Director- Employee Health Plan
          for Indiana University Health Director- Employee Health Plan

Indiana University Health

Indianapolis IN

View job as Director- Employee Health Plan
          for Indiana University Health

View job as Retirement Plan Account Manager
          for Rapidly Growing Client-Centric Firm Retirement Plan Account Manager

Rapidly Growing Client-Centric Firm


View job as Benefits Services Manager
          for The City University of New York Benefits Services Manager

The City University of New York

Remote / New York NY

Selected New Discussions

How Long to Get a PBGC Coverage Determination for a Financial Firm?

"I want to check others' experience on time frame and expectations for getting a PBGC coverage determination. Last communication was on 3/31/2022. Client is anxious because this is for 2021."

BenefitsLink Message Boards

Employer Made 'Deferral' Contributions for Participant with Zero Compensation

"Employer contributed $10,000 in January, 2022 as a 12/31/2021 elective deferral to the account of the business owner's wife, who is a participant but had zero compensation during 2021. Should/can the contribution, adjusted for earnings/losses, be returned to the employer? Any way the funds can stay in the plan someplace other than the participant's account?"

BenefitsLink Message Boards

Audit CAP Maximum Penalty? Your Experience?

"The IRS states that the Audit CAP correction penalties will not be excessive and will bear a reasonable relationship to the nature, extent and severity of the plan failures. However, Rev Proc. Section 5.01 states that the Maximum Payment Amount would be the tax imposed due to plan disqualification including tax on trust income, failure to file Form 1041, income tax due to loss of employer deductions, etc. Has anyone had a client that experienced the Maximum Payment Amount penalty, or severe high dollar penalties, and if so, what amounts?"

BenefitsLink Message Boards

Press Releases

IMA Wealth Launches State-of-the-Art Retirement Plan Solution

IMA Financial Group

Securian Financial Selected as Recordkeeper for Strategic Retirement Partner’s WELLthBUILDER Pooled Employer Plan

Securian Financial Group

IRI Honors Global Atlantic's Paula Nelson as Champion of Retirement Security

Insured Retirement Institute [IRI]

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

The Latest Trends in Advisor Requests for Proposals

June 15, 2022 WEBCAST

CAPTRUST Financial Advisors

Last Issue's Most Popular Items

SECURE 2.0 Surprise: The Roth Catch-Up Contribution and Roth Employer Match Proposal


Crypto, SDBAs, and Your 401(k) Plan: What Now?

Jackson Lewis P.C.

District Court: 401(k) Plan Recordkeeper Not Obligated to Provide Rebates for Foreign Tax Credits

Thomson Reuters Practical Law

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

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