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Retirement Plans Newsletter

June 7, 2022

3 New Job Opportunities 3 New Job Opportunities


[Guidance Overview]

IRS Unveils New Pre-Examination Compliance Pilot Program for Retirement Plans

"The pilot program has three key features: [1] Advance notice of an upcoming audit ... [2] 90-Day review period to self-correct errors ... [3] Reduced fees for errors not eligible for self-correction."  MORE >>


[Guidance Overview]

IRS Announces New Pilot Program for Retirement Plan Audits

"Although the IRS announcement is not specific, it appears that the pilot program will apply to IRS examinations of both 401(a) and 403(b) retirement plans. The IRS announcement does not state whether all or only some retirement plans selected for audit will be offered the pre-examination pilot program."  MORE >>

Verrill Dana LLP

[Guidance Overview]

DOL Proposes Tougher Prohibited Transaction Exemption Procedures (PDF)

"The proposed amendments to the exemption application regulations include some of the DOL's existing policy positions that are already being applied to exemption requests and would also add a number of significant new requirements."  MORE >>

The Wagner Law Group

[Guidance Overview]

The Slippery Slope of SEP and SIMPLE Notification Duties

"As the June 30, 2022 CalSavers deadline bears down on employers with five or more California employees, many small employers may be giving thought to adopting a simplified retirement plan, whether a SEP or SIMPLE IRA.... [E]ach of these types of plans imposes participation notification duties that employers often overlook, and noncompliance can put the tax-sanctioned status of the whole arrangement at risk."  MORE >>

E is for ERISA

Outdated Mortality Tables Contested in IBM Lawsuit

"For [certain] individuals, the complaint alleges, when the plan converts [a single life annuity (SLA) to a joint and survivor annuity (JSA)], it uses a mortality table that is more than 40 years out of date, 'despite massive increases in life expectancy in the intervening decades.' " [Knight v. International Business Machines Corp., No. 22-4592 (S.D.N.Y. complaint filed Jun. 2, 2022)]  MORE >>

PLANSPONSOR; free registration may be required

DOL Sued in Crypto 401(k) Guidance Lawsuit: What Employers Need to Know

"[T]his development serves as more direct evidence that there is an increasing demand from the workforce to have access to crypto products. While several financial experts expect that crypto may eventually have a place in 401(k) offerings, the time period for this adoption, and the parameters for such inclusion, remain to be seen." [ForUsAll v. DOL, No. 22-1551 (D.D.C. complaint filed Jun. 2, 2022)]  MORE >>

Fisher Phillips

401(k) Plan Sponsors: It Doesn't Pay to Ignore Your Plan's Definition of Compensation

"One of the most common errors in 401(k) plan administration continues to be a mismatch between a plan's definition of compensation and the actual compensation taken into account for plan purposes ... [This blog post reviews] scenarios in which this problem occurs and steps plan sponsors can take to minimize the risk of this happening to them."  MORE >>

Dickinson Wright

Legacy Debt in Public Pensions: A New Approach

"The inclusion of 'legacy debt' -- unfunded liabilities from long ago -- with current liabilities impedes effective pension policy. A new approach would separate legacy debt from other unfunded liabilities in order to: spread the legacy cost over multiple generations; and properly identify fixed vs. variable costs. It would also use the municipal bond yield -- rather than the assumed return on assets -- to calculate liabilities and required contributions."  MORE >>

Center for Retirement Research at Boston College

Pension Plan Annuity Purchase Update, Q1 2022

"Following a record-setting 2021, pension buyout sales started 2022 strong, totalling $2.7B in Q1 2022. This represents a 163% increase compared to Q1 2021. 75 buyout contracts were sold, compared to 43 in the first quarter of 2021. The outlook for the rest of the year remains strong, and total annual sales should once again surpass at least $25B."  MORE >>

River and Mercantile

Is Rebalancing a Good Strategy for Retirees?

"Retirees who wish to implement a safety-first investment strategy should be cautious about adopting financial asset investment strategies that do not consider household non-financial assets. They should also be cautious about adopting investing rules of thumb such as 60%/40% investments or accepting common adages respecting rebalancing of such percentages."  MORE >>

Ken Steiner, FSA Retired

Employee Benefits Jobs

View job as Senior Manager Research Analyst
          for RVK, Inc. Senior Manager Research Analyst

RVK, Inc.

Remote / ID / IL / NY / OR

View job as Senior Manager Research Analyst
          for RVK, Inc.

View job as Pension Compliance Administrator
          for Associated Pension Consultants Pension Compliance Administrator

Associated Pension Consultants


View job as Pension Compliance Administrator
          for Associated Pension Consultants

View job as Implementation Project Specialist for Non-Qualified Retirement Plans
          for Newport Implementation Project Specialist for Non-Qualified Retirement Plans


Remote / Walnut Creek CA

View job as Implementation Project Specialist for Non-Qualified Retirement Plans
          for Newport

Selected New Discussions

415 Excess on Plan Termination

"Plan terminates effective 5/2022. After testing is completed it is determined that there are 415 excess amounts. The plan removed them from the pretax source. How does this impact the 402g limit for 2022? Participant deferred $8000. 415 excess is $3000. ($2500 is distributed due to losses). What can the participant contributed on a pretax basis for the remainder of 2022 (assume not catchup eligible)?"

BenefitsLink Message Boards

Plan Wants to Amend Eligibility Requirements to Benefit One Employee

"I have a plan sponsor that wants to amend the eligibility requirements and entry dates to allow a specific employee to enter the plan. After that employee enters the plan, the plan sponsor wants to amend the eligibility requirements and entry dates back to what they were. Is this allowed? If not, why?"

BenefitsLink Message Boards

Can Affiliated Employer (Not in Same Controlled Group) Share a NQDC Plan?

"We have a group of employers that are somewhat related, but definitely not considered the same "Service Recipient" under the 409A Regs. But, they all have identical Nonqualified Plans. We would like to combine the plans into a single plan. We would take pains under the Plan to make sure the definition of "Employer" was a reference to the individual Employer the Service Provider works for, including that the Employer is responsible for benefit payments out of their own general funds, and the Employer's creditors have access to those funds in the event of bankruptcy/insolvency, etc. Does this work? Some concerns I have are:

  • Say one Employer goes bankrupt and their creditors wipe them out so they can't pay benefits under the Plan -- is there any risk the other Employers are on the hook for benefit payments for the bankrupt employer?
  • Say one Employer goes bankrupt, would their creditors have any claim over accrued benefits owed to the Service Providers of other Employers under the Plan?
  • Are there any other rules that would prevent a combined Plan just as a matter of statute or regulation?

Thanks in advance!"

BenefitsLink Message Boards

Press Releases

HUB International Expands Retirement and Wealth Advisory Services with Acquisition of the Assets of CSi Advisory Services, LLC in Indiana

HUB International

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

Summary Plan Descriptions (SPDs): Do’s and Don’ts


Seyfarth Shaw LLP

Important Pension Issues Likely to Surface

June 13, 2022 WEBCAST

American Bankruptcy Institute

IRA Institute

September 5, 2022 WEBCAST


Last Issue's Most Popular Items

2022 Year End Amendment Deadlines for 401(k) Plans

Michael Best

IRS Announces Pre-Audit Compliance Pilot Program

Kilpatrick Townsend

Recent SEC Disclosure Guidance Highlights Growing Concern Surrounding the Risks of User Assets Held by Various Crypto Custodians (PDF)

Debevoise & Plimpton LLP

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

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