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Retirement Plans Newsletter

June 9, 2022

6 New Job Opportunities 6 New Job Opportunities


[Official Guidance]

Text of Draft IRS Form 8717 and Instructions: User Fee for Employee Plan Determination Letter Request (PDF)

Jun. 8, 2022. "What's New: Specific user fee amounts are no longer listed on Form 8717. You must now enter the appropriate user fee when completing line 5. Notice 2011-86 is obsoleted."  MORE >>

Internal Revenue Service [IRS]


457(b) Governmental and Tax-Exempt Plans Update

While similar to 401(k) plans, 457(b) plans have their own set of rules and requirements. The IRS has increased compliance enforcement on sponsors of 457(b) plans. Learn the rules and stay up to date on applicable IRS regulations. Register Now!

Sponsored by ASC

[Guidance Overview]

The IRS Provides an Opportunity to Get with the Program

"Under the pilot [Pre-Examination Compliance] program, the IRS advises the plan sponsor that it has 90 days to review the plan's compliance.... One of [this firm's] third party administrator clients has already received such a letter from one of their plan sponsors ... The letter specifies the primary issue that the IRS is interested in reviewing ... [but] clearly notes that the sponsor should be reviewing 'any other issues that exist.'... [The] best use of this 90-day window is to act quickly to get someone in to pre-examine the plan for issues that the IRS would discover in an audit if one were to take place, and to propose remedial action if anything untoward is found."  MORE >>

Ferenczy Benefits Law Center

DOL Urged to Forgo Retirement Plans' Climate Disclosures

"Both supporters and opponents of greater disclosure on climate-related financial risk are urging the [DOL] to complete its current agenda before pursuing additional rules to protect retirement savings and pensions from climate risk. Despite differing rationales, parties in opposite camps are urging the department to avoid a scattershot approach that would overlap with the [SEC's] proposed climate risk disclosure rule."  MORE >>

Roll Call

Senate HELP Committee Releases SECURE 2.0 Retirement Bill

"The Retirement Improvement and Savings Enhancement to Supplement Healthy Investments for the Nest Egg (RISE & SHINE) Act [S 4353] is the HELP Committee's version of a new round of retirement reforms building on the [SECURE] Act of 2019 ... The committee plans to review, modify and vote on the RISE & SHINE bill on June 14."  MORE >>


The Mathematics of the GLWB

"The [Guaranteed Lifetime Withdrawal Benefit (GLWB) provides] the participant at least some access to those funds in the program; guarantees lifetime benefits and minimum account values, even in changing markets; while providing the participant the ability to grow that benefit with some sort of equity market exposure.... GLWBs almost sounds too good to be true, and you have to wonder how an insurance company can make this all work.... [S]ophisticated mathematics is at the heart of it all."  MORE >>

Business of Benefits

Private-Sector Defined Contribution Pension Plans: An Introduction

14 pages. "[O]ver the past five decades, employees have become less likely to be covered by a DB pension and more likely to be covered by a DC pension.... Multiple types of DC plans may be available to employers ... Some policy analysts note that certain policies toward pensions may need to be reexamined because many were created in the early 1970s -- when most workers with pensions participated in DB plans." [R47152 Jun. 8, 2022]  MORE >>

Congressional Research Service [CRS]

Got Company Stock in Your 401(k)? You Should Know About NUD

"Participants holding company stock within a retirement plan that has decreased sharply in value may want to consider resetting the cost basis of that stock by selling the stock within the plan and repurchasing it shortly thereafter inside the plan.... A bigger gap between the cost basis -- what you paid for the stock -- and the potential growth from that point forward creates more opportunity to apply the [net unrealized appreciation (NUA)] rule in the future."  MORE >>



How Morgan Lewis Proved That Capozzi's Purported 'Excessive' Fee Case Was Implausible

"[There are] lessons that can be learned from Morgan Lewis's masterful dismissal motion. These defense tactics apply to many of the illegitimate purported excessive fee lawsuits based on exaggerated and inaccurate data.... The only potentially legitimate excessive recordkeeping claim is if it is based on the rule 408b2 or 404a5 fee disclosures, and compared to the accurate fee disclosures of other companies with similar recordkeeping services. But the vast majority of lawsuits use deceptive Form 5500 inflated data." [Morales v Capital One Fin. Corp., No 21-1454 (E.D. Va. May 27, 2022)]  MORE >>

Euclid Specialty Managers

Benefits in General

[Official Guidance]

Text of EBSA Meeting Notice for ERISA Advisory Council

"[T]he 2101h open meeting of the Advisory Council on Employee Welfare and Pension Benefit Plans (also known as the ERISA Advisory Council) will be held on July 18-20, 2022.... The three-day meeting will take place at the [DOL offices in Washington DC]. The meeting will also be accessible via teleconference and some participants, as well as members of the public, may elect to attend virtually.... The purpose of the open meeting is for Advisory Council members to hear testimony from invited witnesses and to receive an update from [EBSA]. The Advisory Council will study the following topics: [1] Cybersecurity Issues Affecting Health Benefit Plans, and [2] Cybersecurity Insurance and Employee Benefit Plans."  MORE >>

Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

Senate Vote to Confirm Lisa Gomez as EBSA Leader Falls Short

"The vote failed 49-51, with all 50 Republicans and Senate Majority Leader Chuck Schumer, D-N.Y., voting no. Mr. Schumer voted no for procedural reasons and immediately filed a motion to reconsider the nomination."  MORE >>

Pensions & Investments

Executive Compensation and Nonqualified Plans

[Guidance Overview]

SEC Reopens Comment Period for Proposed Rule on Recovery of Erroneously Awarded Compensation

"The [SEC on June 8] reopened the comment period on proposed rules for listing standards for recovery of erroneously awarded compensation, and the staff of the Commission released a memo [and fact sheet] that contains additional analyses and data that has the potential to be informative for evaluating the proposals."  MORE >>

U.S. Securities and Exchange Commission [SEC]

When Are RSUs Deferred Compensation?

"One perceived advantage of an RSU, especially for private companies, is that there is no requirement to establish fair market value at the time of grant, unlike a stock option grant ... One challenge associated with the design of RSUs is navigating the deferred compensation tax rules under Section 409A."  MORE >>

Cohen & Buckmann, P.C.

Employee Benefits Jobs

View job as Retirement Plan Sales Representative
          for RMC Group Retirement Plan Sales Representative

RMC Group

Remote / Bonita Springs FL / Bonita Springs FL / Naples FL / Vail AZ / Tucson AZ

View job as Retirement Plan Sales Representative
          for RMC Group

View job as Fiduciary Support Analyst
          for Pentegra Fiduciary Support Analyst


Remote / Blacklick OH

View job as Fiduciary Support Analyst
          for Pentegra

View job as Employee Benefits Attorney
          for United Mine Workers of America Health and Retirement Funds Employee Benefits Attorney

United Mine Workers of America Health and Retirement Funds

Washington DC

View job as Manager, Corporate Benefits
          for Bertelsmann, Inc. Manager, Corporate Benefits

Bertelsmann, Inc.

New York NY / NJ

View job as Manager, Corporate Benefits
          for Bertelsmann, Inc.

View job as Retirement Plan Document & Design Consultant
          for OneAmerica Retirement Plan Document & Design Consultant


Remote / Indianapolis IN

View job as Retirement Plan Document & Design Consultant
          for OneAmerica

View job as ESOP Administrator
          for Blue Ridge ESOP Associates ESOP Administrator

Blue Ridge ESOP Associates


View job as ESOP Administrator
          for Blue Ridge ESOP Associates

Selected New Discussions

Interim Valuation - Do All Participants Need Statements?

"I've got a calendar-year pooled 401k/PS plan where the trustee has asked for an interim valuation because the assets have (of course) dropped by a significant percentage since 12/31/21 and participants with a significant total of the plan's assets are looking to take a distribution. I've already gone over the pros and cons, the "if you do it when it's down, you should make sure you consider doing it when it's up" speech, etc. My Q is... obviously, the terminated participants who are looking for a distribution should get updated statements to reflect the updated amounts that are going to be distributed to them. But what about the active participants (who are not eligible for a termination distribution)? Is there any reason to give them statements as of 5/31/22 that show this ~20% drop in value? Since it's not EOY, do they need to get this interim valuation statement? The plan allows no ISWs or hardships (except RMDs, which wouldn't be affected by this interim valuation). Thanks."

BenefitsLink Message Boards

When Is It Appropriate to Do a Spin-Off 401(k)?

"We have a client (A) that purchased a division of another company (B) and wants the employees of that division to "merge" into A's existing 401(k) plan. B's TPA told our client (A) that they could do a spin-off. Our general understanding of a spin-off is that it results in a new company and a new 401(k) plan. Neither of those things are happening. Additionally, company (B) currently sponsors a 401(k) plan and since only one division was sold to our client they will not be terminating their plan. We don't see how this could be treated as a spin-off or a merger. Can anyone give insight as to when a spin-off is an appropriate measure and if there is anyway that this would not be a distributable event for the participants of Company (B)? Thank you!"

BenefitsLink Message Boards

What Happens If a Participant Is Given 100% Vesting by Mistake?

"This small CPA firm has 6 employees. A receptionist is leaving and is 80% vested at best. The owner wants her to receive her full account balance. The 2/20 TH vesting leaves her just short. I suggested with the Cycle 3 restatement requirement change to a 3 year cliff which would also be TH compliant. He wants to just give her the full account balance (her money is segregated, all segregated investment accounts). He asked me, "What if we call it a mistake, we paid her out everything by mistake, what harm would there be?" I said it would be an operational failure due to a failure to follow the document. Would the IRS come down on them if by chance there is an audit? He wants to just do it."

BenefitsLink Message Boards

Press Releases

Groom Ranks High in The Legal 500 United States 2022

Groom Law Group

MissionSquare Retirement Celebrates 50th Anniversary and Launches MissionSquare Foundation with $20 Million Grant for Communities

MissionSquare Retirement

2022 PLANSPONSOR Plan Sponsor of the Year Winners Announced


Pontera and RFG Advisory Announce Partnership to Help Advisors Manage Clients’ Retirement Assets


Webcasts and Conferences
(Retirement Plans / Executive Compensation)

Retiree Reflections: Lessons Learned For The Next Generation

June 22, 2022 WEBCAST

EBRI [Employee Benefit Research Institute]

ERISA Fiduciary Rules: An Update on Current Issues and Considerations and Best Practices for Investment Decisions

June 23, 2022 WEBCAST

Hunton Andrews Kurth

Last Issue's Most Popular Items

The SECURE Act's DC Plan Lifetime Income Disclosure Requirements


Qualified Plan Mistakes Happen: What Plan Sponsors Do Next Is What Matters Most (PDF)

Davis & Gilbert LLP, via Employee Relations Law Journal

Senators Murray and Burr Release Broad Bipartisan Retirement Policy Reform Legislative Discussion Draft

October Three Consulting

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

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