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Retirement Plans Newsletter

June 10, 2022


[Guidance Overview]

Agencies Provide Final Changes to 2022 Form 5500

"The changes made to Schedule MB which contains the actuarial information for multiemployer plans, and the instructions, will require that the plan's actuary get additional information from the plan administrator."  MORE >>


Cybersecurity and Retirement Plans (PDF)

46 presentation slides. Topics: [1] The latest guidance on cybersecurity for qualified retirement plans; [2] Tips for hiring a plan service provider; [3] Cybersecurity program best practices for qualified retirement plans; and [4] The role of the financial advisor in cybersecurity.  MORE >>

Broadridge Fi360 Solutions

401(k)ology: Know Your Participant Notices

"[B]oth the Senate and the House of Representatives have introduced separate legislation requiring the governmental agencies to study all of the required participant communications and to determine if they can be simplified, standardized, and consolidated.... [U]nless and until the disclosure requirements change, employers should know: Which notices are required for your plan type? When must the notices be provided? Who must receive the notice? How can the notice be distributed? What happens if the notice was not provided?"  MORE >>


403(b) Plan Audit Procedures: Universal Availability

"Universal Availability violations often result in material adjustments to the financial statements due to size of the corrective contributions that must be funded by the employer when eligible employees are improperly excluded from participation. For that reason, auditors do need to see census and payroll data for all employees who have been excluded from plan participation, as well as annual notices of the opportunity to defer for those who are eligible but not contributing."  MORE >>

Belfint Lyons Shuman

Ready for Sale? Part 3: Retirement Plans

"This post addresses the impact of a sale on your organization's retirement plans ... For each plan that your organization sponsors, consider whether your organization has made all required amendments and whether the plan should be restated.... If you anticipate the transaction and its effects on any retirement plans that your organization sponsors, that may facilitate discussions with a buyer related to the retirement plan."  MORE >>

Morgan Lewis

Governmental Employers: Multiple Plans May Result in Excessive Participant Loans

"[B]ecause in many 'multiple plan -- multiple vendor' situations there is no one monitoring or policing these limits across all of the plans, the per participant loan limits often are violated."  MORE >>

Best Best & Krieger LLP

Shareholder Climate Activism Comes for 401(k) Plans: Lessons Learned from Amazon and Comcast (PDF)

"[L]essons we can learn from the SEC's decision allowing the shareholder proposals to proceed.... [1] Shareholders may solicit through shareholder proposals climate-related compensation information that is beyond the scope of the SEC's proposed climate disclosure rules. [2] Shareholder proposals may be permitted to proceed despite being inconsistent with ERISA."  MORE >>

Debevoise & Plimpton LLP

Unaccountable and Unaffordable: Unfunded Public Pension Liabilities Exceed $8.2 Trillion (PDF)

35 pages. "Unfunded state pension liabilities total $8.28 trillion or just under $25,000 for every man, woman and child in the United States.... [M]ost of the change is the result of a decrease in the risk-free discount rate, caused by the decrease in U.S. Treasury note yields.... Unfunded liabilities have increased by $2.45 trillion in this year's report due to several factors[.]"  MORE >>

American Legislative Exchange Council [ALEC]

Planning on Social Security, Part II

"[If] no Congressional action is taken prior to [the trust fund depletion date (TFD)] ... benefits will be automatically reduced across the board by something like 20% in 2035. Based on the intermediate assumptions, this 20% decrease is expected to grow to 26% by 2096.... [R]eform measures that restore actuarial balance (over 75-years or longer) would require even larger than 20% combined benefit reduction/tax increases be imposed on non-retired Generation X, Y, Z and Alpha workers."  MORE >>

Ken Steiner, FSA Retired


Don't Believe What You Read About Target-Date Funds

"It is easy to make allocation choices look silly in hindsight, particularly by compounding the results ... What matters are the answers to the following queries: [1] Can the investment's strategy be justified? [2] Was the investment competitive with the realistic alternatives? ... [3] Did the investment succeed by its own measures?"  MORE >>

John Rekenthaler, in Morningstar

Benefits in General

[Official Guidance]

Text of IRS Announcement 2022-13: Revision to Optional Standard Mileage Rates (PDF)

"The revised standard mileage rates are: [1] Business 62.5 cents per mile; [2] Medical and moving 22 cents per mile.... The revised standard mileage rates set forth in this announcement apply to deductible transportation expenses paid or incurred for business, medical, or moving expense purposes on or after July 1, 2022, and to mileage allowances that are paid both [1] to an employee on or after July 1, 2022, and [2] for transportation expenses paid or incurred by the employee on or after July 1, 2022."  MORE >>

Internal Revenue Service [IRS]

Executive Compensation and Nonqualified Plans

CEO Compensation Jumped 15.7% in 2021

"CEO salaries increased 2.0% in 2021, compared with a 1.1% increase in 2020. Annual bonuses soared 39.3% last year, compared with a 6.1% decline in 2020. More than eight in 10 companies (82%) paid annual bonuses that were at or above target levels compared with just 45% in 2020.... The value of target long-term incentives jumped 9.1% in 2021, compared with a 5.5% increase at the median in 2020."  MORE >>

Willis Towers Watson

Selected New Discussions

Eligibility for 'As Needed' Employee

"SH 401(k) plan (SH NEC), two entry dates (Jan-July), eligibility is age 21, 1,000 hours; plan is top heavy. Employee hired 6/8/2020, worked 986 hours in 2020. Employee worked 300 hours in 2021 before stopping full-time work 5/21/2021 (so over 1,000 hours in first 11 months). Employee was then available on as-needed basis. Employee worked 156 hours between 8/5/21 and end of year. (total hours worked in 2021 was 456 hours)

Did this employee enter the plan? She had 1,000 hours in first 12 months but was not there on the entry date although she was available 'as needed.' Is she entitled to any contribution for 2021 (such as SH)? What about top heavy?"

BenefitsLink Message Boards

Counting Hours - Payroll vs W-2/ Vacation Payoff

"Do employers generally track hours separately from pay, ie W-2 pay? So W-2 reports pay for pay date 12/31 of the prior year, paid on 1/5. Employee had 970 actual hours worked in the current year, but when hours are reported alongside payroll, there were 1010 hours worked. Say the 12/31 hours reported on the 1/5 payroll are not included, but the terminee has 40 hours of vacation pay. In both those situations, what do companies generally do, count the hours?"

BenefitsLink Message Boards

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

The Future of 401(k) Plan Advising

June 16, 2022 WEBCAST

Broadridge fi360 Solutions

Restricted Stock & RSU Financial Planning: Advanced Bootcamp

June 29, 2022 WEBCAST

Rise and Shine and Feel Secure Again: How Upcoming Legislation Might Change Retirement Plans

July 14, 2022 WEBCAST

American Bar Association Joint Committee on Employee Benefits [JCEB]

Last Issue's Most Popular Items

Senate HELP Committee Releases SECURE 2.0 Retirement Bill


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

Euclid Specialty Managers

The IRS Provides an Opportunity to Get with the Program

Ferenczy Benefits Law Center

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

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