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Retirement Plans Newsletter

June 20, 2022

5 New Job Opportunities 5 New Job Opportunities


[Official Guidance]

Text of Updated PBGC FAQs: American Rescue Plan Act

Updated June 17, 2022, to include one new Q&A: "How will PBGC assess the reasonableness of a proposed change in the assumption regarding the inclusion of benefits for older terminated vested participants in the cash flow projection used to determine the amount of Special Financial Assistance (SFA)?"  MORE >>

Pension Benefit Guaranty Corporation [PBGC]

Third Circuit: Feds Can't Sue Over TSP Gains Missed During Shutdowns

"A group of ... employees sued the government, arguing they were entitled to damages because the 35-day government shutdown in 2018 and early 2019 meant, along with their pay, contributions to the TSP were delayed. Because the lapse in appropriations occurred while 'the most popular [TSP] funds increased over 10%,' they missed out on those gains.... [The Third Circuit] found that while the 1986 Federal Employees' Retirement System Act allows federal employees to sue in instances when agencies do not make TSP contributions within 12 days of the end of a pay period, that does not extend to the potential gains those contributions might have produced." [John Doe v. U.S., No. 21-2140 (3d Cir. Jun. 13, 2022)]  MORE >>

Government Executive

Exceptional Usefulness and Quality icon Arbitration Clauses Tied to ERISA Claims Face Uncertain Fate

"As a result of court rulings and the challenges of creating arbitration clauses that don't run afoul of ERISA or states' laws or legal precedent, the theoretical allure of arbitration to avoid an expensive ERISA court battle may be tempered by unclear reality.... [Plan sponsors] are cautious not only because of conflicting legal rulings but also because their cost-benefit analyses indicate arbitration might not be worth the time and expense."  MORE >>

Pensions & Investments

JCT Description of the Chairman's Mark of the 'Enhancing American Retirement Now (EARN) Act'

189 pages. Also see 15-page section-by-section summary of the Act. The EARN Act is scheduled for hearing by the Senate Committee on Finance on June 22, 2022.  MORE >>

Joint Committee on Taxation [JCT], U.S. Congress

Senate Finance Committee Rolls Out Massive SECURE 2.0 Counterpart

"The Senate Finance Committee on June 17 released the Enhancing American Retirement Now (EARN) Act, its counterpart to the House-passed SECURE 2.0 -- a massive piece of legislation that includes a number of key provisions[.]"  MORE >>

American Retirement Association [ARA]

Public Pension Reforms and Retirement Decisions: Narrative Evidence and Aggregate Implications

"In response to pension retrenchments implemented immediately, people close to retirement stay in the work force longer. News about future pension retrenchments with implementation lags, however, is likely to lead this group to exit the labor market. This decline in the labor force participation rate is particularly strong for reforms with long lags, ones that introduce fundamental policy changes, and where citizens have lower trust in the government."  MORE >>

National Bureau of Economic Research [NBER]; purchase required for full document

Designing a Portfolio to Weather Tumultuous Periods and Achieve Your Financial Goals

"[F]inancial advisors generally prefer to promote probability-based approaches involving significant investment in equities. Actuaries and economists, however, prefer to match non-risky assets with essential spending liabilities utilizing a safety-first approach (also known as liability driven investing). This doesn't mean that retired households that utilize a safety-first approach shouldn't invest in equities (they should), but in order to avoid taking on too much investment risk, they need to focus first on funding their Floor Portfolio and second on funding their Upside Portfolio."  MORE >>

Ken Steiner, FSA Retired


Exceptional Usefulness and Quality icon The Pleading Standard for Fiduciary Imprudence Cases: The Sixth and Seventh Circuits Disagree in Oral Arguments on What the Supreme Court Held in Hughes v. Northwestern

"Six months after the Supreme Court decision in Northwestern, we have one highly respected appellate judge saying that the Supreme Court was 'perfectly clear' that all excessive cases must be allowed to proceed to discovery, and that the only way for plan fiduciaries to justify their behavior is on a motion for summary judgment. But another respected appellate judge takes the opposite position that the Northwestern decision was limited to just one issue and that the Court ruled that plaintiffs must allege sufficient facts about an imprudent process in order to proceed beyond the motion to dismiss stage."  MORE >>

Euclid Specialty Managers


More Problems with Lifetime Income Disclosures

"Many participants do not look at their quarterly statements, preferring the immediate feedback of checking online information with current account balances and asset allocations, Those who do look at their quarterly statements often stop at the first page if the account balance meets their expectations, remaining unaware of information on fees, projected income, etc.... Only a handful will understand the retirement income estimates, what is in, what is left out, and why the estimates change."  MORE >>

401(k) Specialist

Benefits in General

Form 5500 Reminders for Plan Sponsors

"The due date may be extended if Form 5558 is properly filed with the IRS by the due date.... The information entered onto a Form 5558 should match the Form 5500 and the plan ... [R]ecognize it is your filing made under penalty of perjury; not that of a service provider who may have populated the form ... An auditor might sample some compliance issues and/or instances of late deposits; however, the process is not a comprehensive analysis of a plan's legal compliance."  MORE >>

Hawley Troxell

Executive Compensation and Nonqualified Plans

[Guidance Overview]

SEC Reminds Public Company Executives That Clawbacks Are a Priority

"The [SEC] reopened the comment period for the proposed clawback rules initially proposed in July 2015, signaling that final rules will follow the end of this third comment period on the proposal.... After the SEC's final rules are issued, any issuer that has already adopted compensation recovery policies should examine its existing policies against the final rules to identify areas of likely change, including the applicable events that trigger clawback, the number of executives to whom the policy applies, the length of the applicable lookback window and any fault/misconduct requirements."  MORE >>

Debevoise & Plimpton LLP

Employee Benefits Jobs

View job as Benefits Supervisor
          for NFL Player Benefit Office Benefits Supervisor

NFL Player Benefit Office

Baltimore MD

View job as Benefits Supervisor
          for NFL Player Benefit Office

View job as Compliance Consultant - DC Plans
          for Blue Chip Retirement Plans, Inc. Compliance Consultant - DC Plans

Blue Chip Retirement Plans, Inc.

Remote / WI

View job as Compliance Consultant - DC Plans
          for Blue Chip Retirement Plans, Inc.

View job as Retirement Plan Relationship Manager
          for ERISA Services, Inc. Retirement Plan Relationship Manager

ERISA Services, Inc.

Loganville GA / Sterrett AL

View job as Retirement Plan Relationship Manager
          for ERISA Services, Inc.

View job as Plan Services Consultant II
          for CUNA Mutual Plan Services Consultant II

CUNA Mutual


View job as Plan Services Consultant II
          for CUNA Mutual

View job as Plan Consultant II - RKO Team
          for CUNA Mutual Plan Consultant II - RKO Team

CUNA Mutual


View job as Plan Consultant II - RKO Team
          for CUNA Mutual

Selected New Discussions

Incorrect ADP Refund to an HCE

"A plan failed the ADP test for the 2020 plan year and a refund was properly issued to the HCE by 12/31/2021. When preparing the 2021 testing, the client discovered some of the compensation reported for 2020 was incorrect. The 2020 ADP test was re-run with the correct compensation and the HCE is now due an additional $184.00. Since we are past the 12 month correction period, will the refund fall under EPCRS and a one-to-one correction required?"

BenefitsLink Message Boards

Take an In-Service Distribution and Then Roll It Back Over Within 60 Days?

"As we enter into another economically challenging time, I have a business owner who needs money for a short term issue. He wants to, and can, take an in-service distribution, and then return it to the plan within 60 days. I'm thinking he's better off putting it into a new IRA but the advisor is saying to put it back into the plan. What do other piggy bank owners do with such distributions? He understands he'll receive a taxable 1099-R."

BenefitsLink Message Boards

Different EIN's for DB Plan and DC Plan Sponsored by Same Company?

"Have a potential client that's looking to setup both a DC and DB Plan. No issue in that, but where they are looking to invest the money is asking for separate EIN's for each plan. Is that normal?"

BenefitsLink Message Boards

Grandfathered Deferred Comp -- Changing from Employee to Independent Contractor Status Causes a Termination Event?

"Has anyone seen guidance regarding paying out grandfathered deferred comp when the employee who deferred the compensation becomes an independent contractor? Per Section 1.409A-1(h)(ii) of the 409A regs, an employee is not considered to have a separation from service if he or she shifts from employee status to independent contractor status. A client has a grandfathered 2003 deferred compensation agreement. The executive deferred the compensation until 'Retirement,' which has a rather loose definition."

BenefitsLink Message Boards

Press Releases

Ascensus Wins Retirement Leader of the Year


Paychex Surpasses 100,000 Milestone for Number of 401(k) Clients Served


Webcasts and Conferences
(Retirement Plans / Executive Compensation)

Latest ERISA Ruling: Where Do Plan Sponsors Go From Here?



Last Issue's Most Popular Items

RISE & SHINE Act: The Senate's Initial Response to House-Passed SECURE 2.0

Jackson Lewis P.C.

New IRS Pre-Audit Compliance Program for Retirement Plans

McDermott Will & Emery

Lawsuits Put Spotlight on Paying Remote Workers' Expenses

Society for Human Resource Management [SHRM]; membership may be required to view article

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

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