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Retirement Plans Newsletter

June 22, 2022

3 New Job Opportunities 3 New Job Opportunities

 

[Official Guidance]

Text of IRS Notice 2022-29: Weighted Average Interest Rates, Yield Curves, and Segment Rates for June 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]

[Official Guidance]

PBGC Regulatory Agenda, Spring 2022

No changes from the Fall 2021 PBGC Regulatory Agenda.

Proposed Rules

  • Valuation Assumptions and Methods: Interest and Mortality Assumptions for Asset Allocation in Single-Employer Plans and Mass Withdrawal Liability Determination in Multiemployer Plans
  • Multiemployer Plan Guaranteed Benefits
  • Improvements to Rules on Recoupment of Benefit Overpayments
  • Penalties for Failure to Provide Certain Notices or Other Material Information
  • Actuarial Assumptions for Determining an Employer's Withdrawal Liability

Final Rules

  • Benefit Payments and Allocation of Assets
  • Examination and Copying of PBGC Records
  • Adjustment of Civil Penalties
  • Special Financial Assistance by PBGC

See also the preamble at Regulatory and Subregulatory Actions Under Development. ("Many of these actions are the result of PBGC's active retrospective regulatory review program to identify and ameliorate inconsistencies, inaccuracies, and requirements made irrelevant over time.")  MORE >>

Pension Benefit Guaranty Corporation [PBGC]

[Guidance Overview]

Best Interest Standard of Care for Advisors, Part 94: Maintaining Documentation for Compliance with PTE 2020-02

"While much attention has been given to the 'conditions' for obtaining the relief provided by PTE 2020-02, there hasn't been much discussion of the PTE's requirements to retain documentation of compliance with those conditions. This articles discusses those requirements."  MORE >>

FredReish.com

Excessive Fee Cases Revived After Supreme Court's Northwestern Decision

"In both cases, district courts dismissed the claims after finding the plaintiffs needed to allege more than the mere availability of similar lower-fee funds ... However, two different three-judge panels of the 9th Circuit disagreed with the lower courts, finding the plaintiffs' barebones allegations sufficed to survive a motion to dismiss. Both appeals had been on hold pending the U.S. Supreme Court's recent decision in Hughes v. Northwestern University[.]' [Davis v. Salesforce.com, Inc., No. 21-15867 (9th Cir. Apr. 8, 2022, unpub.); Kong v. Trader Joe's Co., No. 20-56415 (9th Cir. Apr. 15, 2022, unpub.)]  MORE >>

Mercer

Senate Committees Take Up Retirement Savings Proposals

"Here's how the House-passed bill and the Senate EARN bill compare on several key changes[.]"  MORE >>

Slott Report

Which Plan Sponsors Are Most Likely to Implement a Corporate Pension Risk Transfer?

"[The authors] model PRT decisions as an option exercise problem and ... [find that] the propensity to conduct a PRT is higher for firms with higher macroeconomic flow-through costs, lower stock market investments, more inactive employees, and lower default risk."  MORE >>

Sven Klingler, Suresh M. Sundaresan, and Michael A Moran, via SSRN

Public Pension Funding Index, May 2022

"Investment losses during April 2022 lowered the estimated funded status of the 100 largest U.S. public pension plans from 82.7% at the end of March 2022 to 78.6% at the end of April 2022 ... The deficit between the estimated assets and liabilities rose from $1.000 trillion to $1.243 trillion during April."  MORE >>

Milliman

Bear Market Boosts the Tax Advantages of a Roth Conversion

"[A] market downturn presents an opportunity to convert a higher percentage of a pre-tax account to a Roth account for the same amount of taxable income, for those who otherwise should be doing a Roth conversion given their current tax rate."  MORE >>

Nerd's Eye View

CRS in Focus: Social Security's Funding Shortfall

"Social Security's projected long-range funding shortfall is driven largely by demographic factors.... [P]rojections show the ratio of workers paying into the system to support each beneficiary is estimated to fall from 2.8 in 2022 to 2.3 in 2034.... Policy proposals to address Social Security's projected funding shortfall typically include a combination of revenue increases and benefit adjustments.... [P]olicymakers generally agree that taking legislative action sooner rather than later could mitigate the effects on workers and beneficiaries and allow people as much time as possible to adjust to the changes." [IF 10522, updated Jun. 22, 2022]  MORE >>

Congressional Research Service [CRS]

[Opinion]

Americans for Tax Fairness Letter to Senate Finance Committee Opposing EARN Act (PDF)

"[ATF is] especially concerned that the complex set of phase-ins, the encouragement of Roth IRAs and 401(k)s, the revenue losing measures, and the dozens of smaller provisions in the law ... mean that the risks of the legislation are not now well understood. [ATF urges] you not to proceed without a full review of the legislation's impact on inequality, the racial wealth gap, and the long-term impact on the federal budget.... [T]he proposal would do more harm than good on these criteria."  MORE >>

Americans for Tax Fairness [ATF]

Benefits in General

[Official Guidance]

DOL Regulatory Agenda, Spring 2022, Including Employee Benefit Items

Benefits-related items from EBSA and from the Wage and Hour Division (WHD) (changes from the Fall 2021 DOL Regulatory Agenda are noted):

Prerule Stage

  • Improved Fee Disclosure for Welfare Plans
  • Improving Participant Engagement and Effectiveness of ERISA Retirement Plan Disclosures
  • Pooled Employer Plans

Proposed Rules

  • Improvement of the Form 5500 Series and Implementing Related Regulations Under ERISA
  • Definition of the Term 'Fiduciary'
  • Prohibited Transaction Exemption Procedures
  • Provider Nondiscrimination Requirements for Group Health Plans and Health Insurance Issuers in the Group and Individual Markets
  • Mental Health Parity and Addiction Equity Act and the Consolidated Appropriations Act, 2021
  • Short-Term Limited Duration Insurance; Update
  • Coverage of Certain Preventive Services Under the [ACA] (New)
  • Requirements Related to Advanced Explanation of Benefits and Other Provisions Under the Consolidated Appropriations Act, 2021 (New)

Final Rules

  • Pension Benefit Statements -- Lifetime Income Illustrations
  • Adoption of Amended and Restated Voluntary Fiduciary Correction Program
  • Implement SECURE Act and Related Revisions to Employee Benefit Plan Annual Reporting on the Form 5500 (moved from Proposed to Final)
  • Requirements Related to Surprise Billing, Part 1
  • Requirements Related to Surprise Billing, Part 2
  • Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights (moved from Proposed to Final)
  • Amendment of Abandoned Plan Program
  • Updating the Davis-Bacon and Related Acts Regulations (moved from Proposed to Final)

MORE >>

U.S. Department of Labor [DOL]

[Official Guidance]

IRS Regulatory Agenda, Spring 2022, Including Employee Benefit Items

Partial list of benefit-related provisions (changes from the Fall 2021 IRS Regulatory Agenda are noted):

Proposed Rules

  • Reporting and Notice Requirements for Deferred Vested Benefits Under Section 6057
  • Nondiscrimination Relief for Closed Defined Benefit Plans (moved from Final to Proposed)
  • SECURE Act Modifications to Certain Rules Governing 401(k) Plans
  • Provider Nondiscrimination Requirements for Group Health Plans and Health Insurance Issuers in the Group and Individual Markets
  • Mental Health Parity and Addiction Equity Act and the Consolidated Appropriations Act, 2021
  • Requirements in Connection With Coverage of Certain Preventive Services (New)
  • Requirements Related to Advanced Explanation of Benefits and Other Provisions Under the Consolidated Appropriations Act, 2021 (New)

Final Rules

  • Update to Minimum Present Value Requirements for Defined Benefit Plan Distributions
  • Application of Normal Retirement Age Regulations to Governmental Plans
  • Additional Rules Regarding Information Reporting of Minimum Essential Coverage (New)
  • Withholding on Certain Retirement Plan Distributions Under Section 3405(a) and (b)
  • MEPs and the Unified Plan Rule (moved from Proposed to Final)
  • Application of the Employer Shared Responsibility & Certain Nondiscrimination Rules to HRAs and Other Account-Based Group Health Plans Integrated With Individual Health Insurance Coverage or Medicare (New)
  • Guidance on 401(a)(9) Required Minimum Distributions (moved from Proposed to Final)
  • Requirements Related to Surprise Billing, Part 1
  • Requirements Related to Surprise Billing, Part 2 (moved from Proposed to Final)
  • Requirements Related to Surprise Billing, Part 3 (Temporary Regulations)
  • Requirements Related to Surprise Billing, Part 4 (Temporary Regulations)
  • Information Reporting of Health Insurance Coverage and Other Issues Under Sections 6055 and 6056 (moved from Proposed to Final)

   MORE >>

Internal Revenue Service [IRS], U.S. Department of the Treasury

[Guidance Overview]

Big Changes Possible for the Davis-Bacon Act

"[T]he DOL has issued proposed regulations that represent the most comprehensive changes to the DBA since 1982.... The proposed regulations would require contractors to annualize ... all fringe benefit contributions, including for 'defined contribution pension plans (DCPPs)' to determine the hourly equivalent for which they can take a credit against the fringe benefit obligation.... For both funded and unfunded [fringe benefit] plans, the proposed regulations would also require an employer to pay any amount that an employee has been underpaid (including earnings) to an employee. In addition, employers would need to notify employees of the fringe benefits being paid and would need to ensure that the plans are properly funded."  MORE >>

Ascensus

Employee Benefits Jobs

View job as Junior Implementation Specialist - 401(k) Administration
          for Ubiquity Retirement + Savings Junior Implementation Specialist - 401(k) Administration

Ubiquity Retirement + Savings

Remote / San Francisco CA

View job as Junior Implementation Specialist - 401(k) Administration
          for Ubiquity Retirement + Savings

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

ERISA Services, Inc.

Remote / Loganville GA / Sterrett AL

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

View job as Retirement Plan Services Manager
          for Alerus Financial Retirement Plan Services Manager

Alerus Financial

Remote

View job as Retirement Plan Services Manager
          for Alerus Financial

Selected New Discussions

Loan Reporting on Form 5500 (Receivables)

"Employer made the 12/31/21 loan repayments in early 2022. Would these be included as a receivable to the plan? We take receivable contributions into account, so I'm just wanting to make sure that loans were handled the same way and not on a cash basis."

BenefitsLink Message Boards

When Is a Withdrawal by a Beneficiary Subject to the 10% Early Distribution Tax?

"I have read that a younger beneficiary of a deceased plan participant is entitled to take a lump sum distribution and not be subject to the 10% premature distribution tax because the deceased participant was older than 59-1/2. But then I also see in an IRS Publication that '... you will not have to pay the 10% early withdrawal tax even if you and/or the deceased person are under 59-1/2.' Huh?"

BenefitsLink Message Boards

4-Tier Integrated PS Formula Must Use 100% of the Taxable Wage Base?

"We have a debate in the office. A 401(k) plan has an an Integrated (4-tier) PS allocation that specifies 100% of the TWB in its adoption agreement. Could we use a lower integration level (e.g., 46% of the TWB), if it's nondiscriminatory in operation?"

BenefitsLink Message Boards

Press Releases

Hue Health and Banner Health Launch '39North,' a Direct Primary Care Plan in Northern Colorado, Powered by Flume Health

Hue Health

OneAmerica® Brings Aboard Veteran to Head Retirement Business Development

OneAmerica

Tim Hunt Joins Newfront's Growing Employee Benefits Team

Newfront

Morgan Stanley at Work to Acquire Leading Nonqualified Deferred Compensation Plan Provider American Financial Systems

Morgan Stanley

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

Some Crypto Clarity for Retirement Plans

RECORDED

American Retirement Association [ARA]

SECURE 2.0: What Comes Next?

June 30, 2022 WEBCAST

Groom Law Group

Cash Balance Plans for Advisors

August 4, 2022 WEBCAST

Nova 401(k) Associates

Demand Stays Strong for Cash Balance Plans

September 21, 2022 WEBCAST

The Retirement Advantage [TRA]

Last Issue's Most Popular Items

The New IRS Pre-Examination Pilot Program: Key Features and Questions

Groom Law Group

Text of IRS Rev. Proc. 2022-28: No Letter Rulings for Certain Transactions Involving Excess Plan Assets (PDF)

Internal Revenue Service [IRS]

Why Are 401(k) PEPs Growing at a Slower Than Expected Rate?

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

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