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Retirement Plans Newsletter

August 11, 2022


[Guidance Overview]

Exceptional Usefulness and Quality icon DOL's Proposed QPAM Amendments May Amount to an Effective Revocation of the Exemption

"If adopted in its current form, the Proposal would come dangerously close to a revocation of the exemption ... [T]he DOL outlined six objectives behind the proposed amendments. While the objectives on their face appear reasonable, the actual conditions proposed to attain those objectives should raise concerns for both plans and investment providers."  MORE >>

Eversheds Sutherland


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[Guidance Overview]

DOL Proposes Significant Changes to the QPAM Exemption: What You Need to Know

"The Proposed Amendment does not provide for any grandfathering of existing QPAMs or QPAM management agreements.  ... [If] the Proposed Amendment is finalized in its current form, existing QPAM management agreements would need to be amended in order to comply with the revised conditions of the exemption."  MORE >>


SECURE Act 2.0 Would Bring Significant Changes for Retirement Plan Sponsors, IRA Providers, and Service Providers

"While there appears to be bipartisan support for many of the EARN Act's proposals, before being considered by Congress, there will need to be a reconciliation between the EARN Act and the other proposed retirement legislation.... [M]any are hopeful that the final version of the new retirement legislation, dubbed SECURE Act 2.0, will be passed later this year. A few of the EARN Act's key provisions affecting larger plan sponsors and IRA providers are summarized [in this article]."  MORE >>

Morgan Lewis

Participant Loans: Common Errors and How to Fix Them

"We forgot to implement the loan deductions through payroll, now what? ... We changed payroll cycles, does that impact the participant loans? ... We are changing recordkeepers and did not withhold the loan repayments during the blackout period, now what?"  MORE >>


Will 2023 Bring a Rough Ride for Smoothed Pension Assets?

"When the latest round of pension relief was signed into law in late 2021, many thought they'd seen the last of minimum funding concerns for a while as liability volatility was effectively neutralized for a full decade.... Market value gains and losses for [some] plans ... are currently hitting the 'smoothed' value dollar-for-dollar ... And if things don't turn around soon, 2023 could bring some rough results for unsuspecting plan sponsors, including a possible sudden reemergence of minimum required contributions."  MORE >>

Principal Financial Group

Multiemployer Pension Funding Study: Mid-Year 2022 Edition

"Milliman analysis shows a sharp decline in multiemployer plans' funded ratio from 91% to 80% in the first half of 2022.... The $6.7 billion in SFA under ARP that has been paid through June 30 has increased the aggregate funded percentage by about 1%. In total, [PBGC] estimates $74 billion to $91 billion in SFA will be paid, with a median estimated payout of $82 billion."  MORE >>


State-Mandated Retirement Plans for Private-Sector Employees Gain Traction

"As of July 2022, 11 states have passed legislation authorizing auto-IRA programs. Six of those states ... have live programs.... There are more than 497,000 funded accounts with $457 million in retirement savings that can be traced to state mandates ... [One] estimate is that when all 11 states have live programs, they will provide retirement accounts to 31 percent of the current uncovered workforce, or 19 million workers."  MORE >>


CRS Report: Ownership of Retirement Assets (PDF)

10 pages. "This report provides data on retirement asset ownership among U.S. households in 2019 -- specifically, household ownership and account balances of DC accounts, IRAs, and retirement assets (DC accounts plus IRAs)[.]" [R47213 Aug. 10, 2022]  MORE >>

Congressional Research Service [CRS]

Constructing a Household Balance Sheet Using Basic Actuarial and Economic Principles

"[C]onstructing a household balance sheet using basic actuarial and economic principles is an important element of good retirement financial planning ... [This] approach produces a much more robust planning tool than Monte Carlo models frequently used by financial advisors or Systematic Withdrawal Plans (SWPs) such the 4% Rule or the RMD rule."  MORE >>

Ken Steiner, FSA Retired

Takeaways from Comments to DOL on Possible Actions to Mitigate Climate-Related Financial Risks

"There are four major takeaways from EBSA's collection of public comments on its potential responses to climate-related financial risks. [1] EBSA has not committed to any rulemaking.... [2] Plan fiduciaries [are] concerned about solely focusing on climate risk.... [3] Financial industry groups urge EBSA to limit regulations to ERISA and coordinate with SEC.... [4] ESG rules face similar opposition by industry groups."  MORE >>

Hall Benefits Law

Legislation Introduced to Allow Police Officers in Pennsylvania to Buy Back Service Credit of 'Other' Police Service

"Pennsylvania State Senator Mike Regan (R-Cumberland & York counties) re-introduced legislation Senate Bill 669 to allow certain police officers to purchase up to five years of pension service credit for prior police service, including part-time service, in a police department. All Pennsylvania cities (other than Philadelphia), boroughs, towns, townships and regional police departments would be required to amend their police pension plans to allow this type of service purchase."  MORE >>

Cowden Associates, Inc.


ESOP Association Amicus Brief Argues That DOL Has Been Misinterpreting the Adequate Consideration Exemption

"The brief supports an award of attorneys' fees and costs against the [DOL] on the basis that the DOL has been taking unreasonable positions on ERISA's 'adequate consideration' exemption. [The authors] discuss the issue in the appeal and some of the points raised in the amicus brief." [Walsh v. Bowers, No. 22-15738 (9th Cir. amicus brief filed Jul. 27, 2022)]  MORE >>

Faegre Drinker

Benefits in General

[Official Guidance]

IRS Disaster Relief Notice MO-2022-07, for Victims of Missouri Severe Storms and Flooding

"Victims of severe storms and flooding beginning July 25, 2022, now have until November 15, 2022, to file various individual and business tax returns and make tax payments ... Individuals and households ... that reside or have a business in the Independent City of St. Louis, Montgomery, St. Charles and St. Louis counties qualify for tax relief."  MORE >>

Internal Revenue Service [IRS]

Executive Compensation and Nonqualified Plans

The Importance of 83(b) Elections for Qualified Small Business Stock

"A Section 83(b) election can potentially provide substantial tax savings when a taxpayer receives shares of company stock subject to vesting. The idea is that assuming the stock increases in value from the grant date to the vesting date, the taxpayer has paid income taxes on a lower stock value. The catch, however, is that if the company's stock at the time of vesting is less valuable or worthless, then the taxpayer has paid more in taxes and is not eligible for a refund or credit."  MORE >>

Hanson Bridgett LLP

Selected New Discussions

Mid-Year Safe Harbor Change to Eligibility

"Plan is SH Basic Match with 1 year wait and semi-annual entry. Wants to amend to immediate eligibility but exclude seasonal employees who have not met the eligibility requirements. Is that permitted to be done mid-year?"

BenefitsLink Message Boards

Insurance Premiums Paid Outside of Plan

"There are two life insurance policies owned as plan assets. The premiums were paid outside of plan assets. Normally we would use those payments as part of the contributions for the year, but the issue is that the premiums are actually in excess of the allowed contribution (plus the client also made an additional contribution in '22 for the '21 plan year). Would there be an issue in having the fund reimburse the owners who made the premium payments from outside the plan?"

BenefitsLink Message Boards

Increased TE/GE Enforcement Coming?

"Has anyone had any information as to the degree the IRS budget increase under the Inflation Reduction Act will flow down to TE/GE division and possibly impact plan audit activity?"

BenefitsLink Message Boards

2021 Form 5500 Required for New Profit Sharing Plan Even If No Employer Contribution?

"A client established a profit sharing plan during 2021. The client also has a 401(k) plan but they wanted the profit sharing plan to be a stand-alone program. Due to certain cash flow issues, they've just decided to skip the contribution for 2021. There are well over 200 eligible participants. The auditor says they've never had this problem before. Has anyone faced this situation who can offer some guidance?"

BenefitsLink Message Boards

Press Releases

Katherine Schulze Joins MissionSquare Retirement to Lead the Company’s Legal and Corporate Affairs Team

MissionSquare Retirement

Know Your Numbers for 401(k) Day

PSCA [Plan Sponsor Council of America]

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

Benefit Plan Fiduciary Bootcamp

September 20, 2022 WEBCAST

Groom Law Group

Mastering IRC 457(f): Guidance for ERISA Counsel in Structuring Deferred Compensation Plans for Nonprofit Entities

October 19, 2022 WEBCAST


Last Issue's Most Popular Items

IRS Extends Deadline for Plan Sponsors to Adopt Amendments Reflecting Recent Law Changes


IRS Extends Amendment Deadlines for SECURE, Miners and CARES Acts


Why the BlackRock Investment Imprudence Cases Are Implausible and Should Be Dismissed Under the Federal Pleading Standard

Euclid Specialty Managers

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

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