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Retirement Plans Newsletter

August 17, 2022


[Guidance Overview]

IRS Provides a Partial Extension of the 2022 Plan Amendment Deadlines (PDF)

"[T]he December 31, 2025 amendment deadline generally will apply to both pre-approved plans and individually designed plans. Note that December 31, 2025 is a fixed date and the deadline is not tied to a plan's plan yea....Notice 2022-33 did not provide an extension of the amendment deadline for tax-exempt 457(b) plans."  MORE >>


Seventh Circuit Affirms Dismissal of Claims Seeking Roll Over of Accounts in Multiemployer Defined-Contribution Plan

"The court also found that the trustees and the plan administrator did not violate their ERISA fiduciary duties by not amending the Plans to allow rollovers.... The court rejected Plaintiffs' alternative theory that ERISA Section 4235 requires a plan to transfer assets when an employer withdraws as a result of a change in the bargaining representative. This provision does not apply to defined-contribution plans.' [Dean v. Nat"l Prod. Workers Union Severance Tr. Plan, No. 21-1872 (7th Cir. Aug. 15, 2022)]  MORE >>

Roberts Disability Law

Sixth Circuit Provides Tutorial on Context-Specific Pleading in ERISA Fee-and-Expense Cases After Northwestern v. Hughes

"These decisions effectively rebut the arguments of fiduciary imprudence asserted in most excessive fee lawsuits, where plaintiffs ask the court to infer fiduciary malpractice based on circumstantial evidence of what participants consider an undesirable outcome. In so doing, the Sixth Circuit's analysis is instructive on Hughes."  MORE >>

Greenberg Traurig

Managed Account Fees Challenged in Latest ERISA Lawsuit

"The proposed class action lawsuit suggests the Dover Corporation permitted the payment of excessive recordkeeping and managed account fees within the defined contribution retirement plan it offers to its employers. The suit also suggests the plan fiduciaries' retention of the managed account provider, Financial Engines, constituted a violation of ERISA." [Gosse v. Dover Corp., No. 22-4254 (N.D. Ill complaint filed Aug. 11, 2022)]  MORE >>

PLANSPONSOR; free registration may be required

Morningstar's Active/Passive Barometer: Takeaways for 401(k) Fiduciaries

"When evaluating active and index funds, compare long-term returns.... The odds of outperforming index funds varies by category.... Low-cost active funds are more likely to beat index funds.... Picking active funds that beat index funds takes skill -- and maybe some luck!"  MORE >>

Employee Fiduciary

ESG Fund Allocations Among New, Do-It-Yourself Defined Contribution Plan Participants

"This research explores the allocation decisions of 9,324 newly enrolled DC participants who are self-directing their accounts in a DC plan that offers at least one ESG fund. Overall interest in ESG strategies among these participants is relatively weak, with only 8.9% of participants having any allocation to an ESG fund and average allocations to ESG strategies of only 18.7% among those holding any ESG funds."  MORE >>

David Blanchett and Zhikun Liu, via SSRN

COVID-19 and U.S. Private Pensions (PDF)

14 pages. "The article first discusses how COVID-19 has affected U.S. labor and capital markets, providing background on how the pandemic has disrupted workers' ability to accrue future pensions. The second section discusses the government response through changes in pension laws and regulations. The third section discusses the changes made by pension plan sponsors and the responses of workers."  MORE >>

Benefits Quarterly, published by the International Society of Certified Employee Benefit Specialists [ISCEBS]

Changes in Retirement Savings During the COVID Pandemic

"[U]nlike during the Great Recession, contributions by individuals to retirement savings vehicles did not meaningfully decline.... IRA withdrawals substantially declined in 2020 for those older than age 72.... [L]ikely due to the partial suspension of the early withdrawal penalty, employer-plan withdrawals increased for those under age 60."  MORE >>

Pension Research Council, The Wharton School of The University of Pennsylvania

Even with Market and Economic Uncertainty, Retirement Savers Look Long Term and Continue to Save

"Average retirement account balances decreased, but less than the market decline in Q2 -- and less than the last major period of market volatility.... Significant growth occurred in IRA accounts, especially among Gen Z and Millennials.... Total 401(k) savings rates continue to hover at record levels.... The majority of retirement savers did not make changes to their asset allocation.... Outstanding 401(k) loans and average loan amounts continued to decline."  MORE >>


Safekeeping the Written 403(b) Plan

"The IRS guidance provides that there must be a written 403(b) plan, but does not require that there be a written 403(b) plan document. A written 403(b) plan may consist of materials that collectively contain the plan provisions, such as salary reduction agreements, employee handbooks, investment contracts, and collective bargaining agreements."  MORE >>

VOYA Financial

Benefits in General

A Beneficiary Form Is the Most Important Employee Benefit Form

"[T]he varied distribution protocols outlined in different life insurance and 401(k) plan provider documents are often contrary to what one might expect would be the distribution protocol.... [T]he distribution of large sums of money could potentially be against the deceased employee's wishes. The best way to avoid this issue is to make sure that an individual employee's life insurance and 401(k) beneficiary form(s) exist, is current, and matches any estate planning documents."  MORE >>

Masuda Funai

Selected New Discussions

Deadlines for New Plans (2022)

"Hello! I was hoping someone could help clear up some deadline confusion for new plans. I'm not clear on what the final deadlines are for establishing a new plan (both Traditional and Safe Harbor) for this year. Is it October 1st? If its auto enrollment does that mean September 1st? But if there's not auto enrollment provision then its extended to October 1st? I saw some mention that you can start a plan as late as December 31st, but is that only for plans starting next year? Any clarity would be massively helpful! Thank you!!"

BenefitsLink Message Boards

In-Kind Profit Sharing Deposit

"Can a Profit Sharing contribution be deposited 'in kind', ie transferred from a business account to a 401k plan trust? To make it worse, they really want to transfer it from a personal account."

BenefitsLink Message Boards

Roth Rollover to Plan That Doesn't Have Roth

"We had a participant have a rollover processed from her old employer that was all Roth money not knowing that her current plan does not have Roth. The current plan's custodian cashed the rollover check into the plan as the custodian does not have the ability or discretion on whether the type of funds is acceptable. After current plan sponsor acknowledged they can't accept the current custodian issued check back to prior institution. Now we have prior institution stating they will not accept the money back to help the participant have a new election. Anyone have experience with this type of situation? How to correct? I can't imagine the current custodian having any options other than issuing back to prior institution without having a transaction of some sort in the current plan."

BenefitsLink Message Boards

Press Releases

Carrum Health Selected as Trusted Partner by Accolade to Help Employers Achieve Immediate and Tangible Cost Savings

Carrum Health

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

Helping Employers Address the Gender Gap in Retirement Savings


Williams Mullen

New IRS Pre-Examination Retirement Plan Compliance Program: Correcting Errors, IRC Rules, Key Issues for Plan Sponsors

August 31, 2022 WEBCAST


Reserved Roles for Actuaries in Defined Contribution Plans

September 21, 2022 WEBCAST

Society of Actuaries

Last Issue's Most Popular Items

IRS Extends Deadlines to Adopt Plan Amendments for CARES Act, SECURE Act and More

Holland & Knight

Uncommon 401(k) Plan Sponsor Mistakes That Should Never Happen

Fiduciary News; free registration required

More TDF Underperformance ERISA Lawsuits Filed


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

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