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Retirement Plans Newsletter

September 1, 2022

3 New Job Opportunities 3 New Job Opportunities


[Guidance Overview]

IRS Launches 90-Day Pre-Examination Compliance Pilot (PDF)

"A response to the IRS must be sent, and appropriate action must be taken, within the 90-day window.  Not all errors are eligible to be self-corrected under the principles of ECPRS. Closing agreements reached under the 90-day pre-examination compliance program will include sanctions determined according to the VCP fee structure, which are likely to be significantly less than equivalent Audit CAP sanctions."  MORE >>

Roberts & Holland LLP

Low-Cost Index Funds in the Crosshairs of New 401(k) Lawsuits

"Each of the 401(k) plans involved in the lawsuits offered the target-date BlackRock LifePath Index Funds, which received the highest rating in the Morningstar 2022 Target-Date Landscape report. Despite this rating and the fact that TDFs are not meant to have the best performance of a 401(k) plan's investment options, the plaintiffs argue that plan fiduciaries failed to consider the BlackRock TDFs' return potential and instead only 'chased the low fees' charged by the funds."  MORE >>

Holland & Knight

Fiduciary Rule Challenge 'Friended' by ACLI

"A lawsuit challenging the [DOL's] subsequent guidance/application of the so-called fiduciary rule has some support from the American Council of Life Insurers (ACLI).... The pushback here is focused on a key element of the so-called five-part test -- the on-going relationship between the advisor and the advisee." [Federation of Americans for Consumer Choice v. DOL, No. 22-243 (N.D. Texas amicus brief filed Aug. 29, 2022)]  MORE >>

American Retirement Association [ARA]

Retirement Plan Providers' Investments in Technology Are Paying Off

"A quarter of plan participants now prefer to receive 401(k) account information via email, up from 9% in 2020, while 86% said digital savings tools and calculators offered on the provider's website are very or somewhat helpful, up from 77% ... Nearly three-quarters of participants expressed the same sentiment about digital content like articles, videos and webinars posted on the website, up 20% from 2020."  MORE >>

InvestmentNews; subscription may be required

Upcoming Deadline icon Measuring UVBs for Variable-Rate Premiums: The Alternative vs. Standard Method Election Due October 15, 2022

"Defined benefit plan sponsors that [1] are currently using the alternative (24-month average) method to determine unfunded vested benefits (UVBs) for purposes of calculating [PBGC] variable-rate premiums, and who [2] have the ability to elect to switch to the standard (spot-rate) method, may want to consider electing to switch to the standard method for 2022 ... While that election will generally not have a significant effect on 2022 variable-rate premiums, it is likely that it will reduce 2023 premiums significantly. And there are some 'pros and cons' to making that election this year."  MORE >>

October Three Consulting

Factors Contributing to Lower Retirement Confidence Among Women Who Are Not Married (PDF)

37 pages. "Married women workers are more likely to say that they are confident they will have enough money to live comfortably throughout their retirement years than both divorced and single, never-married women workers.... Married women workers are more likely to agree that they feel knowledgeable about managing their day-to-day finances than single, never-married women workers.... Both divorced and single, never-married women workers are more likely to agree that retirement savings is not a priority relative to the current needs of their family than married women workers."  MORE >>

Employee Benefit Research Institute [EBRI]

Social Security Reform: Taxation Options (PDF)

10 pages. "Both the tax rate and the limit on wages subject to taxation have been raised periodically to fund increases in the scope and amount of benefits.... This issue brief explores a wide variety of proposals for increasing system revenue that have been made over the years by members of Congress, government-appointed panels and commissions, and outside experts."  MORE >>

American Academy of Actuaries

Social Security Reform: Benefit Formula Options (PDF)

15 pages. "This issue brief explores a wide variety of proposals for changing the formulas for determining benefits that have been made over the years by members of Congress, government-appointed panels and commissions, and outside experts, with an eye toward how the proposed changes would affect the balance between individual equity and social adequacy."  MORE >>

American Academy of Actuaries

Employee Benefits Jobs

View job as Pension Compliance Specialist
          for CUNA Mutual Pension Compliance Specialist

CUNA Mutual

Madison WI

View job as Pension Compliance Specialist
          for CUNA Mutual

View job as Manager II, Operations - Client Services
          for CUNA Mutual Manager II, Operations - Client Services

CUNA Mutual

Remote / Madison WI

View job as Manager II, Operations - Client Services
          for CUNA Mutual

View job as Business Systems Analyst
          for IJOIN Business Systems Analyst



View job as Business Systems Analyst
          for IJOIN

Selected New Discussions

Roth Conversion with Withholding, Under 59-1/2

"How should withholding be reported on a Roth conversion if under 59-1/2? We have 2 opinions.

1. If a conversion occurs for someone under 59-1/2 and there is withholding then report on two 1099-Rs -- one showing the distribution as code 2 and another saying the withholding was distributed to the client as code 1.

2. The conversion both the cash and withholding would fall under the exception to excise tax withholding so both legs should be reported under a distribution code 2.

Which is right?"

BenefitsLink Message Boards

Electronic Signing of Plan Documents -- Getting Pushback from Record Keeper

"Is anyone else getting push back from any record keeper regarding e-signed plan documents? Nationwide is telling us that they have to wet signatures and are not accepting our e-signed versions. I know that other RKs send their documents out using e-signing so this has to just be Nationwide."

BenefitsLink Message Boards

Which Acts Require a 'Manual' (Rather Than Electronic) Signature?

"A BenefitsLink discussion yesterday remarked on a service provider's request for a nonelectronic signature, despite an IRS procedure that permits an electronic signature. There is no one comprehensive rule that answers questions about the acts or circumstances that require a manual, rather than an electronic, signature. For some of us, it's not easy to recall which acts (of those that call for a plan sponsor's or plan administrator's signature) permit an electronic, or require a 'manual', signature. So, let's crowdsource our list. The focus is on what the three U.S. government agencies -- the Treasury department's [IRS], the Labor department's Employee Benefits Security Administration (EBSA), and the [PBGC] -- say is permitted or required."

BenefitsLink Message Boards

Looking to Terminate Plan But Cannot Find Record of Any 5500 Filings

"Have a sole proprietor with a profit sharing plan, would like to terminate and roll funds to an IRA. In looking through paperwork it appears there may have been 2 Plan ID's used.....checked both and do not see record of any 5500 filings. Plan was established in 2005 and, until recently, had more than $250K in assets each year. Only activity are yearly RMD's. Looking for advice on how to proceed."

BenefitsLink Message Boards

Last Issue's Most Popular Items

Eighth Circuit Holds ERISA Does Not Preempt State Law Claims Against Recipient of Deceased Participant's 401(k) Plan Benefits

Roberts Disability Law

What's in the New 401(k) Retirement Bills

U.S. News & World Report

Seventh Circuit Upholds Dismissal of ERISA Claims Alleging Mismanagement of Retirement Plan by Oshkosh Corporation

Roberts Disability Law

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

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