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Retirement Plans Newsletter

September 14, 2022

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[Official Guidance]

Text of PBGC Interest Rate Assumptions for Valuing Benefits in Single-Employer Plans, Fourth Quarter 2022

"The fourth quarter 2022 interest assumptions will be 3.90 percent for the first 20 years following the valuation date and 3.65 percent thereafter. In comparison with the interest assumptions in effect for the third quarter of 2022, these interest assumptions represent no change in the select period (the period during which the select rate (the initial rate) applies), an increase of 1.09 percent in the select rate, and an increase of 0.71 percent in the ultimate rate (the final rate)."  MORE >>

Pension Benefit Guaranty Corporation [PBGC]

[Sponsor]

SPARK Forum - November 6-8, 2022 -- The Breakers, Palm Beach, FL

3 days packed with actionable insights for advisors, recordkeepers and plan providers. Explore latest trends, strategies and ideas to lead through disruption. Join the retirement event with the most senior audience and network with purpose. Register Now.

Sponsored by SPARK

[Guidance Overview]

Exceptional Usefulness and Quality icon IRS Makes Changes to Determination Letter Application Program and Electronic Filing in General (PDF)

"This year, Rev. Proc. 2022-4 made some notable changes to the determination letter application filing process. This article provides background on changes made under the Revenue Procedure to the determination letter filing process, including utilizing pay.gov, some 'nuts and bolts' advice regarding navigating the website, filing an IRS Form 2848 electronically, and related considerations."  MORE >>

Groom Law Group, via Bloomberg Tax Management Compensation Planning Journal

[Guidance Overview]

What Employers Contributing to Multiemployer Plans That Receive 'Special Financial Assistance' Need to Know

"[The Final Rule] clarifies that a condition on the receipt of SFA is that a [multiemployer plan] may not accept a collective bargaining agreement that allows for a reduction in the contribution rate, or a change in the basis on which the contributions are made that would yield a contribution obligation reduction, from what was set forth in a collective bargaining agreement as of March 11, 2021, including agreed-to contribution increases in those agreements."  MORE >>

Fox Rothschild LLP

[Guidance Overview]

The 415(c) Limit for 401(k) Plans: FAQs for Employers

"In general, the 415(c) limit is straightforward. When it's not, a skilled 401(k) provider will know how to account for the complicating factors.... [This article provides] a FAQ with answers to the most common questions."  MORE >>

Employee Fiduciary

[Guidance Overview]

What Broker-Dealers Need to Know About Correcting PTE 2020-02 Mistakes

"[T]he PTE provides a self-correction process. Unfortunately, some conditions of the self-correction process are difficult to interpret and additional DOL guidance is needed. To avoid these challenges, broker-dealers should implement good processes and documentation to satisfy the PTE conditions and closely supervise their investment professionals to ensure that the processes are followed."  MORE >>

Faegre Drinker

[Guidance Overview]

Can Your Hospital District Have a 403(b) Plan?

"[T]he fact that a particular entity is exempt from federal and state income taxes ... can be based on the fact that the district is a 'local government' agency that is also exempt from taxes.... [M]any retirement plan advisers and consultants often 'assume' that 'tax-exempt' status means section 501(c)(3) status; they proceed to recommend and set-up a 403(b) when the client-entity involved does not have the right type of tax-exempt status."  MORE >>

Best Best & Krieger LLP

Third Circuit Sides with Plan Fiduciaries in Johnson & Johnson Stock Drop Case on 'More Harm Than Good' Standard for Early Disclosure

"The Third Circuit, like the Fifth and the Ninth Circuits, seems to be holding a fairly tight line on stock drop cases -- requiring that plaintiffs clear the 'high bar' of the 'more harm than good' test before proceeding. And the 'Jander exception' to this rule -- requiring disclosure by fiduciaries where ultimate disclosure is 'inevitable' -- is, in the Third Circuit at least, being limited to a very narrow circumstance: where disclosure is imminent, and it has (at the time the motion to dismiss is being considered) already been admitted by the sponsor that disclosure is or was necessary." [Perrone v. Johnson & Johnson, No. 21-1885 (3d Cir. Sep. 7, 2022)]  MORE >>

October Three Consulting

Seventh Circuit Affirms DOL's Authority to Investigate ERISA Plan Cybersecurity

"A defined contribution plan recordkeeper must comply with a broad [DOL] administrative subpoena seeking information about cybersecurity practices ... The subpoena stems from DOL's investigation of alleged cybersecurity breaches, which the agency says led to unauthorized benefit distributions. As part of the investigation, DOL is seeking a wide range of documents and communications, including information about Alight's plan sponsor clients and participants." [Walsh v. Alight Solutions LLC, No. 21-3290 (7th Cir. Aug. 12, 2022)]  MORE >>

Mercer

Social Security COLA on Track to Be Highest in 40 Years

"Based on new CPI-W data through August, estimates by The Senior Citizens League show that the Social Security COLA for 2023 will be 8.7%.... There were only three other times since the start of automatic adjustments that it was higher -- 9.9% in 1979, 14.3% in 1980 and 11.2% in 1981.... The Social Security Administration is expected to announce the COLA on Oct. 13, 2022[.]"  MORE >>

American Retirement Association [ARA]

U.S. Retirement Wellbeing Ranking Slips in Global Index

"[The] 2022 Global Retirement Index from the Natixis Center for Investor Insight ... said the U.S. barely held on to a top 20 position partly due to the progress other countries have made in improving retirement benefits and programs.... And despite the Center for Disease Controls recently noting that life expectancy has declined in the U.S., one of the biggest retirement planning mistakes Americas make is underestimating how long they will live."  MORE >>

InsuranceNewsNet.com

Retirement 'Super Savers' Undeterred by Market Volatility and Inflation, Prioritizing Lofty Savings Goals

"[M]ore than half (59%) of survey respondents said they plan to save more than $20,000 towards retirement in 2022, which is up from 51% in 2021.... [T]he majority of Super Savers (82%) [feel] confident they are in good shape to endure a recession ... Instead of making investment changes, two-thirds (67%) of Super Savers are making lifestyle changes to counter inflation[.]"  MORE >>

Principal Financial Group

[Opinion]

Debunking ERISA's Big Lie That BlackRock LifePath Investment Performance Is 'Deplorable'

"Morningstar has issued a public report debunking the claims in the eleven lawsuits alleging that plan fiduciaries committed fiduciary malpractice by failing to switch out of BlackRock LifePath target-date funds (TDFs) in favor of higher performing investments.... The results-based BlackRock lawsuits are deficient as a matter of law ... because they make no effort to prove an imprudent process -- just circumstantial claims that the alleged lower performance of BlackRock TDFs is somehow evidence of an imprudent fiduciary process."  MORE >>

Euclid Specialty Managers

Employee Benefits Jobs

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New Business Consultant

Retirement Plan Consultants

Remote

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Selected New Discussions

Plan's Trust Can Invest in a U.K.-Based Company?

"Single member company wants to invest in a UK based company. The company is not publicly traded. Are there mixed thoughts? Can it be done?"

BenefitsLink Message Boards

Cash Bonus Paid in 2023 Can Be Shown on a 2022 Form W-2?

"We have an employer who wants a projection for a 2022 profit sharing contribution. Client insists that the bonus being PAID in February or March of 2023 (which is based on 2022 compensation) will be reported on the 2022 Form W-2. I don't see how this is correct, or possible, and although it isn't our problem (we use the projected figures we are given) and it's only a projection, I'd still like to confirm that I'm not crazy (on this issue -- be nice!)"

BenefitsLink Message Boards

Cash Balance Contribution Deductibility Among Members of a Controlled Group

"We have a plan that was adopted by two employers (one employer is owned by the husband, the other by his wife). When it comes time to fund the contributions, do they need to be funded by each employer, or can one employer fund the entire contribution (including the other employees)? In other words: Employer A has 5 eligible employees; Employer B has 5 eligible employees. Does Employer B need to fund the portion of the contributions that will be allocated to its employees' accounts, or can Employer A contribute (and deduct) the amounts that are allocated to all (A and B) employees' accounts?"

BenefitsLink Message Boards

Press Releases

Prudential and MetLife Entrusted to Fulfill $16 Billion in Pension Obligations for 100,000 IBM Retirement Plan Participants and Beneficiaries

Prudential Financial, Inc.

Prime Pensions Acquires Associated Pension Consultants

Prime Pensions

Sana Expands Affordable Health Insurance Offerings for Small Businesses to Alabama

Sana

PAi to Offer CoPilot Prime Solo(k) with American Funds for Small Businesses

PAi

DOL Seeks Nominations for 2023 ERISA Advisory Council

Employee Benefits Security Administration [EBSA], U.S. Department of Labor

Voya to Launch First-of-Its-Kind Workplace Benefits- and Savings-Connected Digital Platform

Voya Financial

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

Hot Topics in the Multiemployer Benefits World

RECORDED

WithumSmith+Brown

2022 Vorys Benefits Conference

September 27, 2022 in OH

Vorys

Last Issue's Most Popular Items

We Could See More RMD Changes This Year

Kiplinger

Cybersecurity Leading Practices: Navigating the DOL Guidance (PDF)

EY

Some Nonfiduciary Liability Issues After Harris Trust (PDF)

The Wagner Law Group

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

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