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Retirement Plans Newsletter

September 26, 2022

3 New Job Opportunities 3 New Job Opportunities


[Official Guidance]

2022 IRS Form 4972: Tax on Lump-Sum Distributions (From Qualified Plans of Participants Born Before January 2, 1936) (PDF)

"Use Form 4972 to figure the tax on a qualified lump-sum distribution ... you received in 2022 using the 20% capital gain election, the 10-year tax option, or both. These are special formulas used to figure a separate tax on the distribution that may result in a smaller tax than if you reported the taxable amount of the distribution as ordinary income."  MORE >>

Internal Revenue Service [IRS]

[Guidance Overview]

What's My Limit? Contributions to Both a 403(b) and a Governmental 457(b) Plan

"Since 2002, contributions to 457(b) plans no longer reduce the amount of deferrals to other salary deferral plans, such as 401(k) or 403(b) plans. A participant's 457(b) contributions need only be combined with contributions to other 457(b) plans when applying the annual contribution limit.... Consequently, an individual who participates in both a governmental 457(b) plan and one or more other deferral-type plans, such as a 403(b), 401(k), salary reduction simplified employee pension plan, or savings incentive match plan for employees has two separate annual deferral limits."  MORE >>

Retirement Learning Center, LLC

Best Practices for Retirement Contribution Tool Design

"Firms should integrate transactional interfaces into homepage/dashboard modeling tools ... Value of dynamic updating capabilities in retirement contribution tool design ... Importance of financial wellness resources."  MORE >>

Corporate Insight

Companies in Colgate-Palmolive Retirement Theft Case Try to Wash Hands of Liability

"Alight Solutions, Bank of New York Mellon and Colgate-Palmolive Co.'s employee relations committee all sought to toss a lawsuit brought against them by a former Colgate-Palmolive employee who had the entire balance of her retirement account stolen.... [The employee] filed a complaint against the companies in July, claiming they violated [ERISA] via a breach of fiduciary duty. This came after an individual impersonating her drained more than $750,000 from her account in March 2020 by successfully changing much of her account information, according to the complaint." [Disberry v. Employee Relations Committee of the Colgate-Palmolive Company, Alight Solutions, LLC, and the Bank of New York Mellon Corporation, No. 22-5778 (S.D.N.Y. complaint filed Jul. 7, 2022)]  MORE >>

Pensions & Investments

Pensions Brace for Private-Equity Losses

"Public pension funds are already reporting big losses in 2022. Things are likely to get uglier. That is because the funds, which manage around $5 trillion in retirement savings for the nation's teachers, firefighters and other public workers, haven't yet factored in second-quarter returns on private equity and other illiquid investments."  MORE >>

The Wall Street Journal; subscription may be required

Things Retirees Can Do to Combat Inflation

"A retiree who owns their home, does not often travel or commute daily, and does not intend to pay for school, has a much different personal inflation rate.... [A] year-over-year budget analysis ... identify any necessary spending adjustments.... [C]onsider alternatives to traditional fixed income within your portfolio.... [Identify] your cash needs and ... [e]nsure you have enough cash on hand to cover these goals ... [A]ny excess could be directed to the portfolio."  MORE >>

Greenspring Advisors


SCOTUS, We Still Have a Serious Problem: The Continuing Inconsistency in Judicial Interpretations of ERISA

"[B]ased on the Brotherston decision and SCOTUS' denial of certiorari, [the author believes] that SCOTUS will ultimately expressly adopt the Restatement's position and rule that market indices and comparable index funds are appropriate for benchmarking purposes in 401(k) litigation.... [If] SCOTUS does adopt this position, then plan sponsors will find themselves in the same position they have found themselves in after SCOTUS' decision in Hughes v. Northwestern University -- utterly defenseless to breach of fiduciary prudence claims."  MORE >>

The Prudent Investment Fiduciary Rules


Society of Actuaries/Financial Fitness Dynamic Retirement Planning Calculator: Pros and Cons

"The Society of Actuaries (SOA) recently released a retirement planning guide for older retirees entitled, 'Late-in-Life Decisions Guide.' ... [The Financial Fitness calculator (FFC)] could be a better financial planning tool than the 4% Rule ... However, some of the potential shortfalls of the FFC are significant and include: [1] No guidance on reasonable assumptions.... [2] Expenses and income in retirement are generally not linear as assumed by the FFC."  MORE >>

Ken Steiner, FSA Retired


Pensions Help Provide Retirement Security, Not Retirement Anxiety

"[F]rom 1975 to 2018, per participant assets grew from $5,634 to $184,432 in DB plans. The same figures for DC plans were from $6,432 to $59,186.... In the public sector, if the U.S. had phased out DB plans,costs to taxpayers would have been much greater. [E]mployers would have had to contribute more than twice the amount to make up the difference between asset accumulation of $184,432 and $59,186."  MORE >>

National Conference on Public Employee Retirement Systems [NCPERS]

Employee Benefits Jobs

View job as ESOP Administrator
            for Blue Ridge ESOP Associates

ESOP Administrator

Blue Ridge ESOP Associates


View job as ESOP Administrator for Blue Ridge ESOP Associates

View job as Experienced Retirement Plan Administrator
            for Karel-Gordon & Associates

Experienced Retirement Plan Administrator

Karel-Gordon & Associates

Remote / Deerfield IL

View job as Experienced Retirement Plan Administrator for Karel-Gordon & Associates

View job as Benefits Consultant
            for Long Beach Unified School District

Benefits Consultant

Long Beach Unified School District

Remote / Long Beach CA

View job as Benefits Consultant for Long Beach Unified School District

Selected New Discussions

Fees Are Collected from Accounts of Terminated Participants But Where Do They Go?

"We have an 85 participant pooled profit sharing plan. Employer wants to amend the plan to 'charge' the accounts of terminated participants an annual administrative fee the year beginning after the year after termination (i.e., terminated in 2020 means fees start in 2022 unless account has been fully paid out). Because this is a pooled account, would these expenses to the terminated participants accounts become additional earnings to the other participants, or would they be forfeitures to be re-allocated to active participants, or something else altogether?"

BenefitsLink Message Boards

New Safe Harbor Plan Deadline is October 1 -- But Must Notice Have Been Given to Employees by September 1?

"I understand a new safe harbor 401(k) plan can be signed prior to October 1 and effective October 1. However, does the notice for the new plan need to have been delivered to eligible employees by September 1 (i.e., 30 days previously)?"

BenefitsLink Message Boards

When Does New Partial Owner (Mid-Year Acquisition of Plan Sponsor Stock) Become a Key Employee?

"PS plan, top heavy for 2021. Both key and non-key receive top heavy minimum. Plan also has 5% gateway requirement for non-HCEs. Beginning of 2021, Joe owned 100% of the company. On July 1, 2021, Joe sold 20% to an employee, Mary. As of 12/31/2021, ownership is 80/20. When did Mary become a key employee? What contribution does Mary need to get for 2021?"

BenefitsLink Message Boards

Plan Sponsor in Receivership But Not Yet Taken Over by PBGC -- Any Need to Suspend Optional Lump Sums?

"DB plan sponsor is an insurance company, currently in receivership under its state insurance department. The prospects for rehabilitation (and/or coming out of receivership) are virtually nil. While there is no formal statement yet from the state DOI, it appears likely the DOI will seek to have the PBGC take over the plan. The plan has an unlimited LS option. My question is, whether any PBGC regs and/or practices would require the plan to suspend (i.e., before any formal action by the PBGC) the use of the LS option for anyone currently reaching a benefit commencement date (retirement or otherwise)?"

BenefitsLink Message Boards

Press Releases

DOL Investigation, Litigation Result in Settlement Requiring Interarch Inc. Fiduciaries to Pay More Than $2 Million

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

Wealth Management Team Led by Harold Reinstein and Michael Nelson Joins First Republic

First Republic

Last Issue's Most Popular Items

Amend Your Retirement Plans This Year for SECURE Act and CARES Act Changes

Verrill Dana LLP

Preliminary Settlement Reached in Long-Running Actuarial Equivalence Lawsuit


Retirement Planning: How Much Money Will You Need to Cover Your Healthcare Expenses?


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

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