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Retirement Plans Newsletter

September 30, 2022

11 New Job Opportunities 11 New Job Opportunities

 

Alert (High Risk Issue) icon Rash of Recent Lawsuits Focus on BlackRock Indexed Target Date Options: Even Low-Cost Funds Are Being Attacked

"The claims in these cases are atypical of claims usually asserted by ERISA plaintiffs because the allegations in the BlackRock cases are focused on performance alone, and not the funds' cost. Further, because the primary focus of previous plaintiffs has been on the investment options' costs, the focal point of litigation has traditionally been actively managed investment options and the claim that the options were overly priced, in addition to being poorly performing. The complaints in the BlackRock cases appear to concede that the passively managed BlackRock Funds were not overpriced."  MORE >>

Trucker Huss

ERISA Self-Dealing Lawsuit Targets Wells Fargo and Ex-CEO

"Plaintiffs claim that during the class period -- from September 27, 2016, to 'the date of judgment' -- the defendants breached their fiduciary duties to participants and engaged in prohibited transactions under ERISA ... by overpaying for stock in the employee stock ownership plan." [Beville v. GreatBanc Trust Company, No. 22-2354 (D. Minn. complaint filed Sep. 26, 2022)]  MORE >>

PLANSPONSOR; free registration may be required

No Fiduciary Breach Where Insurer Sets Guaranteed Rate of Return on Stable Value Contract in Shared Interest of Plan Participants

"Despite the existence of a conflict of interest, the Eighth Circuit concluded that there was no breach of the duty of loyalty where the insurer was not motivated by economic self-interest and did not place its own interests ahead of those of the participants or the plan. Thus, in the Eighth Circuit at least, if a fiduciary insurer can show that the interest rate for fixed-income investments is set according to a shared interest with participants, and appropriately accounts for its risks and costs in offering the investment, there should be no breach of the duty of loyalty." [Rozo v. Principal Life Ins. Co., No. 21-2026 (8th Cir. Sep. 2, 2022)]  MORE >>

Thomson Reuters / EBIA

Retirement Income Is Front and Center; Should Your Committee Consider the Pursuit?

"The need to help plan participants translate retirement savings into income is real and well understood. In equal form, the layers of complexity and variation in approaches have influenced the tepid pace of adoption thus far. In this article, [the authors] offer a backdrop of complicating factors, summarize key retirement service and solution concepts, and provide suggested activities for plan sponsor consideration."  MORE >>

PlanPILOT

Senate Bill Would Boost Alternative Assets in 401(k) Plans

"A new bill from top Republicans on the Senate Banking Committee aims to open workplace retirement plans to a bigger range of investments, making it easier for 401(k) plans to diversify with holdings in private equity, hedge funds, real estate, cryptocurrencies and other alternative assets.... The [Retirement Savings Modernization Act] would also clarify that expenses related to these investments, which in many cases charge higher fees than traditional mutual funds found in typical 401(k) plans, would be acceptable."  MORE >>

Roll Call

Limited Plan Audits Are History: What 401(k) Plan Sponsors Should Know

"[L]imited scope audits are history, being replaced by ERISA Section 103(a)(3)(C) audits. This newly named audit does not change any of ERISA's laws or applicability. However, it does affect how 401k plans are audited, effective as of on December 15, 2021."  MORE >>

Sequoia

De-Risking Opportunities in a Rising Interest Rate Environment

"An increase of 100 basis points (bps) in interest rates reduces pension liabilities on average by 12% to 15%.... Looking at year-to-date movements through July 31, 2022 ... pension liabilities are down nearly 20%.... This article explores some strategies that plan sponsors should consider now, even if a plan's funding situation is not ideal, to avoid missing out on what might be a 'golden' opportunity."  MORE >>

Milliman

Amending a Governmental Employer's 457(b) Plan for SECURE and CARES

"Best practices: [1] Assess state/local law to conform to SECURE and CARES provisions. [2] Coordinate with your plan document provider on required and optional plan design features. [3] Authorize an individual to be responsible for timely adopting plan amendments to the 457(b) plan and ensure that the plan amendment is timely signed. [4] Maintain the plan document, including amendments, in a secure location."  MORE >>

VOYA Financial

Amid Economic Uncertainty, Nonprofits Enhancing 403(b) Retirement Plans for Employees

"[E]mployer contribution rates to 403(b) plans rose almost 24% year-over-year from 4.6% in 2020 to 5.7% of gross annual pay in 2021 ... An average of 79.4% of eligible employees made contributions to their plans in 2021, an increase from 77.2% in 2020."  MORE >>

Principal Financial Group

CBO Letter: Effect of the PBGC's Final Rule on Special Financial Assistance

"The final rule, which was issued in July 2022, changed the method used to compute SFA, including the assumed rate of return. It also changed the type of assets in which pension plans may invest SFA, which changes the expected rate of return and risk profile of those investments. CBO anticipates that the changes in the final rule will increase the total amount of SFA that plans will receive. The agency estimates that the amount of assistance will total $90.4 billion over the 2022-2032 period, which is $4.5 billion, or 5 percent, more than the $85.9 billion estimated in CBO's May 2022 baseline budgetary projections, which were based on expectations consistent with the July 2021 interim final rule."  MORE >>

Congressional Budget Office [CBO]

[Opinion]

Protecting and Expanding Retirement Options for America's Workers

"More than 1 in 3 of plan participants withdraw part or all of their retirement plan assets following a job change, with lost savings amounting to between $60 billion and $105 billion per year. Decoupling retirement plans from individual employers could alleviate job-change-induced retirement savings loss.... State automatic individual retirement account programs can help workers save even when they don't have a workplace savings plan.... Workers should be able to easily take their retirement savings as they move from one job to another."  MORE >>

Kathleen Kennedy Townsend, U.S. Department of Labor [DOL] Blog

Benefits in General

[Official Guidance]

IRS Disaster Relief Announcement FL-2022-19, for Victims of Hurricane Ian in Florida

"Victims of Hurricane Ian that began September 23 in Florida now have until February 15, 2023, to file various individual and business tax returns and make tax payments.... Individuals and households affected by Hurricane Ian that reside or have a business anywhere in the state of Florida qualify for tax relief."  MORE >>

Internal Revenue Service [IRS]

Senate Confirms Lisa Gomez as EBSA Leader

"More than 14 months after her nomination, the Senate on [September 29] confirmed Lisa M. Gomez as assistant secretary of labor for the Employee Benefits Security Administration [EBSA] in a 49-36 vote."  MORE >>

Pensions & Investments

Employee Benefits Jobs

View job as Junior Implementation Specialist - 401(k) Administration
            for Ubiquity Retirement + Savings

Junior Implementation Specialist - 401(k) Administration

Ubiquity Retirement + Savings

Remote / San Francisco CA

View job as Junior Implementation Specialist - 401(k) Administration for Ubiquity Retirement + Savings

View job as Internal Sales Consultant
            for Definiti

Internal Sales Consultant

Definiti

Remote

View job as Internal Sales Consultant for Definiti

View job as Retirement Services Analyst
            for Sacramento County Employees' Retirement System

Retirement Services Analyst

Sacramento County Employees' Retirement System

Sacramento CA

View job as Retirement Services Analyst for Sacramento County Employees' Retirement System

View job as Retirement Services Supervisor
            for Sacramento County Employees' Retirement System

Retirement Services Supervisor

Sacramento County Employees' Retirement System

Sacramento CA

View job as Retirement Services Supervisor for Sacramento County Employees' Retirement System

View job as Offboarding Terminations Manager
            for Guideline, Inc.

Offboarding Terminations Manager

Guideline, Inc.

Remote / AZ / CA / CO / CT / FL / GA / IA / ID / IL / IN / KY / MA / MD / ME / MI / MO / NC / NH / NJ / NV / NY / OH / OR / PA / RI / SC / TN / TX / UT / WA

View job as Offboarding Terminations Manager for Guideline, Inc.

View job as Compliance Analyst
            for Insperity

Compliance Analyst

Insperity

Kingwood TX

View job as Compliance Analyst for Insperity

View job as Fund Administrator
            for Pipefitters Local 537 Trust Fund

Fund Administrator

Pipefitters Local 537 Trust Fund

Boston MA

View job as Retirement Plan Compliance Testing Specialist
            for Associated Bank - Associated Trust Company, NA

Retirement Plan Compliance Testing Specialist

Associated Bank - Associated Trust Company, NA

Remote / WI

View job as Retirement Plan Compliance Testing Specialist for Associated Bank - Associated Trust Company, NA

View job as Actuary
            for Alerus

Actuary

Alerus

Remote

View job as Actuary for Alerus

View job as Specialist I, RPS Recordkeeping, Retirement Plan Services
            for 1st Source Bank

Specialist I, RPS Recordkeeping, Retirement Plan Services

1st Source Bank

South Bend IN

View job as Specialist I, RPS Recordkeeping, Retirement Plan Services for 1st Source Bank

View job as 401(k) Plan Administrator
            for TPA

401(k) Plan Administrator

TPA

Remote

Selected New Discussions

Retroactive Participation in a New Profit Sharing Plan for Persons Employed on a Specified Mid-Year Date

"New plan. Effective date 1/1 for PS of current year (10/1 for 401(k) and safe harbor). Owner wants to allow all employees employed as of 7/1 to be immediately eligible as of 1/1. Does it make sense then that anyone hired between 1/1 and 7/1 is immediately eligible, on their date of hire (instead of 1/1)?"

BenefitsLink Message Boards

Including a Lifetime Income Illustration on 'One' Quarterly Benefit Statement per Year

"These blasted things. The DOL has stated: Section 105(a)(2)(B)(iii) of ERISA provides that participant-directed individual account plans that furnish quarterly benefit statements under ERISA § 105(a)(1)(A)(i) must include the lifetime income illustrations on only one pension benefit statement in any 12-month period.

So let's look at a participant directed quarterly valuation plan. Suppose the 12/31/2022 valuation is completed, and the valuation and lifetime income illustration is sent on February 15, 2023. Then the 12/31/2023 valuation and lifetime income illustration is sent on March 31, 2024. This is more than 12 months later. What's your interpretation on this? Is it out of compliance?"

BenefitsLink Message Boards

Marital 'QDROs' (Also Called 'Post-Nuptial' QDROs)

"I've recently come across a new type of order purporting to be a QDRO. Colloquially termed 'marital' or 'post-nuptial' QDROs, these are court orders that transfer property rights to a current spouse but no divorce or legal separation is anticipated. The sole purpose of the court action is to get the order. Because these are court-signed orders awarding marital property rights to a spouse pursuant to domestic relations law, they technically satisfy 206(d) and would seem to require approval by a plan. Of course, they appear contrary to the spirit and intent of the law. All of this is reminiscent of the sham divorce issue about a decade ago, where the court told the administrator to take an order at face value and not dig into the motivations. Have any of you come across this yet? Thoughts?"

BenefitsLink Message Boards

Press Releases

Surya Kolluri Named Head of TIAA Institute

TIAA

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

Plan Sponsor Insights: A Conversation with Marquette University on Improving Governance Documents

RECORDED

Francis Investment Counsel

Last Issue's Most Popular Items

Year-End Amendment Deadlines Extended: CARES and 2020 Relief Act

Groom Law Group

IRS Employee Plans News: Follow-Up from IRS Tax Forum Retirement Plan Presentation

Internal Revenue Service [IRS]

Target Date Retirement Funds in 4 Charts

Morningstar

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

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