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Retirement Plans Newsletter

October 5, 2022

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[Guidance Overview]

Puerto Rico Adopts Special Distribution Rules for Victims of Hurricane Fiona

"The Puerto Rico Treasury Department has issued guidance for special disaster distributions from Puerto Rico qualified plans and Puerto Rico Individual retirement accounts and annuities resulting from Hurricane Fiona as they did for Hurricane MarĂ­a ... The window period for Eligible Distributions will run from October 6, 2022 through December 31, 2022."  MORE >>

McConnell Valdes


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]

DOL Proposes Substantial Amendments to QPAM Exemption (PDF)

"These amendments would significantly impact entities that rely on the QPAM Exemption, as well as plans, plan fiduciaries, counterparties to transactions involving QPAMs and others. The amendments would impose significant compliance burdens and costs on QPAMs, including the need to amend existing agreements to comply with the conditions. Additionally, the indemnification and hold harmless provisions are likely to increase the potential liabilities of a QPAM that becomes disqualified."  MORE >>

Stradley Ronon, via Employee Benefit Plan Review

PBGC Approves $192.8 Million in Special Financial Assistance for Freight Drivers Local 557 Plan

"[PBGC] has approved the application submitted to the Special Financial Assistance (SFA) Program by the Freight Drivers and Helpers Local Union No. 557 Pension Plan.... The plan, based in Baltimore, Maryland, covers 2,273 participants in the transportation industry. The Freight Drivers Local 557 Plan will receive approximately $192.8 million in SFA, including interest to the expected date of payment to the plan. The plan was projected to run out of money in 2023."  MORE >>

Pension Benefit Guaranty Corporation [PBGC]

District Court Holds That TIAA Was Not Acting as a Fiduciary in Soliciting Rollovers

"Under its interpretation of ERISA's functional fiduciary guidelines, the court held that the funds taken out of the ERISA plans for rollover purposes were no longer plan assets and 'TIAA's pitch to plan members to roll assets out of their plans and into Portfolio Advisor necessarily did not create a fiduciary relationship.' ... With regard to TIAA's use of participants' personal information gleaned through its position as administrator of the ERISA plans, the court concluded that 'plan assets' include money and invested capital, but not participant information." [Carfora v. Teachers Insurance and Annuity Association of America, and TIAA-CREF Individual & Institutional Services, LLC, No. 21-8384 (S.D.N.Y. Sep. 27, 2022)]  MORE >>

Kantor & Kantor LLC

Why Plan Sponsors Should Allow Independent Fiduciaries to Manage Employer Stock in Retirement Plans

"The decision, consistent with other case law, makes clear that plan sponsors who use an independent fiduciary in this way effectively insulate themselves from these types of claims.... [T]he biggest value to using an independent fiduciary in this context is that it dramatically increases the likelihood that a plan fiduciary, sued for the drop in value of employer stock held by employees in a benefit plan, can end the case at the motion to dismiss stage." [Burke v. The Boeing Company, No. 19-2203 (7th Cir. Aug. 1, 2022)]  MORE >>

Stephen Rosenberg, The Wagner Law Group

The Best Time to Communicate Your Active DB Plan to Your Employees is Now

"There are several themes that ... transcend corporate culture and there is no better time than the present to remind your employees how much you care about them. [1] No matter how your 401(k) investments are doing, your pension continues to grow ... [2] While inflation may affect your ability to save in your 401(k), your pension still continues to grow.... [3] DB plans are designed to provide lifetime income ... [4] You're not anti-401(k); you're pro-DB."  MORE >>

October Three Consulting

U.S. Pension Funds Boost Stress Testing as Risks Grow

"90% of funds have increased their stress test budget and all believe industry spending will rise over the next three years. But just 37% believe pension funds are well-prepared to meet challenges of inflation and climate change."  MORE >>

Ortec Finance

Examining the Experiences of Public Pension Plans Since the Great Recession (PDF)

"The majority of public pension plans recovered their pre-recession asset levels within six years ... Discount rates ... have broadly decreased from eight to seven percent for the median public pension plan ... Generational mortality tables ... have been broadly adopted by nearly all large public plans ... Many public plans have shortened amortization periods ... The intense focus on public plan investment programs since the Great Recession misses the more important structural changes that generally have had a larger impact on plan finances and the resources necessary for retirement security."  MORE >>

National Institute on Retirement Security [NIRS]


Roth IRA and Roth 401(k): The World Would Be a Better Place Without Them

"One can make a strong case for getting rid of the Roth version of both 401(k)s and IRAs. While having two forms of retirement saving is lovely for young professionals who know their tax rates will be higher in the future than today, this opportunity is swamped by the mischief they create.... [1] Federal budget gimmick.... [2] Tax dodge for high rollers.... [3] Obstacle to fairer tax incentives."  MORE >>

Alicia H. Munnell, via MarketWatch

Benefits in General

[Official Guidance]

Text of IRS Publication 1220 Specifications for Electronic Filing of Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G, for Tax Year 2022 (PDF)

152 pages. "The purpose of this publication is to provide the specifications for filing of Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G electronically with the IRS including the requirements and specifications for electronic filing under the Combined Federal/State Filing (CF/SF) Program. Additionally, this publication provides specifications to submit an automatic 30-day extension of time to file certain information returns ... Beginning in September 2022, FIRE Transmitter Control Code (TCC) holders who submitted their TCC Application prior to September 26, 2021, will need to submit and complete the IR-TCC Application.... Your TCC will remain active for use until August 1, 2023, after that date, any FIRE TCC that does not have a completed IR-TCC Application will be dropped and will not be available for e-file."  MORE >>

Internal Revenue Service [IRS]

Employee Benefits Jobs

View job as Employee Benefits & Executive Compensation Attorney (Counsel or Attorney)
            for Thompson Hine, LLP

Employee Benefits & Executive Compensation Attorney (Counsel or Attorney)

Thompson Hine, LLP

Chicago IL / Atlanta GA / Cleveland OH / Cincinnati OH / Columbus OH / Miamisburg OH / DC

View job as Employee Benefits & Executive Compensation Attorney (Counsel or Attorney) for Thompson Hine, LLP

Selected New Discussions

Safe Harbor Matching Contributions -- Two Basic Questions

"Just want to make sure there's no issues with a plan we're taking over: [1] They fund their Safe Harbor Match on a payroll-by-payroll basis. If someone opts to start contributing in the middle of the year, can they simply match from that point forward (calculated on a payroll basis) or do they have to do the calculation on the full years salary and true the participant up? [2] The prior TPA allowed them to include commission compensation for the sales staff, but exclude it for everyone else. Is that something people have seen before, where the definition of compensation is different, based on the class of employee?"

BenefitsLink Message Boards

Plan Permanency Issue -- Prudent to Formally Freeze the Plan Instead?

"I recall the recommendation that a contribution to a DC plan, even just a small deposit, should be contributed at least once every three years in order to show the intent of permanency. This was presented to me as a guideline rather than a regulation. If the sponsor of a profit sharing plan has said it will not make contributions for at least five years, would the plan be required to be frozen via amendment if it is to keep operating?"

BenefitsLink Message Boards

Penalty Relief Program for Form 5500-EZ Late Filers

"Background: A potential client adopted a one-participant 401(k) plan (AKA Solo 401(k) plan) in 2015. The plan assets were over $250K by the end of 2020 and the brokerage account services provider didn't file Form 5500-EZ. [1] Can this plan use the Penalty Relief Program for Form 5500-EZ Late Filers to fix the error? (See [2] Are there any additional things I need to take into consideration?"

BenefitsLink Message Boards

Press Releases

Groom Law Group Expands Health Practice With New Principal Xavier Baker

Groom Law Group

Deborah Levy Joins Newfront Employee Benefits Team


America's Leading 401(k) Providers & Retirement Clearinghouse Collaborate to Implement a Nationwide Network for Auto Portability


Webcasts and Conferences
(Retirement Plans / Executive Compensation)

Retirement Plan Roundup, Session 3: Retirement Plan Investments (ESG/Crypto/Managed Accounts/Brokerage Windows)

November 9, 2022 WEBCAST

Thompson Hine LLP

Current Developments (2022)

November 10, 2022 WEBCAST


Last Issue's Most Popular Items

House Passes ERISA Bill to End Arbitration and Require De Novo Review of Benefit Claims

Faegre Drinker

Text of IRS Notice and Request for Comments: Proposed Revision to Annual Return/Report of Employee Benefit Plan and Payment of Pension Plan Excise Taxes

Internal Revenue Service [IRS]

Deference Declined: Fiduciary Status for Rollovers Not a Given, and New Developments in Uses of Plan-Related Data Under ERISA

Groom Law Group

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

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