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Retirement Plans Newsletter

October 7, 2022

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[Guidance Overview]

Upcoming Deadline icon Retirement Plan Sponsors Have Short 2022 Year-End Amendment List

"Parts of 2020 Required Amendments List still due in 2022... [1] Difficulty-of-care payments under the SECURE Act.... [2] CARES Act expansion of CSEC plans.... [3] Periodic updates not specifically mentioned on RA List."  MORE >>


Big Players in 401(k) Industry Team Up to Launch 401(k) Rollover Plan Product

"401(k) plans hold a whopping $7.7 trillion in retirement savings. But cash-outs of small accounts pull billions from the system each year and can harm investors' chances of a secure retirement, research shows. A trio of the industry's largest 401(k) administrators -- Fidelity Investments, Vanguard Group and Alight Solutions -- have teamed up to change that."  MORE >>


How Plan Sponsors Can Combat Cybercrime

"[C]oordination between departments such as IT, risk, legal, and cybersecurity is essential to prevent information from being siloed off between them.... [F]raudsters will often try to manipulate staff into offering pieces of information that the fraudster lacks, such as by suggesting an answer or appearing sympathetic or forgetful in order to solicit missing pieces of identifying information."  MORE >>

PLANSPONSOR; free registration may be required

Auto-Portability: A Guide for Retirement Plan Sponsors

"Auto-portability can prove especially useful in industries with lower wages and high employee turnover, which may include retail, transportation, hospitality, and restaurants, because this can often lead to numerous account balances of $5,000 or less being involuntarily rolled to default IRAs. Note that SECURE 2.0 proposals could increase the involuntary cash-out threshold to $7,000, which could expand the potential market for auto-portability solutions."  MORE >>

E is for ERISA

Fidelity Readies Annuity Platform for 401(k) Assets

"[T]he Guaranteed Income Direct program aims to provide a straightforward income option in the form of an immediate income annuity. The annuities come with institutional pricing and are offered by a significant variety of insurers."  MORE >>


Case Studies: Considerations for Unfreezing Defined Benefit Plans to Drive Business Value

"[T]he environment has come full circle in such a way that unfreezing DB plans and using their surplus funding now makes sense in many cases.... DB plans can serve as a way for employers to reduce cash outlays, manage their workforces, and differentiate their companies in a tight labor market. Here are specific case studies where plan sponsors worked with Milliman consultants to reopen their DB plans in ways that were advantageous to their business."  MORE >>


Defined Benefit Plans Are Making a Comeback: Here's Why (PDF)

"[D]ue to rising interest rates, beneficial regulatory pension relief, COVID induced changes in our work environment and the hiring challenges many employers face -- the defined benefit plan can and will become, a game changer for many employers."  MORE >>


2022 Spending in Retirement Survey: Understanding the Pandemic's Impact

"Overall, more than half retired earlier than expected.... Similar to 2020, 7 in 10 said Social Security is a major source of their income.... Approximately half of retirees said they spend less than $2,000 each month, while 1 in 3 spend between $2,000 and $3,999 each month.... On average, retirees reported that nearly a third of their monthly income goes towards housing expenses. The second largest reported expenditure was food."  MORE >>

Employee Benefit Research Institute [EBRI]

U.S. Pension Finance Watch, September 2022

"The WTW Pension Index increased slightly in September 2022, recovering the losses incurred last month and reverting back to July's level. This month's change was due to a decrease in liabilities, almost completely offset by negative investment returns. The end-of-September index level of 97.0 reflects an increase of 0.1% for the month."  MORE >>

Willis Towers Watson


Young Versus Old Will Define Fight Over Public Pensions

"Many people think of state and local employees as having gold-plated benefits, but there is a catch. First, you generally must put in long service with a single employer to collect full value. Moving around or taking time off means you lose coverage. Second, many public employees, especially newer and lower-paid ones, are excluded from the most generous plans.... The fight in 2023 may be more between younger and older public employees than between united public employees and taxpayers."  MORE >>

Aaron Brown, Bloomberg, Via the Washington Post; Subscription May Be Required

Benefits in General

Alert (High Risk Issue) icon House Passes Mental Health Matters Act: What Employers, Insurers, and Administrators -- Even for Retirement Plans -- Need to Know

"The Mental Health Matters Act [HR 7780], passed in the US House of Representatives on September 29, [1] significantly expands the [DOL's] authority to enforce or file civil litigation with respect to mental health parity violations and [2] eliminates discretionary clauses, potentially dismantling the administrative process of [ERISA]."  MORE >>

Morgan Lewis

In Cybersecurity Enforcement Action, Seventh Circuit Rejects Service Provider's Challenges to DOL Subpoena

"In an enforcement action involving an administrative subpoena seeking documents from a service provider for employer-sponsored health and retirement plans, the Seventh Circuit held that the [DOL's] investigatory authority under [ERISA] is not limited to ERISA plan fiduciaries. The Seventh Circuit also concluded that the subpoena was not too indefinite or unduly burdensome." [Walsh v. Alight Solutions LLC, No. 21-3290 (7th Cir. Aug. 12, 2022)]  MORE >>

Thomson Reuters Practical Law

Employee Benefits Jobs

View job as TPA Administrator
            for Cetera Retirement Plan Specialists

TPA Administrator

Cetera Retirement Plan Specialists

Remote / Roseville CA

View job as TPA Administrator for Cetera Retirement Plan Specialists

Selected New Discussions

401(k) Deferrals: Can Be Based on Year-End Cash-out Payments from PTO Purchase Plan?

"Company has a PTO purchase program under its cafeteria plan in accordance with Proposed Regs Section 1.125-1(o)(4). The program provides that unused elective PTO will be cashed out before the last day of the year. If the cash-out payment satisfies the definition of 'Compensation' under the Company's 401(k) plan, is there anything that would prohibit employees from deferring the cash-out into the 401(k) plan? Would this somehow be considered a violation of the prohibition against deferred compensation under a cafeteria plan under 1.125-1(o)(4)? I can't seem to find any guidance on this."

BenefitsLink Message Boards

Client Didn't Tell Us About His Sole Ownership of Other Companies

"If a client failed to divulge that they own multiple companies (they are unrelated, but he is the 100% owner of all of the corporations) and it's not discovered that it should've been a controlled group, what are the ramifications? Is there any back correction that is needed?"

BenefitsLink Message Boards

Form 5500 Sans Audit Report -- $20,000 Penalty Assessed

"We had a 6/30/2021 filing sent in without the audit report around April 15, 2022 and within 45 days the IRS had sent a penalty assessment letter (around $20,000) which appeared to us be a significant change in approach. Can others indicate whether or not they had similar experiences? We used to just file without the audit and amend when it was available. But now I'm wondering if a change in approach would be to not file at all and use the DFVC. Has anyone else had to deal with this?"

BenefitsLink Message Boards

Press Releases

HUB International Enhances Retirement Consulting Services with Acquisition of the Insurance Brokerage and Investment Advisory Businesses of Quintes in California

HUB International

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

Court Decisions Impacting Plan Sponsors and Fiduciaries


Williams Mullen

CARES/SECURE Acts Interim Amendment Update in Light of Recent IRS Extension

October 20, 2022 WEBCAST


Last Issue's Most Popular Items

Filing Form 5500 Without an Audit Report

Retirement Learning Center, LLC

IRS Extends Additional Deadlines for Certain Tax-Qualified Plan Amendments

Sidley Austin LLP

House Approves Bill Banning Arbitration Clauses in ERISA Plans

American Retirement Association [ARA]

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

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