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Retirement Plans Newsletter

November 18, 2022

3 New Job Opportunities 3 New Job Opportunities

 

[Guidance Overview]

DOL Seeks Public Comments on Proposed Improvements to Voluntary Fiduciary Correction Program for Employers

"Most significant among the proposed changes is the addition of the self-correction component. This feature will enable employers and other plan officials to notify EBSA electronically that they have self-corrected certain failures to send participant contributions and loan repayments to pension plans on time. The proposed self-correction component can only be used if [certain] conditions are met."  MORE >>

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

[Guidance Overview]

New 403(b) Plan Determination Letter Program

"For the first time ever, 403(b) plan sponsors can request an IRS determination letter for their 'individually designed' 403(b) plans on initial plan qualification, on plan termination, or in other limited circumstances to be established by the IRS. The program opens June 1, 2023, with a staggered schedule for initial plan qualification requests."  MORE >>

Groom Law Group

[Guidance Overview]

IRS to Permit Determination Letters in Limited Circumstances for Individually Designed Section 403(b) Plans

"With two very limited exceptions -- a TEFRA church defined benefit plan and a plan grandfathered under Rev. Rul. 82-102 with respect to deferrals made to a credit union -- the new program will be available to all individually designed 403(b) plans. However, if there were any form defects in an individually designed 403(b) plan, a favorable determination letter will only be available for the plan if: [1] the error first occurred after June 30, 2020, and [2] it is corrected by the last day of the second calendar year following the year in which the form defect first occurred."  MORE >>

The Wagner Law Group

[Guidance Overview]

Exiting ROBS with a Redemption Requires an Appraisal

"Ignoring the appraised FMV would jeopardize the ROBS exemption from the prohibited transaction (PT) rules, under ERISA Section 408(e); and it could also be a breach of fiduciary duty by the plan trustees under ERISA. The consequences for the PT would be the requirement that the transaction be reversed, and that a 15% excise tax be reported and paid on the amount involved in the PT."  MORE >>

KLB Benefits Law Group

PBGC Plan List for SFA Priority Group 6

"Priority Group 6 includes those plans for which PBGC projects a present value of financial assistance payments under section 4261 of ERISA that would exceed $1 billion in the absence of SFA.... PBGC has identified the plans listed here as meeting the requirements for Priority Group 6 ... [I]nclusion on this list does not establish eligibility for SFA." [The application period for Priority Group 6 plans is currently scheduled to open on February 11, 2023.]  MORE >>

Pension Benefit Guaranty Corporation [PBGC]

Milliman Pension Buyout Index, November 2022

"Estimated competitive retiree buyout cost, as a percentage of accounting liability, increased by 70 bps from 100.1% to 100.8% during October."  MORE >>

Milliman

PBGC Approves $963 Million SFA Application for New York State Teamsters Pension Plan

"[PBGC] has approved the application submitted to the Special Financial Assistance (SFA) Program by the New York State Teamsters Conference Pension and Retirement Plan  ... The plan, based in Syracuse, New York, covers 33,643 participants in the transportation industry.... SFA will enable the plan to pay retirement benefits without reduction for many years into the future. The plan will receive $963.4 million in SFA, including interest to the expected date of payment to the plan."  MORE >>

Pension Benefit Guaranty Corporation [PBGC]

[Opinion]

Would the Enhancing American Retirement Now (EARN) Act Enhance Retirement Equity?

"The EARN Act ... should be revised to better enhance retirement equity ... Three major changes would help achieve this goal: [1] focus retirement incentives more quickly on those with inadequate retirement savings; [2] insure that those seeking to meet their reasonable retirement needs are the ones targeted for incentives; and [3] reduce the incentives for those with savings in excess of their reasonable retirement needs."  MORE >>

Albert Feuer, via SSRN

Benefits in General

[Guidance Overview]

DOL Changes 'Employee vs. Contractor' Rule

"This FLSA definition also applies to the Family and Medical Leave Act, the Age Discrimination in Employment Act, and the Americans with Disabilities Act.... For retirement plans and other employee benefit plans covered by ERISA Title I, ... the practical definition ... has been determined by the courts. Still, courts may rely on well-reasoned and highly vetted regulations, such as the new proposed FLSA rule, to inform their analyses when crafting common law rulings."  MORE >>

Ascensus

[Guidance Overview]

Exceptional Usefulness and Quality icon 2022 End of Year Plan Sponsor 'To Do' List: Annual Cost of Living Adjustments

"This [list] describes annual cost-of-living increases ... [and includes] a summary table of penalties, percentages, and premiums under the employer shared responsibility requirements of Code Section 4980H."  MORE >>

Snell & Wilmer

Survey: Voters Trust Employers to Provide Benefits, But Want Federal Standards

12 presentation slides. "A plurality of voters (45%) trust employers the most to provide affordable, high-quality health insurance coverage, a rise from 39% in 2020. Further, a plurality of voters (46%) trust employers the most to help achieve a secure retirement.... A majority of voters (51%) trust their employer the most to ensure they have an adequate amount of paid leave from work, rather than federal or state government ... A majority of voters (53%) continue to believe standards for employer benefits should be set at the federal level, although there is some downward trend from 2018."  MORE >>

American Benefits Council

Employee Benefits Jobs

View job as Retirement Plan Consultant
            for Definiti

Retirement Plan Consultant

Definiti

Remote

View job as Retirement Plan Consultant for Definiti

View job as Retirement Plan Administrator
            for Retirement Solutions Specialists, LLC

Retirement Plan Administrator

Retirement Solutions Specialists, LLC

Remote / Jacksonville FL

View job as Retirement Plan Administrator for Retirement Solutions Specialists, LLC

View job as Director, Recordkeeping Services
            for Definiti

Director, Recordkeeping Services

Definiti

Remote

View job as Director, Recordkeeping Services for Definiti

Selected New Discussions

Paycheck Not Enough to Fund Entire Amount of Elected 401(k) Deferral

"I have a plan that sometimes runs into participants' paychecks being lower than the amount of their desired 401k deductions. So, for example, the check is $50.00 but they have $75.00 as their deferral election. Are they supposed to then withhold the other $25.00 in a future check?"

BenefitsLink Message Boards

Elimination of Annuity Options in a 401(k)

"We're taking over a plan that has an insurance company document, which indicates spousal consent is not required for a lump sum distribution. The plan offers 5 annuity options as alternative forms of benefit. We never have those in plans and I'd like to eliminate these with our restatement effective 1/1/2023. It's been awhile since I looked at this. Upon some quick research it appears that these can be eliminated prospectively with a 90-day advance notice and provided the plan has the lump sum option. Agree?"

BenefitsLink Message Boards

One-Person LLCs Are 'Disregarded Entities' -- OK to Participate in 457(b) Plan?

"Suppose you have a tax-exempt (non-governmental) corporation sponsoring a 457(b) plan. This corporation also has a couple of 1-person LLC's that are 'disregarded entities' for tax purposes. Can those employees (1 in each LLC) be allowed to participate in the sponsoring organization's 457(b) plan?"

BenefitsLink Message Boards

Cash Balance Plan Is Terminating -- Need to Purchase 5 Small Deferred Annuities

"A small CB Plan is terminating. 2 participants have elected deferred annuity. 3 participants with a balance of $5K did not return the forms. Cumulative value for those 5 is about $60K. Need a recommendation/reference/contact info -- who would underwrite this, if anyone? What are the options if no insurance carrier is interested?"

BenefitsLink Message Boards

Amount of Payment from Nonqualified Plan Based on Appraised Value of Company

"Company would like a deferred comp plan to pay an executive 10% of the value of the company in 5 equal annual payments beginning 60 days after separation of service, where the value of the company would be determined as of the date of separation by an independent appraiser. Does this proposal violate 1.409A-3(i)(1), which requires that 'objectively determinable amounts' be payable on the payment dates, and says an amount is objectively determinable if it is 'specifically identified,' or if the amount may be determined "pursuant to an objective, nondiscretionary formula . . . (for example, 50% of an account balance)?"

BenefitsLink Message Boards

Press Releases

Lincoln Financial Group Introduces the New Lincoln ProtectedPay Lifetime Income Suite

Lincoln Financial Group

TIGTA Announces Launch of New Website

TIGTA [Treasury Inspector General for Tax Administration]

Last Issue's Most Popular Items

IRS Signals Employers Will Have Less Discretion Over Discretionary Match

Mercer

Text of IRS Notice 2022-60: Weighted Average Interest Rates, Yield Curves, and Segment Rates for November 2022 (PDF)

Internal Revenue Service [IRS]

IRS Compliance Pilot Gives Retirement Plan Sponsors Grace Period

Best Best & Krieger LLP, via Bloomberg Tax

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

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