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Retirement Plans Newsletter

December 1, 2022

 

[Official Guidance]

Text of IRS Publication 4810: Specifications for Electronic Filing of Form 8955-SSA, Annual Registration Statement Identifying Separated Participants with Deferred Vested Benefits (PDF)

60 pages, rev. Nov. 2022. "What's New for 2022: ... Beginning in September 2022, Filing Information Returns Electronically (FIRE) Transmitter Control Code (TCC) holders who submitted their TCC Application prior to September 26, 2021, will need to submit and complete the Information Return (IR) Application for Transmitter Control Code for TCC.... Part B. Data Communications: [1] Sec. 1 Information Returns (IR) Application for Transmitter Control Code -- Added scanned, PDF, PNG, TIF, GIF, JPG, Word, Excel formats will not be accepted.... [2] Sec. 3 Electronic Specifications ... The FIRE Production and Test System server no longer supports Secure Socket Layer (SSL) 3.0 as one of the FIRE System's Internet Security Technical Standards. Transmitters using IE 6.0 or lower as their browser may have problems logging in and connecting to the FIRE System."  MORE >>

Internal Revenue Service [IRS]

[Guidance Overview]

DOL Information Letter Addresses Bonding Requirements for PEPs and Their Pooled Plan Providers

"[DOL Information Letter 09-07-2022] clarifies three important points: [1] The SECURE Act did not expand the bonding requirements ... to include fiduciaries or other persons who handle 'plan assets' of the PEP, but do not 'handle funds or other property' of the PEP ... [2] The employees of employers who participate in the PEP do not have to be bonded while collecting and transmitting participant contributions from their employers to the PEP; and [3] Independent contractors to a plan or a plan sponsor (such as the PEP's pooled plan provider) are required to be bonded ... if handling funds or other property of the PEP."  MORE >>

The Wagner Law Group

[Guidance Overview]

Upcoming Deadline icon End of the Year Amendment Requirement for 457(b) Plans of Tax-Exempt Organizations

"The only provision of the Acts that requires an amendment to a 457(b) plan is the change in the required minimum distribution rules (RMDs) enacted under the SECURE Act. The SECURE Act changed the date that RMDs are required to begin for most employees who were born on or after July 1, 1949, from 70½ to 72. The SECURE Act also made significant changes in the requirements for distributions to beneficiaries."  MORE >>

Boutwell Fay LLP

[Guidance Overview]

DOL Finalizes ESG, Proxy Voting Regulation

"The Rule  ... is largely consistent with historic DOL positions, but it endeavors to provide fiduciaries with more latitude when considering environmental, social, and governance ('ESG') investment factors and voting proxies.... The Rule is scheduled to be published in the Federal Register on December 1, 2022, and it is generally effective 60 days after publication (i.e., January 30, 2022). However, certain provisions related to the reliance on proxy voting advisory firms and pooled fund manager proxy voting requirements will become effective one year after publication (i.e., December 1, 2023)."  MORE >>

Groom Law Group

Roth 401(k) Remains Underutilized Despite Potential Benefits

"While plan sponsors have been able to amend their 401(k) plans to include a post-tax deferral contribution called Roth for more than a decade, only 86% of plan sponsors have made it available to participants ... [Only] a quarter of participants who have access to the Roth 401(k) option use it."  MORE >>

Berry, Dunn, McNeil & Parker, LLC

Stare Decisis and the Status of California's Super Pension Contract

"This Article presents an original inquiry into the overruling expression and criteria for stare decisis in the public pension reform context of California's constitutional contract law. While there is a lively debate among commentators and judges about the role of stare decisis theory and doctrine in federal law, [this] study extends that conversation to state law for the first time."  MORE >>

T. Leigh Anenson and Jennifer Gershberg, via SSRN

Florida Terminates BlackRock Management of $2 Billion Because of ESG

"Florida Chief Financial Officer Jimmy Patronis announced the state's Treasury department is terminating BlackRock from the management of $2 billion in the state's long-duration portfolio and its short-term investment fund.... The Florida State Board of Administration in August passed a resolution that all decisions related to the investment management of the $170.9 billion Florida Retirement System will not include ESG considerations."  MORE >>

Pensions & Investments

FAS87 ASC715 Discount Rates and Moody's Rates, November 30, 2022

An unofficial monthly report of the Moody"s Daily Long-term Corporate Bond Yield Averages and Moody"s Daily Treasury Yield Averages (used as benchmarks by some corporate pension plans).  MORE >>

BenefitsLink Message Boards

[Opinion]

Recap of the Divane v. Northwestern Argument

"The Seventh Circuit panel was skeptical of the excessive fee claims, and especially concerned that the lawsuit was 'Monday-morning quarterbacking' of plan fiduciaries who had revamped the plan with lower fees and streamlined investment options both before and after the lawsuit was initially filed.... [T]he Court may have advanced new ground to the extent that they believe that the Supreme Court's Hughes decision immunizes plan fiduciaries under a good faith business judgment rule standard. " [Hughes v. Northwestern Univ., No. 19-1401 (S. Ct. Jan. 24, 2022; remanded to 7th Cir. Divane v. Northwestern Univ, No. 18-2569)]  MORE >>

Euclid Specialty Managers

[Opinion]

American Benefits Council Amicus Brief to Fifth Circuit Addressing District Court Standard of Judicial Review for Benefit Claim

"The Council submits this brief to help explain the importance of maintaining the well-established standards governing limited and deferential judicial review of benefit determinations by plan administrators vested with discretion to resolve questions regarding eligibility for benefits. In this case, the district court failed to provide the required deference to the determination made by the Retirement Board, as plan administrator, that Plaintiff was not entitled to reclassification to a higher level of benefits.... Additionally, instead of sticking to the administrative record, the district court permitted extensive discovery, including deposition of two Board members, and held a six-day trial." [Cloud v. The Bert Bell/Pete Rozelle NFL Player Retirement Plan, No. 20-1277 (N.D. Tex. Jun. 21, 2022, on appeal to 5th Cir. No. 22-10710)]  MORE >>

American Benefits Council

Selected New Discussions

Individual Can Start Qualified Plan Based on 1099-Type Income?

"The owner of the LLC sold his practice in May 2022. Plans were terminated, all participants paid, final 5500-SF filed.

The former owner is now receiving 1099 income from the new owners. Can the former owner start a new profit sharing plan in 2022 using his 1099 income in determining the contribution?"

BenefitsLink Message Boards

Exclusion from Plan Based on Citizenship?

"I have a US based company that may be hiring a Canadian employee. The client tells me that the employee will be paid on a W-2 form and therefore would otherwise be eligible for the client's 401k. Is it possible for the plan to have 'Canadian based employees' as an excluded category for eligibility? I wasn't sure if that category would be considered discriminatory in any way or if there is a better way to accomplish what the client wants. This particular client plan will easily pass coverage."

BenefitsLink Message Boards

Press Releases

The Cerrado Group Announces the Launch of an Industry Leading Cyber Security Standard

The Cerrado Group

Pentegra Announces 3(16) Advisor Survey – Share Your Thoughts Today!

Pentegra

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

Insights and Challenges for the Executive Compensation Committee, Part One

RECORDED

Mintz

Last Issue's Most Popular Items

The Ins and Outs of IRA-to-HSA Rollovers

Journal of Accountancy

What Is Stable Value? Demystifying and Explaining this Retirement Investment Option

T. Rowe Price

DOL Issues Its Final Word on ESG and Proxy Voting

Debevoise & Plimpton LLP

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

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