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Retirement Plans Newsletter

January 3, 2023

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[Guidance Overview]

Exceptional Usefulness and Quality icon SECURE 2.0 Delivers New Rules for Correcting Retirement Plan Errors

"SECURE 2.0 [includes] three significant changes to corrections of common retirement plan errors: [1] New rules for correcting overpayments, [2] expansion of the Self-Correction Program under the IRS's [EPCRS] to cover most inadvertent errors, and [3] making permanent the current EPCRS safe harbor correction method for elective deferral failures related to automatic contribution arrangements. The first two changes -- new overpayment correction rules and the expansion of EPCRS -- took effect as soon as SECURE 2.0 was signed into law on December 29, 2022."  MORE >>


[Guidance Overview]

Exceptional Usefulness and Quality icon SECURE 2.0 Makes Most Significant Retirement Plan Changes in Decades

"[P]lan sponsors should consider the following ... [1] Decide whether to offer participants the option to receive matching contributions on a Roth basis. [2] Decide whether to make self-certification available for hardship withdrawals ... [3] Decide whether to implement a Roth feature now to be prepared for catch-up contribution changes ... [4] If your 401(k) or 403(b) plan applies a service condition before being eligible to make deferrals, begin tracking hours for the two years with 500 hours of service requirement or consider plan design changes. [5] Review how notices are being distributed to non-participating employees and update your process to take advantage of the new rules."  MORE >>

Kutak Rock LLP

[Guidance Overview]

A Gift to Retirement Plan Sponsors: SECURE 2.0 Act of 2022

"[S]tarting in 2024, plan participants may be given an opportunity to take a distribution (not subject to the 10% early distribution tax) for certain emergency expenses ... SECURE Act 2.0 provides for penalty-free withdrawals due to domestic abuse situations.... [E]ffective as of the date of enactment of the SECURE Act 2.0, distributions to individuals who are terminally ill [are] not subject to the 10% tax on early distributions."  MORE >>

Calfee, Halter & Griswold LLP

2022 Annual Report of the Participant and Plan Sponsor Advocate (PDF)

20 pages. "PBGC has made many changes and improvements over the years in response to the Advocate's recommendations and observations, yet certain systemic issues persist, repeatedly presenting themselves in different forms through various participant and plan sponsor assistance requests. While PBGC has done good work in implementing its Special Financial Assistance Program, it is now time to refocus and dedicate resources to address these unresolved areas of concern.... This year's report includes a special section on retirement security and raises questions that could be addressed so that all generations can enjoy a secure retirement."  MORE >>

Pension Benefit Guaranty Corporation [PBGC]

DOL Warns Retirees: Watch Your Assets!

"Workers about to call it a career generally have accumulated large nest eggs. Is it any wonder that this age group is most attractive to the investment industry? ... For the average person, it's very difficult to distinguish between an honest pitch and a questionable sales spiel. You can't even rely on recognizable firms because not all firms are required to follow the same strict regulations. The [SEC] and the [DOL] are trying to remedy that."  MORE >>

Forbes; subscription may be required

Retirees, It's Time to Update Your Financial Plan

"The first step in the planning process is to see where you stand financially. That is, how your assets compare with your spending liabilities and how big your Rainy-Fund is.... It's time for you (and your spouse) to sit down and crunch your numbers to see where you stand at the beginning of 2023 (the easier part). And, once you determine where you stand, then you can consider the actions you should take (the harder part)."  MORE >>

Ken Steiner, FSA Retired

Does Your 401(k) Plan Offer the Best 'Cash' Option? What You Need to Know About Capital Preservation

"As capital preservation continues to be one of the few asset classes providing participants with a positive nominal rate of return, fixed account products and stable value funds have come to the forefront when fiduciaries speak with recordkeepers and investment managers. Although these may fill the 'cash' bucket of the defined contribution plan investment menu, they might better be viewed as cash-like. Many include unique terms and conditions that could prove challenging in the future."  MORE >>

BenefitsPro; free registration required

The Effect of Pension Wealth on Employment

"This study provides novel evidence about the pension wealth elasticity of employment.... [On] average, the negative employment effect of pension wealth is significant and economically important.... [E]mployment effects are driven by behavioral responses of women close to retirement. The age pattern is partly explained by the positive effect of pension wealth on disability pensions after the age of 60."  MORE >>

Sebastian Becker, Hermann Buslei, Johannes Geyer, and Peter Haan via SSRN

FAS87 ASC715 Discount Rates and Moody's Rates, December 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


Public Pensions' Resilience Is the Untold Story of the Market Downturn

"One-year returns are not how we measure the stability and health of public pensions. What counts is their ability to make good on their promises over a long-term horizon. No U.S. public pension system has ever missed a payment to workers ... investment performance isn't the only thing that affects pension sustainability. Employees continue to contribute to funds, as mandated. Employer contributions have risen ... [We] are seeing improvement in the number of states and localities that opt to honor their commitments rather than invent new reasons to avoid them."  MORE >>

National Conference on Public Employee Retirement Systems [NCPERS]

Benefits in General

What to Keep on Your Radar and Some Predictions for 2023

"The deadline for SECURE Act and CARES Act amendments was extended.... There is still no final word on mandatory arbitration of ERISA claims ... Fee disclosure for welfare plans -- similar to the disclosures required for pension plans -- is required.... A new health plan transparency requirement to provide internet-based price comparison tools comes into effect in 2023.... We should expect to see: ... More efforts to provide coverage for workers without employer plans.... Interest and use of telehealth will increase.... Steps will be taken to protect innocent participants whose accounts are stolen due to lax cybersecurity practices."  MORE >>

Cohen & Buckmann, P.C.

Employee Benefits Jobs

View job as Senior Retirement Analyst
            for Dunbar, Bender & Zapf, Inc.

Senior Retirement Analyst

Dunbar, Bender & Zapf, Inc.

Remote / Pittsburgh PA

View job as Senior Retirement Analyst for Dunbar, Bender & Zapf, Inc.

Selected New Discussions

SECURE 2.0: Classifying Catch-Ups as Roth for ADP Testing in 2024

"A TPA friend of mine who still does a lot of ADP testing mentioned that this section of SECURE 2.0 could sink a lot of plans: Section 603, Elective deferrals generally limited to regular contribution limit. Under current law, catch-up contributions to a qualified retirement plan can be made on a pre-tax or Roth basis (if permitted by the plan sponsor). Section 603 provides all catch-up contributions to qualified retirement plans are subject to Roth tax treatment, effective for taxable years beginning after December 31, 2023. An exception is provided for employees with compensation of $145,000 or less (indexed). This is for 2024 so there is time to provide guidance but a lot of plans get around having to return excess deferrals to HCEs after a failed ADP test by recharacterizing deferrals for some HCEs as catch-up. Would this no longer be possible if the deferrals were all regular 401(k) as catch-ups would need to have been Roth?"

BenefitsLink Message Boards

State Withholding on Taxable Distributions

"Suppose you have a state where state withholding is NOT mandatory -- let's use NY as an example. Can a plan refuse to do state withholding on a taxable distribution, since it isn't required, even if the participant WANTS to have state tax withheld? I know that many platforms will accommodate the request, but I believe it is not required. Thoughts?"

BenefitsLink Message Boards

How 2023's Weekends and Holidays Adjust Certain Key Due Dates

"For services about an individual-account (defined-contribution) retirement plan, here's a few key due dates, and whether each is (or isn't) adjusted under the Treasury department's rule about a return or payment due on a Saturday, Sunday, or legal holiday."

BenefitsLink Message Boards

Can Solo 401(k)'s Have an Automatic Enrollment Feature?

"I believe that you should be able to set up a solo 401k just as you would any other 401k but wanted to make sure that the automatic enrollment feature was available and that then you could also receive the government tax credit for this?"

BenefitsLink Message Boards

Press Releases

Attorney Andrew Oringer Joins The Wagner Law Group

The Wagner Law Group P.C.

Webcasts and Conferences
(Retirement Plans / Executive Compensation)


January 19, 2023 WEBCAST


Last Issue's Most Popular Items

It’s Official: SECURE 2.0 Enacted into Law

American Retirement Association [ARA]

SECURE 2.0 Act of 2022 Modifies Retirement Plan Provisions

VOYA Financial

Top 5 Changes in the SECURE 2.0 Act for Plan Sponsors and Participants


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

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