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Retirement Plans Newsletter

January 9, 2023

5 New Job Opportunities 5 New Job Opportunities


[Official Guidance]

Text of IRS Rev. Proc. 2023-4: Employee Plans Determination Letters and Private Letter Rulings

"In addition to minor non-substantive changes ... the following changes have been made:

  1. Sections 6, 8, 9, 10, 11, 19, and 20 and Appendix B of this revenue procedure are revised to provide the procedures for obtaining a determination letter with respect to a Section 403(b) individually designed plan, beginning June 1, 2023. Appendix A adds user fees for these submissions.
  2. Sections 6.02 and 16 of this revenue procedure are revised to provide that Form 5307, Application for Determination for Adopters of Modified Nonstandardized Pre-Approved Plans and Form 5316, Application for Group or Pooled Trust Ruling, may be submitted electronically beginning June 1, 2023, and must be submitted electronically beginning July 1, 2023, including payment of the user fee.
  3. Sections 3 and 31 and Appendix A of this revenue procedure reflect the temporary suspension of the opinion letter program for prototype IRAs (traditional, Roth and SIMPLE IRAs), SEPs (including salary reduction SEPs (SARSEPs)), and SIMPLE IRA plans.
  4. Section 9.02 of this revenue procedure reflects changes to the scope of determination letters.
  5. Appendix A of this revenue procedure has been modified to increase certain user fees.
  6. A new Appendix G has been added to this revenue procedure which provides a checklist for applications for nonbank trustee approval letters."


Internal Revenue Service [IRS]

[Official Guidance]

Text of EBSA Notice of Exemption: Certain Prohibited Transaction Restrictions Involving JPMorgan Chase Co.

"This exemption allows entities with specified relationships to JPMorgan Chase Co.... to continue to rely on the exemptive relief provided by Prohibited Transaction Class Exemption 84-14 [the QPAM Exemption], notwithstanding the judgment of conviction against JPMC[.]"  MORE >>

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

[Official Guidance]

Text of EBSA Proposed Exemption for Certain Prohibited Transaction Restrictions: TT International Asset Management, Ltd.

"If this proposed exemption is granted, TT International Asset Management Ltd will not be precluded from relying on the exemptive relief provided by Prohibited Transaction Class Exemption 84-14 [the QPAM Exemption], notwithstanding the Conviction ... during the Exemption Period[.]"  MORE >>

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

[Guidance Overview]

Alert (High Risk Issue) icon SECURE 2.0 Overpayment Provisions Now Effective

"The effective date of the changes is December 29, 2022....[N]ew section 206(h) [of] ERISA ... provides relief for fiduciaries who might otherwise feel compelled to pursue recoupment of overpayments. The law also provides important protections for participants and beneficiaries from plans seeking to recoup overpayments particularly after benefit payments have been made for many years.... New Code section 414(aa) provides ... explicit permission for the plan sponsor to amend the plan to increase past, or decrease future, benefit payments to affected participants and beneficiaries in order to adjust for prior inadvertent benefit overpayments."  MORE >>


[Guidance Overview]

How SECURE 2.0 Looks to Increase Plan Participation

"The new mandatory enrollment and automatic deferral requirements are potentially the most impactful changes for increasing workplace savings.... Although most of SECURE 2.0's requirements won't become effective for plan years beginning before December 31, 2023, employers with existing plans will want to think about incorporating these provisions for competitive reasons -- and to leave enough lead time for programming changes and participant communications."  MORE >>

Cohen & Buckmann, P.C.

[Guidance Overview]

Alert (High Risk Issue) icon SECURE 2.0, as Passed, Does Not Permit 403(b) Plans to Invest in Collective Investment Trusts

"[T]his provision passed the House Committee on Ways and Means ... [and] would have amended the Internal Revenue Code and the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940 to permit CITs in 403(b) plans. However, the U.S. House Committee on Financial Services asserted jurisdiction over the securities changes, which were necessary to allow 403(b) plans to use CITs. House Financial Services ... had 'consumer protections' concerns. The required amendments to securities laws did not make it into the final SECURE 2.0 Act."  MORE >>

PLANSPONSOR; free registration may be required

[Guidance Overview]

More Roth, More Catch-Up, and Catch-Up as Roth: SECURE 2.0

"Effective now (i.e., the date of enactment of SECURE 2.0), Section 402A of the tax code permits 401(k), 403(b), and governmental 457(b) plans to permit employees to elect to have employer matching or nonelective contributions treated as designated Roth contributions.... Starting in 2025, participants who are age 60, 61, 62, and 63 will be subject to a higher catch-up contribution limit.... SECURE 2.0 amends the catch-up contribution rules to require certain highly paid workers to contribute all of their catch-up contributions as Roth contributions starting in 2024."  MORE >>

Jackson Lewis P.C.

[Guidance Overview]

DOL Looks to Ease Some Retirement Plan Corrections, Expand Others

"The proposed changes [to the Voluntary Fiduciary Correction Program (VFCP)] include a new self-correction option for delinquent participant contributions to retirement plans ... Another proposal would amend the related prohibited transaction class exemption (PTE 2002-51) that provides excise tax relief for a subset of VFCP corrections. DOL also has asked for comments about a broader expansion of the program, including whether to better align some parts of the VFCP with IRS's Employee Plans Compliance Resolution System (EPCRS). Comments on the VFCP and PTE proposals are due Jan. 20."  MORE >>


District Court Permits Partial Jury Trial in Eversource Energy 401(k) Dispute

"[The District Court judge found] that the plaintiffs' demand for Eversource to 'make good' any losses caused by the alleged breach constituted a legal, rather than equitable, remedy and therefore could be submitted to a jury." [Garthwait v. Eversource Energy Co., No. 20-00902 (D. Conn. Dec. 07, 2022)]  MORE >>

Faegre Drinker

Target Retirement Fund: Using Deferred Life Annuities Rather Than Bonds to Reduce Risk as Retirement Approaches

"Instead of increasing the allocation to bond funds as retirement approaches, a target retirement fund gradually purchases deferred life annuities beginning at age 50.... [The authors] compare how a target retirement fund participant would fare compared with someone who stays with a traditional TDF until retirement and then buys an immediate life annuity."  MORE >>

National Bureau of Economic Research [NBER]; purchase required for full document

Automatic Funded Status Adjustments to Your Retirement Spending Budget

"[S]imple corridors can be implemented around the desired household funded status to introduce a level of discipline in the process while at the same time providing for an element of smoothing of spending from year to year."  MORE >>

Ken Steiner, FSA Retired

FTC's Noncompete Ban Would Hit Retirement, RIA Consolidation

"The widescale, national ban proposed this week surprised many employers, as it cut across all industries and roles ... That includes areas such as financial services and asset management, in which noncompetes have become a regular part of recruiting and hiring."  MORE >>


Benefits in General

[Official Guidance]

Text of Instructions for IRS Form 5330: Return of Excise Taxes Related to Employee Benefit Plans (PDF)

14 pages; rev. Dec. 2022. "What's New ... Form 5330 has been updated to add a new Schedule L for a cooperative and small employer charity (CSEC) plan sponsor to report tax on failure to adopt a funding restoration plan if the plan is in funding restoration status for a plan year (section 4971(h))."  MORE >>

Internal Revenue Service [IRS]

Employee Benefits Jobs

View job as Pension Systems Assistant
            for DeMars Pension Consulting Services, Inc.

Pension Systems Assistant

DeMars Pension Consulting Services, Inc.

Overland Park KS

View job as DB/DC Administrator
            for Peery & Associates, Inc.

DB/DC Administrator

Peery & Associates, Inc.


View job as DB/DC Administrator for Peery & Associates, Inc.

View job as Senior Defined Contribution Account Manager
            for Nova 401(k) Associates

Senior Defined Contribution Account Manager

Nova 401(k) Associates


View job as Senior Defined Contribution Account Manager for Nova 401(k) Associates

View job as Defined Benefit Consultant
            for AimPoint Group

Defined Benefit Consultant

AimPoint Group


View job as Defined Benefit Consultant for AimPoint Group

View job as New Business Consultant
            for Retirement Plan Consultants

New Business Consultant

Retirement Plan Consultants


View job as New Business Consultant for Retirement Plan Consultants

Selected New Discussions

Forfeiture Before 5 Years

"For a partially vested participant who has terminated employment, but has not taken a distribution, is it permissible for the plan to forfeit the unvested portion of the balance before five breaks in service (subject to any restoration and continuation of vesting on rehire)? I don't see any rule affirmatively stating that the forfeiture cannot occur. The guidance seems to say that, by implication, a forfeiture can't (shouldn't?) occur before five years because the participant may still advance on the vesting schedule if rehired. The pre-approved plan documents I can locate from several vendors all require five breaks in service. IRS Pub. 6389 (review of vesting provisions under 2020 RA list) also states the rule explicitly by saying a forfeiture before five years can only occur by a cash-out distribution."

BenefitsLink Message Boards

Plan Design Question: Related Employers

"Two doctors own a medical practice. They want to start a pension plan. They each have their own corporations. They have 7 employees of the practice who are eligible for the plan. They each want to establish a pension plan for their respective corporations without covering any of the employees, and to establish a separate 401k Profit Sharing plan for the employees. CPA insists that several TPAs have told him this design is ok. Can this pass IRS rules."

BenefitsLink Message Boards

Top-Paid Group Election Among Related Employers

"So, it's known that if a client makes an election to use the top-paid group for HCE determinations, it needs to use the same election across all plans of the employer for the determination year. But what happens if separate plans from related employers have conflicting elections? I would suspect that since not all plans actually include the election, then the election is invalid and everyone over the pay threshold will count as HCEs. But it'd be nice to have something to point to. Does anyone have anything reliable for that?"

BenefitsLink Message Boards

Long Term Part Time Employee Rules Under SECURE 2.0

"In Secure 2.0 there is a section on LTPT that references 2 years of 500 hour of service and it is set to take effect in 2025. Does that override the current rules? Or do we use 3 years of 500 hours UNTIL 2025 then scale back to 2 years?"

BenefitsLink Message Boards

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

Advanced ADP and ACP Testing Techniques

February 2, 2023

ASPPA [American Society of Pension Professionals & Actuaries]

Withdrawal Liability for Multiemployer Plans

February 8, 2023

Conference of Consulting Actuaries

Basics of 401(k) Plans Series for 2023, Session 2

February 9, 2023


RMDs: What You Are Required To Know

February 15, 2023

ASPPA [American Society of Pension Professionals & Actuaries]

2023 IRS and DOL Audit Issues for Retirement Plans: Key Areas of Focus and Strategies for Plan Sponsors

February 22, 2023


Last Issue's Most Popular Items

SECURE 2.0 Brings Numerous Retirement Plan Changes in 2023 and Beyond (PDF)

Thompson Hine

SECURE 2.0 Act of 2022: Issues for Plan Sponsor Consideration

Reinhart Boerner Van Deuren s.c.

SECURE 2.0 Changes for the New Year: Key Takeaways for Plan Sponsors

Sherman Howard

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

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