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Retirement Plans Newsletter

January 11, 2023

5 New Job Opportunities 5 New Job Opportunities


[Official Guidance]

Text of PBGC Final Regs: Civil Monetary Penalty Inflation Adjustment

"The multiplier for 2023 is 1.07745. The adjusted maximum amounts are $2,586 for section 4071 penalties and $345 for section 4302 penalties."  MORE >>

Pension Benefit Guaranty Corporation [PBGC]

[Guidance Overview]

SECURE 2.0 Takeaways for Retirement Plan Sponsors, Part 2: Catching Up on Catch-Ups

"Beginning with taxable years starting on or after January 1, 2024, ... catch-up contributions for 'higher-paid participants' must be made as Roth contributions.... This new rule introduces a new definition of compensation and a new group of participants for recordkeepers to track, which will significantly complicate plan administration.... Plan sponsors who allow catch-up contributions but have resisted adding Roth deferrals may face a difficult decision -- either stop allowing any catch-up contributions beginning in 2024 or add Roth deferrals to the plan."  MORE >>

Sherman Howard

[Guidance Overview]

How to Advise Clients of the RMD Age Increase

"A participant who misses the deadline for taking an RMD will owe the IRS an excise tax on the shortfall. SECURE Act 2.0 reduces the excise tax rate from 50% of the RMD shortfall to 25%. The penalty is further reduced to 10% if [certain] requirements are met:"  MORE >>

Appleby Retirement Dictionary

[Guidance Overview]

SECURE Act 2.0: Expanded Self-Correction and New Overpayment Correction Rules and Relief

"No specific deadline for self-correcting failures ... Expanded definition of failures eligible for self-correction ... Expanded availability of self-correction ... Expansion of retirement vehicles eligible for self-correction ... Specific additional relief for self-corrected plan loan failures ... Permanent safe harbor for correcting certain elective deferral failures involving automatic contribution features ... New relief and rules for correcting plan overpayments."  MORE >>

Morgan Lewis

[Guidance Overview]

Exceptional Usefulness and Quality icon SECURE Act 2.0 Summary of Changes to Retirement Plans (PDF)

9 pages. This article summarizes the changes that impact: [1] Access to retirement plans; [2] Withdrawals and distributions; [3] Individual Retirement Accounts (IRAs); [4] Small employers, SIMPLE plans and SEPs; [5] Pooled Employer Plans (PEPs) and Multiple Employer Plans (MEPs); [6] Employee Stock Ownership Plans (ESOPs); and [7] 403(b) plans and governmental plans.  MORE >>

Williams Mullen

[Guidance Overview]

SECURE 2.0 Highlights for Retirement Plan Sponsor

"The changes outlined [in this chart] will require all existing plans to make operational changes in order to administer their plans in compliance with mandatory provisions in the law, some of which take effect as early as 2023."  MORE >>

Ice Miller LLP

[Guidance Overview]

IRS Proposes Permanent Physical Presence Relief for Spousal Consent

"The proposal updates the agency's regulation governing electronic participant elections ... IRS has granted immediate reliance on the proposal, which has a few substantive changes -- including an apparent narrowing of the scope -- from the 2020 temporary relief that expired Dec. 31, 2022. Comments are due March 30."  MORE >>


[Guidance Overview]

SECURE 2.0: Withdrawal and Subsequent Repayment Provisions

"SECURE 2.0 will statutorily permit prudent and reasonable rules for withdrawals from a qualified plan that plan sponsors will have to implement or choose to implement immediately or over the next few years. [This article describes] seven key provisions of the new law regarding withdrawing funds from a qualified plan, and any subsequent optional or required repayments ... [A] few of the actions by participants executing the distributions may require a review of their personal federal income tax filings. State of residence personal income tax rules could also be affected."  MORE >>


The Advantages and Tax Effects of Dividends Paid to the ROBS Plan Account

"When paying a dividend, the corporation pro rates the payment, in cash, to all shareholders; so if a plan owns 99% of the corporation, the plan would receive 99% of the total dividend paid out. The ROBS participant would then be able to invest the dividend in traditional (non-ROBS) 401(k) investments offered within their retirement plan. In this way, dividends help the ROBS owner leverage their company investment to diversify their retirement savings."  MORE >>

KLB Benefits Law Group

Nevada's Pension Debt Soars to $18 Billion

"The relentless growth of PERS debt means yet another rate hike for Nevada public employees -- most of whom are now paying the highest PERS rates in the nation."  MORE >>

Nevada Policy Research Institute

Retirement Inflation Survey

"50% of respondents say they had to pause saving for retirement at some point in 2022. Furthermore, 41% of those surveyed have stopped contributing to retirement funds like 401(k)s or individual retirement accounts. What's more, almost one-third (32%) have had to withdraw money from their retirement savings to keep up with rising expenses and rethink their financial plans."  MORE >>

U.S. News & World Report

Benefits in General

What's in Store for Employee Benefits and Total Rewards in 2023?

"Employers continue to absorb healthcare premiums and other costs.... Virtual primary care will continue to take off as the next generation of telehealth.... Companies may need to manage through significant change as they right-size their organization in line with current market conditions.... Employers continue to reduce expenses in defined contribution plans.... The pace of defined benefit plan terminations increases.... Pension plan sponsors begin to implement income distribution options in their defined contribution plans."  MORE >>


Employee Benefits Jobs

View job as Experienced Defined Benefit Plan Administrator
            for MGKS

Experienced Defined Benefit Plan Administrator


Remote / Phoenix AZ

View job as Experienced Defined Benefit Plan Administrator for MGKS

View job as Retirement Plan Administrator
            for Metro Benefits, Inc.

Retirement Plan Administrator

Metro Benefits, Inc.

Remote / Pittsburgh PA

View job as Senior Attorney, ERISA
            for The Standard

Senior Attorney, ERISA

The Standard


View job as Senior Attorney, ERISA for The Standard

View job as Retirement Plan Administrator
            for The Finway Group

Retirement Plan Administrator

The Finway Group

Remote / West Des Moines IA / IL / KS / MN / MO / ND / NE / SD / WV

View job as Retirement Plan Administrator for The Finway Group

View job as Regional Sales Director
            for July Business Services

Regional Sales Director

July Business Services

Remote / Waco TX

View job as Regional Sales Director for July Business Services

Selected New Discussions

How Do You Check Whether a Beneficiary Designation Is Real or a Forgery?

"About four weeks after a 78-year-old participant’s death, the plan’s administrator receives a document the sender presents as the participant’s beneficiary designation. It is dated a few days before the participant’s death. Nothing about the form is witnessed, by a notary or anyone else. But the employer has no record that its former employee ever had a spouse (or any child or other dependent), and the obituary mentions no spouse or former spouse and no child. The employer/administrator worries that the ostensible beneficiary-designation form might not be the participant’s act. Here’s the difficulty: Because the participant retired 16 years ago, the employer discarded records that might have showed its former employee’s handwriting. The retiree’s request, a few years ago, for automated minimum-distribution payments was processed through the plan’s website. The recordkeeper too has nothing that shows the participant’s handwriting. No one now working for the employer knows anything about the retiree beyond what’s in a computer system record from when she retired. (The employer has tens of thousands of employees, and many retirees.) What information would you want to form a discretionary finding about whether the form submitted as the participant’s beneficiary designation likely is the participant’s act? What information might suggest to you that the ostensible beneficiary designation is not genuine?"

BenefitsLink Message Boards

5 Years Missed RMDs; TPA or Participant Responsible?

"Just received this question from a CPA friend. One of his tax client who was a 5% owner in a small consulting firm (about 5 years back) and then reduced his ownership to 2% later. He received RMD while he was a 5% owner. Since then he never received any RMD from the plan (for 5 years). Recently he received a letter from the TPA that he missed taking his RMD for the past 5 years and they will be processing all of his RMDs and he will owe taxes and penalties (for failure to take RMD) as well as the TPA has told this participant that the plan now has a compliance failure and that needs to be corrected and said that they (the TPA) will bill him about $5,000 for the filing fee + TPAs fee. What should be the response by the participant?"

BenefitsLink Message Boards

TPA Delay Resulted in Higher Interest Rate for Calculation of DB Plan Lump Sum Payment - Any Workaround?

"Calendar year DB Plan uses December as the look back for the 417e rates for lump sum calculations. A participant requested on Nov 7 2022 his benefit, as he was retiring. Had the benefit been prepared anytime prior to 12 31 22 then the lump sum would have been calculated based on the 417e rates of December 2021. The December 2021 were quite low and thus, the lump sum would have been quite high. Although the sponsor was pushing in late December for the calculations to be completed, however it was not done until now in 2023. Question: The December 2022 rates are much higher and therefore the lump sum, calculated now in 2023, will be much lower. Do we give the participant the lower lump sum, or do we say, that since the participant requested his benefit in November 2022 and the sponsor really was pushing in late December 2022 for the benefits to be completed that the lump sum should be calculated as if it was done in 2022 based on the lower December 2021 417e rates and therefore give a higher lump sum?"

BenefitsLink Message Boards

Press Releases

GOSHRM Wins Two Awards for Community Impact on Opioid Crisis

Greater Orlando Society for Human Resource Management [GOSHRM]

PSCA's 2022 Nonqualified Plan Survey Is Now Available

PSCA [Plan Sponsor Council of America]

Andrew Forgrave, Enrolled Actuary at Pinnacle Plan Design, Promoted to Partner

Pinnacle Plan Design

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

Chicken Soup for Retirement Plans, Part Two: Digesting Distributions

January 20, 2023 WEBINAR

Ogletree Deakins

Cross-Tested Plan Workshop: Designing, Testing, and Troubleshooting [Updated for SECURE Act 2.0]

February 22, 2023 WEBINAR

ASPPA [American Society of Pension Professionals & Actuaries]

Last Issue's Most Popular Items

SECURE 2.0 in 2023 and Beyond

Eversheds Sutherland

The SECURE Act 2.0: The Most Impactful Provisions, Part 1 -- Automatic Plans

Text of 2023 IRS Form W-4R: Withholding Certificate for Nonperiodic Payments and Eligible Rollover Distributions (PDF)

Internal Revenue Service [IRS]

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

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