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Retirement Plans Newsletter

January 23, 2023

3 New Job Opportunities 3 New Job Opportunities


[Guidance Overview]

Exceptional Usefulness and Quality icon The Declining Appeal of Inherited Retirement Accounts

20 pages. "As retirement accounts proliferate and grow in value, American retirees are increasingly leaving substantial balances in these accounts to their adult children, siblings, and other relatives. Until recently, these new owners were able to withdraw funds from these tax-favored accounts over their lifetimes as their personal circumstances dictated. But legislation enacted in late 2019 and regulations issued in February 2022 have sharply limited the flexibility that non-spousal beneficiaries now have regarding these assets. This article examines those changes, analyzes their impact on the new owners of inherited retirement accounts, and considers what planning strategies are now appropriate."  MORE >>

Richard L. Kaplan, via SSRN

[Guidance Overview]

SECURE 2.0: Changes to Plan Corrections Guidance

"Although plan correction guidelines are usually addressed by the IRS through its Employee Plans Compliance Resolution System (EPCRS), Congress included several related provisions to provide relief to plan sponsors and owners of Individual Retirement Accounts (IRAs) due to the ever growing complexity of plan administration, as summarized [in this article.]"  MORE >>

Haynes and Boone, LLP

[Guidance Overview]

SECURE 2.0 Requires Auto-Enrollment, Auto-Escalation For Most New Plans

"[A]ll Plans existing on the date of enactment are grandfathered from the requirement as an exception.... [N]ew employers, in existence for less than 3 years, are excepted from the requirement, until their fourth year. There is also an exception for Plans of employers who normally employ 10 or fewer employees until the year after the employer normally employs more than 10 employees.... [If] an employer with an existing plan on the date of enactment joins a multiple employer plan (MEP), the grandfathering disappears. Each Plan of an employer in the MEP is treated as a separate plan."  MORE >>

Murphy Austin

[Guidance Overview]

SECURE 2.0: Emergency Savings in Your 401(k)

"Effective for plan years starting on or after January 1, 2024, 401(k) plans ... may allow participants to access up to $1,000 of their account balance (including pre-tax contributions) without penalty, in the event of an 'unforeseeable or immediate financial needs relating to necessary personal or family emergency expenses.' ... Participants need only self-certify their need for the emergency distribution in order to request it.... Also effective in 2024, plans may allow participants who are non-highly compensated employees ... to contribute up to $2,500 in post-tax deferrals to an emergency savings account under such plan, which will be treated as Roth contributions."  MORE >>

Jackson Lewis P.C.

American Views on Defined Contribution Plan Saving, 2022 (PDF)

24 pages. "Survey responses indicated that Americans value the discipline and investment opportunity that 401(k) plans represent and that individuals were largely opposed to changing the tax preferences or investment control in those accounts. A majority of respondents also affirmed a preference for control of their retirement accounts and opposed proposals to require a portion of retirement accounts to be converted into a fair contract promising them income for life from either the government or an insurance company."  MORE >>

Investment Company Institute [ICI]

PBGC Statement on SFA Application Submitted by Bakery Drivers Local 550 Pension Fund

"PBGC determined that the Plan is not eligible for SFA because it does not meet the eligibility criteria under ERISA Section 4262(b). Accordingly, PBGC has denied the application."  MORE >>

Pension Benefit Guaranty Corporation [PBGC]

Check These Five Boxes to See If You Are Financially Ready to Retire

"[1] Current Funded Status is greater than or equal to desired retirement threshold percentage (recommend 110%); [2] Current present value of non-risky assets/investments is greater than or equal to present value of future essential expenses; [3] Current investment in risky assets is greater than or equal to present value of desired future discretionary expenses; [4] Funded Status threshold for reducing future spending (or increasing assets) has been established (recommend 95%); and [5] Possible future cash flow issues have been identified and planned for."  MORE >>

Ken Steiner, FSA Retired


Will the Tenth Circuit Court of Appeals 'Fix' the Ongoing 401(k) SNAFU?

"A case is currently pending in the 10th Circuit Court of Appeals involves many of the same issues that were in Brotherston, specifically the 'apples and oranges' argument and the issue of whose has the burden of proving causation in 401(k) actions.... This case is a perfect example of how some courts are improperly confusing the two distinct stages of pleading and proof of causation." [Matney v. Barrick Gold of N. Am., Inc., No. 20-275 (D. Utah Apr. 21, 2022; recon. denied Jun. 21, 2022; on appeal to 10th Cir. No. 22-4045)]  MORE >>

The Prudent Investment Adviser Rules


SPARK Comment Letter to EBSA on Proposed Amendments to VFCP and PTE 2002-51 (PDF)

"Improvements to Proposed Self-Correction Component: [1] Remove notice requirement.... [2] Eliminate or increase earnings limitation.... [3] Extend self-correction window.... Improvements to PTE 2002-51: Remove additional contribution requirement ... Improvements to VFCP: [1] Expressly permit corrective contributions by service providers ... [2] De minimis errors.... [3] Use of forfeiture account."  MORE >>

The SPARK Institute

Employee Benefits Jobs

View job as Quality Assurance Manager
            for Bates & Company

Quality Assurance Manager

Bates & Company

Remote / Winter Park FL

View job as Quality Assurance Manager for Bates & Company

View job as Executive Compensation Lawyer
            for Trucker Huss, A Professional Corporation

Executive Compensation Lawyer

Trucker Huss, A Professional Corporation

Remote / San Francisco CA

View job as Executive Compensation Lawyer for Trucker Huss, A Professional Corporation

View job as Client Service Manager
            for United 401(k) Plans, Inc.

Client Service Manager

United 401(k) Plans, Inc.


View job as Client Service Manager for United 401(k) Plans, Inc.

Selected New Discussions

Ethical Dilemma

"Hypothetical situation: Trustee terminates plan and takes all money, including monies due to employees. Takes this money and transfers into a personal IRA for this trustee. Believes he/she can get away with it since no reporting of benefits was ever done to participants. What is the TPA or actuary's obligation in this situation?"

BenefitsLink Message Boards

Tricky Death Benefit Question

"A participant in an ERISA 403b plan passes away. She named her spouse as beneficiary and son as contingent beneficiary. Years before her passing, she divorced then remarried, but never changed the beneficiary form. Is the beneficiary form with the ex-spouse still applicable under ERISA? This is taking place in New York, which has a divorce revocation statute, which would seem to no longer permit the ex-spouse to be a beneficiary. But would NY state law take precedent over ERISA if ERISA would call for the ex-spouse to be the beneficiary, since the form was never changed? And if the ex-spouse is not the beneficiary, would the contingent beneficiary (the son) now be the beneficiary would the current spouse be the beneficiary? I am not sure if a QDRO was ever produced after the divorce. We are having an attorney look into this but I was hoping for any comments on this as we go along."

BenefitsLink Message Boards

Successor Beneficiary RMDs

"Post SECURE Act/IRS Proposed Regs re: successor beneficiaries is making my head spin -- Scenario

  • Traditional IRA owner, dies pre-SECURE Act & before their RBD
  • Original designated beneficiary was 'stretching' payouts & died in 2022

Questions: Its my understanding the successor beneficiary is subject to the 10 year payout (which in this case -- year 1 is 2023) I am struggling to get an answer re: whether RMDs are required in the 10 years and if so -- whose life expectancy is used? Pre-SECURE the successor bene 'Stepped into the shoes' of the original beneficiary and continued the 'stretch' using the remaining life expectancy of the original beneficiary -- easy enough. The IRS proposed regs (at least my interpretation) say the RMDs (during the 10 years) are dependent on when the account owner died -- before/after their RBD. Does this mean (in this situation) the Successor Bene does not take RMDs? In other words RMDs stop. Which doesn't seem to make sense? Or does the successor beneficiary continue taking RMDs based on the original (designated) beneficiary's life expectancy for years 1-9 & drain the inherited account in year 10?"

BenefitsLink Message Boards

SECURE 2.0 317: Retroactive First Year Deferral for Sole Prop

"Under SECURE 2.0 section 317, a Sole-Prop can RETROACTIVELY elect to defer for a new startup 401k for PYs beginning after 12/29/22. Normally I would think that means “for 2023 PYs”, but could the following work:

  1. Initial SHORT PY = 12/30/22 – 12/31/22
  2. Limitation Year = calendar year ending within PY
  3. Compensation Computation Period = calendar year ending within PY
  4. Therefore elect to defer full 20.5K/27K for 2022 PY fully deductible for 2022 Tax return.
  5. (+ PS alloc up to 415 limit, which is NOT prorated since Limitation Year is full 12 months, as well as Comp year; this part was already available for retroactively adopted plans I believe)

I’m a pension actuary obviously trying to think outside the box and there may be other boundaries that can’t be crossed that I am not thinking of. 401ks are not my forte."

BenefitsLink Message Boards

Press Releases

Soteria Personalized Target Date Accounts

Target Date Solutions

Centivo's 2022 Healthcare Spend Analysis Reveals 21 to 33 Percent Cost Savings for Employers


Webcasts and Conferences
(Retirement Plans / Executive Compensation)

SECURE Act 2.0, Part 1



Employer Plans: SEP Plans



SECURE Act 2.0, Part 2



The Benefits of Employee Benefits, Part 2: Realizing Cost and Operational Efficiencies Through Benefit Plans

February 8, 2023 WEBINAR

Morgan Lewis

SECURE 2.0 and Retirement Plan Overpayments and Corrections

February 15, 2023 WEBINAR

Groom Law Group

SECURE 2.0: What You Need to Know Now!

February 16, 2023 WEBINAR

Pension Education Council of Atlanta [PECA]

IRA Fundamentals

February 23, 2023 WEBINAR


SECURE 2.0 for Fiduciaries

February 23, 2023 WEBINAR

Groom Law Group

Last Issue's Most Popular Items

Unpacking SECURE 2.0 Provisions for Defined Benefit Plans


SECURE 2.0: New Contribution Options

Sherman Howard

Practice Note: Modeling -- for Pension Actuaries (PDF)

Pension Committee, American Academy of Actuaries

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

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