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Retirement Plans Newsletter

January 26, 2023

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[Guidance Overview]

SECURE 2.0 Drafting Error Threatens Catch-Up Contributions, But Meaning Is Clear

"A mistake in SECURE 2.0 legislation would eliminate both future and existing retirement plan catch-up contributions, though IRS interpretation to keep the rule as intended seems possible."  MORE >>


[Guidance Overview]

SECURE 2.0: Changes to Retirement Plan Notice Requirements

"[SECURE 2.0] eliminates the requirement for plan sponsors to provide certain notices to eligible but unenrolled employees in defined contribution plans, changes the delivery method plan sponsors must use to furnish benefit statements to participants in retirement plans, and modifies the language required in annual funding notices under defined benefit plans. It also requires agencies to perform significant studies on several notices and report their findings to Congress."  MORE >>

Jackson Lewis P.C.

[Guidance Overview]

SECURE 2.0 Provisions Encouraging Employers to Adopt a Plan

"SECURE 2.0 changes the credit for employers with up to 50 employees for taxable years beginning after 2022. It increases the percentage to 100% of the startup costs. In addition, SECURE 2.0 creates an additional credit based on the amount of employer contributions to plans other than defined benefit plans."  MORE >>

Murphy Austin

[Guidance Overview]

SECURE 2.0: Qualified Charitable Distributions

"[SECURE 2.0] introduces a new provision allowing IRA holders aged 70-½ or older to make a one-time qualified charitable distribution to a split-interest entity. This change provides an opportunity for IRA holders to make charitable contributions while retaining lifetime income interests in the underlying funds.... The SECURE Act 2.0 provides that this annual contribution limit is indexed for inflation starting in 2023."  MORE >>

Schneider Downs

How Much a 401(k) Early Withdrawal Costs

"Before you take an early 401(k) withdrawal, consider: [1] The 10% early withdrawal penalty. [2] The 20% tax withholding for a 401(k) early withdrawal. [3] Income tax due on an early withdrawal. [4] Missed investment growth. [5] Ways to minimize the related costs."  MORE >>

U.S. News & World Report

Themes in 401(k) Prudence Litigation: Standing and 'Meaningful Benchmarks for Comparison'

"Two recent decisions ... granting defendants' motions to dismiss in ERISA prudence litigation illustrate emerging themes in these cases: challenges to the standing of plaintiffs who have not actually invested in the funds (or in one case, were not participants in the plan) being targeted; and challenges to the adequacy of the comparators whose allegedly superior performance (or lower cost) is used to 'infer' imprudence." [Singh v. Deloitte LLP, No. 21-8458 (S.D.N.Y. Jan. 13, 2023); Locascio v. Fluor Corp., No. 22-0154 (N.D. Tex. Jan. 18, 2023)]  MORE >>

October Three Consulting

What Surviving Spouses Need to Know About Social Security

"[1] You cannot combine your survivor benefits and regular retirement benefits, but you can switch between the two in order to maximize the total combined value you receive.... [2] A complex formula determines how much, if any, of your Social Security income is taxable. Your state may tax your benefits as well.... [3] [T]he Government Pension Offset (GPO) and Windfall Elimination Provision (WEP) may impact your survivor benefits and/or retirement benefits.... [4] [T]here is usually an opportunity to alter your claiming strategy.... [5] While getting remarried may entitle you to new spousal benefits, it could also impact your preexisting survivor benefits."  MORE >>


Employee Benefits Jobs

View job as Retirement Plan 3(16) Administrator
            for ERISA Services, Inc.

Retirement Plan 3(16) Administrator

ERISA Services, Inc.

Remote / Knoxville TN

View job as Retirement Plan 3(16) Administrator for ERISA Services, Inc.

Selected New Discussions

Employment Contract: Poor Wording or a Larger Problem

"I am in a very preliminary discussion with a new plan. Just discovered that they have an employment contract with one HCE employee that states that the HCE will receive X% compensation annually to be contributed to his 401k. The amount is going into his gross pay and then to the plan as employee deferrals. It is not going in as employer contributions. I'm not comfortable but haven't quite worked out how big of an issue, if any, this is. On the one hand, they are just giving the HCE funds that he can choose to put into or not put into the plan. But since they clearly labeled it as 'pension funds' (they have a 401(k) not a pension) it concerns me as a possibly discriminatory issue."

BenefitsLink Message Boards

Date Is Missing from Signed Amendment

"Amendment was sent to the client by DocuSign. It has 2 pages, a resolution and an amendment. Both pages were signed but only resolution was dated. Amendment's date is left blank. As they were both sent by DocuSign to be executed, there is proof that all were executed on the same date. There is the summary too. In your opinion, would the amendment be considered as signed on the same date as the resolution? Or, it will need to be re-executed and dated tomorrow? If this was not DocuSign related, I would not accept it but because there is no evidence as to when signed. I am curious on the legality."

BenefitsLink Message Boards

Average Benefit Test and Rate Group Test

"We use FT Williams for administration ... This cross-tested plan has passed the rate group test but not the average benefit test. It also passed the ratio percentage test. Does it still have to pass the average benefits test as well? Are deferrals included in the average benefits test?"

BenefitsLink Message Boards

Press Releases

OneAmerica First to Offer PensionPlus for Personalized Retirement Planning


SageView Launches New Financial Education and Engagement Platform for Retirement Plan Participants

SageView Advisory Group

IRI Announces Changes to Board Directors

Insured Retirement Institute [IRI]

FSA Facts: Health-E Commerce Issues Tips for March 15 Flexible Spending Account (FSA) Grace Period Deadline and FSA Spending Extensions

Health E-Commerce

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

Quarterly Fiduciary Training Series: Part 1

February 9, 2023 WEBINAR

CAPTRUST Financial Advisors

Institutionalizing Retirement Income in the Defined Contribution System: a Pathway to Success

February 9, 2023 WEBINAR


Last Issue's Most Popular Items

SECURE 2.0: Extension of RMD Start Ages

New Questions Arise Concerning the Extent of Liability for Plan and Service Provider Following 'Heinous' Plan Participant Identity Theft

The Wagner Law Group

SECURE 2.0 Increases Age for Required Minimum Distributions

Haynes and Boone, LLP

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

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