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Retirement Plans Newsletter

February 2, 2023

7 New Job Opportunities 7 New Job Opportunities


[Guidance Overview]

SECURE 2.0: New Lost and Found Program and an Increase to the Dollar Limit on Mandatory Distributions

"SECURE 2.0 requires the [DOL], in consultation with the Department of the Treasury, to create an online searchable lost and found database of retirement plans.... The deadline for the DOL to establish the database is December 29, 2024.... [P]lan administrators must furnish the DOL with information about the plan and terminated plan participants for plan years beginning after December 31, 2023.... Section 304 of SECURE 2.0 increases to $7,000, the threshold at which plans may automatically cash out a participant, effective for distributions made after December 31, 2023. This change is optional and may require a plan amendment."  MORE >>

Jackson Lewis P.C.

[Guidance Overview]

A Closer Look at SECURE 2.0's Penalty-Free Distribution Provisions (PDF)

"Plan sponsors can offer penalty-free distributions to participants who are affected by major disasters, have experienced domestic abuse, have personal emergency expenses or have a terminal illness. This GRIST separately examines each distribution’s eligibility provisions and any limitations on the distribution’s amount or timing. The article then discusses common provisions of the distributions, including a plan’s ability to offer them as separate options, participants’ ability to repay distributions, and their tax treatment for plans and participants."  MORE >>


[Guidance Overview]

SECURE 2.0: Impact on ESOPs

"SECURE Act 2.0: [1] amends Section 1042 of the Internal Revenue Code ... to permit a 10% tax deferral for certain sales to S Corporation ESOPs; [2] amends Section 401(a)(35) of the Code to change the definition of 'publicly traded' for certain diversification purposes; [3] directs the [DOL] to create an Employee Ownership Initiative and release formal guidance in connection with the Employee Ownership Initiative; and [4] directs the DOL to release formal guidance on good faith fair market valuation standards."  MORE >>

Morgan Lewis

[Guidance Overview]

Puerto Rico Treasury Department Announces 2023 Retirement Plan Limits

"The Puerto Rico legislature is considering amending the PR Code to incorporate for the first time cost of living adjustments to the maximum deductions amounts that can be claimed by individuals in computing their income tax liability including, among others, contributions to individual retirement accounts."  MORE >>

McConnell Valdes

Wisconsin District Court Rulings Signal Potential New Trend Favoring the Defense of ERISA Fee and Investment Performance Lawsuits

"The emergence of a district court in the Seventh Circuit as the potential leader of a new trend of motion to dismiss outcomes is particularly poignant, as it was the Seventh Circuit ruling dismissing such claims in Hughes v. Northwestern that was vacated and remanded by the Supreme Court."  MORE >>


Courts Continue to Scrutinize Arbitration Clauses in ERISA Plans

"A recent district court decision highlights the continued uncertainties about what it means to include an arbitration clause in an ERISA plan. While courts generally agree that such clauses are, in theory, enforceable, the extent to which courts will enforce a specific clause remains uncertain given divergent outcomes of decisions regarding motions to compel arbitration." [Burnett v. Prudent Fiduciary Services LLC, No. 22-270 (D. Del. Jan 25, 2023)]  MORE >>


PBGC Variable-Rate Premium vs. Borrow-and-Fund

"After the passage of SECURE 2.0, which froze the VRP rate at 5.2% of unfunded vested benefits (UVBs), determining when it is economically more efficient to borrow-and-fund vs. funding the plan over time (at ERISA minimums) and paying the 5.2% VRP 'tax' is, in some respects, relatively straightforward. [This article reviews this calculation and concludes] with some observations about future interest rate risk and how it might affect borrow-and-fund decision-making."  MORE >>

October Three Consulting

Opening a Lump Sum Window -- Will Participants Jump Through?

"[C]onditions in 2023 may be ideal for plan sponsors to open temporary lump sum 'window' offerings to former employees in hopes they agree to go through, taking their future pension risk with them. The question is whether those participants will agree to do so."  MORE >>

Principal Financial Group


American Benefits Council Comment Letter to EBSA on Proposed Amendments to the Voluntary Fiduciary Correction Program and Prohibited Transaction Exemption 2002-51

"[S]pecific recommendation for improving the proposal ... [1] Eliminate or increase the $1,000 lost earnings limitation ... [2] Eliminate the SCC notice requirement ... [3] Remove the additional contribution to participants' accounts requirement ... [4] Expand the de minimis exception ... [5] Allow lost earnings to be paid out of a plan's forfeiture account ... [6] Allow service providers, instead of employers, to make corrective contributions."  MORE >>

American Benefits Council


It's Time to Act on Retirement Income Solutions

"[D]espite good intentions, defined contribution (DC) plans have failed to properly replace the retirement income security that had existed under traditional defined benefit pension plans.... [A] large gap remains between where pre-retirees typically are financially and where they should be. Even among those who have accumulated a sufficiently large nest egg, many have no idea how to safely and responsibly convert those assets into lifelong retirement income."  MORE >>

Retirement Advisor Council

Benefits in General

Examining the Financial Wellbeing of the U.S. Public Service Workforce (PDF)

31 pages. "This report highlights where pockets of financial insecurity among public sector workers persist, summarizes the range of existing benefits for these employees, and demonstrates that benefits and support provided to public employees in building their own savings is a proven pathway for people to achieve financial security. That is, while public sector employers help create financial security for most of their employees, they can amplify these efforts to increase the number of workers who are financially secure."  MORE >>

Mission Square Research Institute

Employee Benefits Jobs

View job as Employee Benefits and Executive Compensation Associate Attorney
            for Verrill

Employee Benefits and Executive Compensation Associate Attorney


Portland ME / Boston MA

View job as Employee Benefits and Executive Compensation Associate Attorney for Verrill

View job as Fund Administrator
            for Plumbers Local Union No. 1 Benefit Funds

Fund Administrator

Plumbers Local Union No. 1 Benefit Funds

Long Island City NY

View job as Sales Development Representative
            for U.S. Retirement & Benefits Partners

Sales Development Representative

U.S. Retirement & Benefits Partners


View job as Sales Development Representative for U.S. Retirement & Benefits Partners

View job as Distribution Specialist
            for ERISA Services, Inc.

Distribution Specialist

ERISA Services, Inc.


View job as Distribution Specialist for ERISA Services, Inc.

View job as Cash Balance Plan Consultant
            for FuturePlan, by Ascensus

Cash Balance Plan Consultant

FuturePlan, by Ascensus


View job as Cash Balance Plan Consultant for FuturePlan, by Ascensus

View job as Senior Compliance Associate, Advertising Compliance
            for Guideline, Inc.

Senior Compliance Associate, Advertising Compliance

Guideline, Inc.

Remote / CA / CO / FL / MA / MD / ME / NC / NY / TX / WA

View job as Senior Compliance Associate, Advertising Compliance for Guideline, Inc.

View job as Employee Benefit Plan Auditor/Assurance and Consulting Associate -- Retirement Plan Services
            for PBMares

Employee Benefit Plan Auditor/Assurance and Consulting Associate -- Retirement Plan Services


Norfolk VA

View job as Employee Benefit Plan Auditor/Assurance and Consulting Associate -- Retirement Plan Services  for PBMares

Selected New Discussions

Each in Own Group / No Allocation Conditions

"Plan has no conditions but they exclude people from getting an allocation if they have less than 1,000 hours or term before last day (not top-heavy). But, the plan is now below 70% for coverage. I realize there are Terms with Breaks because last day/1,000 hours is not the 'sole' reason they're not benefitting. But can I use the Average Benefits Test based on the conclusion that excluding people who have less than 1,000 hours or are termed is a reasonable business classification? Follow-up: Does the answer change if I bring one of them in to pass a failed rate group test?"

BenefitsLink Message Boards

Late Deferral Deposit Correction

"I realize SECURE 2.0 may have changed this possibly. Have a client who hasn't deposited for 4 months in 2022. Dentist bought a practice and didn't know they or their new payroll company needed to initiate payment. The amount for the 4 months is probably less than $5,000. It's being deposited now and I know to report on the 5500 and file Form 5330. My question is the earnings calculation. This will be self-corrected. Can I use the DOL earnings calculator? It is easy to use and takes out any ambiguity. I read different things about whether can be used or not. I'm pretty sure the DOL earnings will be higher than the plan actual earnings for this period (which could even be a loss.)"

BenefitsLink Message Boards

Can 401(k) Plans That Don't Have Roth Still Function Post-SECURE 2.0?

"Can a 401k plan continue to function without Roth in a post-SECURE 2.0 world? Ignore the 'corner cases' where no one defers any catch-up (whether because they defer low or there is no ADP failure recharacterized) or no one earns more than $145K (seriously, $145K? Like we needed another limit to track?). If someone earning $150K is required to make their catch-up as Roth, then the plan has to allow Roth deferrals, right? I know we don't have all the answers yet, but it seems unlikely that there will be a special carve-out we can use to not amend the typically older plans that never had Roth in them before to allow Roth deferrals. And that amendment would have to be in place before any regular Roth deferrals are allowed, because the SECURE 2.0 amendment coming to a document near you in 2025 will only cover the catch-up amounts."

BenefitsLink Message Boards

Press Releases

Marc Fosse Joins Seyfarth to Co-Chair Executive & Equity Compensation Practice

Seyfarth Shaw LLP

The ERISA Industry Committee Calls on the U.S. Patent and Trademark Office to Improve the Patent Access Process to Enhance Prescription Drug Competition

ERIC [ERISA Industry Committee]

MassMutual Further Evolves and Expands Suite of Employee Benefits


Webcasts and Conferences
(Retirement Plans / Executive Compensation)

401(k)ology: What You Need to Know About SECURE Act 2.0

February 23, 2023 WEBINAR


Last Issue's Most Popular Items

SECURE 2.0's New QDRO Rules: The Mainstreaming of the QLAC?

Business of Benefits

SECURE 2.0 Glitch-Fixing: How 2024 Catch-Up Contributions Could Be Restored

401(k) Specialist

SECURE Act 2.0 Provides Additional Tools for Plan Corrections

Qualified Plan Advisors [QPA]

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

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