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Retirement Plans Newsletter

February 3, 2023

7 New Job Opportunities 7 New Job Opportunities


[Official Guidance]

SEC Risk Alert: Observations from Broker-Dealer Examinations Related to Regulation Best Interest (PDF)

"Moving forward, the Division intends to incorporate compliance with Regulation Best Interest into retail-focused examinations of broker-dealers, particularly those that include sales practices within the scope of the examination. The Division is issuing this risk alert to highlight deficiencies noted during examinations conducted, as well as examples of weak practices that could result in deficiencies."  MORE >>

U.S. Securities and Exchange Commission [SEC]

[Guidance Overview]

Exceptional Usefulness and Quality icon SECURE 2.0: Significant Changes for Employer-Sponsored Retirement Plans Start Now (PDF)

14 pages. "SECURE 2.0 did not change the existing requirement for defined benefit pension plans ... to actuarially increase a non-5% owner employee's benefit when that employee continues working after April 1 following the end of the calendar year in which the employee turned 70½.... 403(b) plan administrators will need to understand the [long-term, part-time employee] requirements that will apply to their plans and take the necessary steps to address them.... [Changes to the catch-up contributions rule] may pose some logistical challenges for payroll ... as it may be difficult to determine whether an employee earned more than the threshold in the prior year in time to properly limit the employee's catch-up contributions starting with the first pay period of the next year."  MORE >>


[Guidance Overview]

Catch-Up Contributions: If It Ain’t Broke, Break It!

"Assuming lawmakers and/or regulators are able to find a way to get catch-up contributions back on track ... [b]eginning in 2024, any participant with compensation exceeding $145,000 in the immediately preceding year will be required to have any catch-up contributions ... designated as Roth contributions.... When setting the $145,000 limit, [the Act] points to the part of the Tax Code that essentially addresses W-2 employees. Sole props and partners ... pay for purposes of this is $0.... [A]ny amounts that are recharacterized [as a result of a failed ADP test] would have to also be converted to Roth for any of the HCEs who had prior year compensation in excess of $145,000.... [T]hose HCEs could find themselves stuck with an unexpected tax bill without actually receiving the cash refund to cover it."  MORE >>


[Guidance Overview]

What Deadlines Apply to 403(b) Plan Documents

"When did an employer first need to adopt a 403(b) plan? ... What is the deadline for amendments to a 403(b) plan before the next remedial amendment period? ... What happens if an employer intended to adopt an IRS pre-approved 403(b) plan document, but did not sign the amendment for an IRS pre-approved plan by the June 30 deadline?"  MORE >>

VOYA Financial

Record Number of 401(k) Hardship Withdrawals Seen in 2022

"[A] record 2.8% of the five million people in 401(k) plans run by [Vanguard] tapped their retirement savings in 2022 for financial hardship reasons. It's an increase from 2.1% in 2021 and a pre-pandemic average of about 2%."  MORE >>

American Retirement Association [ARA]

Fiduciary Responsibilities for Non-ERISA Retirement Plans

"ERISA is designed to apply only to private organizations. While government entities and some churches may not be required to comply with its standards, following ERISA best practices can be prudent.... Since state laws vary, fiduciary responsibilities can range from nonexistent to comprehensive, or fall somewhere in between."  MORE >>


Model Pension Plan's Funded Status Continues to Rise

"During the fourth quarter (Q4) of 2022, the funded status of the model pension plan ... rose by 2 percentage points, to 106 percent ... This increase in funded status is primarily attributable to a 7 percent increase in assets, partially offset by a 4 percent increase in liabilities."  MORE >>


Executive Compensation and Nonqualified Plans

[Guidance Overview]

FTC Non-Compete Proposed Rule May Affect Employee Benefit Plans

"[E]mployers should inventory their various benefit plans and compensation arrangements to determine where they have restrictive covenants so that they can act quickly in the event the proposed rule is finalized. The impact of this rule on benefit plans and compensation arrangements could be wide-reaching[.]"  MORE >>

Haynes and Boone, LLP

Employee Benefits Jobs

View job as Pension Compliance Administrator
            for Associated Pension Consultants

Pension Compliance Administrator

Associated Pension Consultants


View job as Pension Compliance Administrator for Associated Pension Consultants

View job as Retirement Plan Specialist
            for RTD Financial Advisors

Retirement Plan Specialist

RTD Financial Advisors

Philadelphia PA

View job as Retirement Plan Specialist for RTD Financial Advisors

View job as Administrator/Consultant (DC and DB)
            for TPA Professionals

Administrator/Consultant (DC and DB)

TPA Professionals

Remote / Fort Myers FL

View job as Employee Benefits & Executive Compensation Associate Attorney
            for Polsinelli PC

Employee Benefits & Executive Compensation Associate Attorney

Polsinelli PC

Chicago IL / Dallas TX / Kansas City MO

View job as Employee Benefits & Executive Compensation Associate Attorney for Polsinelli PC

View job as Retirement Plan Administrator
            for Nicholas Pension Consultants

Retirement Plan Administrator

Nicholas Pension Consultants

Remote / Corona CA / Rancho Cordova CA

View job as Retirement Plan Administrator for Nicholas Pension Consultants

View job as Compliance Director
            for Allegiance Benefit Plan Management

Compliance Director

Allegiance Benefit Plan Management

Missoula MT

View job as Compliance Director for Allegiance Benefit Plan Management

View job as 401K Plan Administrator
            for Tenet Financial Group

401K Plan Administrator

Tenet Financial Group


View job as 401K Plan Administrator for Tenet Financial Group

Selected New Discussions

Foreign Entity Wants to Provide 401(k) Plan to Us Employees. Trustee?

"Shoe company based in the UK and has US employees. The US operations have an EIN and US address based in Portland. The owners reside in the UK and are not US citizens. All US based employees are US citizens and earn W2 compensation. They are wanting to set up a 401(k) plan with ADP and the ADP sales rep is telling them that they can indeed do this. Our hesitation is that there would be no US citizen who would serve as the plan's trustee. I'm reading a previous post from 2020 that speaks to this. In reading the treasury reg, specifically 301.7701-7(d)(1)(v) Example 5, it seems that it is permissible to use a directed trustee, as provided by ADP but I am not sure if I am missing something. Our other hesitation is due to receiving conflicting, and gray area guidance from other practitioners. I'm sorry but I am thoroughly confused at this point. If the plan uses a directed trustee, does that satisfy, both the 'control' and 'court' tests and can they set up a plan?"

BenefitsLink Message Boards

1099R - Code 1 Used But Participant Is Disabled

"1099R was issued with a Code 1 for a 2022 distribution but the Participant is claiming they would qualify for the disability exception to the 10% penalty tax. My understanding is that even though the Code 1 was used, which specifically is titled 'Early distribution, no known exception.', you could claim eligibility for the waiver of the penalty tax. i.e., we don't have to issue an amended 1099-R. Is this correct? Can anyone point me to anything explaining how this is done? I assume it is straightforward. This must happen on a fairly regular basis."

BenefitsLink Message Boards

Plan Terminated but 401(k) Contributions Continue

"Have a client that was bought. Recently told "Oh hey we were bought as of X" where X is a date in the past. Part of the selling agreement which they just sent me had resolutions terminating the Plan as of date before acquisition. Not prepared by us. Buyer is taking the position that that is formal plan termination. Seller decides on his own that since they aren't in the buyers plan he's going to continue deferral and safe harbor match and deposits first 2 January payrolls to the Plan. What is the fix? Can this be self corrected? or does this require VCP? Do the deferrals after term date get paid out as like a 415 excess? they ran through payroll so will presumably be on 2023 W-2. What happens to the match that was deposited? Forfeit? Allocate as prior year contribution? Return to client as mistake of fact?"

BenefitsLink Message Boards

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

Unfinished Business for SECURE 2.0?


ASPPA [American Society of Pension Professionals & Actuaries]

Employee Contribution Failures


Seyfarth Shaw LLP

Practical and Tactical Actions for Small Business Owners

February 22, 2023 WEBINAR

TRA [The Retirement Advantage]

Last Issue's Most Popular Items

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


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

Jackson Lewis P.C.

SECURE 2.0: Impact on ESOPs

Morgan Lewis

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

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