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Retirement Plans Newsletter

February 10, 2023

4 New Job Opportunities 4 New Job Opportunities


[Guidance Overview]

Exceptional Usefulness and Quality icon SECURE 2.0 from the Defined Benefit Perspective (PDF)

"The summary tables [in this article] are organized by SECURE 2.0 provisions affecting only DB plans (color coded in blue), those affecting both DB and DC plans (color coded in green), and a DC provision which may impact combo DB/DC plans (color coded in yellow). Each table includes the background, the change under SECURE 2.0, the effective date of the change, and the analysis or practitioner considerations[.]"  MORE >>


[Guidance Overview]

SECURE 2.0 Brings More Changes to Required Minimum Distribution Rules

"Though not as far-reaching as the SECURE 1.0 changes, SECURE 2.0 increases -- again -- the age at which RMDs must begin. The new law also contains several provisions allowing defined contribution plan participants to take some or all of their account balance as an annuity[.]"  MORE >>


[Guidance Overview]

IRS Proposes to Make Remote Witnessing of Spousal Consents Permanent

"[T]he Proposed Regulation makes permanent the ability for spousal consents to be witnessed by a notary public or plan representative remotely, subject to certain conditions. The IRS had declined to allow this in the 2006 Regulation ... [but noted at that time] that 'in the future, technology could exist that would provide the same safeguards as the physical presence requirement.' That day has apparently arrived for the IRS."  MORE >>

Morgan Lewis

[Guidance Overview]

Puerto Rico 2023 Retirement Plan Limits

"The Puerto Rico Treasury Department recently issued Circular Letter 23-01 announcing the 2023 benefit limits for defined benefit (DB) and defined contribution (DC) retirement plans qualified under the Puerto Rico tax code.... Plan sponsors of dual-qualified plans and plans qualified solely in Puerto Rico should update their administrative processes and systems to reflect the 2023 limits."  MORE >>

Willis Towers Watson

Tenth Circuit: ERISA Plan Participant's Breach of Fiduciary Duty Claims Are Not Subject to Plan's Mandatory Arbitration Provision

"he court stressed that the issue is not the arbitration provision's prohibition on class actions that is the problem, it is the prohibition on any form of relief that would benefit anyone other than Harrison that directly conflicts with the statutory remedies available under ERISA." [Harrison v. Envision Mgmt. Holding, Inc. Bd. of Directors, No. 22-1098 (10th Cir. Feb. 9, 2023)]  MORE >>

Roberts Disability Law

Microsoft Escapes Retirement Plan TDF Suit

"A U.S. District Court judge [has] dismissed a lawsuit against Microsoft Corporation claiming that the BlackRock LifePath Index Funds suite of target-date funds was an imprudent investment choice for Microsoft's retirement plan participants.... [The judge agreed] that the plaintiffs did not prove that comparative TDFs outperformed BlackRock's suite, and that it is not clear the plaintiff would have invested in a different TDF if other options had been given." [Beldock v. Microsoft Corp., No. 22-1082 (W.D. Wash. Feb. 7, 2023)]  MORE >>


Appeals Panel Agrees Illinois Police and Firefighter Pension Consolidation Doesn't Violate State Constitution

"Although the panel agreed the protection clause covers more than just the payment of pension money, it said past Illinois Supreme Court rulings invoking the clause involved benefits that 'directly impacted the participants' eventual pension benefit' ... But being able to vote for board members, or have a local board control investments ... 'is not of the same nature and essentiality as the ability to participate in the fund, accumulate credited time, or receive health care, disability and life insurance coverage.' " [Arlington Heights Police Pension Fund v. Pritzker, No. 2-22-0198 (Ill. App. 2d Feb. 7, 2023)]  MORE >>

Cook County Record

Defined Benefit and Defined Contribution Plans and the Distribution of Family Wealth: CBO Working Paper 2023-02

"Accounting for DB and DC wealth lowers the Gini coefficient in 2019 from 0.88 to 0.83 and reduces the share of wealth held by families in the top 10 percent of the distribution from 80 percent to 72 percent.... [T]he shift from DB to DC retirement coverage modestly affected wealth concentration overall. Between 1989 and 2019, that shift accounted for about a fifth of the increase in the Gini coefficient and a fifth of the increase in the share of wealth held by families in the top 10 percent of the wealth distribution.... Overall, estimates of retirement wealth and its effect on measures of wealth concentration are marginally sensitive to alternative modeling choices."  MORE >>

Congressional Budget Office [CBO]

Fixed Rate Funding for Public Employee Pension Plans: Guide for Actuaries (PDF)

11 pages. "In a fixed rate plan, the retirement system usually invests the assets and administers the benefits but has no direct control over either the contributions or the benefit levels.... [O]ver time, when investment returns vary, either contributions or benefits need to adjust ... The role of the retirement board ... is to indicate when the equation is out of balance and by how much.... [T]his practice note is intended to serve as a guide to actuaries who advise retirement boards."  MORE >>

Public Plans Committee of the American Academy of Actuaries

CRS in Focus: The Social Security Retirement Age -- an Overview

"The Social Security full retirement age (FRA) is the age at which workers can first claim full (i.e., unreduced) Social Security retired-worker benefits.... Benefit adjustments are made based on the number of months before or after the FRA the worker claims benefits. The adjustments are intended to provide the worker with roughly the same total lifetime benefits, regardless of when he or she claims benefits, based on average life expectancy." [IF12323 Feb. 9, 2023]  MORE >>

Congressional Research Service [CRS]

Benefits in General

[Guidance Overview]

Employee Benefit Plan Audit Independence

"[EBSA Interpretive Bulletin 2022-01 specifies that] employee benefit plan sponsors can engage an independent auditing firm immediately after the accountant disposes of the publicly traded securities of the plan sponsor."  MORE >>


Employee Benefits Jobs

View job as Retirement Plan Manager
            for American Trust

Retirement Plan Manager

American Trust


View job as Retirement Plan Manager for American Trust

View job as Retirement Plan Administrator
            for Schiller’s Pension Consulting

Retirement Plan Administrator

Schiller’s Pension Consulting

Remote / San Mateo CA

View job as Employee Benefits Attorney
            for UMWA Health and Retirement Funds

Employee Benefits Attorney

UMWA Health and Retirement Funds

Hybrid / Washington DC

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

Selected New Discussions

Correlation Between 11-G and AFTAP Less Than 60% - 401(a)(26) Issue

"Looking at a DB plan - one lifer. AFTAP was never done so AB frozen a few years back. The plan never officially frozen - just AFTAP freeze. Did a quick run and 401a26 fails, both annual and accrued-to-date. The software program is not providing an option for accrued to date at all. I am thinking an 11-g amendment to provide meaningful benefit. I would not ask this question if the plan was hard-frozen but here the freeze is due to lack of AFTAP. Can one do an 11-g amendment and increase the AB and overwrite the AFTAP freeze? Any other thoughts/comments?"

BenefitsLink Message Boards

New Plan Didn't Actually Start

"I have a client that set up everything for a 401(k) effective 5/1/22. It is unclear how much, if any, communication was provided to employees about the start of the 401(k) plan. The Plan Sponsor didn't actually start deducting any deferrals and nothing has been paid to the Custodian. They are interested in moving forward with it finally. What are the consequences of having a plan in place, but not using it for that plan year? What are the consequences of having a plan in place and not telling participants about it? How would you recommend that they move forward?"

BenefitsLink Message Boards

Reasonable Classification Test

"I have a small defined benefit plan that has been frozen to new entrants for a few years. It is no longer passing the ratio% test. Based on the numbers it would be a nondiscriminatory classification but is the set of employees hired before a certain date a reasonable classification? The formula is a safe harbor formula so the plan still passes 401(a)(4) by itself. Of course if i cannot get the sb plan to pass the average benefits tests I will move onto testing on a combined plan basis with the dc plan for which coverage will not be an issue."

BenefitsLink Message Boards

Press Releases

Executive Compensation Partner David Mollo-Christensen Joins Choate


MissionSquare Retirement Announces New Board Chair and Two New Board Members

MissionSquare Retirement

Putnam Investments Announces Sustainable Retirement Target-Date Funds

Putnam Investments

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

A Valentine's Day 'KISS' for Small Retirement Plans: Keeping It Simple Under the SECURE Act 2.0 for IRAs, SEPs and Simple Plans

February 16, 2023 WEBINAR

Boutwell Fay LLP

Last Issue's Most Popular Items

SECURE 2.0 Creates New Opportunity to Use Surplus Pension Assets for Retiree Welfare Benefits

Groom Law Group

SECURE 2.0: Emergencies, Hardships and Disasters

Jackson Lewis P.C.

SECURE 2.0 Expansion of Self-Correction Program and Plan Loan Error Corrections

Faegre Drinker

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

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