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Retirement Plans Newsletter

February 15, 2023

2 New Job Opportunities 2 New Job Opportunities


[Guidance Overview]

Road-Testing SECURE 2.0's Auto-Enrollment Mandate for New DC Plans

"Unless an exception applies, 401(k) and 403(b) plans established after Dec. 28, 2022, must offer an 'eligible automatic contribution arrangement' with automatic escalation and permissible withdrawal features starting with the 2025 plan year.... This GRIST examines SECURE 2.0's auto-enrollment mandate and its numerous exceptions and provides a road map of implementation questions ripe for agency guidance."  MORE >>


[Guidance Overview]

SECURE 2.0 Provisions Likely to Impact Most Retirement Plan Sponsors

"[1] Increased eligibility and automatic enrollment ... [2] Changes [that] impact employee and employer contributions ... [3] Changes to required minimum distributions, employer-forced distributions, and hardships ... [4] Updates to early distributions ... [5] Special changes for 403(b) plans ... [6] Broadened ability to self-correct errors ... [6] Lost and found program ... [7] Participant overpayment recoveries ... [8] Plan amendment dates."  MORE >>


Tenth Circuit Finds Plan's Arbitration Provision Unenforceable Because It Prohibits Statutory Plan-Wide Remedies

"In the court's view, this clause prevented Mr. Harrison from obtaining in arbitration some of the forms of relief that he sought under Section 502(a)(2), including the recovery of plan losses, some of the declaratory and injunctive relief he sought, and disgorgement of profits.... Because the arbitration provision was written in a manner intended to foreclose the plan-wide relief that Mr. Harrison sought, the Tenth Circuit 'conclude[d] that the effective vindication exception applies in this case.' " [Harrison v. Envision Mgmt. Holding, Inc. Bd. of Directors, No. 22-1098 (10th Cir. Feb. 9, 2023)]  MORE >>

Kantor & Kantor LLC

ERISA Fiduciary Breach Action Narrowly Hurdles Motion to Dismiss in Minnesota

"Although the Schave case will proceed to discovery, this decision reinforces the Eighth Circuit's pleading standard in defined contribution fee class actions, which requires sound comparisons and meaningful benchmarks." [Schave v. CentraCare Health System, No. 22-1555 (D. Minn. Jan. 27, 2023).]  MORE >>

Jackson Lewis P.C.

Fixed and Variable Longevity Annuities in Defined Contribution Plans: Optimal Retirement Portfolios

"Including deferred income annuities in DC plan accounts is welfare-enhancing for all. Providing access to variable deferred annuities with some equity exposure further enhances retiree wellbeing, compared to having access only to fixed annuities.... Even a 20% equity exposure in a deferred income annuity generates a roughly 12% welfare gain for the most educated, which is over 20% for high school graduates."  MORE >>


Three Features of a FIRE-Inspired 401(k) Plan

"Financial Independence, Retire Early (FIRE) is a financial movement defined by frugality and extreme savings and investment.... A FIRE-inspired 401(k) plan has three key features ... [1] minimal administration fees, [2] investments that deliver (at least) market returns, and [3] professional investment advice. Here's how each feature can help 401(k) participants save more annually to retire sooner."  MORE >>

Employee Fiduciary

State and Local Government Spending on Public Employee Retirement Systems (PDF)

"This update provides figures for public pension contributions as a percentage of state and local government direct general spending for FY 2020, and projects a rate of spending on pensions on an aggregate basis for FY 2021."  MORE >>

National Association of State Retirement Administrators [NASRA]

Proposed Indiana ESG Ban Could Significantly Impact PRS Investment Returns

"The report said an estimate of the impact of the bill by the staff of the $43.7 billion INPRS 'could result in reduced aggregated investment returns for the system's defined benefit and defined contribution funds managed by INPRS by a total of $6.7 billion over the next 10 years, with the DB plan down by $6.4 billion and $300 million for the defined contribution plan.' "  MORE >>

Pensions & Investments


ERIC Comment Letter to SEC on Proposed Rule for Open-End Fund Liquidity Risk Management Programs and Swing Pricing (PDF)

"The Commission itself seems to understand the unique challenges this proposal creates for retirement plan recordkeepers and asks whether they should receive a general exemption from the hard close requirements. The answer is yes; in ERIC's view, applying a hard close requirement to transactions involving retirement plans is inappropriate."  MORE >>

The ERISA Industry Committee [ERIC]


SEC's Swing Pricing and Hard Close Proposal Disadvantages America's Retirement Investors

"SPARK cites four negative outcomes if this change is implemented: [1] It will turn 130 million American savers into second class investors and favors institutional Wall Street investors over Main Street investors. [2] It will make everyday retirement plan transactions -- such as purchases, loans, and required minimum distributions -- extremely difficult if not impossible to execute. [3] It will undermine the open investment architecture system developed over the last 30 years, potentially leaving retirement investors with fewer choices. [4] It will erode retirement savers' confidence in the system, since transparent, timely pricing will not be as widely available."  MORE >>

The SPARK Institute

Benefits in General

[Guidance Overview]

ERISA Civil Penalties Inflation Adjustment Act Annual Adjustments for 2023

"The [DOL's] Civil Penalties Inflation Adjustment Act Annual Adjustment for 2023 final rule was published in the January 13, 2023 Federal Register. [This article includes] a table that reflects the 2023 and 2022 civil money penalty amounts."  MORE >>

Butterfield Schechter LLP

[Guidance Overview]

Civil Monetary Penalties 2023

"The increased amounts will apply to penalties assessed after January 15, 2023.... The increases for 2023 are significant, which is consistent with other inflation adjustments for 2023."  MORE >>

HUB International

ERISA Advisory Council Report: Cybersecurity Insurance and Employee Benefit Plans (PDF)

52 pages, Dec. 2022. "The Council concluded that the topic of cybersecurity insurance generally and as it relates to employee benefit plans is complex and nuanced. Accordingly, the Council recommends that the Department study this topic further. The Council also found that the issue of insurance coverage for losses relating to cyber incidents might not be well understood by benefit plan fiduciaries ... [and] recommends that the Department ... develop education for plan fiduciaries regarding cyber and other insurance to protect against losses resulting from cyber incidents."  MORE >>

Advisory Council on Employee Welfare and Pension Benefit Plans, Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

Projected Savings Medicare Beneficiaries Need for Health Expenses Remained High in 2022

"A 65-year-old man enrolled in a Medigap plan with average premiums will need to have saved $96,000 in order to have a 50 percent chance of having enough to cover premiums and median prescription drug expenditures, and a woman will need to have saved $116,000.... Couples enrolled in a Medigap plan with average premiums, meanwhile, will need to have saved $212,000 to have a 50 percent chance of covering their medical expenditures in retirement and $318,000 to have a 90 percent chance.... Although there is significant individual-level variation, enrollees in Medicare Advantage plans generally have lower savings targets."  MORE >>

Employee Benefit Research Institute [EBRI]

Employee Benefits Jobs

View job as Client Support Manager (Contact Center)
            for 401k Generation

Client Support Manager (Contact Center)

401k Generation

Hybrid / Altamonte Springs FL

View job as Client Support Manager (Contact Center) for 401k Generation

View job as Retirement Plan Administrator - PEPs
            for The Platinum 401k, Inc./American Pension Services, LLC

Retirement Plan Administrator - PEPs

The Platinum 401k, Inc./American Pension Services, LLC

Hybrid / Remote / Clearwater FL

View job as Retirement Plan Administrator - PEPs for The Platinum 401k, Inc./American Pension Services, LLC

Selected New Discussions

ADP/ACP Testing Question

"Working on a plan where the owners and their spouses in a corporation had no compensation for 2022. Do I still include them in my testing? This is the first time working on this plan but I see that they haven't taken any compensation for a few years now. One year the prior TPA included them and the next year they were excluded."

BenefitsLink Message Boards

DB/DC Gateway: What If Safe Harbor Match?

"I know the gateway for the combo plans is typically 7.5% (which can be split between 3% SH + 4.5% PS). What happens if it's a Safe Harbor Match? What type of Profit Sharing contribution do we have to include, because we're running into the 6% deductible contribution going over 6% to the eligible employees (less for the HCE)."

BenefitsLink Message Boards

SECURE Section 301: Overpayment to HCE

"Would SECURE Sec 301 apply if the overpayment was to an HCE? Say an employer miscalculates an HCEs match and prior to discovering the error the HCE has terminated and already taken a distribution. ACP passes so no corrective distributions were due. Does the fact that the HCE is the only overpayment negate Sec 301, or can the employer allow the HCE to keep the overage assuming no other participants are affected?"

BenefitsLink Message Boards

Press Releases

DCIIA Elects 2023 Executive Committee

Defined Contribution Institutional Investment Association [DCIIA]

Schlichter Bogard & Denton Managing Partner Jerry Schlichter Recognized as One of the Ten Most Impactful People in the 401(k) Industry

Schlichter, Bogard & Denton, LLP

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

2023 Employee Benefits Update Materials: Public Agency Employers


Hanson Bridgett

2023 Employee Benefits Update Materials: Private Sector Employers


Hanson Bridgett

Retirement Income Calculators: Drive to Annuities

February 28, 2023 WEBINAR

Corporate Insight

Last Issue's Most Popular Items

ERISA Section 408(b)(2): Is That Still a Thing? (PDF)

Ferenczy Benefits Law Center, via Journal of Pension Benefits

SECURE 2.0: Qualified Plan Corrections, Compliance, and Changes to EPCRS


To Err Is Human; to Correct Is Provided for in SECURE Act 2.0

Sidley Austin LLP

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

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