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Retirement Plans Newsletter

February 16, 2023

2 New Job Opportunities 2 New Job Opportunities


[Guidance Overview]

Special Rules for Special Plans: How SECURE 2.0 Impacts 403(b) Plans, MEPs and ESOPs

"Beginning in 2024, ... additional contribution sources are available for hardship distributions from 403(b) plans.... Effective in 2023, SECURE 2.0 also permits 403(b) plans to participate in multiple employer plans (MEPs).... SECURE 2.0 also directs the [DOL] to establish an Employee Ownership Initiative within the [DOL] to encourage and provide grants to state programs on employee ownership, which should encourage ESOP formation."  MORE >>

Cohen & Buckmann, P.C.

[Guidance Overview]

SECURE 2.0: Changes to the Minimum Required Distribution Rules

"While these provisions are technically not mandatory (for example, a retirement plan could continue to mandate that distributions begin at age 72), it may be difficult to administer plans appropriately, and may be confusing for participants, if these new provisions are not adopted. For example, RMDs cannot be rolled over. If a plan continues to mandate distributions at age 72, it would nonetheless have to allow that age 72 distribution to be rolled over, because legally, it is not an RMD."  MORE >>

Foley & Lardner LLP

[Guidance Overview]

SECURE 2.0: Challenges for Taft-Hartley Multiemployer 401(k) Plan Administration

"Some of the mandatory changes of the SECURE Act 2.0 applicable to 401(k) plans will create administrative challenges (to put it lightly) for multiemployer 401(k) plans  ... Mandatory Roth catch up contributions ... Mandatory automatic enrollment provisions for new plans."  MORE >>

Morgan Lewis

[Guidance Overview]

SECURE 2.0: Implications for Multiemployer Defined Contribution Plans (PDF)

11 pages. "[The automatic enrollment requirement] will add further complexities ... as assistance from the Fund's contributing employers will be absolutely critical to ensure compliance ... Multiemployer defined contribution plans will need to update their systems to account for four distinct 'tracks' [for RMDs] ... [There are] a number of potential headaches with establishing an [emergency savings account (ESA)] for Funds which already have a 401(k) arrangement."  MORE >>

Reid and Riege, P.C.

[Guidance Overview]

Navigating Fiduciary Duties Amidst the Rise of Anti-ESG Rulemaking

"Among those caught in the middle of this debate are a broad swath of fiduciaries, including investment managers looking to invest across state lines, companies who operate nationally, and private equity funds with national portfolios. [This article discusses] the recent explosion of pro- and anti-ESG state legislation and regulation over the past few years, provide suggestions for how to navigate these various state laws while continuing to operate on a national level, and suggest certain proactive steps fund managers and investors may utilize to enable them to operate in the face of these conflicting laws and regulations."  MORE >>


The Latest in the 'Regular Basis' of DOL Fiduciary Rule Developments: Federal Court Vacates Certain Provisions Applicable to Rollover Advice

"Along with a September 2022 case in the Southern District of New York, the ASA Decision casts doubt on the DOL's 2020 interpretation of the 1975 Rule ... Additionally noteworthy is the fact that the ASA Decision marks the second vacatur that a Federal court has issued in connection with the DOL's efforts to recraft or interpret the investment advice fiduciary rule codified as the 1975 Rule[.]" [American Securities Association v. DOL, No. 22-0330 (M.D. Fla. Feb. 13, 2023)]  MORE >>

Dechert LLP

Was the DOL FAQed Out and Rolled Over? Second Court Rejects DOL's Interpretation of ERISA's Fiduciary Rule

"If ASA stands, it could be a major blow to what is arguably a centerpiece of the DOL's efforts to regulate rollover solicitations. It remains to be seen what the DOL's next steps would be. The situation right now is an uncertain one, and financial institutions, some of which have already embarked upon substantial efforts to revamp their procedures applicable to rollover solicitations of new customers, may wish to watch the situation with great care." [American Securities Association v. DOL, No. 22-0330 (M.D. Fla. Feb. 13, 2023)]  MORE >>

The Wagner Law Group

Federal District Court Narrows Interpretation of Fiduciary Rollover Advice

"This discussion in the Deseret Letter may take on greater relevance in the future because these principles do not appear inconsistent with the order in American Securities Association. If the DOL revives its interpretations in the Deseret Letter, then a financial adviser potentially need to rely on PTE 2020-02, in at least two types of circumstances[.]" [American Securities Association v. DOL, No. 22-0330 (M.D. Fla. Feb. 13, 2023)]  MORE >>

Kilpatrick Townsend

Correcting 'De Minimis' Plan Errors

"[T]hese de minimis errors are small amounts that are either erroneously deposited to a participant's account or that are erroneously distributed to a participant.... While there is a general $250 de minimis rule, it does not apply in all situations.... EPCRS provides a $250 de minimis exception for both Excess Amounts and Distribution Overpayments, but not Excess Allocations."  MORE >>


Benefit at Risk in Lifetime Pension Pools (PDF)

47 pages. "Several modern retirement arrangements, including lifetime pension pools, allow retirees to convert a single premium into income for life that varies with investment and mortality experience. To assess how much risk members bear in these arrangements, this report introduces a collection of new risk measures -- called benefit at risk, or BaR for short -- to be used in the context of varying benefits."  MORE >>

Society of Actuaries

Benefits in General

Compensation Costs Up 5.1 Percent from December 2021 to December 2022

"Wages and salaries increased 5.1 percent for the 12-month period ending in December 2022 and increased 4.5 percent for the 12-month period ending December 2021. Benefit costs increased 4.9 percent over the year and increased 2.8 percent for the 12-month period ending December 2021."  MORE >>

U.S. Bureau of Labor Statistics [BLS]

Mergers and Acquisitions: Why Is Employee Benefits Due Diligence Useful?

"Identifying risk is crucial in the due diligence process, and employee benefits present companies with significant financial and regulatory risk. It's imperative to use actuarial software to identify inefficiencies within a health plan's pricing and employee contribution structure, which often reveals downside financial risk based solely on employee enrollment patterns. Also, a regulatory review will ensure a target is compliant with applicable government regulations like ERISA, ACA, and IRS guidelines for pre-tax benefits."  MORE >>

Assured Partners

Executive Compensation and Nonqualified Plans

[Guidance Overview]

With Proposed Non-Compete Ban, the FTC Joins the Executive Compensation Regulatory Landscape

"If the proposed rule is finalized, employers would need to broadly review all restrictive covenants found in all of their compensation arrangements to confirm whether the restrictions are prohibited. Thus, compliance with the notice requirement could create a logistical nightmare for many employers. Even with employee contact information readily available, the process of sending proper notice before the 45-day deadline will be a heavy lift for many companies."  MORE >>

Groom Law Group

Employee Benefits Jobs

View job as Defined Contribution Plan Administrator
            for MGKS

Defined Contribution Plan Administrator


Remote / Phoenix AZ / Hybrid

View job as Defined Contribution Plan Administrator for MGKS

View job as Lead Compliance Analyst - Retirement Plans
            for Ameritas

Lead Compliance Analyst - Retirement Plans



View job as Lead Compliance Analyst - Retirement Plans for Ameritas

Selected New Discussions

Possible to Limit Catch Ups to Roth for Everyone (Not SECURE Related, But Kind Of)

"Assume a 401k plan currently allows pretax, Roth and catch up deferrals. In theory, can a 401k plan allow pre tax deferrals, Roth deferrals, and only Roth catch up deferrals for all employees regardless of pay and SECURE 2.0? (Ignore document restraints for this question and ignore that catch ups were accidentally deleted) My answer is 'no' based on the following: 414v allows for catch ups, that section defines 'deferrals' under 402g(3), which defines deferrals under section 401k, which says a plan cannot only allow Roth deferrals (1.401(k)-1(f)(1)(i)). Since a catch up is a deferral, I am not sure how a plan could only allow catch ups as Roth. Thoughts?"

BenefitsLink Message Boards

Leased Employees Mistakenly Allowed Into Plan

"I have a plan where the plan sponsor mistakenly submitted census' for the plan that included some leased employees despite being excluded plan document. That caused safe harbor non-elective and profit sharing contributions to be made on their behalf for several years. Now that the plan sponsor has realized the mistake they want to move these employees out of the plan. I assume that we cannot forfeit the balances like the plan sponsor wants. Any idea on the correct way to handle this?"

BenefitsLink Message Boards

Press Releases

Announcing the 2023 NCEO Board of Directors

National Center for Employee Ownership [NCEO]

Pentegra Welcomes New Officers -- Paula Edmonds, Vice President, Trust Services and Jeremy Lawson, Vice President, Head of Infrastructure -- to Its Team


Webcasts and Conferences
(Retirement Plans / Executive Compensation)

How Will ASOP 4 Impact Public Pension Plans in 2023?



2023 ERISA Litigation Update: DOL ESG Rule Lawsuit, Fiduciary Duty Claims, Third-Party Administrator Liability

April 5, 2023 WEBINAR


Last Issue's Most Popular Items

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


SECURE 2.0 Provisions Likely to Impact Most Retirement Plan Sponsors


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

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

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

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