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Retirement Plans Newsletter
February 20, 2023
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9 New Job Opportunities
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[Guidance Overview]
SECURE 2.0: Matching Contributions on Student Loan Payments
"Could a participant get matching contributions on elective deferrals and on student loan payments at the same time? ... Could the match based on QSLPs be different from the match on elective deferrals? ... Can QSLP matches be funded on a different cycle from matches on
deferrals, for example on a quarterly rather than payroll period basis? ... Does an employer need to amend their plan before starting to make QSLP matches?" MORE >>
McDonald Hopkins
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CBA Evergreen Clauses May Trump the Bargaining Parties' Subsequent Agreement for Multiemployer Plan Contributions
"[T]he employers and union negotiated new CBAs ... which required employers to continue making pension fund contributions but to a different pension fund.... The fund filed suit against the employers ... alleging that the employers breached the trust agreements ...
by ceasing contributions without having properly terminated the CBAs.... The court concluded that the November letters expressed a desire to negotiate new contracts, which is not equivalent to expressing a desire to terminate the CBAs." [Cent. States, Se. & Sw. Areas Pension Fund v.
Transervice Logistics, Inc., No. 20-3437 (7th Cir. Dec. 22, 2022)] MORE >>
Faegre Drinker
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Annuity Purchases for Retirees with Small Benefits
"Annuity purchases for retirees with small benefit amounts can be an easy and highly effective way to reduce PBGC premiums and save money at no cost to plan participants. For plan sponsors not subject to the PBGC Variable Rate Premium Cap, purchasing annuities for retirees
receiving less than $300 monthly will save the plan money. For plan sponsors subject to the cap, purchasing annuities for retirees receiving less than $1,000 monthly will save the plan money." MORE >>
October Three Consulting
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'Great Resignation' Hits DC Plan Committees
"More plan sponsors are reporting high turnover in retirement plan committees, losses that industry observers say have sent some plan sponsors scrambling to find new members and get them up to speed on their fiduciary responsibilities. In some cases, the losses have even led to
stalled projects and initiatives." MORE >>
Pensions & Investments
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Annuity Purchase Update, February 2023
"Average annuity purchase rates dipped this past month- with the average duration 7 annuity purchase rate at 4.31% and average duration 15 annuity purchase rate at 4.28%. The Pension Risk Transfer Market kicked off 2023 with a strong start as plan sponsors continue to take steps
toward plan termination at record pace. Strong stock market returns offset the impact of lower interest rates." MORE >>
October Three Consulting
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Public DB Plan Returns 2022: Historical Perspective
"2022 ... saw high inflation, unprecedented losses in fixed income, and a bear market for equities globally.... Amid this challenging environment, the median public defined benefit plan [returns] fell 12.7%.... [T]his was just the sixth negative calendar year the median
public plan has experienced during the past 30 years." MORE >>
Callan
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CRS in Focus: Retirement Income Security: Issues and Policies
"Some households with the ability to save for retirement might have little or no retirement savings beyond Social Security because they do not have access to employer-sponsored pensions and do not save elsewhere (e.g., through IRAs). These households might benefit from policies
designed to increase access to, participation in, or contributions to retirement plans." MORE >>
Congressional Research Service [CRS]
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PBGC Approves $12.8 Million in Supplemented SFA for Freight Drivers Local 557 Plan
"[PBGC] has approved the supplemented application ... by the Freight Drivers and Helpers Local Union No. 557 Pension Plan ... The plan, based in Baltimore, Maryland, covers 2,273 participants in the transportation industry.... [It] will receive approximately
$12.8 million in supplemented SFA, which is in addition to $192.8 million in SFA approved for the plan in October 2022[.]" MORE >>
Pension Benefit Guaranty Corporation [PBGC]
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PBGC Approves $1.8 Million in Supplemented SFA for Local 1482 Plan
"[PBGC] has approved the supplemented application submitted ... by the Retirement Plan of Local 1482 -- Paint and Allied Products Manufacturers Retirement Fund. The plan, based in the New York Metropolitan Area, covers 152 participants in the manufacturing industry....
[It] will receive approximately $1.8 million in supplemented SFA, which is in addition to $12.9 million in SFA approved for the plan in April 2022[.]" MORE >>
Pension Benefit Guaranty Corporation [PBGC]
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[Opinion]
In a New Pension Plan Actuarial Standard, a Subtle Warning of Possible 'Fire!'
"[S]tate and municipal pension plans valuation reports issued on or after [Feb. 15] will require an assessment of the plan's portfolio investment risk measured against a low default risk obligation measure, like the returns offered by U.S. Treasuries, among the lowest
rates of return in the financial markets, but the most secure.... The new actuarial disclosures ... will give a clear hint of ... the enormous risk of state and municipal pension shortfalls, but will not be so fully transparent as to make them fully obvious to any other than pension experts." MORE >>
J.G. Collins, via The Epoch Times; free registration required
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Benefits in General |
[Guidance Overview]
End of COVID-19 National Emergency Declarations
"[The DOL and IRS had ] issued guidance temporarily extending various deadlines applicable to [retirement] plans and to participants until the earlier of [1] one year from the date an individual was first eligible for relief or [2] 60 days after the end of the National
Emergency.... Group health plans are affected by the end of both the National Emergency and the Public Health Emergency declarations." MORE >>
Slevin & Hart, P.C.
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Employee Benefits Jobs |
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Consulting Actuary
Sentinel Benefits & Financial Group
Remote / Wakefield MA / Melville NY / Hybrid
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Actuary
Strongpoint Partners - HowardSimon
Remote
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Sr. Actuary
Nyhart, part of FuturePlan by Ascensus
Remote / GA
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Sr. Actuary
Nyhart, part of FuturePlan by Ascensus
Remote / Charlotte NC
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Sr. Actuary
Nyhart, part of FuturePlan by Ascensus
Remote / Tampa FL
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Selected New Discussions |
To True-Up or Not to True-Up... That Is the Question.
"Company has a safe harbor match 401k plan. The owner is self-employed, Schedule C. He has several employees who will defer on a payroll by payroll basis, and he would like to fund safe harbor match is contributed each pay period, and not provide a true up, as that's how his
other employer, where he is just a W2 employee, operates. We won't be 'paid' via payroll on the business in question, his income would be determined via his schedule C after the year in over. Once he knows his income figure (after year-end), he would like to contribute to the plan based on his Schedule C, self employed income, and deposit his deferrals and the appropriate match after year-end. Is there a way to structure this? If
the determination period is 'End of Plan Year', then he'd certainly be able to participate as he wants, but would also be required to provide everyone with a true-up. If the doc's determination period is 'Each Pay Period' that does not allow for true ups, but would that negate his ability to participate since he's technically not participating on a payroll by payroll basis? Would he technically be providing
himself a true-up but not everyone else? Thoughts?"
BenefitsLink Message Boards
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Is a Plan Amendment Ineffective Because It Lacks a Distinct Signature for an Adopting Employer?
"In 2022, a retirement plan's sponsor asked its recordkeeper to prepare a plan amendment to add, effective January 1, 2023, a business organization the sponsor acquired last summer. Using an IRS-preapproved document's forms, the recordkeeper sent a restated adoption
agreement. In December, the plan sponsor's chief financial officer signed it. That signature is dated and time-stamped in the recordkeeper's electronic-signature system. The trouble? The recordkeeper now says the amendment is ineffective because it lacks a signature on behalf of the adopting employer. The CFO who signed for the sponsor also is the CFO of the sponsor's subsidiary and has power to sign for it. I'm guessing
there is, or ought to be, no defect. But I know enough to recognize that I might not know enough about rules or customary processes for using IRS-preapproved documents. What am I missing?"
BenefitsLink Message Boards
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When Eligible Becomes Ineligible?
"I have a document that excludes non-key HCE's. My problem is what happens to participants who enter as an NHCE, and then become an HCE is a future year? The document says that if you go from eligible to ineligible that you immediately cease to participate in the plan. What
does that mean? Just that you no longer get a benefit? How do I code this person now? Active? Excluded? They still have a benefit due to them, vested or not. I've been trying to research it, but not having much luck. Most other threads that mention going from eligible to ineligible are based on hours and devolves into another discussion entirely."
BenefitsLink Message Boards
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Webcasts and Conferences (Retirement Plans / Executive Compensation) |
Secure 2.0 Act: Highlights and To Do's for 2023
RECORDED
Williams Mullen
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Negotiating Executive Compensation Arrangements
March 3, 2023 WEBINAR
Ogletree Deakins
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Current Trends in Retirement Plans, Cyber Security, New Distribution Strategies and Pooled Employer Plans
March 23, 2023 in MA
New England Employee Benefits Council [NEEBC]
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Last Issue's Most Popular Items |
SECURE 2.0 Opens the Door on Retirement Match Based on Student Loan Payments
Proskauer
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What Are 'Double-Vest' RSUs and Why Are They Making Headlines?
Goodwin Procter
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IRS Announces Key Deadlines for Preapproved Defined Benefit Plans
Mercer
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BenefitsLink® Retirement Plans Newsletter, ISSN no. 1536-9587.
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