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Retirement Plans Newsletter

February 24, 2023

3 New Job Opportunities 3 New Job Opportunities


[Official Guidance]

Text of IRS Proposed Regs: Use of Forfeitures in Qualified Retirement Plans

"[T]he proposed regulations would clarify that forfeitures arising in any defined contribution plan (including in a money purchase pension plan) may be used for one or more of the following purposes, as specified in the plan: [1] to pay plan administrative expenses, [2] to reduce employer contributions under the plan, or [3] to increase benefits in other participants' accounts in accordance with plan terms. The use of forfeitures to reduce employer contributions includes the restoration of inadvertent benefit overpayments and the restoration of conditionally forfeited participant accounts that might otherwise require additional employer contributions ... The proposed regulations would generally require that plan administrators use forfeitures no later than 12 months after the close of the plan year in which the forfeitures are incurred.... The proposed regulations would update rules relating to the use of forfeitures in defined benefit plans to reflect the enactment ... of new minimum funding requirements applicable to defined benefit plans."  MORE >>

Internal Revenue Service [IRS]

[Guidance Overview]

IRS Issue Snapshot: Plan Loan Offsets

"Issue indicators or audit tips: [1] All plan loan offsets are actual distributions and, like other actual distributions, must be evaluated to ascertain whether they are made pursuant to permissible distributable events. Evaluate whether the in-service distribution is permissible under the terms of the plan and IRC. [2] For QPLOs, evaluate whether the conditions for a QPLO have been satisfied and ascertain whether the participant was entitled to the extended rollover period accorded to QPLOs. [3] Ascertain whether plan loan offsets, including QPLOs, are properly reported on Forms 1099-R."  MORE >>

Internal Revenue Service [IRS]

[Guidance Overview]

Exceptional Usefulness and Quality icon Finding Balance with Form 5500: DOL Announces Changes Starting in 2023

"[T]he 100-participant threshold for determining which plans are considered large ... will now be based on the number of participants with balances as of the first day of each year ... [This change] highlights several other important compliance decisions that plan sponsors make.... [T]he 2023 version of the forms ... [reintroduces] some questions that were removed more than a decade ago and [adds] some new ones. These include questions about the annually required minimum coverage test as well as the ADP test for 401(k) plans.... The new rules include a series of other updates ... related to ... Multiple employer plans (MEPs), Pooled employer plans (PEPs), and Groups of plans (which the DOL now calls defined contribution group reporting arrangements or DCGs)."  MORE >>


[Guidance Overview]

DOL Changes Participant Count Methodology for Plan Audit Threshold

"[T]he new rule will count only the number of participants and beneficiaries with account balances at the beginning of the plan year.... DOL expects this change to reduce the number of plans that must file as large plans by nearly 19,500 filings.... This is effective immediately for plan years beginning on or after January 1, 2023."  MORE >>

Poyner Spruill LLP

[Guidance Overview]

Changes to ASOP No. 4 Affect Public Plan Actuarial Valuations (PDF)

"The revised ASOP No. 4 is effective for any actuarial report that meets the following criteria: [1]The actuarial report is issued on or after February 15, 2023; and [2] The measurement date in the actuarial report is on or after February 15, 2023.... The purpose of this article is to highlight some of the changes included in the revised ASOP, as well as assisting public plan sponsors in considering how these changes may affect their public pension plans."  MORE >>


[Guidance Overview]

Dear Actuary: ASOP 4 Is Here

"The rewrite includes four changes in particular that have some bearing on public pension plans.... [1] Include more detailed information about how the plan's funded status changes from one valuation to the next ... [2] Include more information to help plan sponsors understand the consequences of investment risk in the plan's portfolio ... [3] Comment on a 'reasonable' Actuarially Determined Contribution ... [4] Include more information on the plan sponsor's funding policy."  MORE >>


[Guidance Overview]

Administration Sets New Course on ESG Investing in Retirement Plans

"The final rule ... [allows] more leeway for fiduciaries to consider ESG factors in selecting investment options.... The rule makes clear, however, that there is no requirement to affirmatively consider ESG factors, effectively limiting its scope and effect and putting the onus on fiduciaries to determine whether they want to incorporate ESG factors into their assessments of competing investments."  MORE >>

Jones Walker

401(k) Plan Participants Sue DOL Over ESG Rule

"Two 401(k) plan participants filed a legal challenge aiming to overturn the [DOL's] new rule permitting retirement plan fiduciaries to consider climate change and other environmental, social and governance factors when selecting investments and exercising shareholder rights.... The lawsuit in Wisconsin is similar in scope to one filed late last month by 25 Republican attorneys general[.]" [Braun et al. v. Walsh, No.23-234 (D. Wisc. complaint filed Feb. 21, 2023)]  MORE >>

Pensions & Investments

Industry Coalition Unites to Support Dismissal of ERISA Fiduciary-Breach Claims Related to BlackRock Target Date Funds

"[In] the summer of 2022, one law firm filed eleven class action complaints targeting 401(k) plan sponsors and fiduciaries for offering the BlackRock Life Path Index Target Date Funds ... [A] number of trade organizations ... decided to file amicus curiae briefs ... to assist the courts in understanding the potentially devastating industry-wide impact that complaints such as these could cause were they not immediately dismissed.... [This article looks at] what the Amici had to say about the allegations and also provide[s] a brief update on the status of these cases."  MORE >>


District Court Vacates DOL's Plan-to-IRA Rollover Guidance

"[T]he judge did not vacate PTE 2020-02 or any other policies the DOL articulated in its preamble to PTE 2020-02 as well as in its 2021 guidance regarding being an investment advice fiduciary under ERISA. Given the continued application of PTE 2020-02 and the likelihood that the DOL will appeal this decision and/or revise its guidance to treat rollover advice as fiduciary, ... institutions and advisors [should] continue to comply with PTE 2020-02 in connection with rollovers at this time." [American Securities Association v. DOL, No. 22-0330 (M.D. Fla. Feb. 13, 2023)]  MORE >>

Ropes & Gray LLP

Benefits in General

[Guidance Overview]

IRS Issues Final Regulations Expanding Mandatory Electronic Filing of Information Returns

"The regulations, which were proposed in 2021 to implement statutory changes made by the Taxpayer First Act of 2019, establish lower thresholds for mandatory electronic filing of the following returns affecting employee benefit plans: [1] Form 1094 Series; Forms 1095-B and 1095-C; Form 1099 Series; and Form 5498 Series.... [2] Forms 5330 and 8955-SSA.... [3] Form 5500 Series."  MORE >>

Thomson Reuters / EBIA

Employee Benefits Jobs

View job as Defined Benefit Consultant
            for AimPoint Group

Defined Benefit Consultant

AimPoint Group


View job as Defined Benefit Consultant for AimPoint Group

View job as Retirement Plan Consultant
            for The MandMarblestone Group, llc

Retirement Plan Consultant

The MandMarblestone Group, llc

Remote / Philadelphia PA

View job as Retirement Plan Consultant for The MandMarblestone Group, llc

View job as Combined Plan Administrator
            for Maxus Plan Solutions

Combined Plan Administrator

Maxus Plan Solutions

Remote / Charlotte NC

View job as Combined Plan Administrator for Maxus Plan Solutions

Selected New Discussions

Permissive Disaggregation for ADP But Not 410(b)?

"Generally, if a plan disaggregates otherwise excludable employees to satisfy the coverage requirements of IRC Section 410(b) it's my understating it must do the same for nondiscrimination testing. My question, if the plan does NOT disaggregate for coverage CAN it be disaggregated for nondiscrimination testing i.e., ADP/ACP. In other words 410(b) would not be disag'd but ADP would be....?"

BenefitsLink Message Boards

Changing ADP/ACP Testing Methods

"A plan that has been using current year testing for >5 years fails both the ADP and ACP tests for 2022 and switching to the prior year method is being considered. The plan was amended in mid-2022 to eliminate the eligibility requirements, effectively permitting about 20% more employees to become participants when compared to the prior year. Is it safe to presume that this would not be considered a plan coverage change pursuant to Treas. Reg. 1.401(k)-2(c)(4) and that it would be OK to change to the prior year testing method and just use the actual NHCE ADP/ACP results from 2021? Also, my understanding is that earnings for any refunds made by 3/15/23 should only be calculated through 12/31/22 using any reasonable method -- is this correct?"

BenefitsLink Message Boards

Do ESOP Shares Count for Purposes of HCE/Key Employee Determination?

"We have a company with a 401(k) plan, and they started an ESOP. We are trying to determine ownership for HCE/key determination. I believe we attribute the ESOP ownership (and think I found the appropriate reference in Who's The Employer) but an ERISA attorney says no."

BenefitsLink Message Boards

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

The Change in Retirement: Why SECURE Act 2.0 Makes Retirement a Requirement



Last Issue's Most Popular Items

Taking a Look at SECURE 2.0's Defined Benefit Plan Provisions


Pooled Employer Plan (PEP) FAQs

Willis Towers Watson

Text of Final Forms Revisions: Annual Information Return/Reports (Form 5500 and 5500-SF)

Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]; Internal Revenue Service [IRS]; and Pension Benefit Guaranty Corporation [PBGC]

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

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