"Given the IRS's new position, one possible approach to protect against issues arising in the context of plan audits or an IRS audit would be for plan sponsors to work with recordkeepers to maintain separate forfeiture accounts by plan year (i.e., Forfeiture 2024, Forfeiture 2025, etc.) and appropriately monitor the accounts to ensure that the prior year forfeiture account is zeroed out prior to the end of the following plan year."  MORE >>

"To comply with these proposed regulations, plan sponsors will eventually need to amend their plan documents to account for the 12-month deadline for use of forfeiture amounts.... [A] plan which only permits forfeitures to be used for administrative expenses may run into compliance trouble if the forfeitures exceed plan expenses and there is a surplus at the end of the 12-month usage deadline."  MORE >>

"[Along with] SECURE 2.0's increase to the start-up credit, Congress also granted another tax credit in relation to the amount of employer contributions made to start-up plans ... for the benefit of employees earning less than $100,000.... [T]he SECURE Act also established a tax credit for plans that implement an 'eligible automatic enrollment arrangement' (EACA) of $500 for each of the first 3 years that the plan has such an auto enrollment feature."  MORE >>

"Assuming unfunded vested benefit levels remain stable from year to year, plans not subject to the per participant cap will have lower premiums than previously anticipated. Plans with considerable underfunding that received some premium relief through the application of the per participant cap will begin to see that wear away."  MORE >>

"Over the last two years, the state of California has signed two bills into law, Senate Bill (SB) 278 (CalPERS) and Assembly Bill (AB) 1667 (CalSTRS), which impact how CalPERS and CalSTRS will collect on overpayments made to retirees as a result of compensation reporting errors. While both Bills address overpayments of pension benefits, AB 1667 goes further, and includes additional transparency measures in an effort to promote collaboration between CalSTRS and public education agencies and ensure proper reporting before issues (and large invoices!) arise."  MORE >>

"[T]he reductio ad absurdum of investment imprudence cases was the eleven lawsuits filed in August 2022 by the Miller Shah law firm claiming that any plan fiduciary who chose Morningstar's number-one rated BlackRock LifePath target-date funds was guilty of fiduciary malpractice for chasing low fees because the investment performance was allegedly 'deplorable.' But like the shepherd boy who cried wolf too many times in the fairy tale, Miller Shah's specious claims have met their deserved fate in the rocket docket of the Eastern District of Virginia only six months after the meritless cases were filed." [Tullgren v. Booz Allen Hamilton Inc., No. 22-0856 (E.D. Va. Mar. 1, 2023; Hall v. Capital One Financial Corp., No. 22-0857 (E.D. Va. Mar. 1, 2023)]  MORE >>

"In one of those FAQs, DOL said a recommendation to roll over a participant's retirement plan account to an [IRA] may be fiduciary investment advice when the advisor expects to give ongoing advice after the rollover. According to the court, this guidance contradicts the agency's current regulation -- originally issued in 1975 -- which says advice does not qualify as investment advice unless given to a plan on a 'regular basis.' The court's ruling likely isn't the last word on rollover advice, since amending the 1975 regulation remains one of DOL's top priorities."  [American Securities Association v. DOL, No. 22-0330 (M.D. Fla. Feb. 13, 2023)]   MORE >>

"For a DB participant with a deferred to 65 life annuity benefit of $1,000 per month, 2022 inflation has reduced the real value of that annuity to $939.... [T]he DC participant holds all risk -- asset performance, interest rate (e.g., the cost of annuitization), and inflation risk. Thus, for DC participants, ... decreases in real buying power from increased inflation were more than offset by gains from increases in interest rates."  MORE >>

"Protecting your IRA from penalties and taking advantage of tax strategies is all about timing. This ranges from your IRA custodian providing you with timely notifications about important deadlines, to you completing transactions timely to get tax benefits. Use this calendar to remind you of some of these important deadlines."  MORE >>

"Significant investment losses during 2022 resulted in an aggregate funded percentage for all multiemployer plans of 79% as of December 31, 2022, down from 91% at the end of 2021.... As of December 31, 2022, 35 plans have received $9 billion in special financial assistance (SFA) ... which added 1% to the aggregate funded percentage. An additional $37 billion of SFA was paid in January 2023. If those amounts had been paid by December 31, 2022, the aggregate funded percentage would have been 84%."  MORE >>

"According to the [JCT], the tax advantages for DBs, DCs and IRAs will cost the federal government $371 billion this year. There is no similar tally for state tax breaks, but including those would likely bring the total bill close to half a trillion dollars. Given these tremendous expenses, it is initially hard to understand why people who seem so worried about the costs of old-age benefits choose to focus solely on Social Security. But it becomes easier to understand once you realize who benefits the most from the various parts of the old-age system."  MORE >>