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Retirement Plans Newsletter

March 27, 2023


[Guidance Overview]

The Final 2022 DOL ESG Rule and Why 25 States Oppose It

"Like the prior administration's rule that it replaced, the Prudence and Loyalty Rule makes barely any mention of environmental, social, or governance (ESG) factors ... [T]his rule -- which makes only modest changes from the prior administration's rule -- has been challenged in court by a group of 25 states. This article examines why that ESG moniker persists, why the rule is being opposed, and what impact the rule and subsequent challenges could have on retirement plan sponsors."  MORE >>

T. Rowe Price


Deadlines Approaching! Time to learn about the 403(b) Pre-approved Plan Program

The deadline for timely Cycle 2 Enrollment is around the corner. Learn what every 403(b) practitioner should know. Topics include important Cycle 2 deadlines, SECURE 2.0 impact on 403(b) plans, and more. Sign Up Here!

Sponsored by ASC

ERISA Suit Against Northwestern Has Second Life 15 Months After SCOTUS Ruling

"The appeals court judges conceded March 23 that the Supreme Court had rejected a so-called 'categorical rule' in which 'providing some low-cost options eliminates concerns about other investment options being imprudent.' Plaintiffs complained about excessive record-keeping fees and the fiduciaries' failing to select lower-cost shares of mutual funds and annuities." [Hughes v. Northwestern Univ., No. 18-2569 (7th Cir. Mar. 23, 2023)]   MORE >>

Pensions & Investments

Seventh Circuit Northwestern Ruling Eases ERISA Pleading Standard (PDF)

"The Seventh Circuit has laid out a 'newly formulated' standard for assessing claims that a retirement plan manager breached a duty to make prudent investment decisions, revising claims against Northwestern University and embracing a plan participant-friendly analysis that will likely help certain federal benefits lawsuits survive motions to dismiss."[Hughes v. Northwestern Univ., No. 18-2569 (7th Cir. Mar. 23, 2023)]  MORE >>

The Wagner Law Group, via Law360

The DOL's 2023 Regulatory Agenda for Retirement Plans at a Glance

"[1] Pooled Employer Plans ... [2] Changes to Form 5500 ... [3] Amended Voluntary Fiduciary Correction Program ... [4] Prohibited transactions ... [5] Participant disclosures."  MORE >>

Morgan Lewis

DOL Seeks Funds for New Efforts on Lost Benefits

"The DOL seeks $5 million in FY 2024 to establish a program for ensuring that missing participants receive the benefits to which they are entitled.... The budget request says that [EBSA] also intends to increase its focus on industries with a high number of workers who are foreign-born. EBSA wants to determine if they, too, 'have disproportionate incidents of missing participants' and if they 'face any specific impediments to receiving benefits.' "  MORE >>

American Retirement Association [ARA]

Are Higher Interest Rates a Silver Lining for Public Pension Funds?

"Higher interest rates make public pension plans less expensive because they increase the investment returns plans can expect.... Plans are likely to take a cautious approach to any changes, as they did when interest rates dropped during the Great Recession."  MORE >>

National Conference on Public Employee Retirement Systems [NCPERS]

SECURE 2.0 Makes 529s an Appealing Financial Wellness Option

"SECURE 2.0 allows certain assets in a 529 plan ... to be rolled over on a tax-free basis to a Roth IRA for the benefit of the beneficiary. This makes the risk an individual of being unable to access excess savings in a college savings plan without incurring the 10% withdrawal penalty (a deterrent to starting a 529 in the first place), less likely. This also makes 529 plan benefits potentially more attractive as a workplace benefit and tool for recruitment and retention."  MORE >>

PLANSPONSOR; free registration may be required


The Brilliance of the Ideal 401(k) Plan

"Now that auto enrollment has been codified and endorsed in SECURE 2.0, it's time to reflect on the Ideal Plan ushered into the 401(k) and 403(b) psyche by esteemed professors Richard Thaler and Shlomo Benartzi and the 2006 Pension Protection Act and how it has enabled defined contribution plans to match the accumulation phase of defined benefit plans. So why do most employers, especially smaller ones, still resist it?"  MORE >>

Benefits in General

[Official Guidance]

IRS Disaster Relief Notice NY-2023-04, for Victims of Severe Winter Storm and Snowstorm in New York

"Victims of the severe winter storm and snowstorm beginning Dec. 23, 2022, and ending Dec. 28, 2022, now have until May 15, 2023, to file various individual and business tax returns and make tax payments ... [I]ndividuals and households affected by the severe winter storm and snowstorm that reside or have a business in Erie, Genesee, Niagara, St. Lawrence, and Suffolk counties qualify for tax relief."  MORE >>

Internal Revenue Service [IRS]

Selected New Discussions

Annuity Contract Change of Ownership: Is This a Rollover?

"Coming from an insurance company pension department, if a profit sharing plan was funded with individual bundled annuity contracts and a participant terminated employment and wanted to keep the same underlying investments, it was advised to change the ownership from the XYZ profit sharing plan to the individual and the beneficiary to a non-plan beneficiary. Plan does not require spousal consent regardless of over $5000. Insurance company, of course, told the plan trustee no 1099 required as this is a rollover, even though same contract. We all know insurance company personnel can be and usually are giving out wrong information and IRS requires 1099s for any money leaving the plan, whether rollover or cash distribution with withholding. Question, is this transaction truly a 'rollover'. I am inclined toward a 'yes' and the participant is due a 1099, code G for rollover."

BenefitsLink Message Boards

New Plans and Immediate Eligibility vs 1 Year of Service

"Startup Plan has owner and spouse, both employed over 1 year. Their 3 employees have less than one year of service. I'm curious which of these approaches is preferred:

  • Immediate eligibility for all 3
  • Immediate eligibility only if already worked one year of service, so that the 3 employees will not be in the plan for the first year."

BenefitsLink Message Boards

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

Employee Benefits and Executive Compensation Series, Part 5: Hot Topics and Trends in Payroll for 2023

March 31, 2023 WEBINAR

Ogletree Deakins

PRT in 2023: Experts React to the Impact of Inflation, Interest Rates and Market Volatility

April 5, 2023 WEBINAR

PBI Research Services

Hot Topics in Employee Benefits: What We’re Seeing

April 12, 2023 WEBINAR

Morgan Lewis

Last Issue's Most Popular Items

Notes from Meeting of Actuaries 'Intersector Group' with Treasury and IRS, January 2023(PDF)

American Academy of Actuaries, Conference of Consulting Actuaries, Society of Actuaries, and ASPPA College of Pension Actuaries [ACOPA]

Proposed Treasury Regs Impose Hard Deadline and Requirements on Forfeitures in Defined Contribution Plans

Warner Norcross & Judd LLP

Notes from Meeting of Actuaries 'Intersector Group' with PBGC, January 2023 (PDF)

American Academy of Actuaries, Conference of Consulting Actuaries, Society of Actuaries, and ASPPA College of Pension Actuaries [ACOPA]

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

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