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Retirement Plans Newsletter

March 29, 2023


[Guidance Overview]

Expanded Coverage for Part-Time Employees Under SECURE 2.0

"Plan sponsors of 401(k) plans should track hours for part-time employees starting with plan years beginning in 2021 (in 2023 for ERISA-covered 403(b) plans) or consider using an equivalency if the hours are not available. Part-time employees will enter a 401(k) plan in the 2024 plan year based on the three-year requirement of the SECURE Act. For 2025 and later years they will enter the plan (whether a 401(k) or ERISA-covered 403(b) plan) based on the two-year requirement of the SECURE 2.0 Act."  MORE >>

Boutwell Fay LLP

[Guidance Overview]

Emergency Savings Accounts: What We Know So Far

"Plan sponsors with a large population of lower-paid employees may want to consider [pension-linked emergency savings account (PLESAs)] since this option may incent such employees to start or continue contributing to the plan ... Plan sponsors with low plan participation rates may want to consider PLESAs ... as a tool to increase participation.... Given the ambiguity of its application to non-ERISA plans, plan sponsors of church and governmental plans should wait for additional guidance or clarification on whether a PLESA can be added to their plans."  MORE >>

Ice Miller LLP

[Guidance Overview]

Learning How to Count Again: Changes Ahead for Form 5500 Reporting

"The final rule posted in the Federal Register removes employees of the plan sponsor not actively participating, but eligible to participate.... The rule change would keep around 18,699 defined contribution plans from having to be considered large and which would be required to have the more expanded large plan filing requirements, including a costly audit from being incurred."  MORE >>

Belfint Lyons Shuman

[Guidance Overview]

SECURE 2.0 Provides Major Changes to EPCRS

"Although the expansion of the ability to self-correct is welcome news for many plan sponsors, there is still a need for additional clarity and guidance. The changes to EPCRS appear to be effective on the enactment on SECURE 2.0. The IRS will have two years to update Revenue Procedure 2021-30 to reflect the statutory changes and possibly provide additional guidance."  MORE >>


[Guidance Overview]

How Will SECURE 2.0 Affect Your Retirement Plan Administration?

"[T]he updates that SECURE 2.0 brings will affect plan participation, increase retirement savings and increase ease of withdrawals, but add a layer of complexity to plan recordkeeping."  MORE >>



2023 CCA Enrolled Actuaries Conference | Virtual

Choose from 39 sessions covering topics in single-employer, multiemployer, public, and small plans and other topics relevant to pension professionals. Earn up to 18.5 EA credits, which includes 2.0 EA Ethics credits & 1.5 credits toward bias topics.

Sponsored by Conference of Consulting Actuaries [CCA]

[Guidance Overview]

IRS Proposal Would Clarify Rules for Retirement Plan Forfeitures

"Defined contribution plans would have to use these funds within 12 months after the end of the plan year in which the forfeiture arose. A transition rule would apply to forfeitures arising before the regulation's effective date. The regulation would also better reflect the way the defined benefit plan funding rules implicitly reflect forfeitures in determining minimum required contributions. The proposed rule would take effect for the 2024 plan year, but sponsors and plan administrators may rely on the proposal immediately."  MORE >>


On Remand from Supreme Court, Seventh Circuit Announces a Newly Formulated Pleading Standard

"[T]he court flatly rejected Northwestern's contention that a plaintiff was required to rule out every possible innocent explanation for a fiduciary's conduct.Moreover, in a 'newly formulated pleading standard,' the court held that where 'alternative inferences are in equipoise' in the sense that they are equally reasonable, the court must resolve the matter in favor of the plaintiffs. This means that it is enough if the plaintiffs plead that a prudent course of action might have been available rather than proving it actually was." [Hughes v. Northwestern Univ., No. 18-2569 (7th Cir. Mar. 23, 2023)]  MORE >>

Kantor & Kantor LLC

Missed the 401(k) Restatement Deadline? Here's Your Plan B for Compliance

"The good news is that the IRS does not consider that the failure to timely restate the plan will itself disqualify it from favorable tax treatment. The not-so-good news is that the failure transforms that pre-approved plan into an individually designed plan upon which the employer can no longer rely as a qualified plan."  MORE >>

The Retirement Plan Blog

How AI is Simplifying 401(k) Plan Comparison

"BenchMine [is] billed as the first-ever 401(k) comparative analysis tool that's free and open to the public. Plan advisors (and anyone else for that matter) can search through more than 56,000 plans with at least $1 million in total assets nationwide to see how particular company 401(k) plans stack up in their city, region, against a competitor or within a specific industry -- and show them exactly where the plan excels and/or falls short in terms of average fees, contributions, performance, etc."  MORE >>

401(k) Specialist

TDF Assets Fell in 2022, But Inflows Stayed Strong

"Market depreciation drove a roughly 14% drop in target-date-fund assets in 2022 to $2.82 trillion ... The decline came off a record year for TDFs in 2021, when the investment vehicles popular in retirement plans hit a record high $3.27 trillion ... Despite the market challenges, net inflows for TDFs remained strong at $153 billion for the year, down from $170 billion in 2021[.]"  MORE >>



Social Security Is Not 'Bankrupt'

"Although echoed by some policymakers, claims of Social Security's impending 'bankruptcy' are highly misleading and demonstrate misunderstanding, or deliberate misrepresentation, of Social Security's finances."  MORE >>

Center on Budget and Policy Priorities

Benefits in General

[Guidance Overview]

IRS Requires Most Employee Benefit Plans to File Forms Electronically

"The final regulations: [1] reduce the 250-return filing threshold to generally require electronic filing by filers of 10 or more returns in a calendar year.... [2] require filers to aggregate almost all information return types covered by the regulation to determine whether a filer meets the 10-return threshold ... [3] permit waivers for filers that would experience hardship in complying with the e-filing requirements.... [T]he hardship waiver is not applicable to Form 5500 filings."  MORE >>

The Wagner Law Group

Executive Compensation and Nonqualified Plans

Dodd-Frank Clawbacks: 'Into the Blue Again, After the Money's Gone'

"[M]ost companies will have to confront the obvious question about whether they should defer a portion of officer compensation for a period sufficient to facilitate a clawback in the event the officer terminates employment. Companies wishing to adopt this approach must resolve certain issues first."  MORE >>

Willis Towers Watson

Selected New Discussions

Unterminating DB with PBGC Coverage

"PBGC covered plan, terminated 12/31/2022 500 is not yet done/filed with PBGC. Sponsor changed their mind, wants to continue. Can a simple notice to the participants stating 'we decided not to terminate the plan' would be sufficient? I will amend the plan later to unfreeze the benefits. When terminated all became 100% vested (plan was only 3 years old and all would have been only 40% vested if not terminated). I cannot find any written document of making everyone 40% again with the reversal of termination. Anyone knows if possible?"

BenefitsLink Message Boards

Terminated Plan Failed ADP/ACP Testing

"The plan terminated and assets have been liquidated from record keeper. The plan failed ADP/ACP testing with two participants requiring employer match funds to be returned to the plan. My understanding is once the two participants transfer the employer match funds back into the forfeiture account (via rollover from participant's IRA), those funds will get evenly distributed amongst participants who had balances as of the date of the plan termination. Is this correct? Alternatively, what would happen if the plan decides to do nothing? What penalties will incur? The employer funds only total $900 and if distributed amongst participants, the participants would receive very low amounts."

BenefitsLink Message Boards

Press Releases

The Standard to Acquire Life and Disability Business from Elevance Health; Companies Announce Future Distribution Partnership

The Standard

Oscar Health Announces Appointment of Healthcare Veteran Mark Bertolini to CEO; Co-Founder and CEO Mario Schlosser Transitions to President of Technology

Oscar Health

The Hartford Renames Accidental Death and Dismemberment Insurance to Enhance Consumer Understanding

The Hartford

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

New Plan Creation Under SECURE 2.0

April 5, 2023 WEBINAR


2023 CCA Enrolled Actuaries Conference


Conference of Consulting Actuaries

Church Plans under 403(b) and 401(a)

May 18, 2023 WEBINAR


Last Issue's Most Popular Items

SECURE 2.0: Financial Incentives for Participants for Deferrals

Common Mistakes Plan Sponsors Make in Retirement Plan Administration


CRS In Focus: DOL Guidance and Regs on the Exercise of Shareholder Rights by Private-Sector Pension Plans

Congressional Research Service [CRS]

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

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