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Retirement Plans Newsletter

April 5, 2023

2 New Job Opportunities 2 New Job Opportunities


[Guidance Overview]

RMD Evolution: SECURE 2.0 Changes

"SECURE 2.0 increased the RMD triggering age, decreased excise taxes, eliminated distribution requirements for certain Roth accounts, provided a new election for surviving spouses, and made changes to the rules on annuities to promote lifetime income distribution options. Not only are these changes voluminous, but they also have different effective dates."  MORE >>


[Guidance Overview]

How the SECURE 2.0 Act Will Impact Your Retirement Plan Starting in 2025 and Beyond

"While most provisions will take affect within the next two years, it is important for plan sponsors and service providers to become familiar with the 2025 and later provisions so potential operational roadblocks can be addressed and changes can be quickly implemented when the deadline approaches."  MORE >>


[Guidance Overview]

Updates on ESG Regulation and Northwestern Litigation

"[M]uch of the final regulation should not be controversial. It recites commonly accepted fiduciary principles relating to the two core responsibilities included in the regulation's title: prudence and loyalty. The entire regulation references 'ESG' only one time, and that reference is limited to the permissible consideration of the economic effects of ESG factors. However, Congress, the Attorneys General for 25 states, and a number of private companies have given fiduciaries reason to pause. At this stage, fiduciaries are well-served to stick to the traditional fiduciary principles recited within the regulation"  MORE >>

Qualified Plan Advisors [QPA]

How Much Are Workers Paying to Save for Retirement?

"People who work for smaller employers and participate in small plans pay, on average, around double the cost to invest as participants at larger plans -- around 84 basis points (0.84%) in total compared with 40 basis points (0.40%), respectively.... While the median costs have dropped across all plan sizes ... small plans have not meaningfully closed the gap on their larger counterparts."  MORE >>


Analysis Finds a 'Danger Zone' for Employees Cashing Out 401(k)s

"The 'danger zone' ... appears to be among participants who were 30-39 years old. Apart from those who had less than 1 year of tenure, the highest number of full payouts (nearly 70,000) occurred in this age range for workers who had 5-10 years of tenure.... These groups may be juggling multiple financial goals, such as saving to buy a house, saving for retirement or for college, but they are also carrying unprecedented levels of debt."  MORE >>

Trends in Retirement Plan Contributions and Asset Allocations by TIAA Participants: 2012 to 2018

"Lifecycle funds, an auto-diversified target-date fund with an age-based glide path, are used by an increasing share of participants. Younger participants, who are more likely to have defaulted into the Lifecycle fund, tend to use it as a single comprehensive fund-of-funds investment. Older participants who invest in a Lifecycle fund tend to use it as part of a broader portfolio strategy."  MORE >>

TIAA Institute, via SSRN

Workers Cashing Out 401(k)s When They Switch Jobs

"[N]early half of 162,360 employees who left their jobs between 2014 and 2016 at 28 US companies cashed out of workplace retirement plans like 401(k)s that incentivize saving over time.... Of the workers withdrawing from their funds after a job separation, only 27% were fired or laid off. "  MORE >>

Business Insider

The Key Role of the Quirky 403(b) 'Master Custodial Agreement'

"There is a distinct and legal difference between the 401(k) trust and the 403(b) master custodial agreement ... [T]he custodial account is technically still not a 'trust' in the traditional way used in the 401(a) market -- for example, the 401(a) trust is a tax exempt entity under 501(a), where the 403(b) custodial account is not.... Though ERISA will treat the custodial account as a trust for Title 1 purposes, it still is not legally a trust."  MORE >>

Business of Benefits

Pension Finance Update, March 2023

"Pension finances slipped in March as interest rates moved lower, outpacing modestly rising stock prices. Both model plans ... saw declines last month: Plan A lost more than 1% in March but remains up more than 1% for the year, while the more conservative Plan B lost less than 1% last month but is still up a fraction of 1% through the first quarter of 2023."  MORE >>

October Three Consulting

Here's What Retirement Looks Like in America in Six Charts

"Total household balances in retirement-type accounts for those 65 and up are $407,581 on average.... For 12% of men and 15% of women, Social Security comprises 90% or more of retirement income.... Households headed by people 65 or older spend an average of $7,030 a year on healthcare.... Older adults spent less time socializing, volunteering and attending religious services in 2021, compared with 2011.... People 65 to 74 have a median net worth of $266,400 and an average net worth of $1,217,700."  MORE >>

The Wall Street Journal; subscription may be required

Employee Benefits Jobs

View job as Sr. Retirement Plan Consultant
            for Compass Retirement Consulting Group, Inc.

Sr. Retirement Plan Consultant

Compass Retirement Consulting Group, Inc.

Remote / Stratham NH

View job as Sr. Retirement Plan Consultant for Compass Retirement Consulting Group, Inc.

View job as Senior Retirement Plan Administrator
            for Strongpoint Partners - Retirement Strategies Group

Senior Retirement Plan Administrator

Strongpoint Partners - Retirement Strategies Group


View job as Senior Retirement Plan Administrator for Strongpoint Partners - Retirement Strategies Group

Selected New Discussions

Successor Plan Rule and PEO/MEP: There and Back Again

"A Plan Sponsor elects to discontinue their single-employer plan and join a PEO/MEP. 3 months later, the Plan Sponsor decides they want to leave the PEO/MEP and go back to a single-employer plan. Is this an issue since less than 12 months have passed since the Plan Sponsor originally discontinued their single-employer plan in favor of joining the PEO/MEP?"

BenefitsLink Message Boards

Do Roth 401(k) Participants Not Get Excused from Before-Death Minimum Distributions?

"With a heading 'Mandatory Distribution Rules Not to Apply Before Death', Internal Revenue Code Section 402A(d)(5), as SECURE 2022 adds it for tax years that begin on or after January 1, 2024 (with a transition for 2023 measures to be paid in 2024), provides: Notwithstanding sections 403(b)(10) and 457(d)(2), the following provisions shall not apply to any designated Roth account: (A) -- Section 401(a)(9)(A). (B) -- The incidental death benefit requirements of section 401(a). Am I reading correctly that only Roth 403(b) and Roth 457(b) participants are excused from minimum distribution before death? Or is there another provision I didn't read thoroughly enough to find?"

BenefitsLink Message Boards

SECURE Act Roth Catch Up Requirement

"We use Relius pre-approved IDP Volume Submitters Plan documents. Currently we have 100+ plans that don't allow for Roth 401k deferrals. We are trying to determine if we now have to force these plans to allow for Roth 401k because of the new rules (taking out the catch-up provision is not a route we want to go, we know this is an option to avoid the Roth catch up). Currently there's no way to amend the FIS/Relius IDP VS to add Roth 401k deferrals, without losing reliance. We would have to restate the entire plan document, which we are trying to avoid since we recently restated all plans for Cycle 3. We thought a plan could possibly only allow Roth for Catch Up eligible but that doesn't seem to be the case, it looks like we may have to force plans that don't allow for Roth deferrals to now allow for it because of the new rules (well at least that's what our understanding is so far). Again not so much a question but just wanted to know if we're the only ones dealing with this right now."

BenefitsLink Message Boards

Press Releases

Nestimate Debuts Software Solution for In-Plan Guaranteed Income Products

Newtimate, Inc.

Former Envestnet Leader Neel Ray Joins Pensionmark, a World Company, as Head of M&A


Experienced Employee Benefits Attorney Sarah Sise Joins Quarles as Partner

Quarles & Brady LLP

New National Study by Employee Benefits News Sponsored by Quantum Health Finds 67% of Employees Navigate Their Healthcare Journey Without Expert Help

Employee Benefits News

Public Sector Pension Plans Highlight Rising Risk Profiles

Ortec Finance

Pentegra Welcomes Kevin Finnegan as Senior Vice President and General Counsel


AHIP Appoints Two New Executive Leaders in Its Continued Mission to Guide Greater Health

AHIP [America's Health Insurance Plans]

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

Compensation Conversations: A Four-Part Series on Deferred Compensation Planning

May 2, 2023 WEBINAR

Executive Benefit Solutions

Encouraging New Plan Creation

May 3, 2023 WEBINAR


Professionalism for Employee Benefits Professionals: ASOP 6

May 10, 2023 WEBINAR

Conference of Consulting Actuaries

Last Issue's Most Popular Items

Employers: Are You Ready for the New LTPT Employee Rules? (PDF)

ASC, via Plan Consultant

How Plan Sponsors Can Offer Backdoor Roth Conversions

PLANSPONSOR; free registration may be required

Northwestern University's Alternative Explanations Not Strong Enough to Defeat ERISA Excessive Fee Claims


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

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