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Retirement Plans Newsletter

May 8, 2023

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[Guidance Overview]

Exceptional Usefulness and Quality icon SECURE 2.0: Plan Sponsor Considerations to Avoid a Long-Term Part-Time Mess

"Plan sponsors should consider whether to avoid potentially disparate outcomes and complicated plan amendments by amending the plan to replace the Three-Year Rule with the Two-Year Rule retroactive to 2022 ... SECURE Act 2.0 amends ERISA to provide an enforceable right of an LTPT Employee to make salary deferrals to the plan through the established enforcement mechanisms available under ERISA Section 502.... Consider the interplay of Form 5500 small plan relief and eligibility expansion to LTPT employees."  MORE >>

Hall Benefits Law


The Compliance "Gotchas" You Need to Know

The rules of Sale Harbor Plans are not always straightforward. And SECURE 2.0 raises new issues & concerns. ASC can help! Learn the applicable rules and the many compliance “gotchas” plan sponsors and practitioners need to know. Register Now.

Sponsored by ASC

[Guidance Overview]

SECURE 2.0: The Saver's Match for Low Income Workers

"[T]he Internal Revenue Code provides for a nonrefundable tax credit for low-paid individuals who make plan, IRA or ABLE contributions.... [U]nder SECURE Act 2.0 -- beginning in 2027 -- the tax credit will become refundable, but not to the individuals. Instead, the Federal government will deposit matching contributions into the IRAs and plan accounts of those individuals. The administrative complexity of depositing the Federal matches into those IRAs and plan accounts is significant."  MORE >>

401(k) Costs Coming Down, But Small Plan Costs Still High

"[I]individuals who work for smaller employers and participate in small plans pay around double the cost to invest as participants at larger plans -- around 84 basis points in total compared with 40 basis points, respectively.... This leaves workers at smaller employers potentially having 9% less saved at retirement due simply to higher fees[.]"  MORE >>

American Retirement Association [ARA]

Majority of DC Sponsors Don't Provide an ESG Fund

"The overwhelming majority of plan sponsors don't offer an environmental, social and governance fund as part of their retirement offerings ... Three-quarters didn't provide an ESG fund and had no plans to do so, although another 13% were considering it. Only 12% had an ESG fund."  MORE >>

Pensions & Investments

U.S. Pension Briefing, April 2023

"April saw a slight drop in discount rates ... Global equity market returns were mixed ... however, fixed income markets were generally positive. Pension plan funded status improved for those with meaningful allocations to large cap developed market equities. Plans with large allocations to emerging market stocks or small caps could have actually seen funding levels decline."  MORE >>


Universal Retirement Savings Plan Is Next Up for Fierce Debate

"While the Retirement Savings for Americans Act parallels workers' wishes, it is facing skepticism and industry opposition, with early critics saying it will drive business away from providers serving private-sector plans."  MORE >>

Pensions & Investments

Want to Boost Your Retirement Income? 'Guardrails' Could Help

"Dynamic retirement-spending strategies, which vary retirees' cash flows based on how their portfolios have performed, can help retirees spend more from their portfolios than spending strategies that aim to supply the same real withdrawals year after year.... Guardrails offered the highest starting withdrawal rate and the second-highest lifetime withdrawal rate of any of the systems ... tested. But as effective as the Guyton-Klinger system is at boosting retirees' cash flows, it isn't not without trade-offs."  MORE >>



401(k) Diversification Is Not Working

"Recent 401(k) investment returns have caused many investors to wonder how to protect their portfolios against stock and bond market losses for the rest of 2023. Here is a hint: Do not follow the popular 401(k) investment management strategies."  MORE >>



The Intersection Between Renewable Energy ESG Projects, Bitcoin’s Proof of Work System, and the New ESG Rules for Retirement Plans

"There is growing evidence that Bitcoin mining is ESG friendly and has the potential to help renewable energy projects operate more efficiently and profitably. Despite the ESG friendly nature of Bitcoin mining, a fiduciary should only invest in bitcoin (or a Bitcoin mining company) if the fiduciary concludes that such an investment would maximize the financial interests of the plan participants."  MORE >>

Ryan P. Moulder

Benefits in General

[Guidance Overview]

IRS 2022-2023 Priority Guidance Plan: Third Quarter Update (PDF)

32 pages; employee benefits items begin on page 4.  MORE >>

Internal Revenue Service [IRS]

Employee Benefits Jobs

View job as Client Service Manager
            for July Business Services

Client Service Manager

July Business Services


View job as Client Service Manager for July Business Services

Selected New Discussions

New Plan Delays 401(k) Start; Which Comp Is Considered for Match?

"Brand new 401(k) plan, effective 1/1 of the last year, adopted the year before so 401(k) able to start on 1/1. It's not a safe harbor plan. Took them awhile to get going with the admin of the 401(k) so they started 2/1 and only matched based on comp from 2/1. Match was done on a payroll basis. The definition of comp is full year, so I believe the participants who contributed greater than the minimum required for the 3% match have been undermatched. Advisor disagrees."

BenefitsLink Message Boards

Can a Trust Sponsor a 401(k)?

"With the understanding that the entity sponsoring the plan is usually the employer, this question arose in connection with a transaction where we just found out the seller, and plan sponsor, is a trust. Forgive me if there is an obvious answer, but wondering if, as a technical matter, a trust can be the plan sponsor of a 401(k) plan?"

BenefitsLink Message Boards

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

Unpacking DOL PTE 2020-02

May 5, 2023 PODCAST

Oyster Consulting

Covering Coverage: You Need to Know This Stuff!

May 23, 2023 WEBINAR


The Legal and Practical Issues with De-Risking or Terminating Your Pension Plan

June 8, 2023 WEBINAR

American Bar Association Joint Committee on Employee Benefits [JCEB]

Last Issue's Most Popular Items

Here's a Way to Save Social Security and Defer RMDs


Real Estate Investments in Qualified Plans (PDF)

Harlowe & Fallk LLP, via Journal of Pension Benefits

Final Compliance Deadline for the DOL Fiduciary Rule and Prohibited Transaction Exemption Is Approaching

Haynes and Boone, LLP

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

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