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Retirement Plans Newsletter

May 17, 2023

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DOL Drops Appeal of District Court Decision Tossing Out Portion of Rollover Reg

"[W]ithdrawing the appeal could be an indication of DOL's future priorities.... A fiduciary rule published during the Obama administration was tossed out by the Fifth Circuit Court of Appeals, so DOL regulators are likely taking extra time to craft rules that are sure to end up in court again.... But the DOL is running out of time to complete all the steps required to get a fiduciary rule on the books[.]" [American Securities Association v. DOL, No. 22-0330 (M.D. Fla. Feb. 13, 2023; stipulation as to voluntary dismissal filed May 16, 2023; 11th Cir. No. 23-11266)]   MORE >>

DOL's U-Turn in Court Hints at New Fiduciary Rule in Works

"The American Securities Association says the [DOL] voluntarily dropped its appeal of a Florida court's decision striking down DOL guidance making rollover advice fiduciary.... [T]he change in the DOL's direction hardly means that it's going to abandon a higher fiduciary standard ... Most likely, it hints that the agency is racing to issue a new fiduciary rule proposal[.]"  MORE >>

InvestmentNews; subscription may be required

Plaintiffs Punt Appeal in Two BlackRock TDF Suits

"These were two of the dozen or so suits[i] filed in federal courts across the country alleging the same basic breaches of fiduciary duty, simplistically characterized as 'imprudently selecting, retaining, and failing to appropriately monitor the clearly inferior BlackRock TDFs.' Somewhat ironically, considering the focus of the recent spate of excessive fee suits, these claimed that the plan fiduciaries elected to chase low fees, alleging that they did so sacrificing performance."  MORE >>

American Retirement Association [ARA]

Navigating Retirement Plan Changes in SECURE 2.0

"[Request] insight from your recordkeeper on their capability plans to handle the new provisions ... The next step is to determine which of these optional provisions are aligned with your outlook on the employee benefit plan.... [P]lan your employee communication carefully.... [Assess] the costs associated with implementing the new provisions, such as technology upgrades or additional administrative tasks."  MORE >>


Participants Choose Virtual 401(k) Education at Record Levels

"Worker attendance at educational sessions about 401(k) plans and other financial topics reached new heights in 2022, with virtual live and on-demand sessions driving the most participation ... Participant attendance was up by 5.4% year-over-year, with virtual live meetings accounting for 65% of attendance, while 28% of participants went to on-demand meetings and 7.4% attended in person."  MORE >>

Charles Schwab

Why the PRT Market Is Thriving

"The pension risk transfer (PRT) market has surged as sponsors look to cut costs, de-risk, and move liabilities off their balance sheets, transferring them to insurance companies that are accustomed to generating guaranteed income from investments. Perhaps predictably, a swelling tide of insurers are discovering that they're not particularly well-suited -- or technologically equipped -- to manage these portfolios while also administering the pension and keeping thousands of participants happy. Fortunately for them, a growing variety of outsourcing solutions are joining the marketplace."  MORE >>

Institutional Investor

Roth Catch-Ups Will Be Major Issue for Government Plans

"The National Association of Government Defined Contribution Administrators [NAGDCA] has again [asked the IRS] for greater leniency in implementing some SECURE 2.0 Act of 2022 provisions for government plans.... The letter suggests that some plans may have to drop catch-ups altogether, something Congress presumably did not intend, until they can update their plan administration to accommodate Roth contributions."  MORE >>


2023 Nonprofit Retirement Guide: 403(b) plans vs. 401(k) plans

"Tax-exempt, nonprofit organizations can offer a 401(k), a 403(b), or both. Recent regulatory changes are making nonprofit 401(k)s even more popular among many tax exempt organizations. 401(k) plans are often significantly cheaper for both employers and employees 401(k) plans provide greater flexibility with eligibility and features designed to drive high participation rates."  MORE >>


14 States That Won't Tax Your Pension

"Most states tax at least a portion of the income from many types of retirement benefit plans.... However, some states don't tax pension income no matter your age or how much money you have.... Some states might not tax Social Security (opens in new tab) retirement benefits but will tax 401(k) and IRA distributions."  MORE >>


Benefits in General

[Official Guidance]

Text of EBSA Technical Corrections to Final Regs: Annual Reporting and Disclosure

"On February 24, 2023, [EBSA] published a final rule on annual reporting requirements under Title I of [ERISA] This document contains two technical changes to the regulations: it changes the operational date of the final rule amendments to the regulations ... [and] corrects a typographical error in the lettering of a paragraph in the regulations.... This final rule is effective May 31, 2023. The operational date of the amendments ... is changed from April 25, 2023, to May 31, 2023."  MORE >>

Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

Executive Compensation and Nonqualified Plans

Global Study on ESG Incentives in Executive Compensation

"77% of major companies across North America and Europe include ESG metrics in their executive incentive plans, an increase from 68% last year.... In Europe and North America, ESG metrics are used by more than three-quarters of companies when determining executive incentive compensation, ranging from 69% in the U.S. to about 90% in Europe and the U.K."  MORE >>

Willis Towers Watson

Employee Benefits Jobs

View job as DB/DC Plan Administrator
            for Benefit Associates, Inc.

DB/DC Plan Administrator

Benefit Associates, Inc.

Remote / Huntington Beach CA

View job as DB/DC Plan Administrator for Benefit Associates, Inc.

Selected New Discussions

Terminating DB Plan and Cycle 3 Restatements

"A DB plan utilizes a pre-approved document and intends to terminate before the end of the year. Given we are now into the Cycle 3 restatement period for pre-approved DB plans, does the plan need to restate onto the Cycle 3 document or can they continue to rely on the prior restatement assuming they amend for any mandatory changes since the last restatement?"

BenefitsLink Message Boards

SECURE Act 2.0: Roth Contributions

"The SECURE act 2.0 allows plans to fund matching and nonelective contributions as Roth. [1] I believe the participant must be 100% vested to do this correct? [2] What about safe harbor matching and nonelective contributions. Can they be funded as Roth?"

BenefitsLink Message Boards

Applying for Waiver of Penalties/Interest for Late-Filed 5330s

"A plan had numerous prohibited transactions over a number of years, with very large excise taxes due. The PTs were only recently discovered. We are now filing 5330s. I believe there is reasonable cause and would like to request the IRS to waive interest and penalties on the late filing of 5330s. I am unsure how and when to request the waiver. Does anyone have experience with that?"

BenefitsLink Message Boards

Effect on 401(k) Plan of Plan Sponsor's Change in Business Structure

"If we have a company that is currently a LLC taxed as a S corp but they are changing their structure to be a LLC taxed as a C corp is there anything specific that we need to keep an eye out for in their plan? I assume we need to make an amendment to update the tax structure and the EIN for the plan sponsor. Outside of that is there anything in the plan design that needs to be updated if a tax structure is changed? They don't want to change anything else in their plan such as vesting, eligibility, etc."

BenefitsLink Message Boards

Press Releases

JULY Announces Third Acquisition Transaction of 2023 with HTLF’s Retirement Plan Recordkeeping and Administration Business

JULY Business Services

Last Issue's Most Popular Items

IRS Issues Proposed Regs on Allocation of Forfeitures (PDF)

Groom Law Group, via Taxes the Tax Magazine

Controlled and Affiliated Service Group Rules for Retirement and Cafeteria Plans: An Overview


Safe Harbor 401(k): 2023 Guide for Employers


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

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