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Retirement Plans Newsletter

May 19, 2023

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[Guidance Overview]

CRS Report: Single-Employer Defined Benefit Pension Plans: Funding Relief and Modifications to Funding Rules

29 pages. "This report provides [1] background on single-employer DB pension funding, [2] a discussion of funding rules under PPA, and [3] provisions since PPA that have provided funding relief or otherwise modified single-employer DB pension funding rules." [R46366 updated May 18, 2023]  MORE >>

Congressional Research Service [CRS]

[Guidance Overview]

DOL Warns Plans Proposed UBS QPAM Exemption May Be Short-Lived

"On May 11, 2023, the [DOL] published a fast-tracked proposed individual exemption involving UBS AG and Credit Suisse Group AG (CSAG).... [in] the proposal, DOL issued a 'Department Warning' to plan fiduciaries using UBS- or CSAG-affiliated QPAMs and 'strongly cautioned' them that 'the Department might not extend this one-year exemption following its expiration due to the significant number of convictions and the seriousness of the underlying conduct of the tainted entities that will now reside together within the UBS corporate umbrella following the Merger.' "  MORE >>

Miller & Chevalier

DOL Will Not Pursue Appeal of Federal Court Rollover Ruling, But Will the 'Regular Basis' of Fiduciary Rule Developments Continue?

"While the ASA decision is the second vacatur issued by a Federal court concerning the DOL's attempts to recraft the definition or interpretation of what it takes to be an 'investment advice' fiduciary, it is also the second Federal case to cast doubts on the DOL's analysis in its 2020 interpretation of the Five-Part Test. Nevertheless, there are indications that the DOL is set to propose yet another regulation to amend the Five Part Test -- perhaps during this year." [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 >>

Dechert LLP

New York Pension Systems Sued for Politicizing Public Pension Investments

"The lawsuit ... claims the divestment decision inserted political beliefs into investment decisions and thus violated the pension plans' core fiduciary responsibility to maximize investment returns at prudent levels of risk for the plan's beneficiaries. The lawsuit says that putting net-zero emissions goals ... ahead of investment goals breaks the fiduciary agreement in favor of political and social interests." [Wong v. NYCERS, TRS and BERS, No. 652297/2023 (New York County, complaint filed May 11, 2023)]  MORE >>

Reason Foundation

You're Stuck with That Plan Now: Retirement Plans in M&A

"[O]ne aspect of the transition that is vital to resolve before the closing is what to do with the seller's retirement plan. If that plan is not terminated before the closing, then the buyer ... [will be] taking on the problems in that plan, as well as possibly having to make changes to the buyer's plan to accommodate differences in the seller's plan. Both of these outcomes can be costly and result in more complicated administration."  MORE >>

KLB Benefits Law Group

Two More States Create Retirement Savings Plans for Private Sector Workers

"Legislators in Missouri and Minnesota passed bills to expand access to retirement savings for private sector employees, and Vermont legislators voted to change its approach."  MORE >>

PLANSPONSOR; free registration may be required

GAO Report: Social Security, Part 1 -- the Dilemma

"This is the first in a series of reports that outline [1] Social Security's financial challenges, [2] criteria for evaluating options for reforming Social Security, and [3] types of proposed reforms. This first report focuses on Social Security's financial challenges." [GAO-23-106667]  MORE >>

U.S. Government Accountability Office [GAO]

Benefits in General

[Guidance Overview]

The End of the COVID-19 National Emergency: What Plan Sponsors Need to Know

"[C]ertain time periods and dates for special enrollment under [HIPAA], COBRA continuation coverage, and internal claims and appeals and external review [were] disregarded when determining the due dates for certain elections and other actions by employee benefit plans subject to ERISA and the Internal Revenue Code during the COVID-19 National Emergency. Retirement plan elections were also impacted by the Disregarded Periods."  MORE >>

Boutwell Fay LLP

Employee Benefits Jobs

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            for Pension Associates

Pension Consultant

Pension Associates

Remote / Stamford CT

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Selected New Discussions

Plan Design: Hours of Service Required to Get a Benefit Varies for Different Classes

"Is it OK for a Plan to have a different hours requirements for different classes to get an annual Pay Credit in the Cash Balance Plan? For example, can I design a Plan to require 1,000 hours for Pay Credit for Direct Owners, 500 hours for non-HCEs and 800 hours for Non-Direct Owners? I think this would be OK if the requirements are more liberal for non-HCEs. If I am correct, what would be the best way to accommodate with a Prototype/VS software?"

BenefitsLink Message Boards

How to Report ACP Corrective Distribution with Loss on 1099-R

"Plan fails 2021 ACP test. A refund of match is made to the HCE in February 2022. Participant account lost money for the 2021 plan year. Refund to HCE is made timely and net of losses. Well known national 401k vendor prepares 2022 1099-R form, boxes 1 and 2a are the same amount and equal the gross amount of the refund and not the net amount that the participant received after losses. Is that the correct way to do the 1099-R form? For example, I always understood that had there been earnings on the account, the participant would have received a 1099-R form for the gross distribution (including gains) as long as it was timely distributed. Therefore if there are losses on a timely distributed refund, the 1099-R form should reflect the actual distribution amount after the losses are applied. Am I incorrect or missing something -- or was this 1099-R improperly prepared?"

BenefitsLink Message Boards

Pro Rated Limits for Joining a MEP Mid Year?

"A new company wants to join an existing MEP effective 6/1/23. Do any of the 2023 limits need to be pro rated for them, or because the plan was in existence for all of 2023 that takes precedence and they get the benefit of the full numbers?"

BenefitsLink Message Boards

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

Nuts & Bolts of Benefit Plan Administration

June 8, 2023 in OH

Worldwide Employee Benefits Network [WEB] - Northeast Ohio Chapter

Clawbacks of Executive Compensation: The New Frontier

June 29, 2023 WEBINAR

American Bar Association Joint Committee on Employee Benefits [JCEB]

Last Issue's Most Popular Items

Applying the ERISA Controlled Group and Affiliated Service Group Rules in the Health Care Industry

Foley & Lardner LLP

SECURE 2.0: New and Potentially Easier Ways to Make Withdrawals from 401(k) Plans

Foley & Lardner LLP

ChatGPT Describes 401(k) Plan Sponsor Challenges

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

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