"One of the principal authors of SECURE 2.0's [emergency savings account (ESA)] provisions led a discussion regarding the IRS guidance that would be most helpful.... [It] became clear that most have already experienced the recordkeepers' reluctance to support ESAs. As a result, the IRS took a pragmatic approach to its key question: what guidance would make ESAs simple and remove barriers to recordkeepers and plan sponsors making them available to participants? The ultimate IRS position on ESAs will indeed be one favoring simplicity. The IRS wants participants to have access to ESAs."  MORE >>

"The changes reduce the burden on participants by delaying the distribution deadline, eliminating the requirement for certain contributions, and reducing noncompliance penalties. Some of these changes have already gone into effect, while others will take effect next year and as late as 2033."  MORE >>

"Corrections generally must satisfy all the applicable self-correction conditions laid out in Rev. Proc. 2021-30. Among those provisions, the sponsor must have established practices and procedures reasonably designed to promote overall IRC compliance and may not use a correction method that the EPCRS specifically prohibits. However, sponsors can ignore certain current EPCRS requirements for self-correction that are inapplicable under the statute."  MORE >>

"As the start of 2024 rapidly approaches, it is important to understand the new rules, to know how they apply to your plan, and to start determining the employees that will need to be offered plan participation."  MORE >>

"[T]he plaintiff alleges that the defendant companies, along with the American Airlines benefits committee, breached their duties of loyalty and prudence under [ERISA].... [T]he complaint accuses the plan sponsor and other defendants of putting social motivations ahead of investment performance." [Spence v. American Airlines, Inc., No. 23-0552 (N.D. Tex. complaint filed Jun. 2, 2023)]  MORE >>

"[P]lan sponsors of mega 401(k) plans may be under increased pressure to find the cheapest recordkeeping service options, now that participants may easily meet the pleading standard for a fiduciary breach claim by arguing that recordkeeping services for mega 401(k) plans are fungible and that the same bundled services could have been provided by other comparable recordkeepers at lower cost." [Tolomeo v. R.R. Donnelley & Sons, Inc., No. 20-7158 (N.D. Ill. May 15, 2023)]  MORE >>

"PTE 2020-02 was primarily targeted at financial institutions. But the new rule ... was generally intended to in many cases make, e.g., call center operators affiliated with financial institutions, 'advice fiduciaries.' This will likely require plan fiduciaries to monitor those advice fiduciaries' compliance with the PTE ... The broad terms of the PTE may also pick up, as 'advice fiduciaries,' sponsor employees[.]" [Federation of Americans for Consumer Choice v. DOL, No. 22-243 (N.D. Texas motion to dismiss filed Sep. 2, 2022; amended notice of supplemental authority filed May 17, 2023)]  MORE >>

"[SECURE 2.0 made] amendments to the Internal Revenue Code to permit 403(b) plans to invest in these vehicles; however, that legislation failed to include the necessary changes to securities laws. The Retirement Fairness for Charities and Educational Institutions Act of 2023 [HR 3063] proposes to take the next steps by amending the Securities Act and the Investment Company Act to allow 403(b) plans to make use of CITs. CITs are already widely utilized as investments for 401(k) plans."  MORE >>

49 presentation slides. "Workers and retirees' retirement confidence dropped significantly in 2023, and workers have many concerns about the economy and their retirement finances. Nearly two-thirds of workers feel stressed about preparing for retirement. Only about half of workers are doing various tasks for preparing for retirement."  MORE >>

"[P]ublic pension plans last year averaged a negative return of -6.14%. That is dramatically below the 6.9% average assumed annual rate of return for the sector.... As many as 94% [of managers] questioned say the risk profile of their plan increased last year. One in six say (16%) say it increased significantly. More than four out of five (81%) of those questioned expect the increase in risk profiles to continue in the next 12 months with nearly one in three (32%) expecting a dramatic increase."  MORE >>

"The funded status of the 100 largest U.S. corporate defined benefit pension plans improved by $15 billion during May ... An increase in the benchmark corporate bond interest rates used to value pension liabilities led to a decrease in these liabilities of $41 billion for the month. As of May 31, the funded ratio rose to 100.7%, from 99.6% at the end of April."  MORE >>