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Retirement Plans Newsletter
June 23, 2023
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New Job Opportunity Today
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[Guidance Overview]
Wages, by Any Other Name, Not So Sweet for Employers Under SECURE 2.0
"[F]ailures to follow a plan's definition of compensation are one of the most common issues experienced by retirement plan sponsors.... SECURE 2.0 only adds to that complexity. It provides that wages for purposes of applying the $145,000 Roth catch-up contribution threshold
mean wages as defined in Code Section 3121(a), i.e., wages used for FICA tax purposes." MORE >>
McDermott Will & Emery
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[Guidance Overview]
DOL Rollover Review Deadline Looms; Here's Where Firms Stand
"[S]ome smaller firms may believe that the recent Florida court decision on the DOL's fiduciary interpretation means that they don't need to do a review and report. If so, they misunderstand the court's decision." MORE >>
Fred Reish, via ThinkAdvisor
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Large National Bank and Mortgage Servicer Defeat ERISA Lawsuit
"The plaintiff, a union pension fund, alleged the mortgage servicer breached its fiduciary duty under ERISA, challenging the mortgage servicer's handling of residential mortgages supporting certain residential mortgage-backed securities trusts (RMBS trusts) in which the union
pension fund had invested. The union pension fund alleged the mortgage servicer profited from foreclosures, which caused the union pension fund's benefit plans to suffer losses. The court's opinion turned on whether the mortgages underlying the RMBS trusts were 'plan assets' under ERISA; if the mortgages were not 'plan assets,' the mortgage servicer could not be considered a fiduciary." [Powell v. Ocwen Financial Corp., No. 18-1951 (S.D.N.Y. Jun. 1, 2023)] MORE >>
Weiner Brodsky Kider PC, via JDSupra
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Who Are the Top 403(b) Providers in 2023?
"Small nonprofit businesses may struggle to find time to even look for a provider, much less handle tasks associated with a retirement plan. Often, this means defaulting to one of the larger 403(b) providers ... [F]or nonprofits, a 401(k) is a viable alternative to a
403(b).... [N]ew providers have entered the market with an eye toward automating a number of administrative tasks, and easing the enrollment burden on both employers and employees." MORE >>
ForUsAll
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Optimal Retirement Portfolios with Fixed and Variable Longevity Annuities in Defined Contribution Plans Taking Social Security Into Account
"This paper examines how two instruments -- annuities with lifelong benefits purchased using defined contribution (DC) plan assets, and social security annuities -- should be considered jointly to optimize household lifetime wellbeing.... [P]roviding access to variable
deferred income annuities with some equity exposure (similar to participating annuities) further enhances retiree wellbeing, compared to having access only to fixed annuities." MORE >>
Vanya Horneff, Raimond Maurer, and Olivia S. Mitchell, via SSRN
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Anti-ESG Bill Would Require Only Pecuniary Factors to Be Considered for ERISA Plan Investments
"The Ensuring Sound Guidance Act would ... require advisers and broker/dealers to only consider pecuniary factors, unless a
client consented in writing to the consideration of other factors.... [ERISA] would also be amended to likewise require ERISA fiduciaries to only consider pecuniary factors. The only time a non-pecuniary factor could be considered is 'If a fiduciary is unable to distinguish between or among investment alternatives.' " MORE >>
planadviser
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[Opinion]
The Gamesmanship of the Excess Recordkeeping Claims Against the American Red Cross
"The plaintiff lawyers in the Red Cross case do not properly acknowledge how the fees were charged; nor do they attempt to compare a percentage-of-asset approach to other plans with a percentage-of-asset approach. Instead, they choose the dishonest approach of asserting both
misleading fees and comparators. The had no need to resort to distortion, but that is the default mode of many excess fee lawsuits." MORE >>
Euclid Specialty Managers
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Employee Benefits Jobs |
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Selected New Discussions |
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Excluding Part-Time Hourly Employees
"The client employees few salaried employees and a bunch of hourly-paid employees. Many hourly employees are scheduled to work 1200 -1400 hours per year. Is it a 'reasonable classification' to define the 'hourly employees who are scheduled to work less than 2,080
hours per annum' as an 'Ineligible Class'? I do not need them for testing as my plan would pass the ABPT with very comfortable margin. What are the issues with my thinking? Let's assume there won't be any employees who are scheduled to work part-time but later show up with a gazillion of hours."
BenefitsLink Message Boards
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QDRO Valuation Date
"We are running into a situation with our recordkeeper involving the valuation date for QDROs. In the past a determination date was some date in the past chosen by the participant and alternate payee, and was usually the date the participant and spouse were separated or divorced.
The AP's account was then valued by taking the balance as of the determination date, adjusting for earnings, contributions, withdrawals or whatever, and then splitting the account. The APs account could then be administered just like any other account; payment could be requested or deferred, investments chosen etc. Now the recordkeeper has unilaterally decided that the valuation date is the date of transfer so there are no earnings
calculations needed. This is not what our QDRO procedures or models provide and we have a number of DROs in process which are expected to stipulate the prior method when they are submitted to us for approval. We are getting pushback from participants who want to divide the account based on a specific past date and who are unequipped to calculate several year's worth of investment earnings on their own. The recordkeeper is calling their
new process 'industry standard' but in my years in the industry as a TPA the majority of my cases have used the prior method. Do agree this is industry standard? I have not been a TPA in 10 years so perhaps the industry has moved on without me knowing?"
BenefitsLink Message Boards
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Form 5330 Lost Earnings
"Due to clerical error we had several late deposits for an employee in 2022 and 2023. I'm trying to fill out the form 5330 but i'm extremely confused on how to handle Schedule C Line [2] If there were multiple late deposits do I do one line per late deposit/missed
earning amount or can I do a total? For the deposits from 2022 that weren't paid until 2023 do I need to put those on the form twice, or do I need fill out the form and submit it twice with those numbers? I'm the one who made the errors and am trying to avoid the $1200 fee associated with our ERISA people filling out the form on our behalf. I appreciate any help I can get as our accountant nor our plan consultant has been any
help. For what it's worth the excise tax amount on the missed earnings is $17.66."
BenefitsLink Message Boards
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Press Releases |
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OneDigital Welcomes NY-Based StoneStreet Equity
OneDigital
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Christine Hwang Joins Jones Day as Partner in Employee Benefits and Executive Compensation Practice in San Francisco
Jones Day
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Webcasts and Conferences
(Retirement Plans / Executive Compensation) |
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What's on the Menu for Your Retirement Plan?
RECORDED
CAPTRUST Financial Advisors
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Summer Camp Is in Session: Benefits Compliance 2023 Mid-Year Check-In
RECORDED
NFP Corp.
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Fiduciary Bootcamp
September 6, 2023 WEBINAR
Groom Law Group
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Last Issue's Most Popular Items |
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Catch-Up Contributions Under SECURE 2.0
McDermott Will & Emery
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SECURE 2.0 Roth Catch-Ups: What We Don't Know That We Need to Know
Nelson Mullins
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Lawmakers to Introduce SECURE 2.0 Technical Corrections
Willis Towers Watson
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Copyright 2023 BenefitsLink.com, Inc. All materials contained in this newsletter are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of BenefitsLink.com, Inc., or in the case of third party materials, the owner of those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.
BenefitsLink® Retirement Plans Newsletter, ISSN no. 1536-9587.
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