"For now, sponsors of 401(k), 403(b) or 457 retirement plans: [1] Have additional time to amend the plan to allow for post-tax Roth contributions, if not already offered, and; [2] May classify all Catch-up Contributions (including those making more than $145,000 per year) as pre-tax contributions, during the 2024 and 2025 tax years ... Employers who have already agreed to treat all catch-up contributions after 2023 as Roth contributions may want to contact their record keeper and possibly rescind their earlier action."  MORE >>

"The primary area of difficulty in practice is generally not the definition itself, but rather obtaining the correct employee compensation and ownership information required to accurately determine the HCEs. In this post, [the authors] review the basics of the HCE definition, discuss the Top Paid Group Election, and highlight common errors that plague the HCE determination."  MORE >>

"Effective in 2023, a participant can self-certify that the distribution is not in excess of the amount required to satisfy the financial need, and the participant has no alternative means reasonably available to satisfy the financial need. Similar rules will also apply to distributions from a governmental 457(b) plan due to an 'unforeseeable emergency' of a participant.... For plan years beginning after December 31, 2023, 403(b) plans will now be treated the same as 401(k) plans, meaning that 403(b) plans may also allow hardship withdrawals of employer contributions and historical earnings."  MORE >>

"As there are several changes and many are optional, it is important that plan sponsors take time now to decide which will be added to a retirement plan. Even though plan amendments are not immediately required, coordination with administrators, legal counsel and other service providers will help minimize the compliance risks.... [A] chart provides some of the most important information about each distribution option, including whether adding the distribution option is voluntary and when it goes into effect."  MORE >>

"The 63,000-member class action lawsuit alleged that B. Braun Medical Inc. and its retirement committee violated ERISA's fiduciary duties with respect to the monitoring and selection of the retirement plan's investments and recordkeeping fees. After a three-day bench trial, the Eastern District of Pennsylvania found in favor of B. Braun on all counts.... The Court's ruling ... offers valuable guidance to plan fiduciaries on how to make the case for a prudent process." [Nunez v. B. Braun Medical Inc., No. 20-4195 (E.D. Penn. Aug. 18, 2023)]  MORE >>

"[1] What is your fee structure? ... [2] Do you have experience offering plans for companies similar to mine? ... [3] How can you help with fiduciary responsibilities? ... [4] How can you help with setting up the plan? ... [5] What services will you provide to plan participants? ... [6] Will I have access to a dedicated representative?"  MORE >>

"SECURE 2.0 ... requires all new 401(k) and 403(b) plans to include an automatic enrollment feature beginning in 2025. But as advisers engage clients on the plethora of SECURE 2.0-mandated changes that will debut in coming years, implementing auto-enrollment with new clients now may save precious time later[.]"  MORE >>

"[J]ust 38% of retirement plan participants give their plans high marks for their digital capabilities. Overall satisfaction lags significantly behind other industries ... such as wealth management (701),1 property and casualty insurance (702)2 and automotive (718).... Nearly half (47%) of participants have downloaded their retirement plan's mobile app, up from 35% in 2021, and 38% have used the mobile app in the past 30 days, up from 27% in 2021. "  MORE >>

"This study builds upon a classic life cycle finance utility framework by introducing a discount factor penalty when the annuity is irrevocable. The magnitude of the penalty depends on the irrevocability aversion coefficient. [The authors] found that inclusion of this discount factor penalty can explain the distribution of actual annuity sales."  MORE >>

"[A]nnuity purchase interest rates hit a record high for the year with the average duration 7 annuity purchase interest rate at 4.94% and the average duration 15 annuity purchase interest rate at 4.90%. In the last month, the average duration 7 annuity rate increased by 16 basis points, while the average duration 15 annuity rate increased by 15 basis points. Appealing annuity interest rates have increased plan sponsors' appetite to de-risk defined benefit plans."  MORE >>

"First, the Court allowed documentary evidence from plan documents that contradicted the false share class investment fee claims ... Some courts do not allow plan sponsors to defend with the actual plan fees, and this is the key difference in the disparate rulings on the ERISA excessive fee pleading standard across the county. ... Second, the Court required a meaningful benchmark to allege that plan investment and recordkeeping fees were too high. ... Until we have a reliable national benchmark of what large plans actually pay in recordkeeping fees, courts must require meaningful comparisons to justify claims of fiduciary imprudence." [Matney v. Barrick Gold of N. Am., No. 22-404 (10th Cir. Sept. 6, 2023)]   MORE >>

"Taxpayers affected by Hurricane Idalia in parts of Georgia that began Aug. 30, 2023, now have until Feb. 15, 2024, to file various individual and business tax returns and make tax payments ... [I]ndividuals and households affected by Hurricane Idalia that reside or have a business in Appling, Atkinson, Bacon, Berrien, Brantley, Brooks, Bulloch, Camden, Candler, Charlton, Clinch, Coffee, Colquitt, Cook, Echols, Emanuel, Glynn, Jeff Davis, Jenkins, Lanier, Lowndes, Pierce, Screven, Tattnall, Thomas, Tift, Ware, and Wayne counties in Georgia qualify for tax relief."  MORE >>

"Last week, DOL sent a new proposed 'fiduciary rule' to [OMB] for review.... This highly anticipated rulemaking would be DOL's third attempt to reinterpret the 'investment advice' fiduciary definition in ERISA and replace the five-part regulatory test that has largely been in place since 1975.... Also last week, DOL sent a new association health plan (AHP) proposed regulation to OMB. According to DOL, it will explore in the rulemaking whether to replace its 2018 regulation ... with an alternative set of criteria for determining when an employer association may act indirectly in the interest of an employer under ERISA section 3(5) for purposes of establishing a multiple employer group health plan."  MORE >>