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Retirement Plans Newsletter

September 19, 2023

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[Guidance Overview]

What Does SECURE 2.0 Do for Section 420 Transfers?

"[SECURE 2.0] eased the requirements for overfunded pensions that make transfers to a 401(h) plan for retiree medical benefits, known as 420 transfers ... SECURE 2.0 extended Section 420, set to expire at the end of 2025, through the end of 2032. It also lowered the threshold at which plans may use surplus pension assets to pay retiree health and life insurance benefits for newly created de minimis transfers."  MORE >>

PLANSPONSOR; free registration may be required


ERISApedia -- Announcing: The Plan Distribution eSource

The Plan Distribution eSource, written by S. Derrin Watson, J.D addresses distributions extensively. An entire chapter explains the maze of 1099-R reporting. Numerous practical examples. For more information, please contact

Sponsored by ERISApedia

District Court Grants Summary Judgment in ESOP Litigation

"The plaintiff brought suit against the trustee of the plan for breach of fiduciary duty and sued former shareholders ... under ERISA 502(a)(2) alleging that the company overpaid the shareholders for their stake in the company." [Lysengen v. Argent Trust Co., No. 20-1177 (C.D. Ill. Sep. 7, 2023)]  MORE >>

Husch Blackwell

Common Mistakes Made by Retirement Plan Sponsors

"[1] Lack of a diverse plan committee ... [2] Not benchmarking and reviewing your plan every 3-5 years ... [3] Not understanding and explaining employee eligibility ... [4] Not having frequent committee meetings and recording notes ... [5] Late remittance of employee deferrals."  MORE >>


Public Pension Funding Index, September 2023

"A decline in overall market performance as of August 2023 lowered the estimated funded status of the 100 largest U.S. public pension plans from 76.8% as of July 31, 2023 to 75.3% as of August 31, 2023 ... In aggregate, ... the PPFI plans experienced investment returns of -1.6% in August, with individual plans' estimated returns ranging from -2.4% to -0.8%[.]"  MORE >>


Two Public Pension Funds Keep Annual Returns Relatively Consistent -- Using Wildly Different Methods

"The Teacher Retirement System of Texas, which manages $200 billion, has taken an active approach to investing, hiring managers across strategies, including hedge funds and private equity firms.... The Public Employees' Retirement System of Nevada, meanwhile, pays lower fees, given that the portfolio is mostly index funds and cash. NV PERS's $54 billion portfolio doesn't track the benchmark quite as closely as TRS's does -- the plan's ten-year performance is 9.2 percent, just over the benchmark. But it's still relatively consistent."  MORE >>

Institutional Investor

Assessing Guaranteed Lifetime Income Programs Utilizing CITs

14 pages. "The purpose of this white paper is to inform fiduciaries of some factors they might want to consider ... [when] adding a GLI option that provides lifetime income which incorporates the use of a CIT as part of a managed GLI arrangement.... The practical impact of the differences between the provision of CIT/GLI options through CIT-owned insurance and when provided under plan owned insurance can be substantial. These differences become apparent in key areas including portability, complexity, and the personalization of guarantees."  MORE >>

Robert J. Toth, jr., for Allianz Life Insurance Company of North America

CRS in Focus: The Windfall Elimination Provision in Social Security -- Proposals for a New Proportional Formula

"Two bills introduced in 2023 would replace the current-law WEP approach with a proportional formula for certain individuals who would become eligible for Social Security benefits in 2025 or later[.]" [IF11355 Sep. 19, 2023]  MORE >>

Congressional Research Service [CRS]


A California Law Firm's Shakedown of Corporate America with Manufactured Claims of Excess Recordkeeping Fees

"[A California] law firm is sending copycat ransom letters to large American corporations demanding settlements based on contrived assertions of excessive recordkeeping fees compared to misrepresentations of the 401k Averages Book.... The premise of [these] threats ... is that [1] courts allow these cases to proceed to discovery even without proof of imprudence; [2] these cases are super expensive to defend; [3] it is hard for plan sponsors to prove that they acted prudently in managing plan administration costs; [4] most cases eventually settle; and [5] the plan fiduciaries should, therefore, write a huge check to avoid litigation."  MORE >>

Euclid Specialty Managers

Executive Compensation and Nonqualified Plans

Profits Interests: Are They the Right Long-Term Incentive Design for Your LLC Firm?

"Changes by the Tax Cuts and Jobs Act of 2017 to capital gains and income tax brackets and rates made profits interest plans even more favorable than they were before the passage of this law. When structured carefully, profits interests combine the leveraged growth opportunity of corporate stock options, the design flexibility of a performance-based stock plan and the long-term capital gains tax treatment of outright equity ownership."  MORE >>

Willis Towers Watson

Employee Benefits Jobs

View job as 3(16) Retirement Plan Consultant
            for EGPS, Inc.

3(16) Retirement Plan Consultant

EGPS, Inc.


View job as 3(16) Retirement Plan Consultant for EGPS, Inc.

Selected New Discussions

Rehires and Rule of Parity

"Profit Sharing only plan. A former employee who worked from April 2013 through October 2015 was rehired in 2021. We are currently trying to find out from the employer whether this participant -- although they were eligible for the plan on January 1, 2015 -- received an allocation for 2015. The plan uses the Rule of Parity ... My understanding is that if a participant has more than 5 breaks in service and they were not vested at the time of termination, it is permissible to start from ground zero when they are rehired. In this particular instance, the participant would have been 20% vested at termination. She is not likely to have been eligible to receive a Profit Sharing for 2015 due to her termination prior to the end of the year. (We are waiting for confirmation from employer since we do not have history). My question: Would prior vesting service but no vested benefit permit us to rely on the Rule of Parity? OR was she immediately eligible for the plan on her date of rehire in 2021 because, although she may have never accrued a benefit in the plan, she had nevertheless accumulated vesting service?"

BenefitsLink Message Boards

Press Releases

Study Shows Employers Save 25% Through Onsite and Nearsite Wellness Centers

Premise Health

Centivo Named Insurance Employer of the Year in 2023 Stevie Awards for Great Employers


New Coalition of Transparent PBM Companies Seeks to Fix Nation's Broken Drug Pricing System


National Alliance Urges Action to Achieve Fair Pricing for Hospital Services

National Alliance of Healthcare Purchaser Coalitions

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

It's Time to Start Planning for 2024: Year-End Deadlines, Including Secure 2.0

September 28, 2023 WEBINAR

Boutwell Fay LLP

Women & Retirement: Improving the Pathways Forward

October 4, 2023 WEBINAR

WISER [Women's Institute for a Secure Retirement]

Women & Retirement: Improving the Pathways Forward

October 4, 2023 in DC

WISER [Women's Institute for a Secure Retirement]

Last Issue's Most Popular Items

ERISA Section 408(b)(2): Is That Still a Thing? (PDF)

Ferenczy Benefits Law Center

AI Is Radically Transforming Benefit Plan Management (PDF)

Roland Criss, via Journal of Compensation and Benefits

When Attorney-Client Privilege Applies Under ERISA


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

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