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Retirement Plans Newsletter

September 22, 2023

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[Guidance Overview]

How SECURE 2.0 Impacts 403(b) Plans

"Effective for plan years beginning on or after January 1, 2023, 403(b) plans (other than church plans) may now participate in multiple employer plans (MEP) and pooled employer plans (PEP).... [E]ffective for plan years beginning on or after January 1, 2024 ... plan sponsors will be able to amend their 403(b) plans to allow hardship withdrawals to be made from non-elective and matching contribution sources ... in addition to elective deferral amounts[.]"  MORE >>

Bricker Graydon

[Guidance Overview]

Expanded IRS Determination Letter Program for 403(b) Plans

"The [IRS] has begun accepting determination letter applications for individually designed 403(b) plans.... The IRS will accept determination letter applications for initial review in three waves.... The IRS determination letter program currently permits sponsors of individually designed qualified retirement plans ... to submit a determination letter application following certain plan mergers related to corporate transactions. The IRS has not extended the same opportunity to 403(b) plans."  MORE >>

Kelley Drye & Warren LLP

[Guidance Overview]

The Student Loan Payment Matching Contribution Up Close

"For plan sponsors offering a matching contribution in their plans today, the administration of the provision is pretty straightforward (notwithstanding certain guidance the industry has requested from the IRS). For public school districts that consider adopting a student loan payment match, things can be a bit tricky."  MORE >>

National Tax-Deferred Savings Association [NTSA]

Ninth Circuit: Changes to a Services Agreement Require Consideration of Indirect Compensation

"The Ninth Circuit held that the amendment of AT&T's contract with the recordkeeper was a prohibited transaction for 'furnishing of services' between the plan and a party-in-interest, and therefore could be permitted only if it satisfied the requirements for ERISA's 'reasonable contract' exemption (section 408(b)(2)).... In so ruling, the Court rejected the reasoning of other circuit court decisions ... which more narrowly construed the prohibition against 'furnishing of services' based in part on concerns that a broad, per se construction of the statute would hinder fiduciaries' ability to contract with third parties for essential services." [Bugielski v. AT&T Servs., Inc., No. 21-56196 (9th Cir. Aug. 4, 2023; pet. for rehearing filed Sep. 1, 2023)]  MORE >>


District Court Sides with DOL in Lawsuit Challenging ESG Rule

"Prior legal precedent cited by [Judge Matthew J. Kacsmaryk ] states that in order to avoid violating the Administrative Procedures Act, all that is necessary is a minimal level of analysis from which the agency's reasoning can be discerned. The [DOL] provided that in this case, Kacsmaryk said." [Utah v. Walsh, No. 23-0016 (N.D. Tex. Sep. 21, 23)]  MORE >>

Pensions & Investments

District Court Breaks Trend, Allows Claims Challenging Prudence of BlackRock Lifepath Index Target Date Funds to Proceed

"District courts around the country -- seven of them in total -- have granted motions to dismiss claims by 401(k) plan participants because their copy-cat allegations of underperformance were insufficient to raise a plausible inference of imprudence.... Last week, a federal district court judge in the Eastern District of Virginia became the first to conclude that the participants' allegations of imprudence related to the BlackRock Funds were plausible." [Trauernicht v. Genworth, No. 22-0532 (E.D. Va. Sep. 13, 2023)]  MORE >>


Retirement Plan Investment Menus: Taking a Look Into the Industry Average

"Plan Sponsors want to know how their menu looks compared to peers. There are two primary reasons for this. First, a retirement plan is used as a retention tool and sponsors want to make sure they are competitive with their offering. Second, sponsors have a fiduciary responsibility and want to be in-line with industry standards. [This article highlights] a few aspects of the menu that ... are not only interesting but important considerations for a fiduciary.... It's important to remember that there is not a one-size-fits-all investment lineup."  MORE >>

Conrad Siegel Actuaries

PBGC Approves $20M in SFA for Paper Handlers-Publishers Plan

"[PBGC] has approved the application submitted to the Special Financial Assistance Program by the Paper Handlers-Publishers Pension Plan. The plan, based in New York City, New York, covers 244 participants in the printing industry [and] will receive approximately $20.6 million in special financial assistance ... The plan was projected to become insolvent and run out of money in 2024."  MORE >>

Pension Benefit Guaranty Corporation [PBGC]

Benefits in General

Employee Benefits in the United States, March 2023

"Retirement benefits were available to 94 percent of private industry union workers and 68 percent of private industry nonunion workers in March 2023 ... Among private industry workers, paid sick leave was available to 86 percent of union workers and 77 percent of nonunion workers while paid family leave was available to 23 percent of union workers and 27 percent of nonunion workers.... Ninety-six percent of private industry union workers and 69 percent of private industry nonunion workers had access to medical care benefits."  MORE >>

U.S. Bureau of Labor Statistics [BLS]

Employee Benefits Jobs

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ERISA Partner


Remote / Atlanta GA

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Selected New Discussions

Discontinuing a SH Match; Impact on Vesting

"Plan discontinued SH match in April of 2020 due to business hardship from COVID. Never amended the plan to remove SH for 2020, 2021 or 2022. Restarted match in May of 2022. Plan filed a VCP to retro amend plan out of SH status for 2020-2022. It was approved. How does this impact vesting? The SH Match is 100% vested and the regular match has a 5 year schedule. Is the match that was originally deposited as a 'SH Match' considered fully vested under SH rules or no since the plan was 'amended' to be Non-SH? If deemed to be non-safe harbor could the also retro amend to make the match 100% vested?"

BenefitsLink Message Boards

Delinquent or Not? 5500-EZ

"Individual 401K Profit sharing plan that was managed by a financial advisor for 10 years. She is deceased and I have no records of filed 5500-EZ forms. I am in the process of preparing historical returns for the past 12 years under the penalty relief program: [1] Is there any way to determine if 5500-EZ forms have already been filed? [2] If not, what is the risk of duplicate returns that should be similar but, if she did file, she may have used cash basis rather than my preferred accural method."

BenefitsLink Message Boards

LTPT Choosing Not to Participate

"I believe I understood Ilene Ferenczy to say that if a LTPT employee exists, and chooses not to participate, the plan is subject to ERISA and can no longer file a 5500EZ in 2024 if it otherwise qualified to file as an EZ filer in past years. So if the plan is subject to ERISA, the plan is also now subject to the bonding rules in 2024. Case in point: Husband/wife plan only with an ineligible part-time employee for many years. Part-time employee is defined as LTPT employee on 1/1/24; chooses not to participate. Plan holds $5 million in non-qualifying assets. Now they have to get a bond in place on 1/1/24 for $5 million to bond their OWN assets (as if they would steal the assets from themselves, seriously!) or subject themselves to an audit for 2024. And they also have to disclose to the DOL, and the public, information about their plan. Any thoughts? I think I would choose to terminate the plan at this point."

BenefitsLink Message Boards

9/30 Deadline for Safe Harbor 401(k)

"I'm getting conflicting opinions on this issue. The plan document needs to be signed by 9/30/23, but does an account need to be established by 9/30/23? My client, owner only, wants to do a safe harbor 401(k) for 2023. American Funds is telling him they need at least 30 days to set up an account on their system, and they are telling him it is too late to do a safe harbor 401(k) as they can't set the plan up by 9/30. I believe he would be better served to go with a 401(k)/profit sharing plan, effective 1/1/23, sign the document 9/30/2023, with deferrals to start 10/1/23 and remitted at least on a monthly basis?"

BenefitsLink Message Boards

Last Issue's Most Popular Items

Diving Into SECURE 2.0: New DOL Lost and Found, Updates to EPCRS, and Delayed Implementation of Roth Catch-Up Requirement

Foley & Lardner LLP

Self-Directed IRAs and the Prohibited Transaction Rules

ArentFox Schiff LLP

401(k) Auto-Portability Network Nears Live Date


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

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