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Retirement Plans Newsletter

October 11, 2023

2 New Job Opportunities 2 New Job Opportunities


[Guidance Overview]

The 402(g) Limit for 401(k) Plans: FAQs for Employers

"While the 402(g) limit is an individual limit, it can still affect a 401(k) plan's qualified status.... 401(k) plans that miss the April 15 deadline must distribute the excess deferral to the individual and report the non-Roth amount as taxable both in the year of deferral and in the year distributed. Failure to correct the violation at all could lead to significant IRS penalties, up to plan disqualification."  MORE >>

Employee Fiduciary

Supreme Court Lets Stand Tenth Circuit Ruling Rejecting Arbitration in ERISA Case

"A U.S. District Court in Denver ruled for [the plan participant] in March 2022, saying the arbitration agreement was unenforceable because it 'disallows a litigant from seeking plan-wide remedies.' The 10th U.S. Circuit Court of Appeals upheld the District Court decision, saying that the arbitration policy failed to protect the ERISA rights of ... participants." [Harrison v. Envision Mgmt. Holding, Inc. Bd. of Directors, No. 22-1098 (10th Cir. Feb. 9, 2023; Argent Trust Co. v. Harrison, No. 23-30, cert. denied Oct. 4, 2023)]  MORE >>

Pensions & Investments

2023 401(k) Participant Study: Gen Z Focus (PDF)

14 pages. "Gen Z is facing obstacles to save for a comfortable retirement.... Participants are delaying their retirement by two years on average -- Gen Z is still optimistic they will retire sooner than other generations.... For most participants, their ability to do their job is not affected by financial stress; younger generations are more impacted.... Gen Z is more likely to want personalized investment advice and needs help choosing investments for their 401(k).... Gen Z is tapping into several sources of advice, including family and friends and resources through their 401(k) plan."  MORE >>

Charles Schwab

Common Investment Mistakes Made by Plan Sponsors

"[Here are] three specific mistakes in the realm of investments that ... can result in considerable financial and legal consequences over time.... [1] Not documenting and benchmarking your plan's specific TDF (target-date fund) funds.... [2] Not updating (or not even creating) an IPS (investment policy statement).... [3] Not regularly reviewing the share classes offered to allow the availability of the lowest-cost options."  MORE >>


Financial Industry Groups Warn SEC That AI Proposal Would Hurt Retirement Savers

"The potentially wide reach of [the proposed rule] has drawn widespread criticism across the financial industry. The ERISA Industry Committee ... said the rule would apply to a 'vast swath of tools' that investors rely on daily, including those related to helping investors save for retirement.... 'It is so far out of bounds, it's more like a concept release than a rule proposal,' said Chris Iacovella, CEO of the American Securities Association ... 'There is nothing for the chairman to do other than throw it in the garbage.' "  MORE >>

InvestmentNews; subscription may be required


ERIC Comment Letter to EBSA: SECURE 2.0 Disclosure Mandates (PDF)

"[1] DOL should provide helpful guidance on emergency savings accounts linked to individual account plans.... [2] Defined contribution plan fee disclosure changes should focus on clarity and flexibility.... [3] DOL should not add requirements to new paper statement mandates.... [4] Balanced lump sum offer disclosures should track with legal requirements."  MORE >>

The ERISA Industry Committee [ERIC]


American Benefits Council Comment Letter to DOL: SECURE 2.0 Reporting and Disclosure

15 pages. "Although [the responses in this letter] primarily focus on what guidance Council members have identified as necessary or helpful in their implementation of the changes in law, [this letter also highlights] particular concern with the RFI's indication that DOL may consider conditioning the continued use of its electronic disclosure safe harbors on a participant's 'access in fact.' "  MORE >>

American Benefits Council


IRI Urges DOL to Streamline Disclosure Requirements and Maximize E-Delivery as Default for Documents

"IRI emphasized that notices and disclosures required under ERISA can and should be presented clearly and concisely to ensure consumers read and understand. The association also said that disclosures that are duplicative, inconsistent, or spread out across multiple documents make it much harder for average consumers to comprehend the information."  MORE >>

Insured Retirement Institute [IRI]


ESG Investing Limitations for Fiduciaries Confirmed by New Court Ruling

"[The decision] ... provides much needed clarity to the ESG controversy. Maximizing risk-adjusted returns is an ERISA fiduciary's sole responsibility when it comes to making investment decisions. In pursuing that goal, a fiduciary can adopt a strategy that is 'pro-ESG, anti-ESG, or entirely unrelated to ESG.' But the decision must be solely in terms of maximizing risk-adjusted returns, not collateral benefits.... [S]ubstantial uncertainty still surrounds state and local plans where fiduciaries' ability to maximize risk-adjusted returns may be limited by local laws and pending bills with regard to ESG investing -- both pro and con." [Utah v. Walsh, No. 23-0016 (N.D. Tex. Sep. 21, 2023)]  MORE >>

Alicia H. Munnell, via Center for Retirement Research at Boston College

Benefits in General

Empowerment Through Benefits: Nurturing Employee Financial Health

"Nearly three-quarters of employees surveyed expressed a real desire for financial guidance ...  ... [E]mployers can implement programs such as financial coaching. They can and should include everything from information on financial literacy and counseling to planning assistance, savings programs, and debt mitigation strategies. One-on-one support with a specialist, including the option for regular check-ins to support financial wellness throughout employee careers, is also a huge plus."  MORE >>

HR Daily Advisor

Employee Benefits Jobs

View job as Actuarial Consultant
            for ERP Retirement Services

Actuarial Consultant

ERP Retirement Services

Remote / Melville NY / MO

View job as Actuarial Consultant for ERP Retirement Services

View job as Sr. Retirement Plan Reporting & Testing Analyst
            for SS&C

Sr. Retirement Plan Reporting & Testing Analyst



View job as Sr. Retirement Plan Reporting & Testing Analyst for SS&C

Selected New Discussions

Funding of Earnings on EPCRS Corrective Contributions

"Plan makes a corrective allocation under EPCRS for a missed deferral and missed match in the form of a QNEC to the plan, plus attributable earnings. The RK is partly responsible for the error and offers to cover the cost of earnings on the QNECs involved. Question -- Can the RK fund the earnings directly to the Plan or should the RK reimburse the Plan Sponsor/Employer for the earnings amount by other means outside the Plan? Clearly, a corrective allocation must come from employer non-elective contributions (including forfeiture account if the plan allows 'use to reduce' method) but unclear part is whether the earnings attributable to the corrective allocation should also be required to be funded from ONLY employer non-elective contributions (including forfeitures)."

BenefitsLink Message Boards

Using Predecessor Service to Sweep in New Employees

"We have a client (individual medical practice) that is bringing in a group of 6 employees (5 employees plus 1 doctor) from a hospital. Of course the doctor would like to immediately participate in the medical group plan. We've used the predecessor service plan feature when a practice has been acquired. But I believe I read to use that feature there needs to be some business continuity relating to the group coming over."

BenefitsLink Message Boards

Amend 5500 to Reduce Profit Sharing Contribution

"We have a client with a safe harbor and cross tested profit sharing plan. They opted to maximize contributions for the owners. 5500 was filed and participant statements delivered. Now they do not have the money to fund the plan. Can they amend the profit sharing contribution and 5500 by still giving all the NHCE's the same contribution, but reducing the owners profit sharing to zero?"

BenefitsLink Message Boards

Press Releases

Pgim Announces Enhancements to Target Date Funds


Alera Group Retirement Plan Services Makes FiduciaryRx Platform Available Across National Footprint

Alera Group

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

SECURE 2.0: Updates on Key Provisions Impacting Retirement Plans

October 17, 2023 WEBINAR


Strengthen Your Fiduciary Role: How to Effectively Monitor OCIOs and Benefits Service Providers

October 19, 2023 WEBINAR

North Pier Search Consulting

Emerging Trends in ERISA Litigation

October 24, 2023 WEBINAR

Seyfarth Shaw LLP

Preparing For Health Care Costs in Retirement

October 24, 2023 WEBINAR


SECURE 2.0 Plan Sponsor Year-End Compliance: Plan Amendments, Operational Compliance, Contributions, Distributions

November 15, 2023 WEBINAR


Last Issue's Most Popular Items

Supreme Court Will Not Hear Suit Over Arbitration Clauses in ERISA Plans


Complaints Allege Improper Use of 401(k) Plan Forfeitures

PLANSPONSOR; free registration may be required

DOL Greenlights Citi's Program for Diverse Managers in 'Groundbreaking' Opinion

Pensions & Investments

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

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