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Retirement Plans Newsletter

November 1, 2023

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[Guidance Overview]

Prepare for Upcoming Changes to Defined Contribution Plans: Long-Term, Part-Time Employees

"Although the new rules seem straightforward, there are many open questions that will need to be addressed. For example: What alternatives might be available for employers that do not track actual hours? Does the new rule apply to employees who are excluded from participating as a member of an excluded classification not based on service but who nonetheless complete at least 500 hours of service? For 403(b) plans, what is the effect on universal availability and the student employee exclusion?"  MORE >>

The Wagner Law Group


A Tailored Solution For All Your Compliance Needs

EI's industry-leading knowledge ensures that all your compliance needs are met. Our team integrates as a supplement or extension of yours to deliver savings via rightsized staffing and flexible costing models.

Sponsored by Enterprise Iron

[Guidance Overview]

DOL Would Oversee Annuity Sales, Rollovers Under New Proposal

"The proposal would scrap the traditional five-part test for determining if an adviser is acting in a fiduciary capacity and replace it with a three-part test in which satisfying any one of the three conditions would make the adviser a fiduciary.... [T]he proposal would assert the DOL's authority under ERISA over any retirement account and any annuity purchase made with plan assets, and recommendations in these spaces would be subject to ERISA fiduciary standards."  MORE >>

PLANSPONSOR; free registration may be required

[Guidance Overview]

DOL Fiduciary Rule Would Add a Lot of Advisors Into the Mix

"A pillar of the proposed rule is making virtually anyone who recommends investments to a 401(k) plan a fiduciary, which the Biden administration said is necessary to close a loophole in the [SEC's] Regulation Best Interest.... [An] exemption that has been in place since 1977 that allows investment fiduciaries to recommend open-end mutual funds sponsored by an affiliate may no longer apply, unless the advisor has full investment discretion ... And, similar to a question raised by the 2016 version of the DOL fiduciary rule, there are questions about the use of model portfolios[.]"  MORE >>

InvestmentNews; subscription may be required

[Guidance Overview]

DOL Advisory Opinion Finds No ERISA Fiduciary Issues with Citi's Diverse Managers/Racial Equity Program

"Given the framing of the Advisory Opinion, the biggest issue is the 'inherently factual' one of whether Citi, as sponsor, in furtherance of its own business purposes -- having Citi 'viewed favorably by its employees, the general public, its shareholders, potential customers, business partners, and other interested parties' -- has (despite its representations) tried to influence committee decisions."  MORE >>

October Three Consulting

Small Business Retirement Plans: The Importance of Employer Perceptions of Benefits and Costs

"The main barriers to offering a plan are concerns about the stability/size of the firm and the perceived costs of a plan. Concerns about costs are driven by misperceptions; many firms are unaware of lower-cost options for employers and tax credits. The survey results also suggest that state auto-IRA programs do not deter firms from offering a plan and may even encourage it."  MORE >>

Center for Retirement Research at Boston College

Pooled Employer Plans: The Basics

"A PEP is required to have a pooled plan provider (PPP) that is designated by the terms of the plan as a named fiduciary and plan administrator.... Joining a PEP does not completely exonerate each employer from its fiduciary responsibilities.... [A] PEP is effectively an open MEP because it is not subject to the common interest requirement that applies to other MEPs. As such, PEPs are considered a single plan for both IRS and ERISA purposes."  MORE >>

Belfint Lyons Shuman

What Is 'New Comparability' Profit Sharing?

"New comparability plans work because of cross-testing. Rather than gauge whether a profit share is discriminatory on the face value of the contribution, cross-testing uses a benefit accrual rate, which projects the future value of an individual's retirement portfolio when the individual reaches retirement age. In many cases, NHCEs will have accrual rates that are similar or even higher to their high-earning peers, even if their current profit sharing allocations are significantly less."  MORE >>


Reforming Social Security Sooner Rather Than Later (PDF)

"If Congress has not acted by 2034, we will be faced with an automatic 20% cut in benefits to people already receiving benefits, the need to immediately increase Social Security taxes by 25%, or some combination of benefit cuts and tax increases."  MORE >>

American Academy of Actuaries

FAS87 ASC715 Discount Rates and Moody's Rates, October 31, 2023

An unofficial monthly report of the Moody's Daily Long-term Corporate Bond Yield Averages and Moody's Daily Treasury Yield Averages (used as benchmarks by some corporate pension plans).  MORE >>

BenefitsLink Message Boards


Are America’s Workers Better Off With Plaintiff Lawyers Serving as the ERISA Fiduciary Police?

"Plaintiff lawyers are pursuing theories of liability that have no basis in ERISA. They are biased prosecutors that are not acting in the best interests of plan sponsors or participants. This is particularly true when lawsuits allege imprudence with claims that attempt to stretch or change ERISA fiduciary liability. This includes lawsuits based on disfavored outcomes that ignore fiduciary process -- the lynchpin of ERISA fiduciary liability.... Let's apply some of their rules from recent litigation, and see how America's workers are somehow better off."  MORE >>

Euclid Specialty Managers


'Knew or Should Have Known': Annuities, Plan Sponsors, and Fiduciary Law, Part 2

"The fact that annuity issuers typically reserve the right to change cap and/or participation rates has potentially serious fiduciary liability implications for plan sponsors and other investment fiduciaries.... [T]his is clearly a material fact that a plan sponsor knows or should know as a result of the plan sponsor's required investigation and evaluation.... [T]he practice and its impact on plan participants should automatically preclude any consideration of such an annuity in any ERISA plan."  MORE >>

The Prudent Investment Adviser Rules


DOL Proposes Retirement 'Insecurity' Regulation

"This unnecessary, redundant, and harmful proposal will have a significant adverse impact on the ability of lower- and middle-income workers to access professional retirement planning assistance and affordable retirement planning products, including guaranteed lifetime income products such as annuities[.]"  MORE >>

Insured Retirement Institute [IRI]


U.S. Chamber Disappointed in DOL Proposed Fiduciary Rule

"The Chamber is disappointed that the [DOL] has spent its time and resources resurrecting a rule that has previously been invalidated by the courts, is outside of its rulemaking authority, and, most importantly, does nothing to promote retirement security and savings."  MORE >>

U.S. Chamber of Commerce

Executive Compensation and Nonqualified Plans

[Guidance Overview]

IRS (Permanently) Allows Digital Signatures for Section 83(b) Elections

"IRS announced that it will allow taxpayers to make and file Section 83(b) elections with a digital signature. This decision makes permanent a practice that the IRS temporarily allowed during the COVID-19 crisis. [This article provides] a refresher of certain requirements and considerations when making a Section 83(b) election."  MORE >>

Kilpatrick Townsend

Employee Benefits Jobs

View job as Legislative Affairs Specialist
            for Pension Benefit Guaranty Corporation

Legislative Affairs Specialist

Pension Benefit Guaranty Corporation

Washington DC

View job as Legislative Affairs Specialist for Pension Benefit Guaranty Corporation

Selected New Discussions

Annuity Buy-in Liability Calculation

"For anyone that has experience with annuity buy-ins, how have you calculated the Funding Target liability for the purchased group? I believe for accounting purposes the liability is set equal to the fair value of the GAC, but is that also true for the FT? Or are we required to use the PPA-defined segment rates?"

BenefitsLink Message Boards

Any Way to Escape RMD in This Situation?

"Corporation A. Joe's year of birth is 1952. So Joe will be 73 in 2025 Joe owns 10%, Joe's wife owns 1% and Joe's son owns 89% Joe will sell 8% to his son in 2023. Is there anything I cannot think of that would allow Joe to defer RMD until forever? Also, assuming Joe needs to start RMD, 2025 is the first year, correct?"

BenefitsLink Message Boards

Contributions and Deferrals for Terminated Employee with Severance Paid Through Year End

"In the adoption agreement compensation is described as 'W-2'. The Post-Severance box is not checked: [ ] Include Post Severance Compensation in definition of Statutory Compensation. So.... if an employee terminates on say 10/1 but is receiving severance pay through the end of 2023, we don't count any income earned from 10/2 through the end of the year, correct? AND, the employee can not defer from that severance compensation either, correct?"

BenefitsLink Message Boards

Press Releases

Judy Hensley Joins Eide Bailly as Leader of Compensation and Benefits Tax Services Team

Eide Bailly LLP

National Alliance Names Health Policy Expert Shawn Gremminger as New President and CEO

National Alliance of Healthcare Purchaser Coalitions

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

SECURE 2.0 Planning for Large Employers

November 8, 2023 WEBINAR

Winston & Strawn

Survey of the Retirement Landscape: Challenges and Opportunities for Defined Contribution Specialists

November 9, 2023 WEBINAR


State Retirement Mandates: Understand the Considerations for Businesses

November 16, 2023 WEBINAR


Global Retirement Programs

December 13, 2023 WEBINAR

Conference of Consulting Actuaries

Women in Retirement Conference

January 10, 2024 in SC

ASPPA [American Society of Pension Professionals & Actuaries]

Last Issue's Most Popular Items

White House Fact Sheet on New Actions to Protect Retirement Security

Executive Office of the President

DOL Seeking to Add One-Time Rollover Advice to Fiduciary Standard

Pensions & Investments

Text of DOL Proposed Regs: Retirement Security Rule: Definition of an Investment Advice Fiduciary (PDF)

Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

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

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