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Retirement Plans Newsletter

November 3, 2023

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[Official Guidance]

Text of PBGC Updated General SFA Application Filing Instructions (PDF)

29 pages. "These updates include changes to the application instructions requiring the submission of census data in all participant categories ... PBGC has clarified the information that must be provided with the plan's certification of the amount of the fair market value of assets, ... updated the model plan amendment regarding compliance ... and clarified an example on the change of assumptions regarding CBUs.... [O]ther updates are reflected in the ... SFA Assumptions Guidance and Model Amendment Under 4262.6(e)(1) Regarding Compliance."  MORE >>

Pension Benefit Guaranty Corporation [PBGC]

[Official Guidance]

Text of 2023 IRS Form 8880: Credit for Qualified Retirement Savings Contributions (PDF)

"Use Form 8880 to figure the amount, if any, of your retirement savings contributions credit (also known as the saver's credit). The maximum amount of the credit is $1,000 ($2,000 if married filing jointly)."  MORE >>

Internal Revenue Service [IRS]

[Guidance Overview]

Do You Need to Send an Annual Notice to Plan Participants?

"[A] table provides a list of the content and deadlines for the most common notices that plan sponsors may need to distribute."  MORE >>

Alston & Bird

[Guidance Overview]

New Halloween Fiduciary Proposal May Be a Real Scream

"[M]any of the concepts embedded in the Release's proposed new definition, as well as changes to several existing PTCEs may seem eerily reminiscent of the 2016 Fiduciary Rule.... [This article offers] initial reactions -- subject to revision and clarification -- as to what [the authors] believe would be the principal commercial impacts of the Release."  MORE >>

Dechert LLP

[Guidance Overview]

Exceptional Usefulness and Quality icon The Retirement Security (Nee Fiduciary) Rule Rides Again

"As proposed, the new rule is designed to encompass recommendations that federal securities laws do not currently cover such as recommendations to purchase non-securities such as real estate, certain kinds of annuities, or commodities like gold. In addition, those rules also do not cover advice as to which investments should be included in a 401(k) menu. The Department's proposal is designed to cover these recommendations as well. Both the Department and the White House appear to be specifically focused on 'fixed index annuities' as an area of particular concern."  MORE >>

The Wagner Law Group

[Guidance Overview]

The New Fiduciary Rule, Part 1: An Overview

"The biggest changes are to the definition of nondiscretionary fiduciary advice (the 5-part test) and to independent insurance agents and the insurance companies they work with. However, all broker-dealers, investment advisers, and banks and trust companies will need to make at least some changes if these proposals become final rules."  MORE >>

Optimizing 401(k) Contributions for Higher-Income Employees

"401(k) math [for employees earning over $160,000] differs because Social Security payments [will replace less] of their salaries than they do for median-income employees.... The good news for higher-income employees is that if they start their 401(k) accounts early and receive moderate or better investment performance, they should be able to reach the 80% retirement income standard.... The bad news for higher-income employees is that the projections give them little wiggle room."  MORE >>


Saving for Retirement: Employee and Employer Attitudes Towards Retirement Benefits (PDF)

14 pages. "Employees expect their defined contribution (DC) plan to be a key vehicle for funding their retirement: 70% plan to use these savings to fund their retirement expenses.... 45% of respondents believe they need over $1M to retire, and 10% believe they need more than $2M.... [W]hen faced with the option of receiving a $500 pay increase or a $500 increase in contributions made by the company, 53% preferred the raise."  MORE >>


OIG Management Alert to PBGC: Deceased Participants in the Central States' FSA Calculation (PDF)

16 pages. "[OIG] found 3,479 deceased participants in Central States' (Plan) SFA application because the [PBGC] did not ensure deceased participants were removed from the Plan's application.... Based on [OIG's] identification of deceased participants, Central States calculated the value attributed to deceased participants in the SFA application at approximately $127 million."  MORE >>

Office of Inspector General [OIG], Pension Benefit Guaranty Corporation [PBGC]

CRS Report: Social Security Cost-of-Living Adjustments

13 pages. "Social Security COLAs are based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), updated monthly ... The COLA becomes effective in December of the current year and is payable in January of the following year." [Report 94-803 updated Nov. 2, 2023]  MORE >>

Congressional Research Service [CRS]

Benefits in General

Foxx, Good Demand Transcribed Interviews After Acting Labor Secretary Fails to Respond to Request for Information

"The letter, which follows a September 19 request for materials, highlights EBSA's expensive and overreaching investigations of retirement plan sponsors -- often described as endless and aimless -- that are ultimately punishing employers and discouraging them from sponsoring retirement benefit plans."  MORE >>

Committee on Education and the Workforce, U.S. House of Representatives

Executive Compensation and Nonqualified Plans

[Guidance Overview]

2024 IRS Limits on 401(k) Plans Affect Nonqualified Plans

"November and December are when [most NQDC participants] choose how much of next year's salary to defer beyond the 401(k) limits. Factors in that decision about nonqualified plans include the newly released IRS limits that apply to qualified retirement plans.... The IRS changes in limits for 2024 are much smaller than the increases for 2023[.]"  MORE >>

Forbes; subscription may be required

Employee Benefits Jobs

View job as Regional Director
            for Employee Benefits Security Administration [EBSA]

Regional Director

Employee Benefits Security Administration [EBSA]

Remote / Atlanta GA

View job as Regional Director for Employee Benefits Security Administration [EBSA]

Selected New Discussions

Optional Match True-Up Permitted by Language of Plan Document?

"A client whose safe harbor match is based on the pay period and funded each pay period would like to make a true-up this year although it is not required. The FtWilliam PPA document contained ... language which appears to allow a discretionary true-up ... The Cycle 3 document does not contain this language (at least that I can find) and only addresses required true-ups ... Does the absence of language specifically addressing a discretionary true-up preclude the client from making one? Or, can the language in the document be interpreted as the bare minimum an employer must do, but it does not preclude something more?"

BenefitsLink Message Boards

Missing Auditors Report

"An employer of my acquaintance, who uses a well-respected 5500 software product, filed a number of 5500s timely. Upon checking on the government web site they discovered that the auditors' report was missing for one of their many plans--the remaining are fine. On further examination it looks as though it might have been omitted when everything was uploaded to the vendor's web site for filing. Don't know if this is system error or human error but obviously needs to be corrected. Any advice to avoid a penalty for an incomplete filing? Do they file an amended return even though none of the numbers changed? Should they contact the vendor? Other?"

BenefitsLink Message Boards

Is the Ability to Roll Loans from the Plan a Protected Benefit?

"We generally write our plans' loan policies to say that in the event of a participant termination, the loan can be rolled out of the plan -- this way, if the participant finds a new plan that will take it (which is a big 'if' in its own right), they can transfer the loan to the new plan, establish payments, and not have to deal with the extra taxation. ... [We] just learned that one recordkeeping platform that we work with will not play nicely with this -- their policy is to default the loan due to non-payment and then 1099-R it. They claim it is due to a system limitation. Obviously, we have to issue new loan policies to all these plans to say that they cannot do this. So.... could this be a protected benefit and therefore not allowed to be cut back?"

BenefitsLink Message Boards

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

What Does a New Rule on Financial Advice Mean for Retirement Security?


Brookings Institution

SECURE 2.0 Tax Credits for Retirement Plans

November 9, 2023 WEBINAR

Farmer & Betts

Last Issue's Most Popular Items

IBM to Scrap 401(k) Matching, Offer Alternative Benefit

The Register

IRS Announces 2024 Employee Benefit Plan Limits

McDermott Will & Emery

Maximum Benefits and Contributions Limits for 2007 to 2024

Venable LLP

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

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