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Retirement Plans Newsletter

December 5, 2023


The Anatomy of a Qualified Replacement Plan

"[A] Plan Sponsor must pay a 50% excise tax on excess assets that are reverted to the Plan Sponsor at a defined benefit plan's termination.... [A qualified replacement plan (QRP)] must meet certain requirements ... [1] The replacement plan must cover at least 95% of the participants of the terminating plan; [2] At least 25% of the excess assets must be transferred to the replacement plan; and [3] The transferred excess assets must be allocated as contributions over a period not longer than seven years in the replacement plan."  MORE >>

Ferenczy Benefits Law Center


Next-Level Health & Welfare Administration

FTW & RTO Benefits have partnered to deliver the most advanced solution to the Health & Welfare market. Together we’re redefining Health & welfare compliance. Learn More!

Sponsored by Wolters Kluwer / ftwilliam

Incorporating Alternatives Into DC Plans Brings Challenges, Opportunities for Plan Sponsors

"U.S. plans allocate about 1.1% of assets in target-date funds to alternatives and 1.9% of assets in balanced options to alternatives. In comparison, Australian DC plans -- the most competitive DC market in the world -- allocate about 25.3% of assets under management in alternatives. Defined benefit plans ... tend to have higher allocations to alternatives."  MORE >>

PLANSPONSOR; free registration may be required

The Dirty Secret About Collective Investment Trusts

"[B]ecause they appear similar, some incorrectly assume there's no practical difference between CITs and mutual funds. This is not correct.... CITs can only be offered within the confines of a trust relationship. That means the plan itself might be structurally different than one that has an investment menu limited to mutual funds. In the end, there are pros and cons to both CITs and mutual funds."  MORE >>

Fiduciary News; free registration required

Pension Finance Update, November 2023

"Pension finances were mixed in November, as lower interest rates pushed up liabilities while higher stock markets increased asset values. Both model plans ... were close to even on the month. [T]raditional Plan A ended November up 9% for the year, while the more conservative Plan B is up almost 2% through the first eleven months of 2023."  MORE >>

October Three Consulting


Challenge for Plan Sponsors: Key Fiduciary Liability Risk Management Questions

"[V]ery few plan advisers provide any sort of fiduciary training to plan sponsors.... [P]lan sponsors are often left with no ideas and no tools on to to conduct their legally required independent investigation and evaluation of potential plan investment options.... [This article discusses] three common situations that plan sponsors typically encounter."  MORE >>

The Prudent Investment Adviser Rules

Benefits in General

[Guidance Overview]

Checking It Twice: End of Year Actions for Benefit Plans (PDF)

"[1] Long-term part-time administrative changes ... [2] SECURE 2.0 Optional changes.... [3] Pre-approved plans with discretionary match ... [4] Qualified retirement plan routine year-end maintenance ... [5] Gag clause prohibition compliance ... [6] [MHPAEA] comparative analysis ... [7] Cafeteria plan 'family glitch' amendment."  MORE >>

Eversheds Sutherland

Using AI in Employee Benefits

"During open enrollment season, an AI platform could send out personalized reminders and help employees learn about their benefits.... Employers can use AI to sift through employee data ... and make recommendations for all kinds of benefits applications.... A chatbot could potentially answer basic questions about benefits and be used during onboarding for new employees or for all employees throughout the year.... What are the risks?"  MORE >>

International Foundation of Employee Benefit Plans [IFEBP]

Make the Most of Your Benefits Administration Platform

"Eligibility errors introduced during implementation can result in employees not getting the right benefits at the right time.... 'What if' scenarios challenge the standard operation of your platform by introducing rare, specific or nuanced situations ... Look at the full end-to-end spectrum and test how your requirements interact with each other in your system to avoid a domino effect when making changes to certain benefits.... Develop onboarding templates to help ensure there is no missing information when adding new employees to your system."  MORE >>

Corporate Synergies

Avoiding and Mitigating M&A Integration Issues in Employee Benefits (PDF)

"Most of a target company's employees will not be aware that their company will be part of an add-on acquisition until it has already happened.... Effective harmonization involves creating a seamless integration process that educates participants about the program's features and addresses their individual needs and concerns."  MORE >>


Selected New Discussions

Takeover Plan: Issues with Prior TPA

"I know that ultimately the Plan Sponsor is responsible for all plan compliance, and this is clearly stated in any service agreement with a TPA. In this case, prior TPA did not seem to communicate effectively that a new plan set up a few years back had a 5500 requirement. In fact, they are a large plan with an audit requirement attached to the 5500. There are more circumstances related to lack of consulting services, such as creating a Plan Doc that wasn't really a fit for the organization. As a result there are major, and costly corrections that need to be made. I think there is no recourse, due to my first statement above, but just wondering about any other similar experiences. The Plan Sponsor wants to press the prior TPA for costs incurred due to negligent servicing."

BenefitsLink Message Boards

Press Releases

Hub International Strengthens Wealth Management and Retirement Consulting Services with AFS 401(k) Retirement Services, LLC and AFS Financial Group, LLC in Maryland

HUB International

Alliant Insurance Services Expands Retirement Consulting Footprint in the Northeast with FJC & Associates Acquisition

Alliant Insurance Services

Last Issue's Most Popular Items

Long-Term, Part-Time Employees: A Summary of the IRS Regs (PDF)

Smith, Gambrell & Russell, LLP

2023 End of Year Plan Sponsor 'To Do' List for Qualified Retirement Plans

Snell & Wilmer

Text of Draft Instructions for 2024 IRS Forms 1099-R and 5498: Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, Etc. (PDF)

Internal Revenue Service [IRS]

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

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