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Retirement Plans Newsletter

January 2, 2024

2 New Job Opportunities 2 New Job Opportunities


DOL Retirement Security Proposal Would Extend Fiduciary Duty to Annuity Sellers

"The change from the five-part test's 'regular basis' prong to persons providing investment recommendations 'on a regular basis as part of their business' would ... [make] one-time advice, such as rollover advice, covered by the fiduciary standard.... [PTE 2020-02] would be expanded to cover certain transactions involving pooled employer plans and transactions involving 'pure' robo-advice providers.... The only permissible compensation would be the upfront commission, the renewal fee and any trailing fees."  MORE >>

SECURE 2.0 Provisions Will Affect Individuals Planning to Retire in 2024

"Adjustments to RMDs include an increased age to start and their elimination in Roth 401(k) accounts. A number of tax cuts are sunsetting at the end of 2025, perhaps most notably the lifetime estate tax exemption.... The Secure 2.0 Act eliminated RMDs on Roth 401(k)s and other Roth accounts in qualified plans such as a Roth 403(b) ... [C]ontribution limits for 401(k)s, 403(b)s and other employer-sponsored retirement plans are increasing in 2024."  MORE >>


State and Local Pension Funds 2022

"Total reported unfunded liabilities increased to $1.572 trillion from $1.076 trillion in the prior year, due to weak investment returns and actuarial factors.... [T]he market value of the unfunded liability fell to $5.120 trillion from $6.501 trillion due to substantial increases in risk-free discount rates ... Employer contributions increased substantially, with the contribution rate as of payroll rising from 26.9% in 2021 to 28.3% in 2022."  MORE >>

Oliver Giesecke and Joshua D. Rauh, via SSRN

Fiduciary Resolutions for 2024

"[1] See if your target-date options are over-weight(ed) ... [2] Pump up the default rate in your auto-enrollment plan ... [3] Give reenrolling a second thought  ... [4] Develop a plan budget."  MORE >>

Data 'Points'


A Curious Paradox: 'Meaningful Benchmarks,' Fiduciary Prudence, and the Active Management Value Ratio

"While ERISA and other cases, most notably the First Circuit's Brotherston decision ... have clearly established the validity of comparable index funds as legitimate comparators in ERISA litigation, the courts continue to ignore such arguments and authority.... Can anyone truthfully argue that a prudent fiduciary would select cost-inefficient mutual funds when more cost-efficient investment options are available?"  MORE >>

The Prudent Investment Adviser Rules


American Securities Association Says DOL Acting Secretary Cannot Finalize Fiduciary Proposal

"The letter ... is a possible preview of many of the legal arguments that will arise in litigation if the rule is finalized.... The ASA's letter argues that Acting Secretary of Labor Julie Su ... lacks the authority to finalize rules because she is serving her post in an acting capacity.... This group's argument against the legality of the proposal has been largely absent from the debate over the rule."  MORE >>



Are You Prepared for the Evolution of Retirement?

"[As] people live longer, they are spending more time in retirement, which has the potential of straining resources ... Popular opinion will often suggest taking on more investment risk to grow assets, but the opposite may be true when you add in sequence of returns risks, inflation, taxes, market volatility and medical costs to the equation.... Transferring risk away from you and finding ways to move things into your control helps to prevent unforeseen problems that put your retirement at risk."  MORE >>



ERIC Comment Letter to EBSA on Proposed Retirement Security Rule (PDF)

"ERIC writes to recommend improvements to enhance the ability of large plan sponsors to provide meaningful benefits to tens of millions of working Americans.... [1] The Department should not change the obligations of employer human resources Services ... [2] The investment education interpretive bulletin should not be weakened ... [3] DOL should permit IRS-approved non-bank trustees to use PTE 2020-02."  MORE >>

The ERISA Industry Committee [ERIC]

Benefits in General

[Official Guidance]

DOL EFAST2 Website Updated for 2023 Plan Year Filings

"EFAST2 website credentials have changed to You can no longer sign into this website with an EFAST2 User ID and Password. On January 1, 2024 EFAST released the 2023 Form 5500, 5500-SF, and 5500EZ for filing of annual returns/reports. Electronic filing for Form 5558 is unavailable for form year 2023."  MORE >>

U.S. Department of Labor [DOL]

Employee Benefits Jobs

View job as Employee Benefits Account Manager for U.S. Retirement & Benefits Partners

Employee Benefits Account Manager

U.S. Retirement & Benefits Partners

Wayne PA / Hybrid

View job as Employee Benefits Account Manager for U.S. Retirement & Benefits Partners

View job as Plan Administrator for Atlantic Pension Services Inc

Plan Administrator

Atlantic Pension Services Inc

Kennett Square PA

View job as Plan Administrator for Atlantic Pension Services Inc

Selected New Discussions

Eligibility for Contributions Plan with Last Day Requirement Terminates Before Year End

"If a plan terminates, and the plan had heretofore stipulated a concluding day of the plan year condition for eligibility for an allocation, and the effective date of the plan termination occurs prior to the hitherto calibrated end of the plan year, prima facie the last day of plan year employment eligibility condition resynchronizes to the effective date of plan termination. Please provide guidance on this situation."

BenefitsLink Message Boards

Successor Plan with New Partnership

"3 software developers worked 10 years as independent contractors for 'Business Software Company' that was 100% owned by 'Investment Company'. There were no Employees of Business Software Company or Investment Company. In 2022 the 3 developers, as a new partnership 'Partnership' purchased 75% ownership of Business Software Company, each partner now owns 25% and the remaining 25% still owned by Investment Company. The Software Company appears to be unrelated to Investment Company. The 3 independent contractors may/may not have had individual 401(k) Plan (we were told one possibly has one). One of the partners of the new partnership came to us looking to start a new plan. Should we be concerned about the successor plan rule?"

BenefitsLink Message Boards

Press Releases

The Cerrado Group Announces Addition of Three New Member Firms

The Cerrado Group

Morningstar Retirement joins the Retirement Advisor Council

Retirement Advisor Council

Franklin Templeton Completes Acquisition of Putnam Investments

Franklin Templeton

Last Issue's Most Popular Items

IRS Says Keep Those Class Exclusions Classy Under Long-Term, Part-Time Employee Rules

McDermott Will & Emery

IRS SECURE 2.0 'Grab Bag' Guidance: Cash Balance Plans

October Three Consulting

IRS Employee Plans News: Required Minimum Distributions (PDF)

Internal Revenue Service [IRS]

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

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