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Retirement Plans Newsletter

January 23, 2024


[Official Guidance]

Text of DOL Final Regs: Procedures Governing the Filing and Processing of Prohibited Transaction Exemption Applications

154 pages. "The Final Amendment makes the exemption application process more efficient by reducing or eliminating delays caused when information is missing from exemption applications, and they are otherwise incomplete. It also tries to ensure that all entities have the same access to the exemption transaction process by making all steps of the process transparent.... The Department emphasizes in the Final Amendment that it will apply a high level of scrutiny to any retroactive exemption application ... [T]he Department has revised the regulatory text in the Final Amendment to clarify that the Department will provide feedback in response to oral inquiries, but it will not be bound by that feedback."  MORE >>

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


Pensions on Peachtree IN PERSON April 15-16, 2024 – Register Now!

Ferenczy Benefits Law Center presents the Pensions on Peachtree (POP) Conference on April 15-16, 2024 in Atlanta, GA. Earn 15 CE credits and attend the renowned BBQ hosted by Alison. Space is limited - Don't miss out. Register Now!

Sponsored by Ferenczy Benefits Law Center

[Official Guidance]

Draft of Instructions for IRS Form 8915-F: Qualified Disaster Retirement Plan Distributions and Repayments (PDF)

56 pages, Jan. 22, 2024. "As a result of section 331 of the SECURE 2.0 Act of 2022 ... you are now eligible for the benefits of Form 8915-F if you were adversely affected by a qualified 2021 or later disaster and you received a distribution described in Qualified Disaster Distribution Requirements or Qualified Distribution Requirements[.]"  MORE >>

Internal Revenue Service [IRS]

[Guidance Overview]

DOL Announces Amendments to Prohibited Transaction Exemption Filing, Processing Procedures

"The Exemption Procedure Regulation promotes the department's prompt and efficient consideration of all prohibited transaction exemption applications by, among other things: [1] Clarifying the types of information and documentation required for a complete application. [2] Revising the definitions of a qualified independent fiduciary and qualified independent appraiser in order to ensure their independence. [3] Clarifying the content of specific reports and documents applicants must submit in order to ensure that the department receives sufficient information ... to issue an exemption. [4] Updating various timing requirements to ensure clarity in the application review process. [5] Specifying items that are included in the administrative record for an application and when the administrative record is available for public inspection. [6] Expanding opportunities for applicants to submit information to the department electronically."  MORE >>

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

[Guidance Overview]

Detailing the DOL's Auto-Portability Proposal

"Service providers would be permitted to charge a reasonable fee to default the assets of individual retirement account holders to a new employer-sponsored plan under a proposal published [January 19] by the [DOL].... A service provider may make this default IRA-to-plan rollover without the participant's affirmative consent 'after such individual has been given advance notice of the transfer and has not affirmatively opted out of such transfer.' "  MORE >>


[Guidance Overview]

Pension-Linked Emergency Savings Accounts: Qualified Plans Can Provide More Than Just Retirement Benefits (PDF)

"Although there are a number of options available for emergency savings accounts, this is the first one that provides both a way to encourage retirement savings ... and at the same time provide a tax-advantaged way to meet immediate financial needs that arise in one's day-to-day activities."  MORE >>

Groom Law Group, via Journal of Pension Benefits

[Guidance Overview]

The New Fiduciary Rule, Part 16: Permissible Compensation under PTE 2020-02

"This article focuses on limitations on compensation under PTE 2020-02. However, compensation of advisors and their firms is often an element of the costs of the services and products, and thus can also be part of the consideration of costs. While the general rule in ERISA and the Code is that compensation cannot be more than a reasonable amount, the PTE has additional limitations."  MORE >>

How the Supreme Court's Chevron Decision Might Impact the Retirement Plan Industry

"Plan sponsors that have relied on [DOL] interpretation may find themselves immediately at risk. Past assumptions will no longer guarantee courtroom invulnerability.... [R]educing the role of Chevron in the regulatory process may make life easier for plan sponsors in the long run."  MORE >>

Fiduciary News; free registration required

Retirement Policy: What to Expect in 2024 and Beyond

"Even with significant uncertainty about the legislative outlook in Washington, retirement reform should remain an area of potential ongoing bipartisan agreement in the years ahead, following on the success of both the Secure Act and its Secure 2.0 Act sequel."  MORE >>


Fiduciary Duties for Governmental Retirement Plan Sponsors

"Some states may specify who is a fiduciary of its governmental plans in addition to a plan trustee, but many states may not. State statute may also provide explicit guidance on fiduciary duties in certain contexts. Many state laws mirror ERISA fiduciary laws ... Even if it appears that no state fiduciary law directly applies to your governmental plan, other state laws may impose liability[.]"  MORE >>

Bricker Graydon

California Appellate Court Affirms Retirement Board's Limits on Inclusion of 'Straddled' Leave Cashouts in Retirement Allowance Determinations

"The Alameda decision resolved the constitutionality of one key aspect of PEPRA as it applies to members of CERL retirement systems who first were enrolled in certain California public retirement plans prior to January 1, 2013 ('legacy' or 'classic' members). The VCERA decision has now given further force, and meaning, to the Alameda decision. As anticipated, however, the scope of Alameda and its application in particular circumstances continues to be the subject of debate and litigation." [VCERA v. County of Ventura, No. B325722 [Calif. Second DCA Jan. 4, 2024)]  MORE >>

Nossaman LLP

UAW to Corporations: Guarantee Retirement Income or Face a General Strike

"UAW is launching a two-pronged strategy to bring those defined benefit pensions back, not just for Auto Workers, but for the entire U.S. workforce.... UAW structured its contracts with Ford, GM and Stellantis to all expire on May Day, 2028 -- and [UAW President Shawn Fain is] going to lobby other unions to do the same thing, and for the same cause.And what happens if corporate America resists?  ... 'A general strike,' Fain warned."  MORE >>

People's World


Teresa Ghilarducci: 401(k) Experiment Has Failed, Fueled U.S. Retirement Crisis

"The data that Ghilarducci cites in the new book ... [include] an Urban Institute study showing 61% of households with people aged older than 65 had debt in 2016, up from 38% in 1989 ... Much of the loss of their security came from the loss of defined benefit plans for ordinary people,' said Ghilarducci."  MORE >>

Pensions & Investments

Benefits in General

[Official Guidance]

IRS News Release IR-2024-17: Connecticut Taxpayers Impacted by Storms Qualify for Tax Relief

"[I]ndividuals and businesses in parts of Connecticut affected by severe storms, flooding and a potential dam breach that began on Jan. 10 ... now have until June 17, 2024, to file various federal individual and business tax returns and make tax payments.  ... Currently, this includes New London County, including the Mohegan Tribal Nation and Mashantucket Pequot Tribal Nation."  MORE >>

Internal Revenue Service [IRS]

DOL's Employee Benefits Audit Quality Study: Key Takeaways

"[This DOL report] covers the last year before auditors were required to comply with the new Statement on Auditing Standards (SAS) No. 136 ... Of the 307 plan audits reviewed, 30% contained major deficiencies ... The audit areas with the most deficiencies were participant data (15.6%), contributions received and receivable (15.3%), and benefit payments (9.4%)."  MORE >>

Berry, Dunn, McNeil & Parker, LLC

Executive Compensation and Nonqualified Plans

Employee Stock Plans: International Reporting Requirements (PDF)

"This White Paper highlights some of the principal annual or quarterly reporting requirements for employee stock plans that multinational companies most commonly encounter when offering these programs to their employees in selected jurisdictions worldwide. A chart summarizing these items appears at the end of [the paper]."  MORE >>

Jones Day

Selected New Discussions

Money Purchase Plan Overdeposit

"I have an NFP MP plan with an hours requirement to get the allocation. They make deposits during the year to estimate the annual contribution (it's a straight formula, so in theory this is easy to calculate each month). This year, they put in too much because someone ended up not working the required hours. So this is an excess contribution to the plan based on the formula, not the 415 limit for anyone (and not over 404, not that they have a deduction to worry about). Does it have to be refunded? Any penalty? I know the plan sponsor is going to want to let it stay in the plan; is that subject to an excise tax then?"

BenefitsLink Message Boards

Is Jury Duty Pay a Fringe Benefit or Regular Pay?

"Plan excludes fringe benefits from definition of compensation. Is jury duty pay included or excluded from plan compensation? I have not been able to find anything definitive."

BenefitsLink Message Boards

Are These Independent Contractors or Employees?

"Real estate agent Joe operates as a corporation, only owner, only employee. Checked the website and Joe has a team, Mary, sales associates and Jane, marketing manager. I am told that Mary and Jane are both paid as 1099 employees. The burden of proof for independent contractor is not me, the TPA Joe wants to set up DB and 401k plans. So, what is wrong with this picture?"

BenefitsLink Message Boards

Press Releases

New Survey Reveals 86 Percent of Benefits Leaders Recognize Need for Heart Health Strategy in 2024

Hello Heart

Encore Fiduciary (Formerly Euclid Fiduciary) Releases Authoritative Benchmark Survey on Recordkeeping Fees for Large Defined Contribution Plans

Encore Fiduciary

Financial Accounting Foundation Launches Redesigned Website for the Financial Accounting Standards Board; Additional Sites Premiere Soon

Financial Accounting Foundation

NCPERS Recognizes Industry Leaders with Inaugural Public Pension Communicator of the Year Award

National Conference on Public Employee Retirement Systems [NCPERS]

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

Revisiting Pooled Employer Plans (PEPs): A Cost-Effective, Low-Risk Solution for Providing Retirement Plan Coverage, Part 1


Ropes & Gray

2024 Employment & Employee Benefits Seminar

February 7, 2024 in NC

Poyner Spruill

Fundamentals of Qualified Retirement Plans (2024): Session 4

February 22, 2024 WEBINAR


The Fiduciary Saga Continues

March 6, 2024 WEBINAR

Worldwide Employee Benefits Network [WEB]

Last Issue's Most Popular Items

Employee Benefits Plan Transition and Integration Decisions Continue After M&A Transactions Close

Morgan Lewis

IRS Proposes Long-Term, Part-Time Worker 401(k) Eligibility Rules


IRS Updates Minimum Present Value Requirements for DB Plan Distributions

American Retirement Association [ARA]

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

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