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Retirement Plans Newsletter

February 8, 2024


[Guidance Overview]

SECURE 2.0 Grab Bag Guidance: De Minimis Financial Incentives

"IRS clarified that its idea of a de minimis incentive is one that does not exceed $250 in total value. A financial incentive may be in the form of installments (for example, a $100 payment with the participant’s first deferral election, and a second payment of $100 if the participant is still deferring after 6 months in the Plan), but ... the total value of the installments [must be] less than the $250 limit. ... [T]he de minimis exception would not apply to employees who are already deferring to the plan."  MORE >>

Ferenczy Benefits Law Center

[Guidance Overview]

SECURE 2.0 Guidance Gives More Flexibility to Cash Balance Plans

"These changes make it easier for plan sponsors to use pay-credit schedules that better reward older, longer-service employees. In addition, the guidance lets sponsors change the plan's interest-crediting basis to one based on the plan's actual investment return, which can better align assets and liabilities. Sponsors can immediately implement these changes, but amendments won't be due until at least Dec. 31, 2026."  MORE >>


[Guidance Overview]

The New Fiduciary Rule, Part 18: Requirement to File Form 5330 and Pay Excise Taxes

"The proposed amendments [to PTEs 84-24 and 2020-02] include a requirement that, if a failure to satisfy the conditions of the exemptions is found in the annual review of covered transactions, the failure must be corrected and reported to the DOL and, if those steps are not timely taken, a Form 5330 must be filed with the IRS and excise taxes on prohibited transactions must be paid."  MORE >>

House HELP Subcommittee to Hold Hearing on DOL’s Fiduciary Rule

"On Thursday, February 15, at 10:15 a.m., the Subcommittee on Health, Employment, Labor, and Pensions, chaired by Rep. Bob Good (R-VA), will hold a hearing titled: 'Protecting American Savers and Retirees from DOL's Regulatory Overreach.' ... The hearing is open to the press and will be live-streamed on the Committee's YouTube page."  MORE >>

Subcommittee on Health, Employment, Labor, and Pensions, Committee on Education and the Workforce, U.S. House of Representatives

Rep. Richard Neal Proposes Near-Universal Federal Auto-IRA Program

"The Automatic IRA Act... has no government match and is essentially a requirement to have ... an IRA funded by payroll deduction.... A participant ... would be defaulted for the first year of the plan at a contribution rate of 6% to 10%, which would automatically escalate by 1% until it reached 10%. Starting in the second year, plans would be able to default participants as high as 15%, but no further. Participants would be able to opt out or elect different contribution levels."  MORE >>

PLANSPONSOR; free registration may be required

Cybersecurity Firms in Demand for Identifying, Addressing Risks Faced by Retirement Plans

"[M]any plans seek out 'third-party 360 cybersecurity reviews,' where a firm will conduct a review of both the plan's cybersecurity policies and procedures, and ensure that such policies are being followed by the plan's vendors, which can include their record keeper, custodian, managed account provider and investment consultant[.]"  MORE >>

Pensions & Investments

Gen Z Outpaces Previous Generations in Retirement Savings

"While younger workers are managing more student loan debt and have suffered from ballooning expenses more than prior generations ... Gen Z households in 2022 had two-and-a-half times more assets in their DC plans -- adjusted for inflation -- than Gen Xers had in 1989 at the same age."  MORE >>

PLANSPONSOR; free registration may be required

How Sponsors Can Get the Most Out of DC Plan Design Changes

"Sponsors interested in adding guaranteed retirement income options to plans must examine the demographics of their workforce before jumping into annuity products ... Sponsors mulling over plan design changes should first ensure that they have automatic features and education campaigns to teach participants how to become wise DC investors[.]"  MORE >>

PLANSPONSOR; free registration may be required

Fixed vs. Variable Annuities: The Tables Have Turned

"A decade ago, fixed annuities made up less than a third of the market. As boomers have gotten older and sought protection over growth, that trend has reversed. Variable annuity sales will likely stay muted until the industry decides to go after younger investors."  MORE >>


Pension Finance Update, January 2024

"Pension finances improved modestly in January, as higher interest rates more than offset the impact of mixed stock markets. Both model plans ... were up a fraction of 1% for the month."  MORE >>

October Three Consulting


Why the New DOL Fiduciary Rule Is Scarier Than Ever

"This reconstituted PTE 84-24 shuns the [SEC's] Regulation Best Interest and the National Association of Insurance Commissioners' model regulation in favor of new requirements that force brokers and agents to declare they are fiduciaries, strangulates many forms of compensation, makes inadequate allowances for the role of independent marketing organizations, and imposes draconian supervisory obligations upon insurers. It should send chills up the spines of agents and IMOs who cherish their independence and current way of doing business."  MORE >>


Benefits in General

[Official Guidance]

IRS Disaster Relief Announcement WV-2024-01, for West Virginia Taxpayers Impacted by Severe Storms, Flooding, Landslides and Mudslides

"[I]ndividuals and businesses in parts of West Virginia affected by severe storms, flooding, landslides and mudslides that began on Aug. 28, 2023 ... now have until June 17, 2024, to file various federal individual and business tax returns and make tax payments.... [I]ndividuals and households that reside or have a business in Boone, Calhoun, Clay, Harrison, and Kanawha counties, qualify for tax relief."  MORE >>

Internal Revenue Service [IRS]

Selected New Discussions

RMD Penalty Abatement

"Does anyone know how to request that the IRS abate the now 10% penalty tax on a missed RMD for 2023? I know no one knows if they will abate now that they have reduced it but I still think that the same logic of 'don't stick it to an octogenarian living off of social security for a silly mistake' should still rule the day.... Regardless I'm going to give it a shot but curious if anyone knows how it is done!"

BenefitsLink Message Boards

Perjury Charge for CARES Distribution

"I wasn't aware of this case until just this week. Have other folks been following it? What do people think? Its so rare that I hear about a participant getting in trouble for a bad self-certification, so I find this one interesting! I know that likely if lots of other circumstances weren't also at issue the perjury one case likely wouldn't have been brought, but maybe I'm wrong. I know many of you have interesting insight and opinions so was just curious."

BenefitsLink Message Boards

Press Releases

Tax Season 2024: Updated Resources Offer Crucial Guidance on Tax Returns and Reporting

Vitality Appoints Distinguished Health Plan Executive Steve Margolis as President


Payroll Integrations Automates Admin Hassles of 401(k) Compliance Testing

Payroll Integrations

Voya Evolves Suite of Advice and Guidance Solutions with Launch of New Dual QDIA

Voya Financial

The ESOP Association Prepares to Release Proposed Regulatory Framework

ESOP Association

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

2024 Employee Benefits Webinar: Public Sector Employers


Hanson Bridgett

Understanding Roth: From Employer Sponsored Plans to Individual Planning

February 15, 2024 in CA

Western Pension & Benefits Council

Last Issue's Most Popular Items

IRS Employee Plans News: Pre-Examination Compliance Pilot 2.0 (PDF)

Internal Revenue Service [IRS]

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


Draft of IRS Publication 590-B: Distributions from Individual Retirement Arrangements (IRAs), for Use in Preparing 2023 Returns (PDF)

Internal Revenue Service [IRS]

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

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