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Retirement Plans Newsletter

February 20, 2024

3 New Job Opportunities 3 New Job Opportunities

 

[Guidance Overview]

Ownership Attribution Rules for ROBS Plans Focus on IRC Section 318

"For the non-plan business operations of a ROBS company, it is easy to identify the company owner -- it's the so-called 'ROBS owner,' who is very likely a corporate director and chief employee. However, for certain plan purposes, ROBS participants are only counted as owners if they meet minimum ownership thresholds under technical compliance rules."  MORE >>

KLB Benefits Law Group

[Guidance Overview]

The New Fiduciary Rule, Part 20: Requirement to Correct Failures with PTE Conditions, Part 2

"[It] makes sense, under PTE 84-24 for insurance companies to work with independent producers to draft the notifications of failures and corrections, so that the compliance efforts of the producers and the insurers are fully explained in the notification. Similarly, firms that are filing the disclosures under PTE 2020-02 should fully explain their compliance efforts and why, under the circumstances, a mistake occurred, nonetheless."  MORE >>

FredReish.com

GAO Report on 401(k) Plans: Additional Federal Actions Would Help Participants Track and Consolidate Their Retirement Savings

"401(k) participants face challenges tracking and consolidating their accounts.... 401(k) participants who recently completed a plan-to-plan rollover faced challenges understanding and complying with their plans' requirements.... GAO recommends that Congress consider granting authority to a federal agency to [1] establish a pension dashboard and [2] establish a system for automatic plan-to-plan rollovers. GAO is also making four recommendations to federal agencies to help 401(k) participants, including improving the information participants receive about options for their plan savings and the process they must undergo to consolidate their savings after changing jobs." [GAO-24-103577; pub. Jan. 18, 2024, rel. Feb. 20, 2024]  MORE >>

U.S. Government Accountability Office [GAO]

Student Loan Matching Contributions Could Particularly Benefit Small Businesses

"As a small business, you are working against a multitude of factors that make offering employee benefits difficult.... But the potential outcomes/results of fortified benefits offerings with a new benefit being available can make a big difference for your business.... [O]ffering student loan-related benefits such as matching retirement contributions can help you stand out from your competition."  MORE >>

OneDigital

Auto Rollover IRAs for Force-Outs: Controlling Fiduciary Risk and Unwanted Taxable Income

"All uncashed checks are a fiduciary risk because they remain plan assets, and there is an ongoing responsibility to search for the missing participants. In addition, using checks for force-out distributions of $1,000 or less can result in unwanted taxable income and potential penalties for participants.... Address both the fiduciary risk and unwanted taxable income by using the automatic rollover IRA for all force-out distributions -- from $1 to $7,000."  MORE >>

PenChecks

The Importance of Benchmarking Your Retirement Plan: Fiduciary and Audit Perspective

"[1] Reasonableness of fees ... [2] Optimizing investment options ... [3] Improving plan design ... [4] Evaluating your service provider capabilities ... [5] Recognizing areas of opportunity to improve ... [6] Don't forget your advisor ... [7] Plan Audits."  MORE >>

OneDigital

The Future of Financial Advice: Robot-Assisted But Still Distinctly Human

"[M]any advisors have all the tools they need to build truly comprehensive solutions for their clients.... 65% of affluent investors are willing to leave their advisors if they do not offer an integrated tech experience ... As software providers grow in number and their offerings expand in complexity, automation and cybersecurity will be central themes as client preferences continue to change."  MORE >>

Nerd's Eye View

Helping Sole Proprietors Choose Between a Solo 401(k) and a SEP-IRA

"On the surface, the solo 401(k) may appear to be unquestionably the preferable option due to having a higher potential contribution amount, along with the low fees and vast suite of investment options that SEP-IRAs have always enjoyed.... However, several nuances make this a more complicated choice for clients beyond just asking them if they want to maximize tax-favored savings limits."  MORE >>

Journal of Accountancy

Financial Accounting Treatment of Market-Return Cash Balance Plans (PDF)

19 pages. "This paper first provides background information and the rationale to seek a market-based approach for determining the obligations and costs under market-return cash balance plans. Then, [the authors] provide alternative approaches that [they] believe would faithfully represent the true economics of these plans."  MORE >>

Conference of Consulting Actuaries

[Opinion]

ERIC Comment Letter to IRS on Notice 2024-2: Miscellaneous Changes Under SECURE 2.0 (PDF)

"While ERIC strongly supported SECURE 2.0, we fully recognized that technical implementation would be challenging. The Notice issues important clarifications and states IRS' interpretation of some legislative sections that are vague or not reticulated. ERIC agrees with most of the guidance provided in the Notice, but we do provide comment on several of its sections."  MORE >>

The ERISA Industry Committee [ERIC]

[Opinion]

F.I.R.E. or I.C.E.?

"[In] his twenties [Jonathan Clements] 'cooked up this notion' that by the time he was 40 the goal was to have saved $250,000 that by 60 could grow to $1 million. At 40 he could earn just enough to cover the bills. Implicit in this notion was that doing 'as little as possible' in your 60s was the goal.... Today, at age 61 he is on the other end of that spectrum. He's now thinking that he will never retire."  MORE >>

403bwise

Employee Benefits Jobs

View job as Retirement Plan Administrator for ERISA Services, Inc.

Retirement Plan Administrator

ERISA Services, Inc.

Remote

View job as Retirement Plan Administrator for ERISA Services, Inc.

View job as Senior Retirement Client Consultant for Leading Retirement Solutions

Senior Retirement Client Consultant

Leading Retirement Solutions

Remote / Seattle WA

View job as Senior Retirement Client Consultant for Leading Retirement Solutions

View job as ERISA Consultant for Retirement Learning Center

ERISA Consultant

Retirement Learning Center

Remote

View job as ERISA Consultant for Retirement Learning Center

Selected New Discussions

Additional Distribution to RMD and No In-Service Allowed Under DB Plan

"Here is a new one for me. Told the active client RMD was 3k/month for 9 months (first year) but took 10. There is no in-service allowed under the plan document. Is this something that can be corrected under SCP? There was no withholding nor spouse consent done as I just found out and was never told about this. I know it is a small amount but I still want to make sure all ducks are in a row."

BenefitsLink Message Boards

Excess Salary Deferral Contributions

"Suppose you have a traditional 401(k) plan with about 20 participants. The plan document specifically states that salary deferral contributions in excess of 40% of Compensation are not permitted. In 2023 they had a participant with lower salary that funded salary deferrals of 70% of compensation. Since this is a violation of the plan I would think the extra 30% needs to be removed from the plan and refunded to the participant. Would the full 70% be included in the ADP test? I would think not because the plan specifically prohibits salary deferrals in excess of 40%. Does anyone agree / disagree?"

BenefitsLink Message Boards

Rolling Over IRA to Plan to Avoid RMDs

"Have a real saver of an employee who has no ownership in the company sponsoring the 401(k) plan that she is a participant in. This is a valued employee so she is an HCE. She has a substantial amount in an IRA and was thinking of rolling her IRA into the 401(k) plan to avoid having to take RMDs. She is currently 69 and is looking ahead. Anything wrong with rolling over the IRA now with the idea that she will not need to take RMDs until she actually retires, which she claims will be at least 10 years?"

BenefitsLink Message Boards

Press Releases

Virtua Health Partners with care.ai for Enterprise-wide Implementation of AI-Enabled Virtua Care Solutions for Patients

Virtua Health

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

Groom’s 26th Annual Seminar

May 16, 2024 WEBINAR

Groom Law Group

Last Issue's Most Popular Items

2024 Nondiscrimination Testing

ForUsAll

De-Risking in 2024: DB Lump Sums

October Three Consulting

DOL's New Worker Classification Rules: Do You Know Who Your Employees Are? (PDF)

Buck

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

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