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Retirement Plans Newsletter

March 26, 2024

4 New Job Opportunities 4 New Job Opportunities


[Guidance Overview]

Audit Requirement for New Plans: Counting Participants in the First Year

"Since the intention of the new rules was not to eliminate audits for all first year plans, the 2023 Form 5500 instructions indicate that for plans that check Form 5500, Part 1, Line B to indicate that the plan is 'the first return/report,' then a plan will use the end of year participant account balances to determine the filing status of the plan for the plan year."  MORE >>

Belfint Lyons Shuman

[Guidance Overview]

The New Fiduciary Rule, Part 25: Robo Advice and Robo Conflicts

"When pure robo advice (no human directly involved) or hybrid robo advice is given, if it satisfies the regulatory definition of fiduciary advice, the financial institution will be a fiduciary under ERISA (if to an ERISA plan or a participant in such a plan) and subject to ERISA's duties of prudence and loyalty. If robo advice generates a fiduciary recommendation that is conflicted, the conflicted amount (e.g., commissions, management fees) will be a prohibited transaction under ERISA and the Code, which would necessitate compliance with the conditions of a prohibited transaction exemption (PTE)."  MORE >>

AT&T and Lockheed Suits Mark First Real Test for Pension Transfers

"Thole could pose a big problem for the plaintiffs ... because they'll have to show a material risk that they will lose all or part of their benefits.... That would require showing that the annuity provider is likely to default, and that the relevant state insurance guaranty associations charged with protecting policyholders wouldn't be able to step in and address the situation[.]" [Piercy v. AT&T Inc., No. 24-10608 (D. Mass. complaint filed Mar. 11, 2024); Konya et al. v. Lockheed Martin Corp., No. 24-0750 (D. Md. complaint filed Mar. 13, 2024)]   MORE >>

Bloomberg Law

Schlichter Explores Pension Risk Transfer Lawsuit Against Alcoa

"The law firm that seems ready to make pension risk transfers its next big focus of class actions -- Schlichter Bogard -- last week posted an ad ... seeking Alcoa retirees and pension beneficiaries to join a case that so far has not been filed. Schlichter Bogard is behind the lawsuit against Lockheed as well as one of the two cases against AT&T."  MORE >>

InvestmentNews; subscription may be required

Small Business Retirement Plans: How Firms Perceive Benefits and Costs

"Factors that affect whether small firms offer a plan include firm size, wages, and industry, as well as beliefs on whether it will help attract workers. The main barriers to offering a plan are concerns about the stability/size of the firm and the perceived costs of a plan. Concerns about costs are driven by misperceptions; many firms are unaware of lower-cost options for employers and tax credits. The results also suggest that state auto-IRA programs are more likely to encourage than discourage firms from offering their own plan."  MORE >>

Center for Retirement Research at Boston College

The 3-Letter Plan Type You Haven't Heard Of

"Defined Contribution Groups -- DCGs -- offer another option for sponsors seeking to simplify some administrative tasks.... Plan sponsors that are members of a DCG are still sponsors of a single-employer plan, but the DCG sponsor, known as a direct-filing entity, files a consolidated Form 5500, called Form 5500-DCG, on behalf of all members of the group."  MORE >>

PLANSPONSOR; free registration may be required

2023 California Teacher Retirement Pension Payout Data

"While no two state plans are exactly the same, it's instructive to see what retiring teachers in California can expect from their defined benefit plan. Keep in mind that California is one of about a dozen states where teachers don't pay into Social Security."  MORE >>


What is a Non-Guaranteed Retirement Income Payout? (PDF)

"Under a NGRIP the retiree assumes the investment risk associated with their retirement account balance as well as the risk of living longer than their account balance will last (longevity risk). Though benefits are not guaranteed, many retirees may prefer a NGRIP over a guaranteed income option for reasons that include, but are not limited to, flexibility and lower costs."  MORE >>

Institutional Retirement Income Council [IRIC]


Coalition Amicus Brief Supporting District Court Jury Instructions as to Prudence Standard in Yale Fiduciary Breach Case (PDF)

"The plaintiffs (and the [DOL]) ... [argue] that the defendants should have been required to prove that a prudent fiduciary 'would have' (not 'could have') made the exact same decisions. But that standard finds no foothold in ERISA. Assuming a burden-shifting framework for loss-causation, the standard applied by the district court is sensible: if the decisions could have been reached through a prudent process, then the defendants' lack of a prudent process was a harmless error, rather than the cause of any loss." [Vellali v. Yale Univ., No. 16-1345 (D. Conn. Jun. 28, 2023; on appeal to 2d Cir. No. 23-1082)]  MORE >>

The ERISA Industry Committee [ERIC]

Benefits in General

[Official Guidance]

Text of IRS Announcement IR-2024-81: Relief for Taxpayers Impacted by Severe Storms, Landslides and Mudslides in Alaska

"The [IRS announced] tax relief for individuals and businesses in the Wrangell Cooperative Association of Alaska Tribal Nation that were affected by severe storms, landslides and mudslides that began on Nov. 20, 2023. These taxpayers now have until July 15, 2024, to file various federal individual and business tax returns and make tax payments."  MORE >>

Internal Revenue Service [IRS]

[Guidance Overview]

Penalties for Certain Employee Benefits Failures

Chart lists and describes penalties applicable to retirement and health plans.  MORE >>

KLB Benefits Law Group

Mutual Mistake Under ERISA (PDF)

"[B]ecause reformation is a form of equitable relief, courts have sustained claims for equitable relief under ERISA Section 502(a)(3).... [In] the absence of fraud or inequitable conduct, a unilateral mistake will generally not justify the equitable reformation of a contract ... In the context of ERISA plans, mistake is measured by comparing the actual terms of the plan to the baseline of the beneficiaries' objective, reasonable expectations about the scope of benefits provided."  MORE >>

The Wagner Law Group, via Benefits Law Journal

Employee Benefits Jobs

View job as Retirement Plan Administrator for Bates & Company, Inc.

Retirement Plan Administrator

Bates & Company, Inc.

Remote / Winter Park FL

View job as Retirement Plan Administrator for Bates & Company, Inc.

View job as Lead Plan Admin Analyst - Retirement Plans for Ameritas

Lead Plan Admin Analyst - Retirement Plans


Remote / Lincoln NE

View job as Lead Plan Admin Analyst - Retirement Plans for Ameritas

View job as Lead Business System Specialist - Retirement Plans for Ameritas

Lead Business System Specialist - Retirement Plans


Remote / Lincoln NE

View job as Lead Business System Specialist - Retirement Plans for Ameritas

View job as Senior Retirement Analyst for Dunbar, Bender & Zapf, Inc.

Senior Retirement Analyst

Dunbar, Bender & Zapf, Inc.

Remote / Pittsburgh PA

View job as Senior Retirement Analyst for Dunbar, Bender & Zapf, Inc.

Selected New Discussions

Counting Ineligible Participants with Balance

"Employee incorrectly made 401k contributions during year and had a balance at eoy. This was found after year end and returned timely. For 5500 count purposes -they are not a participant but they have a balance. But count with balances can't exceed eoy participant count. So I'm guessing, treat them as a participant for 5500 count purposes."

BenefitsLink Message Boards

Third Party Employer of Record for Hiring Residents of Another Country

"A prospect we have been working with is in the software industry and uses a third-party Employer of Record for a worker that they have in the United Kingdom. This Employer of Record is the legal employer of this worker. Our plans typically use the Non Resident alien exclusion. I'm trying to determine if this arrangement would meet the Non Resident Alien with no US Source income exclusion and the question stops there. If it doesn't, has it been anyone's experience that the arrangement holds up to the IRS standard that this worker is not actually the employee of the plan sponsor?"

BenefitsLink Message Boards

Press Releases

Roger Hobby Joins Empower as EVP for Personal Wealth


The SPARK Institute Elects New Governing Board Officers

SPARK Institute

FiduciaryxChange Helps Drive Pooled Employer Plan (PEP) Popularity


Last Issue's Most Popular Items

DOL Releases Proposed Regs for Automatic Portability Transactions


DOL Releases Final Rule Clarifying Employee or Independent Contractor Status


Supreme Court Asked to Establish Uniform Standards for Prohibited Transactions

Pensions & Investments

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

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