"Key clarifications in [Fact Sheet 2024-19] include ... [1] Distributions and loans are available only to individual participants or IRA account owners who have experienced an economic loss due to a qualified disaster and whose principal residence is in the disaster area. Dependent and beneficiary residences do not count.... [2] The $22,000 distribution limit is per person, per disaster. It is not per plan or per IRA, nor is it an annual limit. [3] A plan sponsor can choose to permit disaster distributions, expanded disaster loans, or delayed loan repayments. Plan sponsors can also choose to permit some or all these options."  MORE >>

"[M]any retirement plan third-party administrators (“TPAs”) are seeking approval to be an AEP during 2024 and are anticipating being in a position to e-file the Forms 5330 before the filing deadline of March 31, 2025 (applicable to the deadline for the excise taxes on late corrective distributions from a retirement plan that occur in 2024). However, these TPAs cannot guarantee approval prior to the deadline. Unfortunately, employers do not have the option of filing the Forms 5330 by paper even with the lack of AEPs."  MORE >>

68 pages. "Rollover advice is explicitly included in the regulation as a form of fiduciary advice.... PTE 2020-02 ... would be the flagship DOL exemption providing relief for conflicted investment advice ... Compliance with other 'best interest' and conflict mitigation regulations [does] not suffice under PTE 2020-02.... [T]he application of the Final Rule to insurance distribution remains complex.... [E]lements of the Final Rule create the predicate for a potential private right of action by IRA owners."  MORE >>

"A quick comparison reveals that the most significant change is in the additional requirement that the recommendation must reflect the application of professional or expert judgment to the retirement investor's particular needs or individual circumstances."  MORE >>

"[P]laintiffs' claim that the administrator provided substantially inaccurate pension benefit statements was cognizable under Section 1025(a)(1)(B)(ii). The panel also concluded that plaintiffs adequately pleaded an ERISA violation based on their allegation that they made written requests sufficient to trigger the duty to produce pension benefit statements. The panel rejected the administrator's argument that there were no remedies available for the ERISA violations plaintiffs alleged. Accordingly, the panel reversed the district court's dismissal of plaintiffs' claims ... and remanded for further proceedings." [Bafford v. Northrop Grumman, No. 22-55634 (9th Cir. May 9, 2024)]  MORE >>

"With a split among the five circuit courts that have weighed in, a vigorous dissent in the Second Circuit's decision, and another circuit court decision expected soon, we may see the issue make its way to the Supreme Court in the not-too-distant future." [Cedeno v. Sasson, No. 21-2891 (2d Cir. May 1, 2024)]  MORE >>

"The FACC's complaint relies heavily on a 2018 Fifth Circuit case -- binding in the Eastern District of Texas -- that struck down a 2016 iteration of the Fiduciary Rule, arguing that the 2024 Fiduciary Rule is 'effectively indistinguishable' from the 2016 rule that was vacated in full ... The complaint also alleges that the speed with which DOL promulgated the Fiduciary Rule ... demonstrates both that the Rule is merely a 'regurgitation' of the 2016 rule and DOL's 'zeal to reach the desired result of turning every financial product salesperson who deals with a retirement investor into a fiduciary.' " [Federation of Americans for Consumer Choice Inc. v. DOL, No. 24-0163 (E.D. Tex. complaint filed May 2, 2024)]  MORE >>

"Among the top concerns facing retired Americans are: Inflation lessening the value of assets (89%); Higher than expected healthcare costs (85%); A major market downturn significantly reducing assets (76%); Not knowing how to best generate income and/or draw down assets (69%); Outliving assets (68%)."  MORE >>

"The combined Social Security trust fund reserves are projected to become depleted during 2035, one year later than was projected in last year's report.... The 75-year actuarial deficit decreased from 3.61% of taxable wages to 3.50% of taxable wages. The trustees lowered the ultimate total fertility rate assumption from 2.0 to 1.9 children per woman, increased short-term economic growth, and changed the disability assumptions."  MORE >>

"The 2024 report projects a long-range funding shortfall. The funding shortfall is largely a result of rising costs over the 75-year projection period, primarily due to demographic trends.... In the 2024 report, the size of the payroll tax increase and benefit reduction needed to maintain solvency are smaller than estimated in 2023. However, each report shows that larger changes -- payroll tax increases or benefit cuts -- are needed as the insolvency date approaches." [IF12663 May 10, 2024]  MORE >>

"401(k) Specialist has retracted a post originally published on May 2 that contained factual errors relating to collective investment trusts in target date funds." [BenefitsLink note: The original article was included in the May 2 Retirement Plans Newsletter.]  MORE >>

"After some pension plans recently made decisions focused on leveraging investment behavior to achieve environmental goals or to pursue geopolitical ends in China, a few lawmakers are now pushing local economically targeted investments into the limelight. These proposed investments are another deviation from pension plans' fiduciary responsibilities to their members and taxpayers ... Economically targeted investments introduce unnecessary risks for public pension funds that should be avoided."  MORE >>

"[T]he presiding judge ... issued a series of Orders that require all briefing on the request to stay/enjoin the FTC Rule to be completed by June 12. The Court will then announce by June 13 whether it will make a decision based on the parties' briefing or conduct a hearing, which would take place on June 17.... [T]he Court has committed to issuing a decision by no later than July 3 on the request to stay/enjoin the FTC Rule from going into effect." [Ryan v. FTC, No. 24-0986 (N.D. Tex. complaint filed Apr. 23, 2024)]  MORE >>

"Given the legal challenges to the FTC's rule, employers should know New York City's recent proposed challenge to using noncompete agreements, Bill 140, is more onerous to employers than the FTC rule.... If passed, Bill 140 will be retroactive and require employers to affirmatively 'rescind' any noncompete by the date the law goes into effect."  MORE >>