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Retirement Plans Newsletter

May 22, 2024

6 New Job Opportunities 6 New Job Opportunities


[Guidance Overview]

DOL Expands Abandoned Plan Regs and Related Prohibited Transaction Exemption

"The [EBSA] has issued interim final regulations (IFRs) that expand the scope of the abandoned plan program to encompass plans whose sponsors are in liquidation under Chapter 7 of the Bankruptcy Code and related amendments to Prohibited Transaction Exemption 2006-06. The IFRs and PTE amendments, which adopt with modifications the proposed regulations from 2012, are effective July 16, 2024. The DOL has requested comments on numerous aspects of the IFRs. Comments are due by July 16, 2024."  MORE >>

Thomson Reuters Practical Law


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[Guidance Overview]

DOL Releases Final Investment Advice Fiduciary Rule

"The final rule is intended to create a fiduciary standard that applies uniformly to all investments that individual retirement investors may make with respect to their retirement accounts.... [T]he DOL has narrowed the contexts in which an investment recommendation will be considered fiduciary investment advice under ERISA Section 3(21)(A)(ii) with respect to an employee benefit plan. The final rule also amends the parallel definition of a fiduciary under Internal Revenue Code Section 4975(e)(3)(B), that applies to 401(a) and 403(b) plans, individual retirement arrangements (IRAs), including SEP and SIMPLE IRAs, health savings accounts (HSAs), Archer medical savings accounts (MSAs), and Coverdell education savings accounts (ESAs)."  MORE >>


Third Circuit Finds That Participants Adequately Alleged Plan Breached Fiduciary Duty

"Although the district court criticized the Mators for failing to make an 'apples to apples' comparison, pointing to differences in service codes employed by the various plans, the Third Circuit concluded that the Mators' allegation that all plans received similar services rendered their claim plausible despite the coding differences.... And the court was persuaded that the Mators had sufficiently stated that a cheaper comparable service was available through their allegation that the plan obtained just that when it switched service providers in 2020. " [Mator v. Wesco Distribution, Inc., No. 22-2552 (3d Cir. May. 16, 2024)]  MORE >>

Kantor & Kantor

One-Third of Sponsors Do Not Have SECURE 2.0 Implementation Plan

"One-third of plan sponsors have no implementation plans, with 7% reporting not knowing 'where to begin.' Among small sponsors managing plans with less than $25 million in assets, the level of unpreparedness is especially high, with 56% not having plans in place to implement the measures."  MORE >>

Pensions & Investments

Un-Terminating a Plan

"The first item to address when un-terminating a plan is to understand if there was a Board of Directors' resolution to terminate the plan. If so, the Board will need to execute another resolution to rescind the resolution to terminate the plan. Also, any executed plan amendments to terminate the plan would have to be reversed with a subsequent amendment to reinstate the plan."  MORE >>

American Retirement Association [ARA]

401(k) Advisor Fee Study: How Much Does Fiduciary Advice Lower Plan Costs

"For 2020, [the 401k Averages Book] found that 401(k) plans with $500,000 in assets paid an average of 1.71% for bundled administration services (0.66% recordkeeping + 1.05% revenue sharing). That's higher than the 1.63% average [this study] found for smaller plans that averaged $189,367.06 in assets."  MORE >>

Employee Fiduciary

401(k) Managed Account Investors More Confident in Retirement Investment Strategy Than Non-Advice Users

"[O]nly 16% of non-advice users reported feeling very confident in their retirement investment strategy. By comparison, three times that, or 47% of defined contribution (DC) managed account program users, reported feeling very confident in their strategy.... When asked to select the correct definition of 'target-date funds' and 'managed accounts,' approximately two-thirds of participants (67% and 71%, respectively) were either 'not sure' or selected an incorrect definition"  MORE >>

Cerulli Associates

Navigating New Fiduciary Market Challenges

"Emerging fiduciaries should prepare to deliver more value on burdensome issues for plan sponsors, investigate plan designs that shift administrative duties, and consider desired roles in pooled or group plan solutions."  MORE >>

401(k) Specialist

Active Management Approach Has Benefited Target Date Funds

"T. Rowe Price examined 11 of our U.S. Retirement Funds with at least 10‑year records ... On average, the 11 funds outperformed their benchmarks in 96% of rolling five‑year periods and in every rolling 10‑year period since inception, net of fees."  MORE >>

T. Rowe Price


AT&T Asks the Supreme Court for a Uniform Pleading Standard for Prohibited Transaction Claims

"The Ninth Circuit's rudimentary error of statutory construction has significant ramifications that are prejudicial to plan sponsors. The ruling produces what other courts have dubbed an 'absurd' result of turning nearly every transaction with a service provider into a 'per se prohibited transaction.' On a practical level, it allows the trial bar to challenge every essential plan service provider contract, even when perfectly lawful." [Bugielski v. AT&T Servs., Inc., No. 21-56196 (9th Cir. Nov. 8, 2023; cert pet. filed Apr. 5, 2024; amicus brief filed May 9, 2024)]  MORE >>

Encore Fiduciary


Critiques of GAO’s Report on Target Date Funds

"[Here] are five critiques of the GAO report that are specific recommendations to all TDF regulators, including the DOL. [1] Risk near the target date is much higher than it should be.... [2] There's a more meaningful distinction than 'To' versus 'Through' ... [3] Collective Investment Trust TDFs should be scrutinized ... [4] There's only one workforce demographic that actually matters ... [5] Participant interests are not aligned with the interests of those who were interviewed for the study."  MORE >>

Ron Surz, via LinkedIn

Benefits in General


ERIC Comment Letter to EBSA Responding to SECURE 2.0 RFI on Effectiveness of Reporting and Disclosure Requirements (PDF)

"Disclosure changes should focus on simplification and actionability.... The agencies should recommend fully authorizing universal default electronic delivery.... Plans should not be required to track engagement with electronically-delivered documents.... Reporting to the agencies should be tailored."  MORE >>

The ERISA Industry Committee [ERIC]

Executive Compensation and Nonqualified Plans

[Guidance Overview]

FTC Ban on Noncompetes, Part 4: Timing of Taxation under Code Sections 83, 3121(v), and 457(f)

"If the Final Rule becomes effective, companies should reevaluate their reliance on noncompete covenants to create a substantial risk of forfeiture for purposes of postponing taxation on Section 83 transfers ... [and] for purposes of postponing FICA taxation on nonqualified deferred compensation plan deferrals.... If the Final Rule applies to [a] tax-exempt organization, then a noncompete may not be applied as a substantial risk of forfeiture under the organization's 457(f) plan."  MORE >>

Morgan Lewis

[Guidance Overview]

A Quasi-Proposed Rule on Incentive-Based Compensation

"The 2024 Proposal seeks feedback on so-called potential alternatives to the 2024/2016 Proposal's provisions. These questions are essentially the new part of the 2024 Proposal, and the agencies explain that they reflect their 'additional supervisory experience, changes in industry practice, and other developments' since the 2016 Proposal. These potential alternatives, on balance, could make the 2024 Proposal more prescriptive than the 2016 Proposal."  MORE >>

Venable LLP

Employee Benefits Jobs

View job as Senior Benefits Administrator for First Hill Trust Company

Senior Benefits Administrator

First Hill Trust Company

Remote / Seattle WA / Hybrid

View job as Senior Benefits Administrator for First Hill Trust Company

View job as Client Service Manager for July Business Services

Client Service Manager

July Business Services


View job as Client Service Manager for July Business Services

View job as Retirement Solutions Advisor for Buckingham Wealth Partners

Retirement Solutions Advisor

Buckingham Wealth Partners


View job as Retirement Solutions Advisor for Buckingham Wealth Partners

View job as Senior Pension Administrator for The Hilb Group

Senior Pension Administrator

The Hilb Group


View job as Senior Pension Administrator for The Hilb Group

View job as Office of Strategic Health Policy Director for State of Wisconsin- Department of Employee Trust Funds (ETF)

Office of Strategic Health Policy Director

State of Wisconsin- Department of Employee Trust Funds (ETF)

Madison WI / Hybrid

View job as Enrolled Actuary / Reviewer for Retirement Plans for Pension Consultants, Inc.

Enrolled Actuary / Reviewer for Retirement Plans

Pension Consultants, Inc.

Remote / MN

View job as Enrolled Actuary / Reviewer for Retirement Plans for Pension Consultants, Inc.

Selected New Discussions

Partial Plan Terminations

"it is my understanding that the IRS, when calculating the 'turnover' rate, considers all employees ELIGIBLE to defer as participants for purposes of calculating the participant numbers. The fact that the DOL has altered the definition of 'participant' for purposes of 5500 counting does not affect this IRS stance. Anyone disagree, or have other thoughts?"

BenefitsLink Message Boards

Qualified Plan vs. IRA in Bankruptcy

"My recollection is that regular IRAs are exempt from bankruptcy up to $1,000,000 and rollover IRAs (from qualified plans) are unlimited. But is there a difference between federal and state bankruptcy. I think bankruptcy laws are a state thing not federal. The ob/gyn client with $5 mil just retired and wants to keep the K plan open indefinitely. I told him only for a year at most. I told the FA to have the client contact an ERISA attorney. Still -- any comments are appreciated."

BenefitsLink Message Boards

Press Releases

Arch Insurance Publishes State Disability & Paid Family Leave Reference Guide

Arch Insurance

Nadia Matthie Appointed to the AICPA’s Employee Benefit Plans Expert Panel


Jason S. Kane Joins DATAIR’s Sales Team

DATAIR Employee Benefit Systems, Inc.

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

From Slumber to Savings: The Benefits of Pension Plan Hibernation


Fidelity Investments

Mastering QPAM Exemption Changes: Essential Insights for Investment Managers

June 26, 2024 WEBINAR

Thompson Hine LLP

ERISA 403(b) Advisor Conference

September 19, 2024 in IL

National Association of Plan Advisors [NAPA]

Last Issue's Most Popular Items

IRS FAQs Address SECURE 2.0 Disaster Relief


Is Your DC Plan Retirement Ready? Helping Participants Get to and Through Retirement (PDF)

Groom Law Group

Text of ASOP No. 27: Selection of Assumptions for Measuring Pension Obligations

Actuarial Standards Board

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

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