Aug. 15, 2024; 26 pages. "What's New: [1] Automatic rollover amount increased.... [2] Certain corrective distributions not subject to 10% early distribution tax.... [3] Designated Roth nonelective contributions and designated Roth matching contributions.... [4] Distributions for emergency personal expenses.... [5] Distributions to a domestic abuse victim.... [6] Distributions to terminally ill individuals.... [7] Disaster tax relief.... [8] Increase in required minimum distribution (RMD) age."  MORE >>

"This notice provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates ... and the 24-month average segment rates ... [as well as] the interest rate on 30-year Treasury securities ... as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate[.]"  MORE >>

"[P]lan sponsors can now provide distribution and loan relief in response to a qualified disaster declared by the Federal Emergency Management Agency.... For 401(k), 403(b), 457(b) and profit-sharing plans, the maximum amount of distribution that a participant can take from the plan in the event of a qualified disaster is $22,000. Covered distributions, which will not be subjected to the 10% tax penalty, are those made on or after the first day of an incident period and within 180 days from the date of the disaster declaration."  MORE >>

"The final regulations apply to qualified 401(a) plans and IRAs ... The final regulations that affect eligible rollovers apply for distributions on or after January 1, 2025, and final regulations related to the penalty tax on RMD failures apply for taxable years beginning on or after January 1, 2025. For earlier years, individuals must apply the 2002 and 2004 regulations, taking into account a reasonable, good faith interpretation of the amendments made by the SECURE Act and SECURE 2.0."  MORE >>

"SECURE 2.0 significantly expands the ability for plan sponsors to correct common deferral errors that occur in the operation of 401(k) and 403(b) plans, specifically those that include an Automatic Contribution Arrangement (aka Automatic Enrollment).... [Notice 2024-2] includes specific questions and answers addressing the newly available ability to apply the reduced MDO correction option (of 0% or 25%, instead of the standard 50%) in [certain] situations[.]"  MORE >>

"Judge Matthew Kacsmaryk's earlier decision to uphold the rule leaned heavily on agency deference under the scrapped Chevron doctrine. The US Court of Appeals for the Fifth Circuit sent the case back to Kacsmaryk after the high court ruling. The next phase of the case will be a crucial early test of Loper Bright's impact on regulatory challenges." [Utah v. Su, No. 23-11097 (5th Cir. Jul. 18, 2024)]  MORE >>

"401(k), 403(b), and 457(b) are just three flavors of the same product.... [A]ll the varieties of retirement plans sponsored by different types of employers also do their job well: improving retirement readiness for employees of for-profit, nonprofit, and governmental entities. However, all plans are not created equal, and cannot be audited the same. [This article focuses] on audit procedures specific to 403(b) plans."  MORE >>

"Asset managers might offer the same products to retirement plan clients that are subject to ERISA as they do to other clients that are subject to very different legal and regulatory regimes. Given this divide, asset managers face the challenge of ensuring that their communications are tailored to allow ERISA fiduciaries to select their investment products while still ensuring that such products are attractive to other clients and otherwise are aligned with those clients' overarching business goals and differing legal environments."  MORE >>

"Public pension plans have traditionally prioritized three key pillars in their investment strategies: diversification, enhanced return, and liquidity.... Some plans have identified the need for a portfolio that helps balance these pillars.... [T]hey are designed to better protect assets during deep and extended equity market declines largely comprised of liquid investment strategies.... [P]lans are recognizing the need for liquidity as fulfilling private market capital calls, quarterly rebalancing activity, and benefit payments are essential to their operations."  MORE >>

"As of June 30, 2024, 73% of all plans are in the green zone. The funding shortfall for all plans improved by approximately $29 billion during the first six months of 2024.... As of June 30, 2024, 73 plans received nearly $54 billion in SFA ... contributing an additional 7% to the aggregate funded percentage since the program's inception ... The [PBGC] estimates a total SFA payout of about $80 billion to 198 plans by 2027. If all remaining estimated SFA were included in the market value of assets as of June 30, 2024, the aggregate funded percentage would rise from 93% to 96%."  MORE >>

"Chicago's pension systems remain among the worst-funded local retirement systems in the nation ... [T]he four city-sponsored pension systems -- municipal, laborers, police and fire -- along with the teachers pension fund carry pension debt of about $51 billion. Despite billions in extra funding from federal pandemic relief, the unfunded liability of these pension has only gotten worse."  MORE >>

"[In] recent weeks ... rapidly falling interest rates have led to increased purchase prices.... [It] is likely the Federal Reserve will cut interest rates in coming months prompting plan sponsors to act quickly ... if they want to transact before year-end. As we approach the end of the year, insurers are expressing capacity constraints and calendar conflict.... [R]ates remain 21 basis points higher than annuity purchase interest rates observed at the beginning of the year."  MORE >>

"[A Florida district court judge] enjoined the FTC from implementing or enforcing the Noncompete Rule against the plaintiff, and was careful to note that he was granting an injunction against the FTC only for the plaintiff, and was not entering a nationwide stay of the Noncompete Rule. [A]ll eyes remain on the Northern District of Texas, where the Ryan court has promised a final decision on or before August 30 as to whether it will issue a permanent injunction and a nationwide stay of the Noncompete Rule." [Properties of the Villages, Inc. v. FTC, No. 24-0316 (M.D. Fla. Aug. 15, 2024)]  MORE >>

"How a company implements equity compensation depends on its stage, company structure, and goals. Over time, companies may start granting different equity vehicles and adjusting the cash-to-equity mix as they mature and evolve their total rewards strategy. While equity awards vary by company, every company needs a plan. The first things to think about when planning are benchmarking and compensation philosophy."  MORE >>