33 pages; Jan. 17, 2025. "What's New for 2024: [1] Credit for employer contributions.... [2] Matching contributions on account of qualified student loan payments.... [3] Military spouse retirement plan eligibility credit.... [4] Safe harbor deferral-only section 403(b) plans.... [5] Pension-Linked Emergency Savings Accounts.... What's New for 2025: [1] Retirement savings contributions credit.... [2] Limit on elective deferrals.... [3] Limit on annual additions."  MORE >>

"Among other changes, the amendments also add new payment or correction alternatives for: [1] Below market interest rate loans to non-parties in interest. [2] Below market interest rate loans solely due to a delay in perfecting the plan's security interest. [3] Purchases of assets by a plan from a party in interest when the purchase cannot be reversed. [4] Sales of assets by a plan to a party in interest."  MORE >>

"Most significantly, the final rules create a self-correction feature for retirement plan sponsors to address delinquent transmittal of participant contributions and loan repayments, which are two of the most common retirement plan operational failures. In addition, the final rules provide that the self-correction procedures also apply to certain participant loan failures that are eligible for correction under [EPCRS]."  MORE >>

"The Proposed Regulations largely incorporate previous interim guidance issued by the IRS at the end of 2023, with some important clarifications. The Proposed Regulations also address various participant notice requirements for plans subject to the automatic enrollment requirements."  MORE >>

"The proposed regulations [1] clarify that if a participant's prior year FICA wages from the employer sponsoring the plan exceed $145,000 (indexed), then any catch-up contributions related to employment with that employer must be made on a Roth basis.... [2] confirm that plans may not require that all participants make catch-up contributions on a Roth basis, an approach which could simplify plan administration.... [3] will permit plans to treat a participant's pre-tax election as a deemed Roth election if the participant is a qualifying participant, so long as the plan allows for a subsequent election to change deferral elections"  MORE >>

"[S]ome have viewed the Opinion as having far reaching consequences because [1] its undertone suggests it is yet another attack on the controversial practice of ESG investing, and [2] it seeks to upend the common practice of plan fiduciaries delegating authority for proxy voting to investment managers." [Spence v. Am. Airlines, Inc., No. 23-0552 (N.D. Tex. Jan. 10, 2025)]  MORE >>

"The decision sets a standard for 'pecuniary'/financially justified ESG investing/proxy voting that is higher than that articulated in DOL's most recent revision of its regulation ... It requires (in effect) a showing that consideration of ESG factors with respect to, e.g., a particular proxy voting position, is justified based on an objective, rigorous analysis. If that element of this decision holds, sponsors will want to consider revisiting their ESG proxy voting policies generally." [Spence v. Am. Airlines, Inc., No. 23-0552 (N.D. Tex. Jan. 10, 2025)]  MORE >>

"The GAO report emphasizes that while cryptocurrency assets remain a small portion of the 401(k) landscape, they carry significant risks.... [A] GAO simulation found that allocating 20% of a portfolio to bitcoin resulted in notably higher volatility compared to smaller allocations of 1% or 5%. Such unpredictability underscores the importance of exercising caution."  MORE >>

"A 2023 Vanguard study found that a quarter of participants deferred less than 4% of their income -- generally below the threshold to maximize an employer match. While financial constraints play a role for some, psychological factors can also contribute. Understanding these cognitive biases can help explain why workers forfeit free money -- and highlight strategies to help."  MORE >>

"After losing their excessive fee case against Cornell University in the district court, the Schlichter firm appeals to the Supreme Court, seeking a mulligan by recasting their failed fiduciary imprudence claim as a prohibited transaction to avoid having to allege plausible proof that the plan's fees are excessive. If allowed to proceed, this open-door pleading standard would encourage more ERISA class action litigation abuse, creating the right for plaintiff law firms to conduct litigation audits of any plan sponsor." [Cunningham v. Cornell Univ., No. 21-0088 (2d Cir. Nov. 14, 2023; cert. pet. granted Oct. 3, 2024; oral arg. sched. Jan. 22, 2025)]  MORE >>

"In FY 2024, EBSA closed 729 civil investigations.... Over $544 million restored to workers through informal complaint resolution ... 68 people indicted and 161 people plead guilty or convicted for crimes related to employee benefit plans ... $53.5 million distributed to participants through abandoned plan program ... Over 21,000 compliance assistance program applications & filings."  MORE >>

"[P]aper filers must submit completed Forms 3921 and Forms 3922 with the IRS no later than February 28, 2025, and electronic filers must do so no later than March 31, 2025.... [Y]ou must provide the employee (or former employee) the information statement no later than January 31, 2025.... The information statement and return requirements under Section 6039 are not dependent on whether the exercise or stock transfer is a qualifying or disqualifying disposition."  MORE >>

"Cliff -- or lump sum -- payment events in one year could make an employee more likely to be among the five highest compensated for the taxable year in which the compensation is potentially subject to the Section 162(m) deduction limitation ... Similarly, a private company employee equity plan structured to pay upon an initial public offering likely would result in amounts being subject to the deduction limitation, but the effect could be mitigated by deferring payment of some of the largest awards to one or more future taxable years."  MORE >>