Retirement Plans Newsletter
December 22, 2022
[Guidance Overview]
DOL Proposes Changes to the Voluntary Fiduciary Correction Program
"The proposed changes are the first updates to VFCP since 2006 and provide, for the first time, a self-correction feature for delinquent participant contributions and loan repayments, the most common prohibited transactions under ERISA. [This article provides] a summary of the proposed changes to the VFCP." MORE >>
Trucker Huss
[Guidance Overview]
DOL's Final ESG Rule Clarifies Fiduciaries' Duties
"[1] ESG factors may be part of risk-return analysis.... [2] Qualified default investment alternatives (QDIAs) play by the same rules.... [3] The new rules clarify ERISA's duty of loyalty.... [4] The final rules contain three changes to shareholder rights, including proxy voting." MORE >>
Ascensus
[Guidance Overview]
Auto-Enrollment Plans: Issues, Benefits, Concerns
"Participation in a plan by eligible employees would likely increase ... If the 403(b) plan sponsor is a non-governmental 501(c)(3) entity and the plan currently meets the DOL rules to avoid being an ERISA plan, the addition of automatic enrollment will likely make the plan become subject to ERISA.... Advisors also need to be aware of any applicable state rules ... which could have an impact on the adoption of automatic features in the individual employers' plans." MORE >>
National Tax-Deferred Savings Association [NTSA]
SECURE 2.0 in the Consolidated Appropriations Act, 2023
"SECURE 2.0 includes over 100 provisions intended to expand coverage, increase retirement savings, and simplify and clarify retirement plan rules." MORE >>
Jackson Lewis P.C.
2023 Key Administrative Dates and Deadlines for Calendar-Year Single-Employer Defined Benefit Plans
5-page chart describes important administrative dates and deadlines for single-employer defined benefit plans that are subject to ERISA and the Internal Revenue Code. MORE >>
Milliman
Interest Rate Hikes Present Challenge for Fully Funded Pension Plans
"While many employers with underfunded pension plans will welcome decreases in liabilities, this is bad news for many closely held family businesses with key employee-owners who are fast approaching retirement.... These owners will be surprised and disappointed to learn that their lump sum amounts may have decreased by 20% to 30%, depending on whether the lump sum payment occurs in 2022 or 2023." MORE >>
Fox Rothschild LLP
What is Complete Estate Planning for a Proprietor’s Retirement Plan Benefits?
"The estate planning of an individual who owns a professional or other enterprise that maintains a tax-advantaged plan ... requires that measures also be taken so that soon after the death of the individual a person be authorized to invest plan assets, determine the plan beneficiary(ies) and benefit entitlements, give notifications of such determinations, and make plan distributions ... If this is not done, the delay in making investment decisions and giving the individual's beneficiary(ies) access to their plan benefits may place those benefits at substantial risk and expose the individual's estate to fiduciary liability claims." MORE >>
Albert Feuer, via SSRN
PBGC Approves $19 Million in Supplemented SFA for Local 365 UAW Plan
"[PBGC] as approved the supplemented application submitted to the Special Financial Assistance Program by the Local 365 UAW Pension Fund Pension Plan. The plan, based in Englewood Cliffs, New Jersey, covers 3,736 participants in the manufacturing industry.... The Local 365 UAW Plan will receive approximately $19 million in supplemented SFA, which is in addition to $228.3 million in SFA approved for the plan by PBGC in May 2022 under the interim final rule." MORE >>
Pension Benefit Guaranty Corporation [PBGC]
CRS in Focus: Benefit Reductions to Participants in Delphi Pension Plans
"In May 2009, Delphi's pension plans were terminated and responsibility for the payment of plan participants' benefits was turned over to the [PBGC] ... PBGC may not pay an individual more than a statutory maximum benefit. Some participants in Delphi pension plans whose benefits were reduced by PBGC claimed that their pension plan was wrongly terminated and have sought relief via both judicial and legislative processes." MORE >>
Congressional Research Service [CRS]
Planned Retirement Consultants & Administrators, LLC
Remote / Ridgewood NJ
Selected New Discussions
Should a Plan Allow Self-Certifications for Before-Retirement Payouts?
"When the Internal Revenue Code of 1986 becomes amended by this week’s Consolidated Appropriations Act, 2023, many provisions that permit a before-retirement payout, including a or an: eligible distribution to a domestic abuse victim, emergency personal expense distribution, hardship distribution (for a deemed hardship), qualified birth or adoption distribution, or unforeseeable-emergency distribution (under a governmental § 457(b) plan), permit reliance on the claimant’s written statement that she meets the tax law’s standard for the kind of distribution requested. (A plan’s administrator may not rely on such a “certification” if the administrator has actual knowledge that the claimant’s statement is false.) Let’s leave aside the public policy discussions about whether it’s wise to allow early access to savings purposed for retirement income. And let’s leave aside discussions about whether a self-certification regime invites a claimant’s incorrect, or even false, statement. Do you see any disadvantage, from the administrator’s perspective , of allowing these self-certification regimes?"
BenefitsLink Message Boards
Change Eligibility Requirements Temporarily?
"Plan has typical 1 YOS and age 21 requirement for eligibility, with dual entry dates following. There is a small match, and an ADP & ACP test must be done every year. The owner wants to know if it would be OK to amend the eligibility requirements to allow for a new employee's immediate participation and then amend the eligibility back to what it was. I imagine it would be a much bigger issue if it was an HCE, but let's assume the new hire is an NHCE -- can you amend a plan by adding a special entry date to the existing 21 & 1 provision such as 'in addition, all employed on 1/19/23 (the employee's DOH) will become participants on that date'? It would also allow a couple dozen other employees to enter the plan doing it this way, but they're OK with that. Thanks in advance for all help."
BenefitsLink Message Boards
"Under soon-to-be-enacted Internal Revenue Code Section 414A, some new Section 401(k) or Section 403(b) plans must include an automatic-contribution arrangement. For small-business employers not excused as too new or too small, could this new tax-qualification condition slow down creations of new plans?"
BenefitsLink Message Boards
Press Releases
Arthur J. Gallagher & Co. Announces Agreement To Acquire Buck
Arthur J. Gallagher & Co.
Webcasts and Conferences(Retirement Plans / Executive Compensation)
Last Issue's Most Popular Items
Senate Finance Committee Summary of SECURE 2.0 (PDF)
Committee on Finance, U.S. Senate
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BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587.
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