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April 2020 Digest

This digest contains a wide variety of the freshest source material dealing with current trends, opinion, news, legislative action, investments, marketing, sales, consulting, and legal issues regarding 401k, 403(b) and other retirement plans. Each listing contains a headline (hyperlinked to the source document), description, source of the item, and the month and year posted to this digest.

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Outline of the Impact of the Economic Downturn on DC Retirement Plans

The current volatility in the economy due to the coronavirus pandemic has created various issues for retirement plans that need to be addressed in an expedited and efficient manner. The impacts on defined contribution plans, including 401k plans, profit-sharing plans, money purchase plans, and 403b plans, can be categorized into three broad areas: day-to-day plan operations, plan administration, and fiduciary matters. Each of these categories has a range of considerations that are outlined here.

Source: Wagnerlawgroup.com, April 2020

Barrick Gold Accused of Fiduciary Failures Regarding 401k Investments

An ERISA lawsuit has been filed against Barrick Gold of North America and other fiduciaries of its defined contribution retirement plans. The lawsuit alleges the defendants did not try to reduce the plan's expenses or exercise appropriate judgment to scrutinize each investment option that was offered in the plan to ensure it was prudent.

Source: Planadviser.com, April 2020

Some Comforting Lessons for Retirement Plan Investors

Data from leading retirement plan recordkeepers shows 401k and IRA accounts have seen smaller losses than many broad market indices, thanks in no small part to the efforts of plan sponsors and their advisers. Corporate pensions have also fared better than their public counterparts.

Source: Planadviser.com, April 2020

Approving QDROs During Court and Government Office Closures

Due to widespread court closures as a result of the coronavirus pandemic, it may be difficult for participants or their attorneys to obtain a certified copy of a domestic relations order that many retirement plans require as part of the procedures for processing qualified domestic relations orders. To address this issue, plans might consider adopting temporary procedures that allow for the continued qualification and processing of QDROs during these extraordinary circumstances without creating permanent exceptions to their normal QDRO procedures.

Source: Morganlewis.com, April 2020

The Impact of the CARES Act on 401k and Other DC Plans

In enacting rules governing distributions from tax-qualified retirement plans, Congress has historically sought to strike a balance between encouraging retirement savings while at the same time recognizing that there are instances in which participants may have legitimate reasons to access funds before they retire. The CARES Act contains several provisions that enable plan sponsors to provide plan participants with access to funds in defined contribution retirement plans and individual retirement accounts to pay for unanticipated costs associated with the coronavirus pandemic.

Source: Mintz.com, April 2020

Catch-up Contributions Being Weighed in Congress

A congressman is floating a proposal that would funnel more assets into tax-deferred retirement accounts by tripling the contribution limits for the rest of this year.

Source: Investmentnews.com (registration may be required), April 2020

SECURE Act: Prohibition on Exclusion of Part-Time Workers

The SECURE Act, signed into law at the end of 2019, brought several significant changes to retirement planning. A major goal of the legislation was to enable and encourage the American worker to save for retirement. One significant change is that businesses are now required to allow long-term, part-time employees to participate in employer-sponsored 401k plans.

Source: Hallbenefitslaw.com, April 2020

A "Rosetta Stone" for Finding 401k Provider Fees

401k provider services and investments can vary dramatically in terms of breadth, depth, and price. Benchmarking 401k fees on an all-in basis helps normalize these differences, putting the onus on a 401k provider to justify higher fees. This article provides a 3-step process you can use to compare fees, including where to find the administration and investment fees for ten leading 401k providers. In short, a "Rosetta Stone" for finding 401k fees.

Source: Employeefiduciary.com, April 2020

403b Retirement Plan Fee Litigation Update

Despite the COVID-19 pandemic, 403b retirement plan litigation remains largely uninterrupted. While not all claims are successful, to manage risk, plan sponsors should understand the issues and keep track of the litigation surrounding retirement plans. This is a comprehensive update on the status of 403b retirement plan lawsuits.

Source: Cammackretirement.com, April 2020

Expanding E-delivery, Deadlines, EBSA Announces Filing Relief

The DOL's Employee Benefits Security Administration has issued "deadline relief and other guidance" related to the impact of the Coronavirus outbreak, including expanded "good faith" application of electronic delivery.

Source: Asppa.org, April 2020

How Saver and Employer Behaviors Are Evolving in Response to COVID-19

Proprietary data from Ascensus reveals how U.S. employees shifted their savings behaviors in March 2020, as the COVID-19 outbreak caused major disruption to the U.S. economy and financial markets. The following insights serve as an early baseline of how contribution and withdrawal behaviors have evolved in response to the pandemic.

Source: Ascensus.com, April 2020

401k Mistakes Job Hoppers Make

When you switch employers, it's important to keep your nest egg intact. Without careful attention, a variety of taxes and fees could significantly reduce your retirement savings. Before making any major career moves, be sure to take a close look at 401k vesting schedules and waiting periods. Here are some common 401k mistakes that job hoppers make.

Source: Usnews.com, April 2020

The SECURE Act: Key Items for Plan Sponsors

With its broad impact across qualified retirement plans, it is important for plan sponsors to become familiar with the SECURE Act's changes, and to take appropriate action. The Act's administrative changes will likely require plan amendments, and participant notification practices will also need to change. This article reviews a few key components of the Act.

Source: Tra401k.com, April 2020

COVID-19 May Affect Nondiscrimination Testing

Because of the economic impacts of the COVID-19 pandemic, DC plan sponsors may be making changes that can affect actual deferral percentage and actual contribution percentage test results: laying off or furloughing employees, reducing employees' salaries, reducing or suspending company matches, for example. Also, plan participants may make changes to their deferral rates, which can also affect nondiscrimination testing. Because of these changes, plan sponsors may want to consider sample testing to project outcomes and take steps to avoid failed testing.

Source: Plansponsor.com, April 2020

CITs Fit Well With Best Interest Service

A new white paper published by Wilmington Trust documents the dramatic ongoing expansion of the U.S. collective investment trust marketplace. Among the attractive but less-often-discussed features of collective investment trusts is the fact that the sponsoring trustee -- a bank or trust company -- must commit to acting in the best interest of unitholders.

Source: Planadviser.com, April 2020

403b Plans and Optional Retirement Plan Provisions

Can a pre-approved 403b plan have an optional retirement plan provision? Would it fall under the mandatory contributions? ORPs can take on different components of a 403b plan. They are not all the same.

Source: Ntsa-net.org, April 2020

Adoption of 401k Auto Features Climbs, but Growth May Slow

A new study finds that a significant percentage of plan sponsors have embraced the use of automatic plan design features, but adoption may have plateaued to some degree. The DCIIA plan sponsor survey reveals that 69% of plans currently offer auto-enrollment, up from 60% in 2016. And that finding generally holds for both large and small asset-size cohorts. Nearly three-quarters (73%) of plans with over $200 million in assets have now adopted the feature, up from 67% in 2016, while 63% of plans with less than $200 million in assets have now adopted it, up from 51% in 2016.

Source: Napa-net.org, April 2020

How 401k Plan Sponsors Can Better Shield 401k Participants From External Fraud

In today's world, the money isn't in the banks. It's in retirement plans. And smart thieves don't crack safes or use dynamite. They steal identities and use the internet. In our current stay-safe-at-home policies, we have never seen retirement accounts more at risk today than ever before. It's not that the plan sponsors are lax. It's that their employees may be.

Source: Fiduciarynews.com, April 2020

Implementation of Auto Features Continues to Rise as Plans Recognize Benefits, Survey

The survey, conducted by DCIIA's Retirement Research Center, represents the views of 175 defined contribution plan sponsors and is based on year-end 2018 data. Fifty-seven percent of the respondents represent plans with assets greater than $200 million. The remaining 43% of respondents have less than $200 million in plan assets. This report offers observations relative to prior survey findings, where applicable, and provides historical perspectives on how sponsor behaviors and attitudes towards auto features have developed over time.

Source: Dciia.org, April 2020

IRS Extends Deadline for Forms 5500 Due Before July 15, 2020

On April 9, 2020, the IRS issued Notice 2020-23 to extend key tax deadlines for individuals and businesses in response to the ongoing COVID-19 pandemic. This new tax relief is provided under Section 7508A of the Internal Revenue Code, which gives the IRS authority to postpone deadlines for taxpayers affected by federally declared disasters.

Source: Cowdenassociates.com, April 2020

Ontario Employers Permitted to Suspend DC Pension Contributions, Says FSRA

The Financial Services Regulatory Authority of Ontario has confirmed it will permit a suspension of employer contributions to defined contribution pension plans temporarily. However, any change to either employer or employee contributions can only be on a go-forward basis and must be supported by an amendment to the plan text.

Source: Benefitscanada.com, April 2020

How to Correct Late Salary Deferral Deposits

Late deposits of employee 401k and 403b deferrals continue to be a common error and consistent with the top ten list of mistakes the IRS and DOL identify during their audits and investigations. When employee deferrals are not deposited timely, there are two available correction avenues: self-correction or completing a filing through the DOL's Voluntary Fiduciary Correction Program. This article discusses the rules regarding the timely deposit of salary deferral withholdings, when a timely deposit doesn't occur, and the steps the plan sponsor must take for each of the available correction options.

Source: Belfint.com, April 2020

401k vs. Roth 401k: Which One Is Better for You?

The 401k plan comes in two varieties, the Roth 401k and the traditional 401k. Each offers a different type of tax advantage, and choosing the right plan is one of the biggest questions workers have about their 401k. It can be a surprisingly complicated choice, but many experts prefer the Roth 401k because you'll never pay taxes again on withdrawals. However, the choice depends a lot on your financial situation. Here's what you need to know about each type and why one might be better for your needs.

Source: Bankrate.com, April 2020

DC Plan Sponsor Fiduciary Torch Is Brighter and Can Help Light Dark Days

Defined contribution plan sponsors are putting more importance on their fiduciary duties, based on results from a recent survey. It also saw more plan sponsors turning to third parties for guidance as well as a growing appreciation for professional training and fee transparency. This is especially welcome news as sponsors face the disruption of their plans and their participants are grappling with market unsettledness caused by the coronavirus crisis.

Source: Alliancebernstein.com, April 2020

COVID-19 World: Reducing or Suspending Company Contributions to a 401k or 403b Plan

In response to the current economic crisis caused by COVID-19, many companies are considering cost-savings measures to improve their companies' financial stability. One such cost-saving option is the reduction or suspension of company contributions to a company's 401k or 403b plan. The procedure for and the implications of such suspension will depend on the plan terms, including whether the contribution is intended to be a "safe harbor" contribution.

Source: Spotlightonbenefits.com, April 2020*

How Coronavirus Has Impacted Retirement Confidence

Workers' overall confidence in their ability to live comfortably in retirement remains steady, while the share who feel very confident continues to increase, according to the 2020 Retirement Confidence Survey from the Employee Benefit Research Institute and Greenwald & Associates.

Source: Planadviser.com, April 2020

401k Assets Down, But Savings Levels Up: Fidelity

The average 401k balance fell by 19% during the first quarter, according to data released Friday by Fidelity Investments. Despite the negative returns in the stock market and historic volatility, people continued to save, and many either increased their 401k contribution levels or opened up their first individual retirement accounts, the company stated.

Source: Investmentnews.com (registration may be required), April 2020

IRS Extends Various 401k Deadlines in Response to COVID-19 Crisis

The Internal Revenue Service released Notice 2020-23 which, among other things, extends several recent deadlines applicable to retirement plans (including 401k plans), as well as to other employee benefit plans and arrangements. Generally stated, Notice 2020-23 automatically extends deadlines for certain "time-sensitive acts" that would otherwise fall on or after April 1, 2020, and before July 15, 2020, until July 15, 2020.

Source: Compliancedashboard.net, April 2020

New Bill Would Triple Retirement Plan Contribution Limits for 2020

Rep. Patrick McHenry has introduced the Securing Additional Value for Every Retirement Saver (SAVERS) Act, legislation that would permit increased annual contributions to tax-qualified retirement savings arrangements for 2020. The legislation would raise the annual contribution limitations to 300 percent of previously announced limits for 2020 (not to exceed applicable compensation).

Source: Ascensus.com, April 2020

Bridging the Gap Between Accumulation and Decumulation for Participants

Defined contribution plan participants are increasingly keeping retirement balances in the plan, and a growing number of plan sponsors are interested in retaining these balances. Information gleaned from focus groups suggests that participants have misperceptions about the value of staying in plan. Some participants do not even know that staying in the plan is an option after retirement. If plan sponsors want to maintain retirees in the plan, they should not keep it a secret. They must engage with participants early and often.

Source: Troweprice.com, April 2020

Investors Rush to Stable Value, Money Market Funds in March

The stock market fell throughout March, spurring 401k investors to trade at record-high levels, according to the Alight Solutions 401k Index. Total transfers as a percentage of the starting balance were the highest since October 2008. March had 18 above-normal days of trading activity, the most above-normal days in a month in the more than 20-year history of the 401k Index. Retirement plan investors traded 0.96% of their starting balances during the month.

Source: Plansponsor.com, April 2020

Recordkeepers Adjust to Pandemic

Recordkeepers have acted quickly to incorporate social distancing and follow stay-at-home orders in response to the Coronavirus pandemic, including a whopping 98% of staffers working at home, a new survey finds. That's a huge jump from the 20% reported three months ago, according to a summary of the survey released April 21 by the SPARK Institute.

Source: Napa-net.org, April 2020

The Retirement Plan Industry's Troubling Framework

Fiduciary buyers bear virtually all the legal responsibility, but it's the nonfiduciary sellers that largely control them, argues Scott Simon. While a recordkeeper's business model is good for the recordkeeper's company, the model is often destructive to plan participants.

Source: Morningstar.com, April 2020

Employers Start to Suspend Their 401k Match

The employer match of employee contributions is an important characteristic of 401k plans. The match was designed to encourage participation and contributions, particularly by lower-paid employees. However, at a growing number of companies, the employer match has become a casualty of the COVID-19 crisis and ensuing economic collapse. Will employers, as in previous recessions, restore the match as the economy recovers?

Source: Marketwatch.com, April 2020

DOL E-Disclosure Rule Submitted to OMB

On April 16th, the Office of Management and Budget received the Department of Labor's long-anticipated final regulation updating and modernizing the rules for using electronic media to furnish ERISA-required disclosures and notices. DOL's existing electronic disclosure rule has been in place for nearly two decades and was developed long before the widespread adoption of many current electronic communications methods. The rule should not only modernize DOL's electronic disclosure standards but also address communication concerns specifically raised by the current health crisis.

Source: Groom.com, April 2020

Stop and Review COVID-19 Distribution and 401k Loan Forms Carefully

The CARES Act authorizes employers to make changes to their qualified retirement plans to increase loan limits, delay loan repayments, and make distributions to plan participants experiencing certain COVID-19 related circumstances. Due to a lack of guidance from the IRS, there's confusion among third-party administrators about how to administer these changes, resulting in potential issues with forms used by TPAs to approve these CARES Act loan and distribution changes.

Source: Employeebenefitslawreport.com, April 2020

CARES Act Loan Provision: The "Fly in the Ointment"

It turns out that there is a quirk in the CARES Act provisions regarding COVID-19 loans that are giving plan sponsors a reason to pause. This issue is that while the CARES Act allows an increase in the loan limits for borrowers who qualify for a COVID-19 loan ($100,000 or 100% of a participant's vested account balance, if less), it did not extend the repayment terms. Thus, the loan must be repaid over five years, unless used to acquire a primary residence.

Source: Cammackretirement.com, April 2020

Coronavirus-Related Distributions Are NOT "Eligible Rollover Distributions" but They Can Be Rolled Over

To address the novel Coronavirus, the CARES Act has created a novel type of distribution from retirement plans: the Coronavirus-Related Distribution. It is a "rolloverable" distribution that is NOT considered an Eligible Rollover Distribution for certain purposes, such as withholding. Although a CRD can be rolled over to another qualified plan or IRA directly or within three years of its distribution, it is only subject to the optional 10% withholding applicable to distributions that are not eligible to be rolled over.

Source: Belfint.com, April 2020

Revisiting Retirement Plan Designs After the Global Pandemic

As we move through the pandemic crisis, there is hope that we will eventually be able to resume our normal lives and create better organizations and systems. With the SECURE Act, employers who sponsor DC retirement plans now have (1) new participant disclosure obligations; (2) the ability to adopt certain portability design features related to lifetime income investment options; and (3) guidelines to encourage the inclusion of lifetime income investment options in plan investment line-ups. Plan sponsors and fiduciaries should become familiar with the mandatory requirements as well as the optional aspects of these rules and determine how to leverage them to ease employee retirement concerns.

Source: Westminster-consulting.com, April 2020

Impact of Furloughs and Layoffs on Corporate DB and DC Plans

During this COVID-19 public health emergency and the accompanying financial turmoil, many employers are finding it necessary to furlough or layoff a significant number of employees. These workforce reductions can potentially have some important implications for single-employer DB and DC plans in the private sector that are often overlooked.

Source: Segalco.com, April 2020

DC Plan Sponsors Reacting With Moderation to Coronavirus

The novel coronavirus pandemic and its effect on the stock market caused speculation in the retirement plan industry about whether plan sponsors would react with changes to their retirement plans as they did in past market crises. There was also concern about how the market drop and subsequent reaction would affect participants' retirement security. PLANSPONSOR fielded a pulse survey on April 7 through 10. Responses were received from 387 DC plan sponsors from a wide range of employer sizes.

Source: Plansponsor.com, April 2020

Providers' Responses to COVID-19

From waiving fees to offering additional financial help, retirement plan recordkeepers, third-party administrators and advisers, as well as financial wellness providers are stepping up to assist plan sponsors and employees in many ways during the novel coronavirus pandemic. This is a listing of the latest announcements.

Source: Planadviser.com, April 2020

Impact of COVID-19 on the Adviser Industry

Retirement specialist advisers are helping plan sponsors make tough choices about plan designs, especially the expansion of loan and hardship withdrawal provisions now permitted under the CARES Act. Such work is certainly building loyalty and goodwill among the client base, sources agree, but it is also important for firm leaders to step back from these efforts to take stock of how this situation is affecting their businesses. Not only is this prudent from a client service perspective, but it also can help staff gain an important piece of mind during an incredibly stressful time.

Source: Planadviser.com, April 2020

Why a 401k for Small Businesses?

An American Express Survey found that 60% of small business owners were not saving the money they needed for retirement. This means many of their employees are likely not saving enough for retirement either. However, a small business 401k carries with it not only incredible employee benefits but also special tax incentives that SMB owners can get from offering retirement plans to their employees. What's more, prohibitively expensive 401k fees have decreased significantly in recent years.

Source: Humaninterest.com, April 2020

Extended Deadlines for Benefit Plans Granted by the IRS

Earlier this month, the IRS announced that it had extended deadlines for filing federal income tax returns and making tax payments due to the COVID-19 pandemic, which had a small effect on benefit plans. The IRS has since amplified this relief through Notice 2020-23 and provided additional relief that is more significant for benefit plans.

Source: Graydon.law, April 2020

Waiver of Required Minimum Distributions

For defined contribution plans and IRAs, the CARES Act provides temporary relief from the required minimum distribution rules. The following chart explains this relief in the context of plans; the rules for IRAs are much the same.

Source: Fredreish.com, April 2020

Impact of the COVID-19 Pandemic on Retirement Income Adequacy

The research in this EBRI Issue Brief explores the aggregate potential impact of the 2020 market crisis as well as assumptions concerning future employee and employer behavior in response to the current situation and potential decreases in defined contribution eligibility arising from increased unemployment. The findings of the analysis are reviewed.

Source: Ebri.org, April 2020

New Lawsuit Could Clarify Fiduciary Responsibility for Cybersecurity

Abbott, as the plan sponsor, is a fiduciary and was responsible for supervising Alight's procedures for safeguarding plan assets, yet the complaint provides no information about what Abbot did or did not do to monitor Alight. Abbott may also have breached its duties of loyalty and prudence by its failure to hire a vendor with adequate internal procedures. In that event, Abbott and its fiduciaries would also be required to restore the loss.

Source: Cohenbuckmann.com, April 2020

Revisiting the Fiduciary Rule

The fiduciary rule issued by the Department of Labor during the Obama administration was struck down in the courts, creating uncertainty that still exists. A recent ASPPA webcast discussed federal efforts to regulate fiduciary activity, as well as the demise of the fiduciary rule and what that means. This article highlights of the webcast.

Source: Asppa.org, April 2020

Employee Layoffs May Vest Retirement Plan Benefits

Increasing numbers of employers are being forced to shutter places of business and lay off workers as the coronavirus pandemic continues. When laid-off workers are participants in their employer's qualified retirement plan, one consequence of the aggregate layoffs may be a partial termination of the plan. When there is a partial termination of a qualified retirement plan, the affected participants are automatically fully vested. For participant accounts to be correctly administered, the employer needs to recognize the possibility of a partial termination when layoffs occur.

Source: Verrill-law.com, April 2020*

Using a 401k Loan to Cope With Coronavirus Costs

The Coronavirus Aid, Relief, and Economic Security Act of March 2020 doubles the amount retirement savers can borrow from a 401k plan. But that doesn't necessarily mean you should raid your future retirement savings, even during the coronavirus pandemic. Here's how to decide whether to take a 401k loan to cope with coronavirus costs.

Source: Usnews.com, April 2020

401k Plan Participants Say Fiduciaries Ignored Excessive Fees

In a lawsuit targeting the Pharmaceutical Product Development Retirement Savings Plan, the plaintiffs allege that fiduciaries of the plan violated their duties under ERISA. They say the plan fiduciaries failed to objectively and adequately review the plan's investment portfolio to ensure each investment option was prudent in terms of cost and maintained certain funds in the plan despite the availability of identical or similar investment options with lower costs and/or better performance histories.

Source: Planadviser.com, April 2020

Second Excessive Fee Suit Targets Cerner Corp.

The Cerner Corp. now faces a second excessive fee fiduciary breach lawsuit. The new lawsuit, filed in the U.S. District Court for the District of Kansas, closely mirrors another pending ERISA challenge filed earlier this year against the Cerner Corp. In that case, the defense has filed a motion to compel arbitration because the plaintiff allegedly signed an arbitration agreement. While it repeats very similar claims, this new lawsuit seeks to establish that the plaintiff did not sign such an agreement.

Source: Planadviser.com, April 2020

401k Plan Sponsors, Make Sure Your Plan Document Doesn't Cost You

As a plan sponsor, there are many things you don't know about your plan document and you really should. Why? Because the plan documents could be a major culprit in what ails your 401k plan. Here are five items you should be considering.

Source: Jdsupra.com, April 2020

Liberty Mutual Sued Over Its 401k

Liberty Mutual is facing a class-action lawsuit brought by its 401k participants, who allege the plan's recordkeeping fees were out of control and the insurance giant allegedly violated ERISA by failing to rein them in.

Source: Investmentnews.com (registration may be required), April 2020

COVID-19 and Employee Benefit Plans: An Action List for Employers

New COVID-19 related federal legislation is leading many employers to review their benefit plans and related obligations. This checklist was created to help employers understand what issues to consider and possible actions to take.

Source: Boutwellfay.com, April 2020

One-Fifth of Large Retirement Plan Sponsors Say They Are Suspending 401k Matches

Just weeks after implementation of the CARES Act, some sponsors of DC retirement plans are acting preemptively in front of what is expected to be record slowing of economic activity in the second quarter. Among 152 sponsors surveyed by the Plans Sponsor Council of America, 21.7 percent of sponsors with 1,000 or more participants in their retirement plans have either suspended or are considering suspending employer matches to those plans.

Source: Treasuryandrisk.com, April 2020

Another University 403b Excessive Fee Suit Settles

Approximately 20 of these suits have been filed since 2016, this would be the seventh settlement. This time the defendant is Princeton University, and the original suit was filed nearly three years ago by plaintiff Elysee Nicolas individually and as representative of a class of participants and beneficiaries of the Princeton University Retirement Plan and the Princeton University Retirement Savings Plan.

Source: Napa-net.org, April 2020

CARES Act - Q&As for Retirement Plan Sponsors

The CARES Act enacted sweeping measures to strengthen the U.S. economy and support businesses and individuals during the COVID-19 crisis, including new ways for retirement plans to give participants greater access to retirement funds and reduce plan-related tax and loan repayment obligations, as well as providing funding relief for sponsors of single-employer defined benefit plans. This is a 3-page Q&A for retirement plan sponsors.

Source: Morrisoncohen.com, April 2020

Enforcing the $100,000 Coronavirus Related Distribution Limit on Multiple Plans

The $100,000 limit on coronavirus related distributions under the CARES Act is both an individual limit and a plan limit. Tracking and enforcing the $100,000 limit has the potential to create special compliance issues for employers and controlled group affiliates that sponsor more than one retirement plan and have individuals with an account balance under more than one of those plans.

Source: Morganlewis.com, April 2020

Delving Into CARES Act Relief for Retirement Plan Participants

The CARES makes it easier for retirement plan participants affected by the pandemic to use their savings to regain their financial footing. For affected participants, the act lets DC plans offer special in-service "coronavirus-related distributions," doubles the maximum loan amount plans can make and allows suspension of loan repayments for the remainder of 2020. IRS has yet to issue any guidance on the CARES Act's retirement provisions. However, IRS Notice 2005-92 provides guidance on essentially identical relief under the Katrina Emergency Tax Relief Act. Absent any later guidance to the contrary, employers may look to that notice for direction.

Source: Mercer.com, April 2020

A Close Look at ERISA 403b Plans, 2016

The study of 403b plans is complicated because plan sponsors span public and private sectors; also, some plans are subject to ERISA and some are not. ERISA 403b plan assets account for nearly half of the estimated total 403b plan assets. This 68-page report analyzes 403b plans covered by ERISA that also file Form 5500 Schedule H in 2016.

Source: Ici.org, April 2020

A Checklist for Sponsors to Consider Before Adopting Retirement Plan Provisions of the CARES Act

Although some retirement plan recordkeepers and TPAs have reached out to plan sponsors on decisions regarding the optional provisions of the CARES Act, e.g., coronavirus-related withdrawal and loan relief options, others are waiting for additional guidance. Here is a checklist of issues to consider to help you navigate decision-making concerning optional CARES Act changes and determine whether your TPA has procedures in place to ensure compliance with the CARES Act provisions.

Source: Huschblackwell.com, April 2020

New Lawsuit Alleges Fiduciary Breaches for Quarter Million Dollar Cybertheft

A recently-filed lawsuit describes in specific detail the efforts cybercriminals often take to pilfer assets from retirement accounts. As a complaint, the filing provides only the plaintiff's version of what happened, and we have not yet heard from the defendants. But the complaint is particularly interesting in its description of how the theft occurred and may point to some useful approaches to try to reduce future fraud.

Source: Groom.com, April 2020

CARES Act Brings Immediate Changes for 401k Plans

Effective March 27, 2020, the CARES Act brings immediate changes and relief to 401k plans, similar to natural disaster relief issued in the past. This relief follows the relief available for natural disasters in the past (and the 2009 WRERA relief following the 2008 economic downturn), and as such is generally viewed as available at the option of the plan sponsor. Plan amendments are not required until the end of the 2022 plan year, provided that the plan is operated following the terms. A summary of the relief is set forth here.

Source: Groom.com, April 2020


This is a CARES Act Q&A. The answers are based on the collective wisdom of many retirement plan compliance experts. For the plan sponsors out there, the experts aren't always right, particularly about your plan situation, so this is not a substitute for the advice of the expert legal counsel who works with your particular retirement plan.

Source: Cammackretirement.com, April 2020

The Fiduciary Angle to the Participant COVID Certification Because of Spousal Employment Loss

The determination of whether or not an individual qualifies as a COVID participant would usually be a determination that requires the exercise of discretion by a fiduciary, under ERISA Section 3(21). But the CARES' participant certification rule adds an odd twist into the mix.

Source: Businessofbenefits.com, April 2020

Video: CARES Act Implications for DC and DB Plans

Watch this webinar to review provisions on special coronavirus distributions, loans and hardships, RMDs, pension plan funding, the DOL's ability to postpone deadlines, and more.

Source: Pnc.com, April 2020

Impact of the CARES Act on 2020 Retirement Plan Required Minimum Distributions

One element of the CARES Act targets retirement plans like IRAs, 401ks, and 403bs. Specifically, concerning those plan participants and beneficiaries, the CARES Act suspends required minimum distributions for 2020. So how might this impact you?

Source: Nixonpeabody.com, April 2020

New Fidelity Fee Decision Addresses Several Important Issues for Plan Fiduciaries

The District of Massachusetts issued a decision finding that Fidelity breached its fiduciary duties to its 401k Plan by failing to monitor investments and administrative expenses. Although the decision involved unique facts relating to the implementation of a settlement of a prior case brought against Fidelity, the court's 67-page opinion addresses several significant legal issues. These issues include a plan fiduciary's obligations to self-directed brokerage accounts and the consideration of collective investment trusts and separate accounts as alternatives to mutual funds.

Source: Groom.com, April 2020

The CARES Act: Special Distributions to Qualified Participants

This article discusses a second provision of the Act that can help participants who are affected by the coronavirus (called "qualified individuals"). This is a special coronavirus-related distribution. Though discussed this in the context of 401k plans, the CRD provision applies to all qualified plans, 403b plans, and IRAs as well.

Source: Fredreish.com, April 2020

Coronavirus Crisis Workforce Reduction Can Adversely Affect Retirement Programs

While payroll-reducing strategies may be necessary during this time of substandard revenue, they may also present other costs or hurdles in the company' pension, retiree medical, and retiree life insurance programs. Significantly changing employee demographics can trigger unexpected accounting, cash flow, and compliance issues that could be an unwelcome surprise given current market conditions.

Source: Findley.com, April 2020

The CARES Act: Do We Have To?

Much of the confusion around the CARES Act centers on what is mandatory and what is voluntary. This has produced a lot of controversies, mostly because CARES is not written in a manner that directly addresses that key question.

Source: Ferenczylaw.com, April 2020

Are Your Target-Date Funds a Prudent Investment? COVID-19 Puts Spotlight on Fiduciary Choices

COVID-19 may have accelerated a reckoning for fiduciaries who have not fulfilled their responsibilities for target-date fund selection. Those who simply selected their vendor's funds without investigation and financial firms that selected their proprietary funds for their plans, especially funds without good track records, are probably most at risk. However, fiduciaries with exposure can begin to reduce that exposure by reviewing their selections and implementing a prudent review process. Here are some questions frequently asked about target-date fund selection.

Source: Cohenbuckmann.com, April 2020

IRS Extends the Form 5500 Due Dates for Some Employee Benefit Plans

The Internal Revenue Service has broadened the filing and payment relief provided under prior guidance. IRS Notice 2020-23 postpones, among other relief, the due date for employee benefit plans required to make the Form 5500 series filings due on or after April 1, 2020, and before July 15, 2020. Plans with original due dates or extended due dates falling within this period now have until July 15, 2020, to file their information reports.

Source: Benefitslawadvisor.com, April 2020

How Do I Stop Employer Contributions to My Retirement Plan?

In pandemic times, employer contributions to retirement plans are not immune to cost-cutting initiatives, as corporate cash flows and liquidity dwindle. However, discontinuing discretionary contributions does not always eliminate all employer contribution requirements, and employers need to anticipate and budget for any contributions that cannot be eliminated.

Source: Belfint.com, April 2020

More Cuts to 401k Matches are Coming

To conserve cash, some employers are suspending contributions to their workers' 401ks. And if this downturn plays out like previous recessions, more will follow. The handful of employers announcing suspensions in recent weeks include travel companies and retailers hit first and hardest by shrinking consumer demand, including Amtrak, Marriott Vacations Worldwide, the travel company Sabre, Macy's, Bassett Furniture Industries, Haverty Furniture Companies, and La-Z-Boy.

Source: Bc.edu, April 2020

The Coronavirus Outbreak Could Upend Retirement Planning

Retirement in the age of coronavirus isn't going to be easy. True, seniors and pre-retirees can take advantage of some flexible and lenient new rules on retirement accounts. But in many other ways, things could get tougher, especially for people who already were behind on their retirement preparations. Here are some possible themes ahead.

Source: Usatoday.com, April 2020*

401k Recommendations During the Coronavirus Crisis

For many of us, our 401k plan is our main retirement savings vehicle. It's important to ensure that you don't ignore this key retirement asset account during the market downturn that has resulted from the coronavirus pandemic. Here are recommendations to combat market volatility from the coronavirus pandemic.

Source: Thestreet.com, April 2020

How 401k Plan Sponsors Should Deal With the Rollercoaster Stock Market

When the stock market isn't doing well (such as now), many plan sponsors are paralyzed by panic as they realize that their retirement savings are being wiped out. As plan sponsors, you are a plan fiduciary. You can't afford to be paralyzed with panic. This article is all about how you can manage the rollercoaster stock market and properly manage your plan.

Source: Jdsupra.com, April 2020

What to Do If Your Employer Suspends 401k Matching Contributions

Thanks to the COVID-19 crisis, your investment portfolio has most likely taken a hit. But there may be even more retirement-related fallout from the coronavirus pandemic: Your employer could freeze their 401k matching contributions. If your company is planning on suspending its 401k contributions, take these steps to protect your retirement fund.

Source: Forbes.com, April 2020

Alleged Fraud Drains Retiree's 401k; Plan's Administrator Facing Federal Probe

When Heide Bartnett went to the mailbox in January 2019 and opened up her 401k statement, she expected to see a robust balance. Instead, she saw lines of zeros and an unauthorized $245,000 withdrawal. She filed a federal lawsuit in Chicago against Abbott and Alight Solutions alleging they failed to protect her retirement savings plan and seeking to recover the $245,000 plus damages. While Bartnett's lawsuit is focused on a single alleged victim, the problem of 401k cyberfraud is widespread, experts say.

Source: Chicagotribune.com, April 2020

RFP Guide for Selecting DC Plan Service Providers for Association Retirement Plans

The SPARK developed this tool for preparing and evaluating Requests for Proposal for Association Retirement Plans, which are a special type of defined contribution plan, to assist Associations and advisors/consultants in this important task. While the use of this tool is completely voluntary, the Society is encouraging widespread use of this tool to enable service providers to prepare consistent responses, resulting in reduced response time and improved evaluations.

Source: Sparkinstitute.org, April 2020

CARES Act Adoption Defaults

Some recordkeepers/TPAs are already reaching out to plan sponsors on decisions regarding the optional provisions of the CARES Act, notably COVID-19 related distribution and loan options, but while some are waiting for instructions, others have made some assumptions. While this is certainly a moving target, and subject to change, NAPA compiled option information into an online table for your reference.

Source: Napa-net.org, April 2020

Near-Retirement Target-Date Investors Show Signs of Stress

Target-date fund investors have a reputation for shrugging off the short-term stock market volatility, but as the coronavirus-driven sell-off accelerated in March, near-retirees saw an unusual amount of selling activity. Investors within 15 years of retirement pulled more than $9 billion in March.

Source: Morningstar.com, April 2020

SECURE, CARES Acts Change Rules on Required Minimum Distributions

The SECURE Act increases the age at which required minimum distributions must begin. The law also largely eliminates "stretch" distributions to beneficiaries of defined contribution plans. Just over three months later, the enactment of the CARES Act waived most RMDs from DC plans for 2020. Although these changes also affect individual retirement account holders, this article focuses on the impact on employer-sponsored plans.

Source: Mercer.com, April 2020

Why 401k Fees Are a Mystery

Despite fee-disclosure requirements passed a decade ago, it's not easy for participants to figure out how much they're being charged.

Source: Investmentnews.com (registration may be required), April 2020

The CARES Act Contains Changes to Retirement Plan Withdrawal Rules: What Are They?

With the nuances of the existing rules as well as the onslaught of new loan and hardship withdrawal guidance under the CARES Act, company retirement plan fiduciaries must be careful to avoid non-compliance pitfalls that could result in costly penalties. This article provides an overview of existing IRS loan and hardship requirements, updates to loans and hardship withdrawals under the CARES Act, and considerations for employers as they navigate what is likely to be a deluge of retirement plan withdrawal requests in the weeks and months ahead.

Source: Hallbenefitslaw.com, April 2020

Before You Adopt Those COVID-19 Loan and Distribution Provisions

It is important to understand that recordkeepers will not be the ones on the hook for any hasty decisions that are made regarding the CARES Act retirement plan distribution and loan provisions. That liability will rest squarely on the shoulders of the plan fiduciaries. And, as with any fiduciary decision, a prudent process should be followed, and that prudent process is probably going to take longer than five days. Should plan sponsors adopt the new loan and/or distribution rules? Here are some things to consider.

Source: Cammackretirement.com, April 2020

Retirement Contributions and the Paycheck Protection Program

The CARES Act creates a Paycheck Protection Program to help small businesses affected by the COVID-19 crisis by covering their near-term operating expenses and providing incentives to retain employees. Questions have arisen as to how "payments of retirement benefits" are considered when employers are making various payments to retirement plans.

Source: Asppa.org, April 2020

Court Finds Fault With Fiduciary Fee Review

A federal judge has found that a provider breached its fiduciary duty of overseeing its own 401k by failing to monitor proprietary funds and its recordkeeping expenses, though it was not obligated to consider options other than mutual funds.

Source: Asppa.org, April 2020

What to Do With Your 401k if You Get Laid Off

When facing a job loss, it can be natural to look at money set aside for retirement. If you had a 401k with your former employer, you’ll need to decide what to do with the funds in the account. There are several options to consider, but each one comes with potential benefits and costs. Here's what you can do with a 401k if you are laid off during the coronavirus crisis.

Source: Usnews.com, April 2020

Four Key CARES Act Provisions for Retirement Plan Sponsors

President Trump signed the Coronavirus Aid, Relief and Economic Security Act. In addition to emergency provisions including financial stimulus payments to qualifying Americans, the Act provides certain relief within retirement plans to participants and plan sponsors.

Source: Strategicbenefitservices.com, April 2020

COVID-19: So Many Questions for Employers About Their 401k Plans

COVID-19 is causing the retirement plan world to rapidly change and keeping up with the pace is challenging. The questions are coming from all sides and even showing up on page 1 of the Wall Street Journal. Not every situation has a clear-cut answer, let alone the right answer. Here is a discussion of three questions.

Source: Retirementtownhall.com, April 2020

COVID-19 Extensions for Retirement Plan Filings and Payments

Grappling with COVIT-19 issues has certainly been difficult, but retirement plan filings and payments are still required. The Internal Revenue Service has provided relief for some of them by granting extensions. Here is a summary of those extensions.

Source: Retirementplanblog.com, April 2020

The Annual Retirement Plan Checkup: An Exercise in Preventive Medicine

The primary reason that medical professionals recommend an annual checkup is that problems found early, especially when they are minor, generally are easier to fix. For the same reason, a comprehensive retirement plan checkup can help plan sponsors identify existing or potential issues and fix them before they negatively impact plan participants.

Source: Pnc.com, April 2020

Communicating With Employees During COVID-19

The coronavirus threat people around the world are facing has left plan sponsors in unknown waters, navigating several tactics to connect with their employees. Sources suggest topics to address with retirement plan participants and methods to do so in this environment of limited face-to-face contact.

Source: Plansponsor.com, April 2020

How the COVID-19 Crisis Is Affecting 401k Sales

There is no doubt that 401k and 403b plan sales have stalled as a result of the COVID-19 crisis. Retirement plan advisers and recordkeepers are putting on a brave face but, other than anecdotal sales, nothing is getting closed. Plan sponsors have more important things to focus on than changing their defined-contribution adviser or recordkeeper.

Source: Investmentnews.com (registration may be required), April 2020

Helping Your 401K Participants During the Coronavirus Crisis

With the spread of the coronavirus and the resulting closures and cutbacks, many 401k participants are working reduced hours. Many of those employees do not have high incomes or significant savings. As a result, they are likely facing financial crises, including possible eviction, loss of credit, and inability to purchase necessities. Employers, in their roles as plan sponsors, may be able to help those participants.

Source: Fredreish.com, April 2020

Seventh Circuit Upholds Dismissal of 403b Plan Lawsuit in Apparent Split With Third Circuit

Since the beginning of 2016, the ERISA plaintiffs' bar has filed nearly two dozen complaints targeting university-sponsored 403b plans. The majority of these lawsuits assert that plan fiduciaries breached their duties and engaged in prohibited transactions. In a significant development, the Seventh Circuit recently issued its decision in the case against Northwestern University and, in doing so, became the first court of appeals to uphold the dismissal of such claims in their entirety.

Source: Erisapracticecenter.com, April 2020

The CARES Act and Your Retirement Plan

With the business disruptions and market turbulence being wrought by COVID-19, many employers sponsoring qualified retirement plans are facing key decisions about their plans. Some of the most important fiduciary issues an employer may wish to consider in light of COVID-19 and depending on the type of qualified plan it sponsors are reviewed here.

Source: Consultrms.com, April 2020

Critical Qualified Plan Fiduciary Issues for Employers to Consider in Light Of Covid-19

With the business disruptions and market turbulence being wrought by COVID-19, many employers sponsoring qualified retirement plans are facing key decisions about their plans. Some of the most important fiduciary issues an employer may wish to consider in light of COVID-19 and depending on the type of qualified plan it sponsors are reviewed here.

Source: Benefitslawadvisor.com, April 2020

Five Things People Miss (or Get Wrong) About the CARES Act

The legislation is still very new, and amidst the scramble for answers and action, some things will inevitably get overlooked, and other important things will be misconstrued. Here are five things you'll want to keep straight.

Source: Asppa.org, April 2020

CARES Act -- Optional or Required? Part 1 -- Distributions

A common question regarding the CARES Act distribution, loan, and required minimum distribution waiver provisions is whether these provisions are optional or mandatory. In most cases, they are optional. But in the retirement world, there are very few questions where a short answer will suffice.

Source: Asppa.org, April 2020

COVID-19: Suspending Safe Harbor Contributions and Other Cost-Saving Measures

Employers that sponsor retirement plans and their fiduciaries must continue to manage and make retirement plan decisions during these unprecedented and uncertain times. As a response, small businesses adversely affected by COVID-19 may be considering terminating their 401k plans to end their contribution obligations and cut costs. Here are some procedural notes to bear in mind when considering whether to suspend safe harbor contributions and implement other cost-saving measures.

Source: Aspireonline.com, April 2020

Bear Market Communication Tips for DC Plan Sponsors

The bear market is challenging DC plan sponsors to reinforce timeless investing principles while also conveying new rules that bring relief to participants. Good communication practices are a key ingredient to achieving success in both these areas. How can DC plan sponsors cut through the anxiety to help participants make informed decisions? Here are ways to communicate with greater impact.

Source: Alliancebernstein.com, April 2020

Retirement and Pension Provisions in the CARES Act

Congress provides a variety of tax incentives for employers to offer retirement plans and for individuals to save for their retirement. Also, several restrictions exist to ensure that retirement funds are used for retirement purposes. The CARES Act contains several provisions that affect pensions, retirement plans, and Individual Retirement Accounts. This 3-page document from the Congressional Research Service reviews them.

Source: Congress.gov, April 2020*

Before You Take That Retirement Plan Withdrawal

While desperate times call for desperate measures and some employees' circumstances may necessitate the need to access retirement plan savings, taking these distributions before retirement age should be a measure of last resort, used only when the alternative options prove worse. Here are some of the reasons why.

Source: Cammackretirement.com, April 2020

Guidance on Substantial Workforce Cuts and Partial DC Plan Terminations

Employers that reduce their workforce or discontinue defined contribution plan eligibility for certain employee groups may experience an inadvertent "partial plan termination." If not properly managed, this event could result in a disqualification of the entire plan.

Source: Callan.com, April 2020

CARE Act Suspension of Loan Repayments: Is It the Employer's or the Participant's Choice?

The CARES Act appears to make the loan suspension mandatory. But when you look at how the IRS interpreted the same provision that was in the Katrina Emergency act, it's reasonable to conclude that it's optional, not mandatory.

Source: Businessofbenefits.com, April 2020

Impact of the CARES Act on Retirement Plans and Action Items for Plan Sponsors

This special alert addresses the relevant CARES Act provisions affecting retirement plans, which plan sponsors should be aware of immediately, and suggest practical steps that plan sponsors should consider now in light of the passage of the CARES Act.

Source: Truckerhuss.com, April 2020

COVID-19 Relief: Changing Employer Retirement Plan Contributions

As employers face the current state of the economy with COVID-19, some plan sponsors are seeking to reduce or temporarily suspend employer contributions. Here is a brief overview of the options available to employers. Plan sponsors should review their plan documents and discuss the reduction or suspension with their retirement plan service providers and/or ERISA attorneys.

Source: Tri-ad.com, April 2020

Minimizing the Risk of ERISA Litigation in a Turbulent Economic Climate

Based on past litigation experience, there are some types of investments that are considerably more likely to be the target of claims under ERISA. This article reviews these claims and also offers some thoughts on preventative measures that plan sponsors and fiduciaries can consider.

Source: Proskauer.com, April 2020

The Math Behind Plan Fee Evaluations

Plan sponsors have heard -- and many excessive fee lawsuits state --that larger defined contribution plans, in terms of assets, pay lower fees. But do they? Determining whether fees are reasonable for participants requires an additional layer of calculation, and some fee elements and allocations make it more complicated than it should be.

Source: Plansponsor.com, April 2020

Help Participants Stay on Course in Turbulent Times

The recent stock market turbulence associated with the coronavirus has been described as a crash, a "meltdown," and a "disaster." Even investors who are committed to staying the course can find it hard to overcome the uncertainty of what lies ahead. Plan sponsors can help participants to stay the course by reminding them that short-term market fluctuations, even unprecedented ones, should not affect their long-term investment goals. Here are just a few of the steps you can take to provide your plan participants with greater peace of mind that their assets are in good hands.

Source: Planpilot.com, April 2020

Special Distributions From Puerto Rico Retirement Plans and IRAs are Extended to COVID-19 Victims

The PR Treasury Department issued on March 29, 2020, Internal Revenue Circular Letter No. 20-23 providing that "Eligible Expenses" under the recently issued Internal Revenue Circular Letter No. 20-09 will also consist of damages, losses (including loss of income), and extraordinary expenses incurred as a result of the COVID-19 emergency.

Source: Mcvpr.com, April 2020

Retirement Plan Provisions in the CARES Act

The CARES Act was signed into law on March 27, 2020. It is a mammoth bill of over 880 pages and contains many employee benefit-related items. This post deals with the qualified retirement plan provisions in the Act.

Source: Kushnerco.com, April 2020

COVID-19: Impact on U.S. Retirement Plans

The COVID-19 pandemic is a once-in-a-generation global emergency. Retirement programs are not immune to the disruption it has caused. At this time it is critical that these programs continue to function and fulfill their important role in society as many will depend on them to provide much needed financial security. This 10-page reference document addresses the potential disruptions to employer-sponsored retirement programs and how plan fiduciaries can mitigate them.

Source: Buck.com, April 2020

New COVID-19 Rules for Hardship Distributions

If an affected taxpayer makes a qualified COVID-19 withdrawal, the funds are not limited to COVID-19 related expenses such as medical bills. They can be used for any purpose, such as food, rent utilities, paying off credit cards or helping another family member or any other purpose for that matter. The CARES Act is fairly broad as to who qualifies for a COVID-19 related hardship distribution.

Source: Belfint.com, April 2020

COVID-19 Checklist for Plan Sponsors

As COVID-19 upends business operations, it is changing 401k plan management. Plan sponsors face new responsibilities and urgent situations. This is a checklist of tasks and issues for consideration, with recommendations of service providers whose assistance employers may seek.

Source: Alliant401k.com, April 2020

401k Matching Contributions at High Risk Due to Coronavirus Crisis

With mass layoffs, furloughs and dramatic drops in business revenue infecting sectors across many industries as the U.S. battles the COVID-19 pandemic, it's not particularly surprising that companies are looking at suspending their 401k matching contributions, or even terminating plans altogether as they struggle to stay in business.

Source: 401kspecialistmag.com, April 2020

Plan Sponsors Facing Difficult Decisions During Coronavirus Pandemic

Employers are facing difficult decisions as a result of the economic impact of the coronavirus outbreak, including decisions about their retirement plans. Stopping employer matching contributions, laying off employees, adjusting DB plan contributions; plan sponsors need to understand the effects of each decision.

Source: Plansponsor.com, April 2020

Judge Cans Anheuser-Busch Dismissal Motion in ERISA Lawsuit

At least some district courts across the U.S. seem to be willing to allow cases alleging the use of outdated mortality tables in the calculation of nonstandard annuity benefits to proceed to trial.

Source: Planadviser.com, April 2020

Fidelity Found Liable for Certain Fiduciary Breaches

A new district court decision finds Fidelity has breached its fiduciary duties in the operations of its retirement plan; importantly, the "case stated" ruling "addresses only the question of liability, not causation or loss."

Source: Planadviser.com, April 2020

University Wins Appeal of 403b Suit

A federal appellate court has ruled in favor of the fiduciaries of a university 403b plan excessive fee lawsuit. This was the second of the 403b university excessive fee suits to go to trial and the second in which the university defendants prevailed.

Source: Ntsa-net.org, April 2020

CARES Act: Retirement Plan Impact

The CARES Act has enacted numerous economic relief measures intended to assist businesses and individuals as they deal with the broad impact of COVID-19. This article is intended to focus on the impact that the Act will have on tax-qualified retirement plans.

Source: Legacyrsllc.com, April 2020

Ten Important Facts About 401k Plans

In 1981, the Internal Revenue Service (IRS) proposed regulations for 401k plans that allowed pretax contributions to be made from employees' ordinary wages and salary. In the first years of these rules, employers typically offered 401k plans as supplements to their defined benefit plans. Almost four decades later, 401k plans have grown to become the most common employer-sponsored defined contribution retirement plan in the United States. Here are ten important facts about 401k plans.

Source: Ici.org, April 2020

Reducing or Suspending Employer Retirement Plan Contributions Due to COVID-19

The COVID-19 pandemic raises many concerns for employers who sponsor qualified retirement plans, particularly employers who experience economic hardship. This article addresses the most common questions asked by employers who want to reduce or suspend retirement plan contributions.

Source: Icemiller.com, April 2020

The Coronavirus Crisis: What Plan Sponsors Should Do

The Coronavirus pandemic is disrupting everyone's personal and financial lives. While our health, and that of our families and friends, is paramount, we realize that the sudden and large investment losses in the 401k plans that you sponsor -- and act as fiduciaries for -- present issues more challenging than those typically encountered by employers and plan committees. This article suggests steps that you can take as fiduciaries to address those challenges. The article also applies to advisors because it addresses questions they may get from plan sponsors.

Source: Fredreish.com, April 2020

Safeguarding Participant Contributions to Your 401k Plan

In light of the economic disruption created by the COVID-19 pandemic, employers are exploring all available avenues to cut costs. Many are wondering about the ability of employers to defer or eliminate contributions to 401k and other types of retirement plans. It is critical to understand that any ability to defer or eliminate 401k contributions applies to employer contributions only. Under no circumstances, may an employer defer participant contributions to a 401k Plan.

Source: Foxrothschild.com, April 2020

401k Plans in the Age of COVID-19: Hardship Withdrawals, Loans, Contributions, and Other Issues

Employee benefit plans, including 401k retirement plans, present unique issues. This article explores hardship distributions, plan loans, contributions, and other issues in association with the present COVID-19 crisis.

Source: Compliancedashboard.net, April 2020

The CARES Act Participant Loan Payment Suspension Rules Take an Unusual Approach

The structure and the language used by the drafters of the CARES Act in their crafting of the new participant loan repayment suspension rules seem to be both rare and broad: they appear to mandate, as a matter of federal law, that each loan repayment due through December 31, 2020, by COVID qualifying participants be suspended for one year. Interestingly enough, the language does not appear to prevent ongoing loan repayments from being made should the participant choose to do so. The plan may not be able to impose a due date on those payments from COVID participants. The challenge for administrators is how you accommodate the suspension with the desire to permit repayments at the same time?

Source: Businessofbenefits.com, April 2020

IRS Extends Remedial Amendment Periods

The IRS has extended the remedial amendment period for 403b plans and pre-approved defined benefit plans. The IRS made the announcement on March 27.

Source: Asppa-net.org, April 2020


The CARES Act includes several key provisions that will positively impact retirement plan participants and plan sponsors. The ARA has prepared this FAQs to highlight some of the most salient relief measures.

Source: Asppa-net.org, April 2020

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