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COLLECTED WISDOM™ on Compliance and Regulatory Related Issues

This page gathers relevant information for 401k plan managers, sponsors, administrators, recordkeepers and others with plan fiduciary and administrative responsibilities. It covers many aspects of compliance and regulatory related issues.

This archive contains not only the most current material on the topic, but also older items that are still relevant, provide background, perspective or are germane to the topic.

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Podcast: Employee Contribution Failures

A common failure is not following the participant's contribution election, or perhaps failing to auto-enroll a participant otherwise eligible. So how do employee contribution failures occur, and how are they typically corrected? How do the IRS correction procedures treat automatic deferral plans? This podcast looks at these pressing questions and more.

Source: Seyfarth.com, February 2023

Correcting Average Deferral Percentage Test Failures

The tax code governing 401k plans was written to prevent qualified retirement plans from overly favoring highly compensated employees. A series of non-discrimination tests were devised to measure whether a plan's design or operation tends to favor the HCEs over the non-highly compensated employees. This article dives into the different methods of correcting an ADP test failure.

Source: Legacyrsllc.com, February 2023

Ten Mandatory SECURE 2.0 Changes for 401k Plans

The SECURE 2.0 Act of 2022 contains over 90 provisions affecting retirement plans and IRAs, but only a handful are required changes for 401k plans. This post lists those changes and indicates when the provisions go into effect. Unless otherwise noted, 401k plans will need to be amended to reflect mandatory SECURE 2.0 changes by the end of their 2025 plan year. Some of the changes listed here, such as the paper disclosure requirement, may not require a plan amendment.

Source: Eforerisa.com, February 2023

Defined Contribution Plan and IRA Distributions Reconsidered

SECURE 2.0 made significant changes to the required minimum distribution rules. Several of those changes relax the basic RMD rules and reduce the penalties applicable when RMDs are not made. Other, more technical changes to the RMD and early distribution rules are intended to encourage the use of defined contribution plans and individual retirement account funds to purchase life annuities.

Source: Cohenbuckmann.com, February 2023

Dialing Up the Intensity of Missing Participant Searches

Understanding how (and when) to increase the intensity of a missing participant search is vital to fulfilling a plan sponsor's fiduciary duty to ensure that plan participants receive the retirement benefits that they're owed.

Source: 401kspecialistmag.com, February 2023

SECURE 2.0 Act: Optional Treatment of Employer Matching or Non-elective Contributions as Roth Contributions

Historically, employers were not permitted to provide employer matching or nonelective contributions in their 401k, 403b, and governmental 457b plans on a Roth basis. These types of employer contributions were allowed only on a pre-tax basis. Under a new provision of the SECURE 2.0 Act, effective immediately, plans may now allow participants to elect to receive matching and nonelective contributions on a post-tax basis.

Source: Schneiderdowns.com, January 2023

Secure 2.0's New QDRO Rules: The Mainstreaming of the QLAC?

The regs must be changed to reflect that if a QLAC is issued as a joint and survivor annuity (which it is required to be unless spousal consent is obtained, under plans to which such rules apply), and a divorce subsequently occurs before the date the annuity payments begin, the DRO "will not affect the permissibility of the joint and survivor annuity benefits" as long as that order meets several requirements.

Source: Businessofbenefits.com, January 2023

Annual Notice of Discretionary Match in Pre-Approved 401k Plans May Be Required Soon

Employers that provide 401k plans on documents that have been "pre-approved" by the Internal Revenue Service beware: there is yet another annual notice requirement that may need to be added to your compliance list.

Source: Ogletree.com, January 2023

Major SECURE 2.0 Error Puts Catch-Ups in Jeopardy

The American Retirement Association recently identified what it calls a "significant technical error" in the SECURE 2.0 Act of 2022 regarding catch-up contributions. Specifically, according to wording in the current legislation, beginning in 2024, no participants will be able to make catch-up contributions (pre-tax or Roth). That's the result of the elimination of a subparagraph in the body of the legislation to allow for a conforming amendment, but in the process inadvertently eliminated the ability to make any pre-tax catch-up contributions.

Source: Asppa.org, January 2023

User's guide to SECURE 2.0

Navigating SECURE 2.0 is a formidable challenge. The statute consists of 120 pages of text and 90 individual sections with no table of contents. To help employers and plan sponsors understand the legislation's implications, this guide provides a high-level summary of SECURE 2.0 provisions grouped topically including separate treatment of provisions specific to DC and DB plans. The six tables in this guide describe statutory changes and their effective dates, identify whether the changes are mandatory or optional for employers, and provide initial observations, including implementation challenges for which agency guidance would be helpful.

Source: Mercer.com, January 2023

Proposed IRS Regulations Would Make Permanent the Availability of Remote Spousal Consent Elections

On December 27, 2022, the IRS issued proposed regulations permitting remote witnessing, in the presence of either a notary public or plan administrator, as an acceptable alternative to the physical presence requirement if certain conditions are satisfied.

Source: Wagnerlawgroup.com, January 2023

SECURE 2.0 Provisions Impacting Employer-Sponsored Retirement Plans

Building upon the retirement improvements made by SECURE 1.0, SECURE 2.0 aims to expand retirement coverage and increase retirement savings. SECURE 2.0 also includes provisions intended to simplify and clarify plan rules and provisions that generate revenue for the U.S. Department of the Treasury. SECURE 2.0 contains more than 90 substantive changes to retirement plan law. The key provisions impacting employer-sponsored retirement plans are discussed here.

Source: Truckerhuss.com, January 2023

Legislative Highlights of SECURE 2.0 Act and Impact on Retirement Plans

The provisions included in the SECURE 2.0 Act will take effect in varying years. This staggered approach gives plan sponsors and service providers more time to understand and implement these changes to their plans and recordkeeping systems. This article provides a high-level summary of selected provisions that are effective in 2023.

Source: Tri-ad.com, January 2023

Continuation of Remote Spousal Consent Proposed by Treasury

The Treasury Department has proposed changes to, and clarifications of, its remote consent rules. The proposed rule, which replaces a temporary notice that expired on December 31, 2022, allows plans to continue to use remote consent, with minor changes. Sponsors of retirement plans may rely on the proposed rule immediately although it will not be effective until six months after a final rule is issued.

Source: Segalco.com, January 2023

Required Minimum Distribution Age to Increase to 75

Effective for distributions made after December 31, 2022, Section 107 of SECURE 2.0 increases the RMD age to 73 for retirees who (a) attain age 72 after December 31, 2022, and (b) attain age 73 before January 1, 2033. It then increases the RMD age to 75 for retirees who attain age 74 after December 31, 2032. Additionally, Congress directed the Internal Revenue Service to update its regulations to eliminate what can amount to a penalty on plan participants with accounts that include annuity contracts.

Source: Benefitslawadvisor.com, January 2023

IRS Proposes Making Remote Notarization Permanent for Retirement Plan Elections & Consents

The proposed amendments would provide an alternative to in-person witnessing of spousal consents required to be witnessed by a notary public or a plan representative, and clarifies that certain special rules for the use of an electronic medium for participant elections also apply to spousal consents. This article provides background and commentary.

Source: Groom.com, January 2023

Pocket Guide to SECURE 2.0

The SECURE 2.0 Act of 2022 was signed into law on December 29, 2022, as part of the Consolidated Appropriations Act, of 2023. This Pocket Guide provides a summary of the retirement-related provisions in SECURE 2.0. Parts I through XIII of the Pocket Guide are organized chronologically by effective date, and the final part summarizes provisions with varying effective dates after SECURE 2.0 enactment.

Source: Erisapracticecenter.com, January 2023

SECURE 2.0 Retirement Reform Becomes Law

The SECURE 2.0 Act of 2022 was enacted as part of the 2023 Consolidated Appropriations Act, which was signed into law on December 29, 2022. It is the culmination of a multi-year, bicameral, bipartisan effort to follow up on the SECURE Act that was enacted on December 20, 2019. SECURE 2.0 contains roughly 90 separate provisions each with its own effective date. This article focuses on the provisions of SECURE 2.0 that are of interest to large and medium-sized employers and plans.

Source: Segalco.com, January 2023

Secure 2.0: Congress Enacts Wide-Ranging Changes to 401k and 403b Plans

As part of its mammoth 2022 year-end spending bill, Congress passed Secure 2.0, which makes dozens of modifications to the laws governing retirement savings. These revisions, almost all of which were driven by concerns that Americans are failing to accumulate sufficient resources to fund their retirement, build on changes Congress made in 2019 in the SECURE Act. This is a list of key provisions in Secure 2.0 that employers with existing 401k and 403b plans need to pay attention to.

Source: Blankrome.com, January 2023

Defined Contribution Retirement Plan: 2023 Compliance Calendar

Retirement plan sponsors are responsible for compliance with many ongoing reporting, disclosure, and notice requirements. This Retirement Plan Compliance Calendar summarizes the major requirements that apply to defined contribution plans for 2023. Due dates are based on a calendar plan year and apply to plans subject to ERISA.

Source: Usicg.com, January 2023

IRS Proposes Alternative to In-Person Witnessing of Spousal Consents

The IRS has issued proposed regulations on the use of electronic media to make participant elections and spousal consents. The proposed regulation generally affects sponsors and administrators of, and individuals entitled to benefits under, certain qualified retirement plans.

Source: Napa-net.org, January 2023

SECURE 2.0 Delivers New Rules for Correcting Retirement Plan Errors

This article discusses three significant changes to corrections of common retirement plan errors: New rules for correcting overpayments, expansion of the Self-Correction Program under the IRS's Employee Plans Compliance Resolution System to cover most inadvertent errors, and making permanent the current EPCRS safe harbor correction method for elective deferral failures related to automatic contribution arrangements.

Source: Erisapracticecenter.com, January 2023

IRS Proposed Regulations Would Permanently Allow Remote Witnessing of Spousal Consent

The IRS issued new proposed regulations that would permanently change the rules that require spousal consent for plan distributions to be signed in the physical presence of a notary or plan representative. Specifically, the proposed regulations would allow plans to accept remote notarization or witnessing by a plan representative if the remote process meets certain standards aimed at ensuring the integrity of the process.

Source: Erisapracticecenter.com, December 2022

How Does One Implement a Student Loan Matching Benefit?

The SECURE 2.0 Act passed Congress and would allow employers to offer matching 401k, 403b, 457b, and SIMPLE IRA contributions if the participant elects to pay down student loans instead of contributing to a retirement plan. This option would be available starting after December 31, 2023. How should plan sponsors go about implementing this provision, if they choose to?

Source: Planadviser.com, December 2022

SECURE 2.0 Retirement Reforms Set to Become Law

The enactment of SECURE 2.0 caps several years of congressional effort. Numerous stakeholders have worked to educate lawmakers about the value of the employer-based retirement system and the need for many policy changes to support it. This article provides a high-level summary of some key provisions in the legislation.

Source: Mercer.com, December 2022

RMD Age Increases to 73 in 2023 Under SECURE 2.0

While it came down to the wire, both the House and Senate have now approved the much-anticipated SECURE 2.0 Act of 2022 as part of the mammoth $1.7 trillion omnibus spending bill.

Source: 401kspecialistmag.com, December 2022

Proposed Changes to the DOL's Voluntary Fiduciary Correction Program

The DOL published proposed updates to its Voluntary Fiduciary Correction Program. The VFCP is designed to encourage employers to voluntarily comply with ERISA by voluntarily correcting certain prohibited transactions and submitting those corrections to the Program for approval. 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. Here is a summary of the proposed changes.

Source: Truckerhuss.com, December 2022

DOL Proposes Significant Changes to VFCP Program

The VFCP allows plan sponsors to voluntarily correct certain fiduciary breaches to avoid civil enforcement actions and civil penalties imposed under ERISA. The most relevant components of the proposed changes for plan sponsors relate to delinquent contributions of participant deferrals and loan repayments as these tend to occur more frequently than other issues corrected through the VFCP. Importantly, the proposed amended and restated VFCP would add a new self-correction feature, clarify existing transactions currently eligible for correction and simplify certain administrative or procedural requirements for participation in and correction of transactions under the VFCP.

Source: Employeebenefitsblog.com, December 2022

The Unsung Importance of Self-Correction Memos

Self-correction of operational errors arising in qualified retirement plans is a critical means for plan sponsors to retain their plans' tax-qualified status. Self-correction has been promoted by the Internal Revenue Service as part of the Employee Plans Compliance Resolution System for approximately twenty years, but the rules for self-correction have evolved over that period, and some essential requirements of self-correction are still little understood. One recommended component of self-correction that can tend to be overlooked is the preparation of a self-correction memo.

Source: Eforerisa.com, December 2022

DOL Announces Form 5500 Changes

The DOL announced changes to Forms 5500 and 5500-SF (short form) and released updated instructions on December 8. The DOL updates Form 5500 annually to keep it up-to-date with various regulatory changes. Every defined contribution and pension plan sponsor is required to file a 5500 to the IRS and DOL annually.

Source: Plansponsor.com, December 2022

2023 ERISA Plan Compliance Calendar

Being a retirement plan sponsor involves juggling many tasks, one of the more important is to make sure your plan complies with all pertinent federal legislation and regulations. A compliance calendar like this one helps you keep track of your company's required filings, their due dates, and related details so you can avoid incurring any fines or other penalties for late filings or missing information.

Source: Plansponsor.com, December 2022

Your 7-Point Year-End Retirement Checklist

Remember the late nights spent coupon hunting with family after Thanksgiving dinner, scouring the papers, and meticulously planning each store's purchases for Black Friday? Organizational year-end activity is no different, so here are seven financial to-do's that plan sponsors need to complete and remind participants about before December 31.

Source: 401kspecialistmag.com, December 2022

401k Plan Matching Contributions: To True Up or Not True Up?

As a matter of plan design, for purposes of matching contributions, some 401k plans provide that a participant's compensation for the entire plan year is taken into account, while other 401k plans take into account a participant's compensation only for payroll periods for which the participant makes elective deferrals. The former design is commonly referred to as a "true up" feature. This article illustrates, through examples, each design, and addresses why a plan sponsor might choose one design over the other.

Source: Verrill-law.com, December 2022

DOL Releases Final Regulation on ESG Investing

Following the Biden administration's launch of a government-wide effort to combat climate change, on November 22, 2022, the DOL released a final regulation, which allows for more latitude in considering ESG factors when investing plan assets and backtracks on prior Trump-era restrictions in considering ESG factors.

Source: Paulhastings.com, December 2022

For Second Consecutive Year, IRS 2022 Required Amendments List Does Not Affect 401k Plans

On November 21, 2022, the IRS released Notice 2022-62, its annual list of required amendments for individually designed qualified retirement plans, including 401k plans. Notably, for the second consecutive year, the RA List contains no provisions directly applicable to 401k plans and, in fact, contains no changes affecting retirement plans at all.

Source: Compliancedashboard.net, December 2022

2022 Required Amendments List Includes No Changes in Qualification Requirements

While this year's IRS Required Amendments List does not specify changes, that does not necessarily mean that 401k plan sponsors have no amendments to adopt. The RA List does not cover discretionary plan amendments, which generally must be adopted by the end of the plan year in which discretionary plan design or operational changes are implemented, except for certain discretionary amendments that must be adopted before they are implemented.

Source: Thomsonreuters.com, December 2022

DOL Proposes to Amend Its Voluntary Fiduciary Correction Program

The proposed amendment and restatement of the VFC Program and related PTE 2002-51 to incorporate self-correction of the transmittal of delinquent contributions and loan repayments is a mixed bag at best. Although delinquent contributions are the number one failure corrected through the VFC Program, the $1,000-or-less limit on lost earnings may limit the self-correction component's utility.

Source: Thomsonreuters.com, December 2022

DOL Final Regulations Authorize Plan Fiduciaries to Consider Climate Change and Other ESG Factors

The final regulations purport to clarify that fiduciaries may consider the potential financial benefits of ESG funds when selecting investments and that doing so may not violate ERISA. However, it is unclear whether this will be the case in operation.

Source: Thomsonreuters.com, December 2022

2023 US Defined Contribution Plan Compliance Calendar

For calendar-year defined contribution plans, this retirement plan compliance calendar list key IRS, Pension Benefit Guaranty Corp., and Labor Department reporting and disclosure deadlines.

Source: Mercer.com, November 2022

DOL Proposes Adding Self-Correction Component to VFCP

The DOL proposed updates to the voluntary fiduciary correction program, including a provision that should help plan sponsors and providers. More specifically, the addition of a self-correction component for employers that fail to send employee salary withholding contributions or participant loan repayments to retirement plans on time.

Source: Asppa.org, November 2022

ARA Presses DOL for Changes to QPAM Exemption Proposal

The American Retirement Association is calling on the Department of Labor to make changes to its proposed amendments to the Qualified Professional Asset Manager exemption, arguing that, as currently drafted, the proposal would needlessly disrupt plan relationships and increase costs.

Source: Asppa.org, November 2022

DOL Proposes Changes to the Voluntary Fiduciary Correction Program and Related Prohibited Transaction Exemption

On November 18, 2022, the DOL issued proposed amendments to the Voluntary Fiduciary Correction Program and Prohibited Transaction Exemption 2002-51. The VFCP provides relief from civil liability and an exemption from excise taxes under the Internal Revenue Code to employee benefit plan fiduciaries if they voluntarily report and correct certain transactions that breach their fiduciary duty under ERISA.

Source: Westlaw.com, November 2022

DOL Proposes Self-Correction of Delinquent Contributions and Loan Payments Under Qualified Retirement Plans

Self-corrections would be allowed for certain low-level delinquent participant contributions, which is significant since delinquent participant contributions are the most common problem corrected through the VFCP.

Source: Sidley.com, November 2022

Year-End Compliance Issues for Single-employer DB and DC Retirement Plans

By year-end 2022, sponsors of calendar-year single-employer retirement plans must adopt necessary and discretionary plan amendments to ensure compliance with statutory and regulatory requirements of ERISA and the tax code. This piece looks at key areas, including administrative compliance issues, that DB and DC plan sponsors should address by December 31, 2022.

Source: Milliman.com, November 2022

401k Annual Administration - A Checklist for Business Owners

Annual 401k administration shouldn't be stressful or time-consuming for employers. A qualified 401k provider will do most of the heavy lifting by completing the many technical tasks, making the employer's role simple. Employers should use a checklist like the one provided here to ensure their 401k plan's annual administration tasks are completed on time. A 401k administration checklist can also help employers monitor their plan provider's job performance.

Source: Employeefiduciary.com, November 2022

IRS Expands Determination Letter Process for Certain Individually Designed 401k Plans

On November 7, 2022, the IRS released Revenue Procedure 2022-40 which generally updates the determination letter submission process for qualified retirement plans, including 401k plans. In particular, among other changes, the program expands the eligibility for requesting determination letters for certain individually designed plans, extends the "remedial amendment period" for certain new plans, and revises the scope of IRS review generally applicable to the determination letter process.

Source: Compliancedashboard.net, November 2022

DOL Proposes Adding Self-Correction Component to VFCP

On November 18, the DOL proposed updates to the voluntary fiduciary correction program, including a provision that should help plan sponsors and providers More specifically, the addition of a self-correction component for employers that fail to send employee salary withholding contributions or participant loan repayments to retirement plans promptly.

Source: Ntsa-net.org, November 2022

IRS Signals Employers Will Have Less Discretion Over Discretionary Match

Employers offering discretionary matching contributions have less discretion to set the terms of those contributions outside of plan documents. The IRS recently noted that 403b plan documents submitted for preapproval must include provisions on the computation period and allocation formula for a discretionary match. This likely means that going forward, all employers using preapproved documents for their defined contribution plans -- 403b and qualified plans -- should expect to specify these terms in newly adopted documents.

Source: Mercer.com, November 2022

Tackling Beneficiary Designations

The majority of beneficiary designation issues affecting plan sponsors and administrators arise after a participant has passed away and is no longer able to make changes. To prevent costly and time-consuming, competing claims and potential litigation related to 401k account balances, plan sponsors and administrators should strongly consider investing more time in developing and following through with best practices related to beneficiary designations that are intended to avoid any future, competing claims and potential litigation.

Source: Foley.com, November 2022

IRS Provides Extension to Certain Retirement Plan Amendment Deadlines

On Aug. 3, 2022, the IRS issued Notice 2022-33 which extends the deadlines for certain plan sponsors to adopt amendments under the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act), the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), and the Bipartisan American Miners Act of 2019 (Miners Act) until Dec. 31, 2025. This extension applies to non-governmental qualified retirement plans, 403b plans as well as collectively bargained plans, and IRAs.

Source: Bsk.com, November 2022

Employee Benefit Plan Year-End Deadlines

This year, with the delay of the deadline for amending qualified plans, 403b plans, and governmental 457b plans to comply with the SECURE Act and CARES Act, year-end to-dos are on the light side; however, there are still a few deadlines to be aware of depending on what types of plans an employer sponsors, including the first item mentioned below, a disclosure that applies to the majority of employers.

Source: Frostbrowntodd.com, November 2022

What Retirement Plan Sponsors Need to Know About SECURE 2.0

Federal legislation that would substantially impact retirement plan sponsors, service providers, and plan participants appears likely by year-end. Although the contours of a final bill still need to be refined, certain provisions are likely to be included in enacted legislation, dubbed SECURE 2.0. It is not too early for plan sponsors to begin preparations. Here are some steps plan sponsors may want to consider now and when legislation becomes reality.

Source: Troweprice.com, November 2022

When Is Spousal Consent Required Under a Qualified Retirement Plan?

Spousal consent for qualified retirement plans has been in the spotlight recently as a result of the COVID-19 pandemic. In response to the temporary lockdowns in 2020 and the extended period of social distancing that followed, the IRS began to permit electronic consent rather than the standard requirement for a consenting spouse to sign in the presence of a notary public. Spousal consent is only required in certain situations which are reviewed here.

Source: Klblawgroup.com, November 2022

401k End of Year Reminder Checklist - 2022

This 401k plan checklist will help you end your plan year smoothly.

Source: Consultrms.com, November 2022

DOL Clarifies Bonding Requirements for Pooled Employer Plans

A DOL information letter clarifies how ERISA's bond requirements apply to a pooled employer plan. A PEP is a type of multiple-employer plan created by the SECURE Act to make it easier for unrelated employers to participate in group retirement plans.

Source: Mercer.com, November 2022

2022 Retirement Plan Year-End Amendments and Operational Compliance

As the end of 2022 approaches, it's again time for plan sponsors to review their plan documents and plan operations to ensure compliance with increasingly complex qualification requirements and moving deadlines. While there are few, if any, required plan amendments for 2022, plan sponsors must remain diligent about amendment deadlines, operational compliance with changes in law, and ensuring later-adopted plan amendments accurately reflect plan operations.

Source: Groom.com, November 2022

Plan Amendment Deadline for SECURE and CARES Amendments

This Tax Magazine article by Groom principals Elizabeth Dold and David Levine contains a summary of the key SECURE, Miners, and CARES Act amendments, in chart format, for both defined benefit and defined contribution plans, along with a look at the amendment deadlines that apply to these provisions.

Source: Groom.com, November 2022

401k Errors That Should Require a Plan Provider Change

Change for the sake of change is a bad idea, you need a reason for it. There are certain plan errors where 401k plan sponsors should consider change and that change is a change of their plan providers. Here is a list of 401k errors that should get the plan sponsor to consider making such a change.

Source: Jdsupra.com, October 2022

Maintaining Plan Documents and Procedures for Retirement Plan Required Minimum Distributions

Various types of tax-qualified retirement plans and individual retirement accounts must pay required minimum distributions to participants at their required beginning date. Retirement plan participants that do not timely obtain the required minimum distributions of their benefits can face excise tax penalties for these failures, and plan sponsors can face plan disqualification. Plan sponsors and fiduciaries should clearly communicate plan rules and update their documents and procedures to ensure that required minimum distributions are timely taken, especially since the rules have changed in recent years.

Source: Mintz.com, October 2022

The Importance of Maintaining Retirement Beneficiary Forms

A new employee has a variety of forms to complete when hired. One of the most important forms new employees must complete is a beneficiary form for the company's retirement benefit plans. The plan sponsor must provide a beneficiary form to keep on file upon enrolling a new employee in a retirement plan. Plan sponsors should also update or confirm beneficiary information annually.

Source: Watkinsross.com, October 2022

Best Practices for 401k Plan SPDs

To help employers properly administer their 401k plans, Foley & Lardner LLP has been authoring a series of monthly "401k Compliance Check" newsletters. This latest article includes some tips for drafting a best-in-class 401k plan summary plan description.

Source: Foley.com, October 2022

IRS Issues Update on Required Minimum Distribution Rule

The IRS has issued Notice 2022-53, providing guidance on final regulations related to required minimum distributions under section 401(a)(9) of the Internal Revenue Code that will apply no earlier than the 2023 distribution calendar year. The notice also provides guidance related to certain provisions of section 401(a)(9) that apply for 2021 and 2022.

Source: Planadviser.com, October 2022

IRS Extends Helpful RMD Rule Transition Relief

In recognition that RMDs may not have been made in 2022 in compliance with the Proposed Rule, or in 2021 consistent with what the IRS would consider a good faith interpretation of the SECURE Act, the IRS issued Notice 2022-53 to provide transition relief for 2021 and 2022. Additionally, Notice 2022-53 states that the final RMD rule will not apply to RMDs any earlier than 2023.

Source: Icemiller.com, October 2022

IRS Extends Deadline to Amend Plans for Additional Cares Act, CAA Disaster Relief Provisions

On September 26, 2022, the IRS issued Notice 2022-45 which extends the deadline for amending retirement plans, including 401k plans, to comply with recent legislation. The applicable legislative provisions, which have now expired, were enacted as part of a wider effort to provide temporary relief in response to the global COVID-19 pandemic, and generally require plan documents to be amended, as further explained below.

Source: Compliancedashboard.net, October 2022

IRS Extends More Retirement Plan Amendment Deadlines

The IRS announced on September 26, 2022, that it would extend the deadline for amending retirement plans or IRAs to reflect coronavirus-related distributions and certain qualified disaster distributions. Notice 2022-45 extends the deadline by three years, generally to December 31, 2025. The deadline extension also applies to retirement plans that allowed expanded participant plan loans during 2020.

Source: Bdo.com, October 2022

Retirement Plan Sponsors Have Short 2022 Year-End Amendment List

With IRS recently extending several plan amendment deadlines, retirement plan sponsors now have few (if any) plan amendments to adopt before 2022 draws to a close.

Source: Mercer.com, October 2022

DOL Set to Finalize ESG Rule for Retirement Plans

The DOL has effectively finished its ESG rule for retirement plans and sent it to the White House Thursday for final approval. The final version of that rule, which has been in the works since last year, likely will not be published until next month.

Source: Investmentnews.com, October 2022

IRS Notice 2022-53: Certain Required Minimum Distributions for 2021 and 2022

This notice announces that the Internal Revenue Service intends to issue final regulations related to required minimum distributions under section 401(a)(9) of the Internal Revenue Code that will apply no earlier than the 2023 distribution calendar year. In addition, this notice provides guidance related to certain provisions of section 401(a)(9) that apply for 2021 and 2022.

Source: Irs.gov, October 2022

IRS Extends More Retirement Plan Amendment Deadlines

Newly released IRS Notice 2022-45 extends the plan amendment deadline for provisions of the CARES Act that allowed retirement plan sponsors to offer special penalty-free distributions, set a higher plan loan cap, and suspend loan repayments for participants affected by the COVID-19 pandemic. The extension also applies to provisions of the Taxpayer Certainty and Disaster Tax Relief Act of 2020 that allowed penalty-free distributions to participants affected by certain disasters.

Source: Mercer.com, October 2022

Retirement Plan Notice Delivery Requirements

Providing your employees and plan participants timely access to retirement plan documents is required by law. In May 2020, the DOL finally agreed the internet is here to stay and, at long last, has made it easier to fulfill that requirement electronically. With the rise in technology and the use of electronic devices, the DOL has learned to appreciate the benefits that come with recognizing electronic delivery as an acceptable medium for communicating these required documents to employees. Regardless of delivery method, Plan administrators must still take measures to reasonably ensure the confidentiality of personal information is protected, the documents are received and reviewed, and the process remains free of charge to the participant.

Source: Benefit-Resources.com, October 2022

Limited Plan Audits Are History: What 401k Plan Sponsors Should Know

Two types of 401k plan audits exist, limited and full-scope audits. In a limited scope audit, an independent auditor does not have to audit any plan asset information if a bank, an insurance company, or a regulated trust company holds the 401k plan's assets. Limited scope audits are changing and plan sponsors should understand how these changes impact their 401k plans.

Source: Sequoia.com, October 2022

Plan Sponsors Can Self-Audit Before an IRS Examination

Voluntary compliance tools are an important part of the IRS's retirement plan enforcement strategy. If a plan is out of compliance, the primary IRS goal is for the plan sponsor to make the necessary changes to bring the plan into compliance, although it also has the authority to assess penalties, taxes, interest, and even disqualify a plan. Recently, the IRS announced a new enforcement initiative that involves plan sponsors auditing their plans.

Source: Newportgroup.com, September 2022

The Headache of 401k Plan Notices

Being a 401k plan sponsor isn't easy and one of the biggest headaches is dealing with notices and required documents. One area that most plan sponsors fail to fulfill their duties is the dissemination of required notices and documents, especially to former employees who still have a participant account balance in their plan.

Source: Jdsupra.com, September 2022

Year-End Amendments Extended: CARES and 2020 Relief Act

Following up on the SECURE Act and other recent plan amendment extensions in Notice 2022-33, the IRS has issued Notice 2022-45 (Sept. 27, 2022) to extend the amendment deadlines for the remaining provisions of the CARES Act, as well as for relief provided under the Taxpayer Certainty and Disaster Tax Relief Act of 2020, generally until December 31, 2025.

Source: Groom.com, September 2022

Clarification on Extension of Amendment Deadlines for CARES Act Provisions

The IRS released IRS Notice 2022-45, which corrected a potential oversight in IRS Notice 2022-33. Notice 2022-33 had extended the deadline to adopt certain retirement and savings plan amendments required by the SECURE Act and the CARES Act from December 31, 2022, to December 31, 2025, but the extension did not apply to certain CARES Act provisions, including penalty-free coronavirus-related distributions, increasing the permissible loan amount, and delaying repayment of loan amounts.

Source: Erisapracticecenter.com, September 2022

Retirement Plan Documentation Mitigates Operational Risk

Retirement plans face risk every day from many sources. One of the most overlooked is operational risk, often due to inconsistent employee performance and turnover. Employee turnover among a plan sponsor's benefits staff can lead to a loss of valuable knowledge and experience, as well as operational failures and possible litigation. Unfortunately, plan sponsors often learn this the hard way. The Great Resignation was a wake-up call to many employers. They realized that the knowledge employees took with them will take years to replace.

Source: Segalco.com, September 2022

IRS Extends Plan Amendment Deadlines Under CARES, Disaster Relief Acts

The IRS on Sept. 26 in Notice 2022-45 announced that it is extending the deadline for amending eligible retirement plans concerning coronavirus-related distributions and the use of retirement funds for disaster-related assistance.The IRS on Sept. 26 in Notice 2022-45 announced that it is extending the deadline for amending eligible retirement plans concerning coronavirus-related distributions and the use of retirement funds for disaster-related assistance.

Source: Napa-net.org, September 2022

Amending Your Retirement Plans This Year for SECURE Act and CARES Act Changes

While many commentators and employee benefits publications have cheered the three-year extension, the article authors are of the view that plan sponsors will be best served by amending their plans this year to incorporate provisions of the SECURE Act, the Miners Act, and the CARES Act that they have been applying in operation.

Source: Verrill-law.com, September 2022

What Qualifies as an "Immediate and Heavy Financial Need" Under Hardship Withdrawal Rules?

Do specialists have a list of the types of expenses for which distributions are deemed to be made on account of an immediate and heavy financial need from a 401k/ 403b plan under the hardship withdrawal rules? Experts from Groom Law Group and CAPTRUST answer the question.

Source: Plansponsor.com, September 2022

IRS Makes Changes to Determination Letter Application Program

IRS Revenue Procedure 2022-4 made some notable changes to the determination letter application filing process. This article provides background on changes made under the Revenue Procedure to the determination letter filing process, including utilizing pay.gov, some "nuts and bolts" advice regarding navigating the website, filing an IRS Form 2848 electronically, and related considerations.

Source: Groom.com, September 2022

Top 401k Priorities on the DOL's Regulatory Agenda

On June 21, 2022, the DOL published its Spring 2022 Regulatory Agenda which lists all the regulations the DOL expects to have under active consideration, including 401k reform items. You should check them out to understand the DOL's 401k-related priorities for the next 12 months. Here are the three 401k-related priorities that the author is most excited about.

Source: Employeefiduciary.com, September 2022

DOL Releases New Bulletin on Independence for Plan Accountants

How independent do accountants have to be when auditing plan documents? The DOL just got more specific. Interpretive Bulletin 2022-01 revises and restates the 1975 Interpretive Bulletin to remove certain outdated and unnecessarily restrictive provisions and reorganize other provisions for clarity.

Source: 401kspecialistmag.com, September 2022

Guidance on Employee Benefit Plan Auditor Independence Clears Review

While there are no details yet, the federal government's regulatory dashboard suggests that the DOL may soon release guidance addressing the independence of employee benefit plan accountants. The Office of Information and Regulatory Affairs has concluded a review of an interpretive bulletin concerning the independence of employee benefit plan accountants and presumably their audit functions.

Source: Napa-net.org, August 2022

Comparing Seven Defined Contribution Plan Designs - 2022

In designing a retirement plan, you look at the employer's objectives, the need for flexibility, the ages of the key personnel, the salaries of everyone involved, total budgeted dollars, the advantages of adding 401k features, etc. This chart shows the results of an analysis prepared for one company that wanted a defined contribution plan. There were 10 people eligible for the retirement plan, including one owner.

Source: Consultrms.com, August 2022

Maintaining Records: Who Does What, and When?

Retaining and maintaining records is not a minor matter, ERISA and DOL regulations make that clear. And yet, says a plan administrator, policies concerning record retention and maintenance are not as common as one may expect.

Source: Asppa.org, August 2022

Avoiding Improper Retirement Plan Distributions

One of the challenges of administering a retirement plan is the timely and proper payment of distributions to plan participants. This responsibility occurs in more than one context and can have several "facts and circumstances" variations.

Source: Penchecks.com, August 2022

IRS Extends Deadlines for Amending a Retirement Plan or IRA for Certain Provisions of SECURE Act, Miners Act, and CARES Act

On August 3, 2022, the IRS issued Notice 2022-33 to extend the deadlines to amend certain retirement plans (such as qualified 401(a) plans, 403b plans, governmental 457b plans, and individual retirement arrangements) for certain provisions of the Setting Every Community Up for Retirement Enhancement Act of 2019 and section 104 (relating to reduced age for in-service distributions for qualified 401(a) plans and governmental 457b plans) of the Bipartisan American Miners Act of 2019.

Source: Icemiller.com, August 2022

Compliance Check: Amending Your 401k Plan Document on Time

This article looks at the deadlines for a plan sponsor of an individually-designed 401k plan to adopt legally-required and discretionary 401k plan amendments, as well as recent IRS Notice 2022-33, which extended the deadline for certain legally-required 401k plan amendments related to the SECURE Act and the CARES Act.

Source: Foley.com, August 2022

A Beneficiary Form Is the Most Important Employee Benefit Form

The most important form in all employee benefits is an individual employee's 401k plan beneficiary form. In the absence of a valid beneficiary form, 401k plan documents will often control the distribution of plan proceeds upon an employee's death. In other words, the distribution of large sums of money could potentially be against the deceased employee's wishes. The best way to avoid this issue is to make sure that an individual employee's 401k beneficiary form exists, is current, and matches any estate planning documents.

Source: Masudafunai.com, August 2022

What Retirement Policies Should Your 401k Plan Have in Place

Having clear policies and procedures for 401k plans helps employees involved in the plan administration do their job more efficiently by mapping out steps to take when various situations arise. ERISA and the DOL guidance recommend retirement plans maintain some of these policies and, while not required by law, are helpful in the event of a DOL audit or participant litigation. This article reviews what policies you should consider having and what they entail.

Source: Consultrms.com, August 2022


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