How Will the SECURE Act Affect a 401k Plan Sponsor
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In This Issue
Legislative and Washington DC How Will the SECURE Act Affect a 401k Plan Sponsor The SECURE Act and spending bill provisions recently signed into law by President Trump contain a cornucopia of significant changes, but some of the most important affect 401k plans. While plan amendments will not be required until 2022 at the earliest, plan sponsors may take advantage of some of the changes in 2020. Here is a summary of new rules that current and potential 401k plan sponsors need to know. Source: Cohenbuckmann.com SECURE Retirement Legislation Becomes Law: Overview of Provisions Affecting Retirement Plans The SECURE Act -- the most impactful retirement plan legislation since the Pension Protection Act of 2006 -- was included in the bipartisan spending bill signed by US President Donald Trump on December 20, 2019. The SECURE Act will advance the goals of increasing access to defined contribution plans, promoting lifetime income options, and facilitating retirement plan design and administration. This article focuses on the Act's impact on retirement plans. Source: Morganlewis.com Legislation Includes the SECURE Act, Which Changes Retirement Plan Requirements Congress has passed, and President Trump has signed into law, the Further Consolidated Appropriations Act, 2020, which includes the Setting Every Community Up for Retirement Enhancement Act, known as the SECURE Act. The Act includes provisions relating to retirement plans such as multiple employer plans, required minimum distributions, frozen defined benefit plans, and lifetime annuity options. Source: Westlaw.com »» Click here for more on Legislative and Washington Actions Insight: Studies, Research, and White Papers What if OregonSaves Went National: A Look at the Impact on Retirement Income Adequacy With more than a year of experience with the OregonSaves plan, the Employee Benefit Research Institute asked the question: What if OregonSaves were a national program? How would that impact the retirement security of American workers? They further asked how a national version of OregonSaves would compare with nationwide implementation of 401k safe harbor plans among employers who do not currently offer a DB or DC plan. They examined both using EBRI's Retirement Security Projection Model. Source: Ssrn.com »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers A Retroactive Deduction for Adopting a 401k Plan Let us say you are a plan advisor with experience advising on cash balance, age-weighted profit-sharing, or similarly designed retirement plans, and your client's accountant calls in April with a problem. Your shared client (with just a 401k plan) had a banner year and they are getting clobbered with a giant tax bill. She asks you: "Is there anything you can do to help?" Here is the Post-SECURE Act Solution. Source: Asppa.org 403b Plans 403b Plan Restatement Deadline Fast Approaching 403b retirement plans are used by a wide variety of non-profits, including large university systems. These plans are required to be restated on IRS-approved documents in order to ensure they meet IRS requirements. The deadline to accomplish this, March 31, 2020, is fast approaching. Source: Hallbenefitslaw.com Compliance, Fiduciary Duty Top 403b Plan Sponsor Priorities Fulfilling responsibilities and increasing participation and deferral rates are the top priorities of 403b plan sponsors for 2020, the Plan Sponsor Council of America finds in a new survey. Survey respondents' top five priorities are noted. Source: Napa-net.org »» Click here for More 403b Material Court and Legal As have previous years, 2019 brought major settlements and decisions in retirement-plan focused litigation, including some precedent-setting appellate and Supreme Court decisions. Source: Planadviser.com Plan Sponsors Sued for Investment Menu Practices With regard to "improper selection and monitoring of plan service providers," the lawsuit specifically names a broker/dealer representative whom it says was terminated in 2014 for "failure to follow firm policies and industry regulations." Source: Planadviser.com Past Practices Cited in ERISA Lawsuit Against Plan Sponsors A participant in the Rollins 401k Savings Plan has sued that plan and the Western Industries Retirement Savings Plan, as well as the plans' administrative and investment committees and various John Does, for breaches of ERISA fiduciary duties. Although the complaint notes that the defendants acted to replace higher-cost share classes with lower-cost ones in 2019, it says that action did nothing to repair participants' accounts for past practices. Source: Plansponsor.com »» Click here for more Court and Other Legal Issues Cyber and Plan Security Retirement Plan Cyber Crimes and How to Mitigate Them Cybersecurity has been a growing concern across all parts of life in the digital age. Plan sponsors need to understand how vulnerable retirement plan and participant data is to cyberattacks and know what they, providers, and participants can do to mitigate the risk. Source: Plansponsor.com »» Click here for more on Cybersecurity Issues Compliance and Regulatory 72 Is the New 70 1/2 for RMDs, but What If You Turned 70 1/2 This Year? What if a participant attained age 70 1/2 during 2019? Does the passage of the SECURE Act mean these participants can delay distributions? Unfortunately, the answer is no. The SECURE Act only changes the age for participants who attain age 70 1/2 after December 31, 2019. Therefore, IRA owners, 5% or more owner-participants, and retired participants who attained 70 1/2 at any point during 2019 will still need to take their required minimum distributions by April 1, 2020. Source: Graydon.law »» Click here for more Compliance and Regulatory Material Marketplace News Edelman Financial Engines Is Bringing Financial Planners to Small 401k Plans »» Click here for More Marketplace News
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