2022 401k and Retirement Plan Limits Announced
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Newsletter Sponsor Fall is Upon Us.... What a great time to benchmark your 401k plans The 21st Edition of the 401k Averages Book is a great resource for fee benchmarking data. Use the 401k Averages Book to better understand investment, recordkeeping, and revenue sharing expenses for 401k plans. Still the most recognized resource book for comparative, non-biased 401k average cost information. Click here to order your copy. In This Issue
Compliance and Regulatory 2022 401k and Retirement Plan Limits Announced On November 4, 2021, the Internal Revenue Service announced that employees in 401k plans will be able to contribute up to $20,500 next year. The IRS announced this and other changes in Notice 2021-61. This guidance provides cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2022. Chart and details here. Source: 401khelpcenter.com 2021 Year-End Preparation for Benefit Plans As 2021 barrels toward its end and the focus is on infrastructure and tax legislation, don't lose sight of important 2021 legislative and regulatory deadlines. With that in mind, here is a list of benefits and compensation items to be sure to check off your list before 2021 concludes. Source: Ipbtax.com EPCRS Update Brings Good News for Plan Sponsors Rev. Proc. 2021-30 is the latest iteration of the IRS correction program -- Employee Plans Compliance Resolution System -- that enables plan sponsors and the retirement industry to sleep at night knowing that plan errors can be corrected and may retain their all-important tax-favored status. In this article, Groom’s Elizabeth Dold and David Levine outline the few, key changes that were made to the Self-Correction Program, Voluntary Correction Program, and the Audit Closing Agreement Program, and Voluntary Audit Cap via EPCRS. Source: Groom.com Time Running Out to Issue Plan Notices It is again time for plan sponsors to distribute their annual notices to participants. Outside of the normal changes to plan COLAs and investment expense ratios, plan sponsors will want to consider and incorporate any changes made to their plan in the past year into this year's annual notice. As a reminder, the 401k safe harbor, qualified default investment alternative, and automatic enrollment notices must all be sent to plan participants between 30-90 days before the beginning of the plan year (i.e., no later than December 2nd for calendar year-end plans), and may be combined into a single document. Source: Graydon.law ERISA Bonding Requirements and Compliance Testing ERISA bonding requirements and compliance testing, although not necessarily related, are two of the compliance matters auditors commonly look at during an audit. It is important for plan fiduciaries to be aware of the overall purpose of the bonding requirements and the compliance tests and be familiar with the correction methods and deadlines. Source: Berrydunn.com The Who, What, Where, Why, and How of Retirement Plan Audits You (or your client) may have just found out that an audit is required for its retirement plan. Many questions may be running through your head such as Why must an audit be performed? What must be audited? Who performs audits? Who is required to have an audit? How is an audit performed? Well, it's your lucky day, because this blog will address these burning questions. If your plan already requires an audit, this article may still provide benefits by uncovering facts that you didn't know. Source: Belfint.com »» Click here for more Compliance and Regulatory Material Fiduciary and Plan Governance Benchmarking Your Retirement Plan Committee While there is no perfect number of committees or committee members, their construction, monitoring, and maintenance are critical to their effective operation, as is the design of the plan functions they oversee. Little wonder that over the years, Plan Sponsor Council of America members have been curious as to the experience of other organizations, how and how often these bodies are benchmarked, how many and who participate, as well as how often they convene to comply with those needs. In response to these inquiries, PSCA conducted a snapshot survey in April 2021 to answer these questions. PSCA received responses from 255 plan sponsors representing a range of industries and plan sizes. Source: Napa-net.org Misuse of Participant Confidential Data The DOL has become highly focused on the cybersecurity practices of plan sponsors and their service providers and has begun asking comprehensive cybersecurity questions in plan audits. It seems clear the DOL is concerned not just with theft of plan data or assets, but also with the misuse of confidential participant data. Source: Wagnerlawgroup.com What are Prohibited Transactions in Retirement Plans? What exactly is a prohibited transaction? A transaction between the qualified plan and anyone listed here is considered a prohibited transaction unless there is a statutory exemption allowing for the transaction to occur. Source: Consultrms.com Switching Retirement Plan Providers in a Changing Market Considering the consolidating market for recordkeepers, one might wonder whether looking to move a retirement plan to a new service provider is worth the effort. Yet, shopping around by soliciting requests for proposals, for instance, can yield important intelligence regarding the state of pricing and the level of services being offered. For example, employers with DC retirement plans, DB pension plans, and stock-compensation plans could find opportunities to save time and money by consolidating the administration of all of those plans with one provider. Source: Shrm.org Fiduciaries: Assuming Additional Responsibilities for Retirees Is Rife With Questions Should a 401k plan sponsor take on the additional fiduciary liability associated with retirees? Deciding whether to encourage participants to leave account balances in the plan through retirement should not be based solely on considerations like accumulation of assets in the plan, the offsetting of administrative fees, and the ability to offer very low-cost funds. Using only these factors may lead to unexpectedly difficult questions with no clear answers. Thus, when contemplating whether to encourage participants to leave account balances in the plan, consider the questions outlined here. Source: Keightleyashner.com »» Click here for more Fiduciary and Plan Governance Material General Items "Absurd" 401k Plan Sponsor Facts That Are 100% True When it comes to retirement plans, there are absurd things that make no sense but are true. The problem is that plan sponsors don't know about these things before it's too late. So this article is about absurd things regarding 401k plans that are true. Source: Jdsupra.com SIMPLE IRAs vs 401k Safe Harbor Plans - 2021 This outline compares a SIMPLE IRA with a safe-harbor 401k plan and is especially important for employers who must cover participants other than just the owners. Source: Consultrms.com Items of Special Interest to Service Providers The Unbelievable Value of 401k Participant Data It's incredibly powerful (and profitable) but when it comes to who "owns" participant data, there's a palpable tension between recordkeepers and advisors. Source: Royle.com Court and Legal Fiduciary underwriting company Euclid Fiduciary filed an amicus brief in Hughes v. Northwestern case before the Supreme Court, urging the Court to provide guidance to district courts to use the same factors that inform fiduciary underwriting to weed out meritless cases alleging inaccurate and misleading claims against the fees and investments in retirement plans. Source: Euclidspecialty.com SCOTUS May Soon Decide Fate of Many 401k Fee Suits A forthcoming decision by the Supreme Court could either stem the number of retirement-plan fee lawsuits being filed or it could encourage plaintiffs' law firms to continue filing them at the fast pace seen in recent years. Numerous trade groups and other organizations have been flooding the court with briefs in support of Northwestern University, while at least one group of organizations is against it. Source: Investmentnews.com (registration may be required) »» Click here for more Court and Other Legal Issues Marketplace News 2022 401k and Retirement Plan Limits Announced Fi360 Announces Formation of "Lifetime Income Consortium" OneAmerica Launches Plan as Alternative to MEPs, PEPs Newport Group to Merge With Ascensus Firms Partner to Offer a Retirement Plan Solution for Small- and Mid-Sized Businesses
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