New IRS Compliance Program Should Be on Every Plan Sponsor's Radar
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Compliance and Regulatory New IRS Compliance Program Should Be on Every Plan Sponsor's Radar Every employer that receives the new 90-day notice should immediately engage in a comprehensive review of its retirement plan with its third-party administrator and legal counsel. Correction of any plan document defects or operational failures discovered should be made a top priority to ensure timely compliance and response to the IRS. Source: Foxrothschild.com Anonymous Correction Guidance Still Available Under EPCRS New EPCRS procedures have replaced the anonymous submission under VCP with a Pre-Submission Conference. The plan sponsor's representative can submit a VCP Pre-submission Conference request with the IRS. Unlike the anonymous VCP submission, there is no fee for a Pre-Submission Conference. Source: Graydon.law IRS Unveils New Pre-Examination Compliance Pilot Program for Retirement Plans The IRS Employee Plans division announced a new pilot program whereby it will notify retirement plan sponsors 90 days in advance that their plan has been selected for an upcoming examination. The pilot program has three key features. Although it is only a pilot, this pre-examination pilot program marks a potentially helpful new tool for plan sponsors to ensure tax-qualification compliance for retirement plans. Source: Erisapracticecenter.com The SECURE Act's DC Plan Lifetime Income Disclosure Requirements The deadline for complying with the defined contribution plan lifetime income disclosure requirement is quickly approaching. Now is the opportunity for plan sponsors and retirement committees to reacquaint themselves with the requirements and prepare for how to proactively use the changes to promote plan participation, education, and conversation regarding their retirement plans. Source: Milliman.com Don't Be Afraid of DOL, IRS Audits During the second day of the 2022 PLANSPONSOR National Conference in Orlando, a duo of expert panelists tackled the challenging topic of regulatory audits, explaining what to expect in an audit and how to effectively prepare for that inevitable knock on the door. Assuming no malfeasance or criminal activity is going on, the process of a DOL or IRS audit does not have to be unpleasant, even if minor issues are discovered. Source: Planadviser.com 401(k)ology: Know Your Participant Notices If you are a service provider, plan sponsor, or participant in a retirement plan, then you are keenly aware of the numerous participant communications required to be provided regularly. Unless and until the disclosure requirements change, employers should know which notices are required for your plan type, when must the notices be provided, who must receive the notice, how the notice can be distributed, and what happens if the notice was not provided. Source: Newfront.com »» Click here for more Compliance and Regulatory Material Insight: Studies, Research, and White Papers Using data from How America Saves, Vanguard's annual comprehensive look at Americans' retirement saving habits, Vanguard helps plan sponsors and consultants take action to optimize plan design to better serve employees through their entire investing journey. Source: Vanguard.com Why Minority Groups Have Less Access to Workplace Retirement Savings Plans People of color are a lot more likely than white Americans to lack access to a pension, IRA, or 401k at their jobs, according to a study by John Sabelhaus of the Brookings Institution. Nationally, two-thirds of Hispanic workers (63.6%) are without a work-based retirement plan, as are more than half (53.2%) of Black employees. Those percentages are substantially higher than those of Asian employees (45.2%) and white workers (41.6%) whose employers haven't set up payroll-based retirement savings accounts for their employees. Source: Financial-planning.com May Sees a Change of Pace in 401k Trading Activity Following a month when there were no above-normal trading days despite high levels of market volatility, 401k traders seemingly decided to change course in May. According to Alight's May 2022 401k Index, 12 of 21 days in May had above-normal trading activity, but no day exceeded three times the daily average. In comparison, there were 16 above-normal days in the first four months of the year. Source: Asppa.org 401k Plans Are Failing Middle-Class Americans A new report finds that the tax breaks designed to encourage Americans' retirement savings disproportionately benefit high-income households and do little to assist middle-class families. More than half of the tax breaks for defined-contribution plans, such as 401ks and individual retirement accounts, go to those whose income puts them in the top 10%, according to new research from the National Institute on Retirement Security, a nonprofit, nonpartisan organization established to contribute to informed policymaking. Source: Investmentnews.com »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers Podcast: New Role(s) With Rollovers In this podcast Nevin Adams & Fred Reish discuss the new parameters, how they're applied, the conditions that might (and might not) be sufficient to warrant rolling money out of a qualified plan and into an IRA, and the new requirement that the justification as to why that move is in the interests of the plan participant. Source: Napa-net.org DOL Proposes Tougher Prohibited Transaction Exemption Procedures On March 15, 2022, the DOL published proposed amendments to its regulations specifying the procedures for applying for class and individual exemptions and the processing of such applications. If finalized as recently proposed, these changes would impose significant new requirements on applicants and other actors (such as appraisers and independent fiduciaries) who are involved in transactions that require an exemption. Source: Wagnerlawgroup.com Court and Legal Lack of Standing Trips Up (Another) Excessive Fee Suit A federal judge has dismissed an excessive fee suit involving a $7.8 billion 401k plan, accepting the argument that the participant-plaintiff wasn't even invested in the funds in question. Source: Napa-net.org »» Click here for more Court and Other Legal Issues Legislative and Washington DC Senate HELP to Kick Off SECURE 2.0 Push The Senate Health, Education, Labor, and Pensions (HELP) Committee is set to move forward on legislation intended to build off the House-passed SECURE Act 2.0. After formally introducing the "Retirement Improvement and Savings Enhancement to Supplement Healthy Investments for the Nest Egg" (RISE & SHINE) Act on June 7, the committee announced that it will hold a markup on Tuesday, June 14 to consider the legislation. Source: Napa-net.org »» Click here for more on Legislative and Washington Actions Cyber and Plan Security Cybersecurity and Retirement Plans This learning deck will help you understand the latest guidance on cybersecurity for qualified retirement plans, adapt the tips for hiring a plan service provider, know cybersecurity program best practices for qualified retirement plans, and recognize the role of the financial advisor in cybersecurity. Source: Fi360.com »» Click here for more on Cybersecurity Issues State-Based Private-Sector Retirement Programs State-Mandated Retirement Plans: Coming to a State Near You? With approximately 30% of all private-sector employees not having access to a workplace retirement plan, some states and some bigger cities have decided that our current system, which lets employers decide whether they want to adopt a retirement plan for their employees, is not working well. In response, at least 12 states and three cities have developed some form of private employer workplace retirement plan, with some of these plans mandatory for certain private employers. Source: Frostbrowntodd.com Marketplace News 2022 Plan Sponsor of the Year Winners Announced Broadridge Launches Multi-Account CIT Fund Open to 401ks Senate Rejects EBSA Nominee Lisa Gomez in Close Vote OneDigital Makes it Five for Five Hub Picks up $1.1 Billion Indianapolis-Based Advisory Firm
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