Employee Benefit Plan Year-End Deadlines
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Compliance and Regulatory 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 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 Impact on Plan Sponsors of Higher IRS Retirement Plan Limits As a result of sustained high rates of inflation over the past several months, the 2023 retirement plan limits recently announced by the IRS reflect unprecedentedly large increases over the 2022 limits. This article examines the implications of the 2023 limit increases for retirement plan sponsors from a variety of different perspectives to help them better prepare and manage the potential impact points for next year. Source: Segalco.com What Responsibilities and Liabilities Come With Signing the Form 5500? You are wise to check on what the responsibilities associated with signing the 5500 are. Here's a quick review. Source: Plansponsor.com 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 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 »» Click here for more Compliance and Regulatory Material Insight: Studies, Research, and White Papers Resilient Retirement Savers Shifting Focus to Short-Term Needs: Study Rising prices and inflation are certainly affecting American workers but despite the economic environment, Americans remain resilient. More than 63 percent of Americans are confident they are financially on track for retirement. The study analyzes the behavior of approximately 4.3 million active DC participants to better understand their savings habits and levels of involvement with retirement planning, particularly during a highly challenging economic and financial environment. Source: Businesswire.com Report Urges Pension Plan Fiduciaries to Focus on Finance When Considering ESG Factors A new report from the C.D. Howe Institute says pension plan fiduciaries shouldn't ignore climate change and other environmental, social, and governance factors that are relevant to financial purposes. However, when plan fiduciaries use ESG factors to prioritize social or environmental concerns, such as those expressed by plan members, they put themselves on shaky legal ground, said the report. Source: Benefitscanada.com Canadian Employees Delaying Retirement Due to Rising Cost of Living: Survey Nearly two-thirds (62 percent) of Canadian pre-retirees say the rising cost of living is preventing them from retiring when they'd like to, up from 56 percent in 2021, according to a new survey by Fidelity Canada. The survey, which polled more than 1,900 Canadians aged 45 and older, found 55 percent said a lack of savings is holding them back from retiring, while 45 percent cited the performance of their investments. Source: Benefitscanada.com Americans Are Increasingly Directing Attention to Retirement Plans New findings from Voya Financial show that a workplace retirement plan is just as important for employee retention as a competitive salary and flexible work arrangements. Sixty percent of employees surveyed said they were more likely to stay with their current employer if they offered an employer-sponsored retirement plan, compared to 64% who said they would stay for a competitive compensation package and 63% for flexible work hours. Source: 401kspecialistmag.com Workers React to Retirement Language and Imagery Organizations are taking a psychological approach to analyze the way Americans think about their retirement. New research from Capital Group studied close to 2,500 American adults and how they respond to retirement language and imagery, confirming a finding that the industry has understood for some time, there is no one-size-fits-all approach to retirement communications. Source: 401kspecialistmag.com Participants Admit Auto-Enrollment Kickstarts the Retirement Savings Journey As more employees ask for retirement planning vehicles in their employer-sponsored plans, a Principal study finds automatic features help participants achieve their largest share of retirement income. The latest research from Principal shows that over half (51%) of 725 respondents attributed auto-enrollment to kickstarting their retirement savings journey, and 81% said it helped them begin saving even sooner. Source: 401kspecialistmag.com »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers Today's Retirement Plan Advisories Require Specialization An evolving small business market, increased regulation, and shifts in client needs all lead to more specialized retirement plan advisement, according to a panel held by American College. Source: Planadviser.com 403b Plans IRS Opens Determination Letter Program to 403b Plans The IRS recently announced the expansion of its determination letter program to individually designed 403b plans beginning June 1, 2023. This presents a significant and welcome opportunity for sponsors of 403b plans -- such as universities, schools, tax-exempt organizations, and churches -- to secure long-awaited assurance from the IRS on plan document compliance. Source: Icemiller.com What Deadlines Apply to 403b Plans Whether you are a school business official or a human resources employee of a nonprofit organization, chances are that you are juggling so many responsibilities that your time is at a premium. Knowing deadlines for amending your employer's 403b plan document helps keeps that plan compliant. Here is a good review. Source: Ntsa-net.org »» Click here for More 403b Material Cyber and Plan Security SPARK Institute Releases Updated Cybersecurity Standards for Plan Sponsors and Advisors Recordkeepers and retirement industry consultants are banding together to beef up cybersecurity. A collaborative effort between recordkeepers and consultants leads to updated Data Security Best Practices and a new Plan Sponsor and Advisor Guide to Cybersecurity to strengthen the retirement industry's defenses against cyber criminals. Source: 401kspecialistmag.com »» Click here for more on Cybersecurity Issues
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