SECURE 2.0 Grab-Bag Brings Holiday Treats From the IRS
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In This Issue
Compliance and Regulatory SECURE 2.0 Grab-Bag Brings Holiday Treats This holiday week, the IRS issued its long-anticipated guidance on miscellaneous changes under the SECURE 2.0 Act of 2022 that are effective now (or in short order). Specifically, Notice 2024-2, covers, in question and answer format, twelve provisions of SECURE 2.0. The guidance brings increased and much-needed clarity to several important provisions. This is a brief review of the guidance. Source: Groom.com The end of the year is fast approaching. Many plan sponsors are tying up loose ends and hopefully preparing for some downtime with family and friends. With competition for your time and attention in mind, this article provides a rapid-fire roundup of the retirement plan issues that have emerged over the last few weeks. Source: Qualifiedplanadvisors.com Last-Minute Guidance Leaves Little Time for Long-Term, Part-Time Employee Changes Though well-intentioned, implementing the new LTPTE rule has been fraught with complexity, driven in part by long-unanswered questions about how the requirement should be applied. Recently issued guidance provides insight into the rule and answers to many of those unanswered questions. However, with that new rule effective for 401k plans beginning January 1, 2024, the guidance leaves employers very little time to make changes. Source: Mwe.com IRS Issues 2023 Cumulative List of Changes in Pre-Approved DC Plan Requirements The IRS, on Dec. 20th, issued their 2023 cumulative list of changes in plan qualification requirements for pre-approved defined contribution plans. The changes are contained in Notice 2024-03. The 2023 Cumulative List is intended to assist providers applying to the IRS for opinion letters for the fourth remedial amendment cycle for DC-qualified pre-approved plans (Cycle 4) under the IRS' pre-approved plan program. Source: Napa-net.org Self-Correction of Plan Failures Made Easier: At Least for Now In its current form, EPCRS continues to offer three programs for plan sponsors to use in correcting plan failures, thereby avoiding the consequences of plan disqualification. This article focuses on the expansion of one of the three, the Self-Correction Program under the SECURE 2.0 Act of 2022 and IRS Notice 2023-43. Source: Truckerhuss.com »» Click here for more Compliance and Regulatory Material Fiduciary and Plan Governance The 401k "Check Engine Lights" for Plan Sponsors Unfortunately, as a 401k plan sponsor, you don't have a plan check engine light or tire pressure light. But there are warnings "lights" that your 401k plan may have issues. To check these, you have to be proactive and look under the hood of your 401k plan. This article is all about the warning lights you need to check. Source: Jdsupra.com Podcast - Year-End Fiduciary Focus: Best Practices for Employers As 2023 comes to an end, the responsibilities of employers and fiduciaries take center stage in ensuring the financial well-being of employees and the overall success of retirement plans. It's a critical juncture where strategic decisions can make a profound impact. Ensuring you understand your fiduciary obligations and year-end considerations is essential. Discover how you can elevate fiduciary standards, benefiting employees, and your organization with this future-focused discussion shaping your approach to retirement planning and fiduciary responsibilities. Source: Hubinternational.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, Analysis, and White Papers New Report Examines Demographic Influences on Retirement Readiness Among Americans Fewer than one in four Americans (24%) strongly agree they are currently building or have built a large enough retirement nest egg. However, this sentiment varies dramatically across demographic segments, according to "A Compendium of Demographic Influences on Retirement Security," a comprehensive survey report released today by the nonprofit Transamerica Center for Retirement Studies in collaboration with Transamerica Institute. Source: Prnewswire.com »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers How Innovation and Optimism Are Changing the TPA Industry What are the biggest challenges facing TPAs, RIAs, and recordkeepers? And what will be most impactful from all that we're seeing on the legislative and regulatory front? This podcast features PenChecks' President and CEO, Spiro Preovolos, and Scott Okrasinski, the firm's National Sales Director, to answer these important questions and more. Source: Asppa.org Envestnet Expects Financial Advisers to Expand Further Into 401k Plan Business Financial advisers, not just retirement specialists, are expected to pursue the 401k plan business at greater rates in 2024 and beyond, while demand for end-to-end technology solutions and personalized services will continue to grow, according to research from Envestnet Inc. Source: Planadviser.com Empower, SPARK Push Back Against Fiduciary Proposal Empower, the country's second-largest retirement recordkeeper by assets, filed a letter with the Department of Labor on Thursday, calling for the full withdrawal of the department's retirement security proposal, sometimes called the fiduciary adviser proposal. Empower is the first major recordkeeper to submit a comment letter before the January 2 deadline. The SPARK Institute, an advocacy organization for the retirement plan industry, also called on the DOL to withdraw the rule during oral testimony at a hearing on December 12. Source: Planadviser.com 403b Plans 403b Participation Hits All-Time High: PSCA While participation rates in 401k plans dropped in 2022, participation rates increased in 403b plans last year and hit a record high, according to PSCA's 2023 403b Survey. The survey gathered information from 250 nonprofit organizations that sponsor 403b plans for employees and revealed that 80% of eligible employees contributed to their plans in 2022. Source: 401kspecialistmag.com 403b plans are generally subject to fewer technical requirements and less administrative burdens than 401k plans. But there are other differences as well. Here is a 4-page chart comparing the two types of plans. Source: Consultrms.com »» Click here for More 403b Material Court and Legal BlackRock Sued for Alleged Misleading ESG Strategy State Attorney General Jonathan Skrmetti said BlackRock funds that don't take into account ESG factors are being unfairly impacted by the asset manager's membership in climate groups, its shareholder-voting record, and the pressure it puts on companies to meet environmental goals, according to a complaint filed Monday in state court. This shows a "pattern of deception" that has hurt investors, the complaint says. BlackRock said in a statement that it rejects Tennessee's claims and plans to contest the accusations. Source: Investmentnews.com A Closer Look at Arbitration Provisions in ERISA Breach of Fiduciary Duty Claims As plan sponsors increasingly look to arbitration provisions to avoid costly class action litigation, courts across the nation have weighed in on whether plan-wide claims for breach of fiduciary duty under ERISA Section 502(a)(2) can be subject to mandatory arbitration. Here is a review of court rulings on the issue. Source: Truckerhuss.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC Congress Proposes SECURE 2.0 Technical Corrections Bill After a closer read, several inadvertent errors were identified in the text of SECURE 2.0. In an open letter to the Secretary of the Treasury and the Commissioner of the IRS, dated May 23, 2023, Congress identified those errors and explained their intention to propose a correction bill. On December 6, 2023, the House and Senate released a draft bipartisan SECURE 2.0 technical corrections bill. The proposed bill includes key corrections that are reviewed here, along with additional minor fixes. Source: Erisapracticecenter.com »» Click here for more on Legislative and Washington Actions Marketplace News $13.4 Billion Big Deal: Aon Acquires NFP Nomination Period Open for 2024 Plan Sponsor of the Year Awards Gallagher Taps Transamerica as RK for New 401k Pooled Solutions BPAS Partners With the SS&C Automatic Rollover Program
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