The IRS had in Notice 2020-61 (August 6, 2020) clarified that the extended CARES Act contribution deadline applied to both minimum and “excess” contributions – a critical issue in the calculation of PBGC variable-rate premiums. The extension did not, however, apply to the contribution due date for tax deductions or for filing Form 5500.
In this article we review possible retirement policy agency initiatives of a Biden Administration. We will follow up with a discussion of possible legislative initiatives when the Congressional situation becomes clearer.
On October 27, 2020, House Ways and Means Committee Chairman Neal (D-MA) and Ranking Member Brady (R-TX) released the Securing a Strong Retirement Act – a set of retirement savings policy changes with bi-partisan support. The bill builds on changes made by 2019’s Setting Every Community Up for Retirement Enhancement (SECURE) Act and may provide a template for further improvement of our current retirement savings system.
On October 30, 2020, the Department of Labor released its final rule on consideration of environmental, social, and corporate governance (ESG) factors in retirement plan investments under ERISA’s general fiduciary rules.
Stocks slipped again in October, producing modest declines for pensions. Both model plans we track lost less than 1% during the month. For the year, Plan A is down more than 5% and Plan B is down almost 2% through the first ten months of 2020.
On June 19, 2020, plaintiffs in Hughes v. Northwestern University – an “excessive fee” case – filed a Writ of Certiorari, asking the Court to review a Seventh Circuit decision affirming a district court’s grant of defendants’ motion to dismiss.
In this article we present some “lessons learned,” thus far, with regard to 2020 annuity settlements – transferring DB liabilities with respect to one or more participants to an annuity carrier. We say “thus far” because it is still practical for some sponsors to transfer DB liabilities to a carrier this year.
Pension plan funded statuses have generally declined in 2020 and PBGC premiums will increase in 2021. Now may be the perfect time for your plan to reduce premiums by reducing headcounts.
Defined benefit plan valuation interest rates have declined nearly 200 basis points since late 2018. Interest rate stabilization has significantly mitigated the effect of this decline on plan funding. GAAP accounting (e.g., balance sheet disclosure) is, however, indexed to current rates, and the steep declines in interest rates have presented a number of challenges and opportunities for defined benefit plan sponsors.
The Social Security Administration just announced benefit increases effective in 2021. Current retirees will receive a cost-of-living increase, beginning in January 2021, of 1.3%, reflecting the increase in CPI-W between the 3rd quarter of 2019 and the 3rd quarter of 2020.