SECURE Act

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Pooled plan providers hoping to start operating pooled employer plans in 2021 will finally have the ability to register to do so, under regulations finalized by the Department of Labor (“DOL”) on November 16, 2020.

As described in detail in our prior alert, the SECURE Act created a new type of retirement vehicle called a “Pooled Employer Plan,” or PEP, in which multiple unrelated employers may participate and which may be sponsored by entities including financial services companies, such as banks, insurance companies and third-party administrators.  The sponsors, referred to as “Pooled Plan Providers” or PPPs, are responsible for most fiduciary and administrative duties related to the PEPs they sponsor.  The SECURE Act permits a PPP to begin sponsoring PEPs as soon as January 1, 2021, provided the PPP meets the SECURE Act’s requirements, including registration with the DOL and IRS before commencing operations.  The DOL issued proposed regulations on August 20, and in its November 16 final regulations, softened some of the requirements it had originally proposed.
Continue Reading Diving into the Pooled Plan Provider Deep End? It’s Time to Register!

The SECURE Act, enacted in December 2019, greatly enhances the ability of employers (particularly small and medium-sized employers) to maintain retirement programs for their employees. Specifically, it provides for the creation of a new retirement vehicle called a “Pooled Employer Plan.”  Unrelated employers may participate in a Pooled Employer Plan, which is sponsored by a…

During the economic downturn associated with the COVID-19 pandemic, some 401(k) plan sponsors may be considering a mid-year reduction or suspension of matching contributions or nonelective contributions to their 401(k) plans as a cost-saving measure. Generally, whether the matching or nonelective contributions may be reduced or suspended will depend on the specific terms of the plan. In addition, in the case of  a plan that is intended to be a safe harbor plan under sections 401(k) or 401(m) of the Internal Revenue Code of 1986 as amended (the “Code”), the Code imposes particularly restrictive rules limiting mid-year changes. The following summarizes steps that a plan sponsor must take to reduce or suspend matching or nonelective contributions to its safe harbor plan during the plan year without jeopardizing the plan’s tax-qualified status.
Continue Reading Reducing or Suspending Matching or Nonelective Contributions Under a Safe Harbor Plan