Legislative News and Updates – Q3 2020
Updated IRS Guidance on CARES Act: On July 9, 2020, the IRS provided additional guidance on CARES Act provisions to expand the definition of a “qualified individual” as well as “qualifying conditions”. For more information on the enhanced provisions, click here.
ESG Proposal from the DOL: The Department of Labor has proposed to provide a rule that gives “clear regulatory guideposts” for plan fiduciaries in light of recent trends involving environmental, social and governance (ESG) investing. To read the DOL’s press release on the proposed rule, click here.
- September 30th Summary annual reports are due to participants from plans with a December 31 year- end (if Form 5558 was not filed).
- October 15th Extended deadline for Form 5500 submission (must have already filed Form 5558) November 15th Summary annual reports are due to participants from plans with a December 31 year-end (if Form 5558 was filed). It is used to apply for an extension to file forms 5500 and/or 5330.
Note: Not all deadlines mentioned above are required for each retirement program. Ask your Alliant Retirement Consultant today which ones apply to your Plan. Click here for the 2020 ERISA Plan Compliance Calendar.
Cyberattacks Risks Increase as Remote Work Continues – “The widespread move to remote work in light of the COVID-19 pandemic means plan sponsors should take a careful look at their cybersecurity measures.” For tips on how to drive home the importance of cyber safety, click here.
Industry Insider Tips – Avoid Pitfalls in Plan Administration
Timing on the Deposit of Employee Contributions
To avoid increased audit risk as well as additional 5500 reporting, plan sponsors should take extra caution when managing the remittance of employee contributions to their retirement plan. Should you have to make any corrections, be sure to read the IRS 401(K) Plan Fix-It Guide located here.
COUNTING ALL OF THEM – After peaking at $36.1 trillion on 2/19/20, the total market capitalization of all US equities fell $12.7 trillion to $23.4 trillion as of 3/23/20 but has since added back $12.4 trillion to close 8/07/20 at $35.8 trillion (source: Wilshire).
MIGHT AS WELL STAY – Only 7% of workers “auto- enrolled” in an employer’s 401(k) plan elect to “opt-out” of the plan, i.e., 93% of all employees remain in the plan (source: Vanguard Research).
BEING CAUTIOUS – The personal savings rate in the United States was a record 33.5%in April 2020 as Americans reacted to the COVID-19 pandemic outbreak. The personal savings rate in the United States was 7.5% in April 2019 or just 1 year earlier. The personal savings rate is defined as “savings” (i.e., after-tax income less consumption spending) divided by after-tax income (source: Department of Commerce).
SOURCE: MFS “By The Numbers” Newsletter August 10, 2020 Edition
Sarah Keibler, Retirement Plan Representative at 1420 5th Ave Ste 1500, Seattle WA 98101 Sarah.Keibler@alliant.com (206) 204-9176. Advisory Services offered through Alliant Retirement Consulting, a federally Registered Investment Advisor. This information was developed as a general guide to educate plan sponsors, but is not intended as authoritative guidance or tax or legal advice. Each plan has unique requirements and you should consult your attorney or tax advisor for guidance on your specific situation. Due to volatility within the markets mentioned, opinions are subject to change with or without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results The S&P 500 index is a group of the 500 largest U.S. stocks, weighted by market capitalization. The index is widely considered to be the best indicator of how large U.S. stocks are performing. Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take in to account the effects of inflation and the fees and expenses associated with investing.