Photo of Robert Toth

Bob Toth has more than 30 years of experience in employee benefits law. His practice focuses on the design, administration and distribution of financial products and services for retirement plans.

Long-time readers may recognize this as a version of the Mother’s Day blog I would periodically post in honor of Mom. It has been nearly two years since her passing, and I have not posted it since. But it seems that sharing these notions now, during Thanksgiving week, makes some sense. Hopefully, it may help

Lifetime Income from Defined Contribution continues to gain traction, which means that those tasked with administering these programs really need to start paying attention to the details of how its done. This also means understanding how the Joint & Survivor Annuity rules-rules which many have spent a career avoiding in 401(k) plans- operate. This then means understanding how Revenue Ruling 2012-03 actually works.
Continue Reading

One of the most important rules which really hasn’t gotten a lot of press is the very new rule under Rev Proc 2019-39 that any “discretionary” 403(b) amendment must-as of January 1, 2020- be adopted by the end of the plan year in which the change to the plan’s operation was made (a “discretionary” amendment, by the way, is one which not required by law).This is actually a very significant change, and one which should not be overlooked.
Continue Reading

Code Section 402(g)(7) seems to have a gift for certain 403(b) plan sponsors (that is, for “qualified organizations, being educational organizations, hospitals, home health service agencies, health and welfare service agency, church, or convention or association of churches): the annual elective deferral limit for participants in these plans with “15 years of service” with the qualified organization these plans can be as much as $3,000 greater than the existing limit for everyone else, up to a lifetime maximum of $15,000. You should, however, pause at that moment, and consider the details of what it takes to be able to support providing this benefit. It’s not what it seems to be, and it truly has become an “attractive nuisance.”
Continue Reading

Those organizations which do take advantage of the Student FICA Exclusion are often well versed in its use, but that knowledge may or may not spill over into those responsible for making plan document choices under the 403(b) plan. It is too easy sometimes to simply choose that exclusion without recognizing the details of that exclusion-especially when the employer is also choosing to exclude “students” (and not necessarily just those with the FICA exemption) from receiving any employer contributions, and may want to exclude all student employees from making elective deferrals.

Continue Reading

The Business Roundtable issued a press release  on August 19 signed a the CEOs of the largest companies in the U.S. outlining a “Statement on the Purpose of a Corporation .” In it, the CEOs outlines a ” modern standard for corporate responsibility” or, as Jamie Dimon, CEO of JP Morgan Chase and the Chair of the Business Roundtable stated,” Major employers are investing in their workers and communities because they know it is the only way to be successful over the long term.”

I not only believe that the Business Roundtable has it right, but it is a position that properly frames the issues for the ERISA  investment fiduciary: prudent  assessment of an investment must take into account a broader view than the narrow financial analysis of the books and records of the company, or of current market pricing. Particularly for ERISA fiduciaries, the investment standard is long-term, to provide retirement income. Any valid, long-term  analysis has to be able to take into account the social, political, market  and scientific trends which will inevitably affect the investment’s value
Continue Reading

It has now been a dozen years since the IRS issued Revenue Procedure 2007-71, which was written in response to the logistical difficulties which arose from the mammoth changes imposed by the 2007 changes to the 403(b) regulation. The value of this  Rev Proc endures; and is particularly helpful when plans restate their 403(b) plan docs and need to do things like name their vendors;  have Information Sharing Agreements; and try to make plan redesign decisions.
Continue Reading

DOL’s new Field assistance Bulletin, 2019-01 is designed to correct common MEP Form 5500 filing issues. The most telling stories about this FAB is that (1) it establishes the data  groundwork that both the DOL and the IRS need to determine what requirements will need to be imposed when RESA and SECURE (or their successors) eventually pass; and (2) for those who argued that this data is somehow an unwarranted imposition of an administrative burden on MEP operations need to be prepared, I think, for a substantial new set of regulations over time designed so that the agencies have sufficient information to fulfill their mandate.
Continue Reading

It is worth now considering of the impact of 2008 MOU between the SEC and the DOL on fiduciary enforcement, with the publication of the SEC’s new Reg IB on fiduciary duties and the suggestions from EBSA that a a new fiduciary rule will be closely related to that of the SEC. What will happen where you have two broadly empowered federal agencies working from what may be the same playbook (or at least very similar ones), where you already have a well established, coordinated cross-enforcement structure in place?

Continue Reading

The proposed reg is welcome as a purely technical and structural matter. But the relief may be mostly illusory. The “bad apple” problem has always sounded worse than it is and may have been able to be  fixed by a simple adjustment to the Maximum penalty Amount rules under EPCRS, and to the rules as to who should be responsible for that penalty.

But the IRS proposal only really addresses small part of what actually happens when a plan is forcibly spun off, which may take a significant regulatory effort-especially if RESA/SECURE become law.
Continue Reading