The Rosenbaum Law Firm P.C. Blog

The Department of Labor’s Employee Benefits Security Administration, announced their enforcement tally by claiming they recovered $1.4 bilion for fiscal year 2022. That contrasts with EBSA recovering $2.4 billion in 2021, and in 2020, a record $3.1 billion for plan participants. EBSA closed 907 civil investigations in 2022, with 595 of those cases resulting in monetary results for plans or other corrective actions. There were 103 criminal indictments.

Most of the money, $931 million, was regained through enforcement actions and investigations. $542 million was given to terminated vested defined benefit plan participants.

Millennium Trust announced that they will add an optional auto-portability function to its automatic rollover IRA solution. They expect this add-on feature to be ready for client testing later this quarter and available in 2024 at no additional cost.

The auto-portability function is designed to connect to existing and new auto-portability networks to avoid retirement savings leakage, an answer to SECURE 2.0, which allows providers like Millennium Trust to offer auto-portability services to record keepers, third-party administrators and plan sponsors.

A California environmental consultant is being sued by the Department if Labor for failing to manage or administer their profit-sharing plan since the late 1990s or early 2000s, effectively barring distribution of participants’ retirement assets. The complaint, Su v. Environmental Instrumentation Co. et al, was filed in U.S. District Court for the Northern District of California.

The DOL has the court to appoint an independent fiduciary for the plan to administer the retirement plan through its termination and the distribution of plan assets to participants.

The Environmental Instrumentation Co. Profit Sharing Plan went into effect in 1988 and the last Form 5500 was filed in 1997. The plan still has $144,168.60 in assets.

I have been an advocate for mandatory IRA programs for employers that don’t offer them because I believe when push comes to shove, employers would rather have their own plan than be forced into a state-mandated program. A recent Pew study backs me up.

Pew examined the effects the state programs have had on private market plans and whether eligible businesses would ditch their own defined contribution plans or terminate existing plans as a result.

The shifts in the share of plans created, pre-and post-implementation of the state programs, align with national trends and in some cases prove larger than the national change, the Pew research found.

The share of plans created in the U.S.—excluding California—increased from an average of 6.4% before 2019 to 7.3% from 2019 to 2021.

In the three states examined, the rate of introduction of plans, as a share of existing plans, remained higher than prior to the year when each launched its savings program.

In California, the share of new plans increased from an average of 8.1% between 2013 and 2018 to an average of 9.4% from 2019 to 2021, when the CalSavers program fits made effective.

In Illinois, the average share of new plans increased from 5.3% between 2013 and 2017 to 6.2% with Illinois Secure Choice enrolling savers from 2018 to 2021.

In Oregon, the average share of new plans increased from 6.7% between 2013 and 2016 to 8.5% on average in the years after OregonSaves started in 2017.

Businesses in California, Illinois, and Oregon continued to create new plans in 2021 at rates similar to or surpassing those in states without state-mandated IRA programs.

My latest article for JDSupra.com can be found here.

My latest article for JDSupra.com can be found here.

When I was Synagogue Vice President, the Hebrew school PTA presidents were there for so long, one of them actually didn’t have kids at the school anymore. That was odd, but what was even worse is they did nothing with their jobs. The Hebrew school Passover Candy sale is something I ran, as well as other Hebrew School parent-attended events.

I will never understand why people accept positions and do nothing with them. This isn’t high school or college when there is a need to pad a resume. Yet, there are people who do it all the time. We have people on the local chambers of commerce’s board who own no business and do nothing while local businesses die. Maybe people like to brag about what they do for a local community because it’s good for their resume or marketing, but they are living a lie. If you want to say you’re doing great for the community, make sure you’re actually doing great things for the community.

When I was Synagogue Vice President, the Hebrew school PTA presidents were there for so long, one of them actually didn’t have kids at the school anymore. That was odd, but what was even worse is they did nothing with their jobs. The Hebrew school Passover Candy sale is something I ran, as well as other Hebrew School parent-attended events.

I will never understand why people accept positions and do nothing with them. This isn’t high school or college when there is a need to pad a resume. Yet, there are people who do it all the time. We have people on the local chambers of commerce’s board who own no business and do nothing while local businesses die. Maybe people like to brag about what they do for a local community because it’s good for their resume or marketing, but they are living a lie. If you want to say you’re doing great for the community, make sure you’re actually doing great things for the community.

I read an article that was saying SECURE 2.0 had some shortcomings, namely that it provided high earners more opportunities to save, especially because of the increased catch-up contributions in their 60s. Thanks, Captain Obvious.

Of course, high earners will have more money to save. While they claim that a Highly Compensated Employee for purposes of retirement plans is someone who makes $150,000 or more, whoever creates that annual limit, doesn’t live in New York, Boston, or Los Angeles. People don’t have money to defer because the cost of living is so high and some things like the kid’s tuition bills for college get in the way. In a system where the bulk of the retirement plan contributions come from participants’ salaries, those who make more can defer more. It’s not rocket science.

I think SECURE 2.0 helps with getting lower-paid employees to defer through obligatory automatic enrollment for new plans and high earners will have to make catch-up contributions as Roth, which means they will have to pay the taxes upfront. So SECURE 2.0 isn’t just a reward for the highly compensated.

I once said that I thought I lived in a great community until I joined the Facebook community newsgroups. You just can’t imagine what people think. The same can be said about some of these polls of plan participants, which shows that we still are failing at the job of explaining plan costs.

An AARP survey found that over 70 percent of plan participants thought that they weren’t paying any fees at all. I’m sure a lot of plan sponsors still think their administration is free. Despite fee disclosures and the industry is far more transparent, there is still an issue that people think they’re getting free 401(k) administration.