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Four Mistakes Clients Make with Roth IRAs and Their Estate

The Roth IRA is a powerful and popular tool for all investors. Investors make Roth contributions with after-tax money, and all distributions are tax-free so long as account holders are at least 59.5 years old and the account is at least five years old. In this Investopedia article, McDermott Partner Bobbi J. Bierhals offers insight about the Roth IRA’s biggest benefits for estate planning.

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Recent Developments in Employer Student Loan Repayment Benefits

Last month, McDermott partner Jeffrey M. Holdvogt was a speaker at the ERIC March Financial Wellness Huddle on the topic of Recent Developments in Employer Student Loan Repayment Benefits. His presentation covered:

  • Student loan repayment benefits
  • Employer options for student loan benefits
  • CARES Act Educational Assistance Program
  • Converting unused PTO funds to student loan debt relief
  • Retirement plan options

Access the presentation.




Full Disclosure Required: Lifetime Income Estimates on Defined Contribution Plan Benefit Statements

The Department of Labor provided interim guidance on the new required annual lifetime income disclosures to participants in defined contribution plans, including plans covered under section 401(k) or 403(b) of the Internal Revenue Code, profit-sharing plans and employee stock ownership plans (ESOPs). The Lifetime Income Disclosure Rule is currently scheduled to go into effect on September 18, 2021. Given this timeframe, sponsors of defined contribution plans should start planning for these new disclosure requirements now.

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Securing Retirement: Additional SECURE Act and Miners Act Guidance for Retirement Plans

The Internal Revenue Service (IRS) recently issued practical and helpful guidance in a question-and-answer format for tax-qualified retirement plans and for an Individual Retirement Arrangement (IRA), regarding the legislative changes under the Setting Every Community Up for Retirement Enhancement Act of 2019 (the “SECURE Act”) and the Bipartisan American Miners Act of 2019 (the “Miners Act”).

Teal Trujillo, an incoming associate in our Chicago office, also contributed to this On the Subject.

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How Advisers Serving MEPs and PEPs Can Be Conflicted

The most obvious potential conflict of interest for advisers setting up or serving pooled employer plans is if their practice is affiliated with the investments being selected—but there are other potential pitfalls to acknowledge.

In a recent article, Erin Turley, a partner with McDermott Will & Emery, said a potential conflict of interest for advisers to PEPs would be if they were acting as either a 3(21) or 3(38) fiduciary to help select investments and were paid from plan assets.

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Up, Up and Away: 2020 Increased Penalties for Employee Benefit Plans

For 2020, legislation enacted in December of 2019 dramatically increases penalties imposed by the Internal Revenue Code (the Code) for late filing of certain employee benefit plan notices and reports. In addition, a final rule published by the Department of Labor (DOL) makes inflation adjustments to a wide range of penalties. Learn the penalty amounts that apply beginning in 2020.

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Finally SECURE: Opportunities in the 2019 SECURE Act for Plan Sponsors

The SECURE Act—the most significant piece of retirement plan legislation in more than a decade—is now law. Plan sponsors should immediately start considering how changes included in the SECURE Act could impact their retirement and health and welfare plans in 2020 and beyond.

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DOL and IRS Expand Access to Multiple Employer Plans and Propose to Eliminate the ‘One Bad Apple’ Rule

Recently, the Department of Labor (DOL) published final rules clarifying the circumstances under which “bona fide” groups or associations of employers and professional employer organizations (PEOs) may be permitted to sponsor single defined contribution multiple employer plans (MEPs). Concurrently, the Internal Revenue Service (IRS) published proposed rules detailing an exception to the “one bad apple” rule for defined contribution MEPs, which rule provides that the failure of one employer to meet established qualification requirements results in the disqualification of the MEP for all participating employers.

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