Client Service May 17, 2021

Wednesday Webinar: Product vs Solution

Products have not had strong traction in the retirement space, mainly because they don’t meet the needs or expectations of plan participants. 

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Products have not had strong traction in the retirement space, mainly because they don’t meet the needs or expectations of plan participants.

Furthermore, with a lack of innovation since the rollout of target-date funds, plan participants are seeking a more solutions-based approach. This webinar is geared for those financial professionals that are seeking to learn more about the future of personalization, retirement income and participant education.

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The webinar will take place Wednesday, May 19, at 2 p.m. EST. Registration information is available here: https://www.planadviser.com/webcasts/ 

Moderator: 

John Manganaro, Managing Editor, PLANADVISER Digital 


Panelists: 

Mary Beth Glotzbach, Vice President – Institutional DCIO, Franklin Templeton Institutional, LLC

Sarah Krapec, Director of Participant Experience and WELLth, Strategic Retirement Partners

Todd Lacey, Chief Revenue Officer, Stadion

 

Compliance May 14, 2021

IRS Answers Questions About Partial Plan Termination Relief

The guidance answers questions about who is an "active participant" and says the relief applies to each plan year which falls inside the relief period.

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The most recent COVID-19 relief bill, attached to the Consolidated Appropriations Act, 2021, included provisions to help retirement plan sponsors avoid a partial plan termination.

The bill states: “A plan shall not be treated as having a partial termination (within the meaning of 411(d)(3) of the Internal Revenue Code of 1986 [IRC]) during any plan year which includes the period beginning on March 13, 2020, and ending on March 31, 2021, if the number of active participants covered by the plan on March 31, 2021, is at least 80% of the number of active participants covered by the plan on March 13, 2020.”

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Now, the IRS has issued guidance to clarify implementation of the partial plan termination relief. In a Q&A on its website, the agency says “a reasonable, good-faith interpretation of the term ‘active participant covered by the plan,’ applied in a consistent manner, should be used when determining the number of active participants covered by a plan on March 13, 2020, and March 31, 2021.”

It also explains that the active participants counted on March 31, 2021, include all participants who are active on that date, regardless of whether they were active on March, 13, 2020—meaning new participants are included.

The guidance further clarifies that the partial plan termination relief applies regardless of the reason for the reductions in active plan participants. The provision’s terms are not limited to reductions related to the COVID-19 national emergency.

Asked how the relief applies to a plan year if only part of the plan year falls within the period beginning on March 13, 2020, and ending on March 31, 2021, the IRS answers: “If any part of the plan year falls within the period beginning on March 13, 2020, and ending on March 31, 2021, then [the relief] applies to any partial termination determination for that entire plan year.” As an example, the IRS says if a plan has a calendar year plan year, the 80% partial termination test applies to both the January 1 to December 31, 2020, plan year and the January 1 to December 31, 2021, plan year.

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