News

On November 12, 2020, the IRS published final regulations updating life expectancy tables that are used for required minimum distributions (RMDs) and for other purposes. These new tables reflect an increase in life expectancies since the last tables were issued nearly 20 years ago.

On November 30, 2021, the IRS released Notice 2021-64 containing the 2021 required amendments list. This annually issued list describes changes in retirement plan qualification requirements and amendment deadlines for individually designed qualified and individually designed 403(b) plans. Some items require plans to be amended, while others do not. The list of changes to qualification requirements are as follows.

The IRS has issued Notice 2020-80, which requests comments on spousal and annuity rights that may potentially apply to 403(b) custodial accounts that are distributed to participants in-kind upon termination of a 403(b) plan.

Understanding the CARES Act: Required Minimum Distribution (RMD) Waiver

Understanding the CARES Act: Coronavirus-Related Distributions (CRDs)

Our proprietary data reveals how individuals in the U.S. have changed their savings behaviors over the course of the COVID-19 pandemic as business and travel restrictions disrupted our economy.

The DOL has issued a proposed rule on registration for pooled plan providers (PPPs), who may begin offering pooled employer plans (PEPs) on January 1, 2021. As this date quickly approaches, those who are considering offering or adopting a PEP need further guidance. But at least this proposed rule starts to answer some of the many questions that must be resolved before PEPs can become a viable alternative for employers.

Our proprietary data reveals how individuals in the U.S. have changed their savings behaviors over the course of the COVID-19 pandemic as business and travel restrictions disrupted our economy. Throughout the summer months, we've started to see some very early signs of recovery.

Our proprietary data reveals how individuals in the U.S. have changed their savings behaviors over the course of the COVID-19 pandemic as business and travel restrictions disrupted our economy. Not surprisingly, we saw notable shifts in savings plan contributions and withdrawals in the first few months of the outbreak, as individuals experienced changes in employment and braced for the potential financial fallout. States across our nation have since begun phased reopenings of businesses, and our data already suggests positive signs of savings recovery.

Retirement

• The industries that we reported as having the most significant drop-off in retirement plan contribution activity as of the end of May have seen striking improvements in these contribution deficits:
  • Accommodation & Food Services: 5.4% more plans contributed in June, a 96% deficit reduction from May
  • Health Care & Social Assistance: 3.8% more plans contributed in June, a 75% deficit reduction from May
  • Retail Trade: 2.4% more plans contributed in June, a 95% deficit reduction from May
• Though there was a 7.4% decrease in the total amount of employer contributions through June based on projections, this represents a 4 percentage point improvement over May.
• Positively, 9.0% of employers that decreased their retirement plan match in or after March have since increased their match or returned to pre-March levels.
• In January through June, 93.1% of savers made no change to their savings rates. Only 1.3% of savers stopped their deferrals entirely, and only 1.9% reduced their savings rate.
• 13.7% of employers have adopted coronavirus-related distributions (CRDs), with only 1.6% of all eligible savers actually taking a CRD as of the end of June. The monthly CRD utilization rate of CRDs by savers is quite slow but steady.

Education Savings

• In June, there was 16.5% decrease in the total amount of one-time 529 account contributions based on projections, representing a 4 percentage point improvement over May. This improvement was primarily driven by higher average amounts per one-time contributions made in June. While there may be fewer savers actively making one-time 529 contributions (9.5% less than projections), those who continue to invest in their 529 via one-time contributions are saving at pre-COVID levels.
• 529 withdrawal activity remains low, with a 29.6% decrease in the number of withdrawals, as schools and students continue to evaluate how their learning environment and expenses might shift in light of the pandemic.

Health and Benefits

• According to data from Chard Snyder, an Ascensus company, there was a 10.1% increase in the number of COBRA qualifying events March through May. In June, qualifying events returned to 2019 levels.
• Chard Snyder also reports a 21.1% decrease in debit card transactions from consumer-directed healthcare accounts in March through May. In June, the number of these transactions returned to pre-COVID projections and the average amount per transaction increased over 2019 levels. This trend highlights the pent-up demand by consumers to access healthcare services and leverage these savings.

View and download the complete State of Savings report here.

Rep. Sean Maloney (D-NY) has introduced H.R. 7645, legislation that would extend the time period for taxpayers to withdraw coronavirus-related distributions (CRDs) from retirement savings arrangements and receive the special tax benefits that CRDs provide. Certain withdrawals could be tax-free under the legislation.