PLANSPONSOR - April - May 2022 - 8

RULES & REGULATIONS
in retirement savings at work.
SECURE 2.0 also
enhances
the
retirement plan start-up credit, making
it easier for small businesses to sponsor
a retirement plan. The legislation further
increases the required minimum distribution
age to 75 and indexes the catch-up
contribution limit for individual retirement
accounts. Lawmakers who support
the bill say these changes will make it
easier for American families to prepare
for a financially secure retirement.
Other features of the legislation
package would provide support to workers
Because of that pause in repayments, 41
million Americans were able to breathe a
little easier during some of COVID-19's
toughest days, the president said.
In a statement, the DOE said the
extension will provide additional time
for borrowers to plan for the resumption
of payments, reducing the risk of delinquency
and defaults after restart. During
the extension, the DOE said, it will
continue to assess the pandemic's financial
impact on student loan borrowers and
prepare to transition them smoothly back
into repayment.
with student loans by allowing employers
to match their loan repayments with
retirement account contributions.
In an encouraging sign for the bill's
Because of that pause
in repayments, 41 million
Americans were able to
breathe a little easier during
some of COVID-19's toughest
days, Biden said.
Borrowers with paused loans will
future, both Republican and Democratic
members of the U.S. Senate immediately
praised the House's strong bipartisan
vote, pledging to follow up with action in
the upper chamber of Congress.
'A Fresh Start' on Student
Debt Repayments
President Joe Biden and the Department
of Education extended the federal student
loan repayment freeze until August 31,
they announced, to assist borrowers in
achieving greater financial security and
to support the DOE's efforts to continue
improving student loan programs.
The forbearance was previously set
to expire on May 1, but, Biden said, he
recognizes the country is still recovering
from the pandemic and the unprecedented
economic disruption it caused.
8 PLANSPONSOR.COM April - May 2022
be granted a " fresh start " on repayment
by lessening the possibility of delinquency
and default-allowing them to
re-enter repayment in good standing,
the DOE said. The DOE also said it will
continue to provide loan relief, including
to borrowers who have been defrauded
by their institution and those eligible for
relief through the Public Service Loan
Forgiveness program.
An analysis by the Committee for
a Responsible Federal Budget suggests
the loan pause has resulted in the effective
cancelation of significant amounts of
student debt thus far, namely through the
suspension of interest accrual. The CRFB
estimates a typical recent medical or law
school graduate will effectively receive
anywhere from $30,000 to $50,000
of debt cancellation, while those with
a bachelor's degree or those unable to
graduate will receive $2,000 to $4,500 in
debt cancellation, assuming that a recent
graduate has not yet begun repayment.
The CRFB's analysis goes on to
suggest that the extension of the forbearance
program may have unintended
consequences that see higher-income
earners benefit the most. This is because,
although only 7% of borrowers have over
$100,000 of student debt, their debt
accounts for almost 40% of the total
outstanding amount.
On the opposite end, those with $0
to $20,000 of debt, who presumably are
working in lower-paid fields, account for
53% of borrowers and make up just 13%
of the amount outstanding. In the middle,
those with $20,000 to $40,000 of debt
account for 21% of borrowers and 17% of
the outstanding debt, while those with
$40,000 to $100,000 of debt account
for 18% of borrowers and 32% of the
outstanding debt.
Despite this, most adults in the
U.S. (57%) want the president to make
student loan forgiveness a priority- " a
majority that increases by 27 points to
84% when considering just those with
federal student loans, " says the report on
a January CNBC/Momentive " Invest in
You " poll. Overall, nearly two-thirds (62%)
of adults in the U.S. said they approved of
Biden's decision to pause student loan
repayment until May 1; that number grew
to 84% approval among federal student
loan borrowers.
Trader Joe's and
Salesforce Cases Head
Back to District Court
The 9th U.S. Circuit Court of Appeals
has said that a district court " erred in
dismissing [the] plaintiffs' claim for
breach of fiduciary duty " in a lawsuit
alleging excessive fees in the Trader Joe's
Company 401(k) plan. The Appellate Court
found that the complaint plausibly alleges
a failure to provide cost-effective investments
with reasonable fees. It noted that,
at this stage in the litigation, the court
must take the allegations stated as true.
Also, in April, the Appeals Court
http://www.PLANSPONSOR.COM
PLANSPONSOR - April - May 2022

Table of Contents for the Digital Edition of PLANSPONSOR - April - May 2022
