PLANSPONSOR - August/September 2021 - 7

ending June 30, 2022. They could not wait
until the end of next year's third quarter
because the 12-month period would have
already elapsed.
For plans under which a participant
or beneficiary has his or her own account
but does not have the right to direct the
investment of assets in that account-
i.e., nonparticipant-directed plans-the
lifetime income illustrations must be
included on the statement for the first plan
year ending on or after this September 19.
The DOL says, for most plans, this will be
the statement for calendar year 2021. The
statement would be furnished no later
than the last date for timely filing of the
annual return for that year for a calendar
year plan-e.g., October 15, 2022.
Existing Assumptions
The agency also offered clarification for
plan administrators that have already been
providing lifetime income illustrations to
participants, due to the DOL's 2013 advance
notice of proposed rulemaking (ANPRM).
" Although the SECURE Act requires
plan administrators to provide participants
with lifetime income illustrations
that differ from [those] proposed in the
department's 2013 ANPRM, the department's
rule specifically allows for additional
lifetime income illustrations, "
the agency's FAQ document says. " This
permission was based on the department's
recognition that many retirement
plans have been [supplying] various types
of illustrations for several years, including
in some cases illustrations of the type
contemplated by the ANPRM. "
Finally, the agency says it intends to
issue a final rule " as soon as practicable "
taking into account comments it received
about the interim final rule. The DOL
also acknowledged concerns about the
challenges plan administrators could face
if it issues a final rule that differs materially
from the interim final rule without
allowing sufficient transition time for the
administrators to accommodate necessary
changes. -Rebecca Moore
More From Washington
And the Courts
403(b) Universal
Availability Requirements
In an updated Issue Snapshot on the IRS
website, the agency notes that a 403(b)
plan must satisfy the universal availability
requirement with respect to elective
deferrals. All employees of the employer
must be eligible to make elective deferrals
if any one employee may do so, with
certain limited exceptions. Certain parttime
employees, for example, may be
excluded from eligibility. Unlike a plan
that is subject to Internal Revenue Code
(IRC) Section 401(a), a 403(b) plan may
not exclude employees based on a generic
classification such as: part-time; temporary;
seasonal; substitute teacher; adjunct
professor; or collectively bargained
employee. However, if these employees
fall under the " normally work less than
20 hours per week " criterion, they may be
excluded on that basis.
To be excluded, an employee must
be reasonably expected to, under normal
circumstances, work less than 20 hours a
week and not more than 1,000 hours in the
applicable 12-month period.
Uncashed Checks
Law firm Morgan Lewis is reporting
that the Department of Labor (DOL) has
issued letters urging retirement plan
sponsors to recoup amounts that any
past recordkeepers or paying agents hold
from benefit checks that participants
never cashed. Attorneys say, in a blog
post, that the letters seem to be spurred
by the recent wave of DOL investigations
focused on providers and recordkeepers
that service Employee Retirement
Income Security Act (ERISA) plans. The
letters notify retirement plan fiduciaries
of the existence of small uncashed
check balances and direct them to coordinate
with their former recordkeepers to
restore these amounts to the participants
and beneficiaries.
In January, the DOL issued guidance,
in three parts, suggesting processes
that defined contribution (DC) and
defined benefit (DB) plans could use to
locate missing participants. However,
the Morgan Lewis attorneys note, " guidance
from the DOL on a fiduciary's obligations
with respect to uncashed checks
continues to be scarce. "
They suggest that plan fiduciaries
consider reviewing recordkeeping
and service provider agreements as
well as uncashed check procedures to
confirm existing processes and practices.
They also recommend that fiduciaries
" consider proactively reaching out to
former recordkeepers, trustees or paying
agents-particularly if there have been
recent changes in any of these relationships-to
find out if there are any undelivered
assets-even small amounts-that
remained behind after the transition. "
Form 5500 Filing for Plans
Adopted Retroactively
Section 201 of the Setting Every Community
Up for Retirement Enhancement
(SECURE) Act extended the deadline for
employers to adopt a new retirement plan
that is effective for the preceding taxable
year until the employer's tax return for
that year is due. In an Employee Plans
News bulletin, the IRS has addressed
how to file Form 5500 for such plans for
the first year they are effective. The IRS
says, if an employer adopts a plan during
its 2021 taxable year and elects to treat
it as having been adopted as of the last
day of its 2020 taxable year, the sponsor
will not need to file a Form 5500 until the
2021 taxable year.
While the first Form 5500 that must
be filed by such plans will be the 2021
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