PLANSPONSOR - July - August 2023 - 6

RULES & REGULATIONS
From Washington and the Courts
alternatively match student loan payments
with contributions to 529 plans or health
savings accounts.
Additionally, SECURE 2.0 permits
plan sponsors to match earnings being
saved into Roth accounts, meaning participants
could elect to pay income tax on
their match in order to receive it into a
Roth source. Sponsors want clarification
on this provision, especially as it relates to
vesting schedules.
ERIC's letter also seeks guidance for
how to implement the provision requiring
Roth treatment for catch-up contributions
made by highly compensated employees.
Lastly, the letter asks for guidance
on health coverage items unrelated to
SECURE 2.0. Specifically, it asks for the
" spousal flexible spending account glitch "
in the rules governing FSAs and health
saving accounts to be fixed. The glitch
occurs because the IRS does not permit
one spouse to have an FSA while the other
has a health savings account.
Large Sponsors Seek
Clarification on SECURE 2.0
The ERISA [Employee Retirement Income
Security Act] Industry Committee sent an
open letter to the IRS and Department
of the Treasury, June 8, asking them to
clarify various provisions in the SECURE
2.0 Act of 2022, follow-up to the Setting
Every Community Up for Retirement
Enhancement Act of 2019.
ERIC's letter asked the federal agencies
to make this a top item in their
priority guidance plan for 2023 through
2024. The committee's requests mostly
focused on issues that SECURE 2.0 raised
but also addressed a few other topics.
SECURE 2.0 permits plans to offer
matching contributions for student
loan repayments, as an optional feature,
starting in 2024. The statute allows participants
to self-certify their payments but
lays out no procedures by which sponsors
can verify that participants are, in fact,
paying down their debt. The ERIC letter
asks for clarification on this point, as well
as on how the match may be structured
in terms of frequency-e.g., paycheck by
paycheck, quarterly, annually, etc.
The letter further encourages the
IRS to explore whether employers may
6 PLANSPONSOR.COM July - August 2023
Art by OYOW
Lawsuit Dismissed, Pending
Amended Complaint
An Employee Retirement Income
Security Act lawsuit against Advance
Publications accusing the company
of offering a poor-performing suite of
target-date funds was dismissed, June 13,
in a district court decision. The plaintiff,
however, was afforded a second opportunity
to amend his complaint.
In Anderson v. Advance Publications
Inc., Jermaine Anderson, a former participant
of Advance Publications' 401(k) plan,
sued the privately held media company
and its plan fiduciaries,
claiming the
employer made " an imprudent decision
that deprived plan participants of significant
growth in their retirement assets. "
District Judge Analisa Torres of
the U.S. District Court for the Southern
District of New York granted Advance
Publications' motion to dismiss all three
of Anderson's alleged breaches under
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