Products June 24, 2020

Aon and Voya Team on Pooled Employer Plan

Aon has announced the launch of a new pooled employer plan (PEP) to be recordkept by Voya.

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Aon and Voya Financial are teaming up to launch a pooled employer plan (PEP) of the type recently authorized by the Setting Every Community Up for Retirement Enhancement (SECURE) Act.

Aon will operate the PEP, while Voya Financial will serve as the recordkeeper for the new plan, which will be available January 1, 2021.

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Aon’s leadership says the PEP will relieve employers of many fiduciary duties they have today. Due to the economies of scale, it also has the potential to lower fees for plan participants and provide access to state-of-the-art features that may be difficult for individual employers and fiduciary committees to both assess and access independently, Aon says.

The firm notes that the SECURE Act, which passed into law in December, was designed to encourage broader 401(k) plan participation and greater retirement savings. With the law’s passing, the firm says, employers will no longer need to sponsor their own individual 401(k) plan and absorb the risks and workload associated with that role.

The PEP will utilize Aon Investments USA Inc., Aon’s investment solutions group.

“We are pleased to have Voya as a partner in this initiative to provide the very best in retirement services to PEP members starting in 2021,” says Rick Jones, a senior partner at Aon.  

“We believe PEPs will transform the retirement landscape, similar to how 401(k) plans transformed the pension landscape 40 years ago,” adds Paul Rangecroft, North America retirement practice leader for Aon. “We are thrilled to enter this important market and are pleased to provide this plan as a service to employers as they look to increase efficiency, reduce risks and most importantly—create better retirement outcomes for participants.”

More information about the pending launch of the PEP is available on Aon’s website.

Compliance June 23, 2020

IRS Establishes CARES Act RMD Rollback Framework

Anyone who already took a required minimum distribution (RMD) in 2020 from certain retirement accounts now has the opportunity to roll those funds back.

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The Internal Revenue Service (IRS) has published Notice 2020-51, through which it is providing rollover relief for required minimum distributions (RMDs) from retirement accounts that were waived under the Coronavirus Aid, Relief and Economic Security (CARES) Act.

The upshot of the relief is that anyone who already took an RMD in 2020 from certain retirement accounts now has the opportunity to roll those funds back into a retirement account following the CARES Act RMD waiver for 2020.

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The notice provides that this repayment is not subject to the one rollover per 12-month period limitation and the restriction on rollovers for inherited individual retirement accounts (IRAs). It also provides two sample amendments that employers may adopt to give plan participants and beneficiaries whose RMDs are waived a choice as to whether or not to receive the waived RMD.

Under Notice 2020-51, the 60-day rollover period for any RMDs already taken this year has been extended to August 31. The notice answers questions regarding the waiver of RMDs for 2020 under the CARES Act. That law enables any taxpayer with an RMD due in 2020 from a defined contribution (DC) retirement plan—including a 401(k), 403(b) or IRA—to skip those RMDs this year. This includes anyone who turned age 70.5 in 2019 and would have had to take the first RMD by April 1, 2020.

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