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| ERISA Plan Fiduciaries: 2021 Update (PDF) |
Hanson Bridgett LLP
June 2, 2021
74 presentation slides. Topics:  Legislative and regulatory priorities;  Remote governance issues;  Update on general fiduciary issues: claims and appeals issues, service provider issues, data security/fraud prevention;  Fiduciary breach litigation;  Update on fiduciary investment issues: ESG investing, proxy voting, DOL fiduciary rule, DOL private equity investments guidance;  Annual review process: plan document compliance, operational compliance.
| ERISA Litigation in Defined Contribution Plans: Background, History, Current Status and Risk Management Techniques (PDF) |
SageView Advisory Group LLC
June 2, 2021
12 pages. "How did we get to a point where the simple act of sponsoring a defined contribution retirement program exposes plan sponsors to potentially uninsurable litigation risks? ... [H]ow can plan sponsors protect themselves against the risks associated with their plans -- namely, litigation risk ... and also insurability risk, as fiduciary liability insurance providers increasingly move to reduce coverage limits, materially increase retention, or perhaps even cancel coverage?"
| Public Sector Plan Fiduciaries: 2021 Update (PDF) |
Hanson Bridgett LLP
June 2, 2021
78 presentation slides. Topics:  Legislative and regulatory priorities;  Remote governance issues;  Update on general fiduciary issues: Why we care about ERISA/brief overview, service provider issues, data security/fraud prevention;  Fiduciary breach litigation;  Update on fiduciary investment issues: ESG investing, proxy voting, DOL fiduciary rule, DOL private equity investments guidance;  Annual review process: plan document compliance, Operational compliance.
| The True Cost of Forgotten 401(k) Accounts (PDF) |
June 2, 2021
22 pages. "As of May 2021, [the authors] estimate that there are 24.3 million forgotten 401(k)s holding approximately $1.35 trillion in assets, with another 2.8 million left behind annually. Leaving behind a forgotten 401(k) account has the potential to cost an individual almost $700,000 in foregone retirement savings over a lifetime."
| Understanding the Impact of the Low Interest Rate Environment on Retirement Security in the U.S. (PDF) |
Society of Actuaries
June 1, 2021
58 pages. "Persistent low interest rates could affect the retirement security of Americans profoundly through direct impacts on investment returns and through impacts on the capacities of governments and the private sector to finance Social Security, pension funds, and other retirement savings mechanisms. This report examines academic and practitioner research on these topics critically, with an eye toward drawing common themes and conclusions, while reconciling and explaining discrepancies." [Also available: 51-page Appendix, containing brief summaries of papers reviewed.]
| Industry Working Group Provides Standard Templates for PRT Commitment Agreements for Certain U.S. Pension Risk Transfer Transactions |
An industry working group comprising PRT insurers, pension consultants and legal counsel
May 28, 2021
"[These forms] were created as a result of discussions among a cross-sectional industry working group ... The Documents are intended to provide an unbiased standard starting point for pension risk transfer solutions transactions and their use and terms are subject to further negotiation between transacting parties." [Documents presented:  Commitment Agreement Template -- IFID AIK;  Commitment Agreement Template -- Non-IFID AIK;  Commitment Agreement Template -- Non-IFID Cash; and  Commitment Agreement Template -- IFID Cash.]
| IRS Issues Guidance on Federally Funded COBRA Premium Subsidy: What You Need to Know |
May 27, 2021
"Notice 2021-31 [provides] much needed guidance ... Loss of coverage due to a reduction in hours includes furloughs, lawful work stoppages, and voluntary reduction in hours.... Involuntary termination includes termination for good reason and constructive discharge.... An individual may become a potential AEI more than once."
| IRS Uncoils COBRA Subsidy Guidance |
Groom Law Group
May 26, 2021
"The IRS previously published FAQ guidance in 2009 related to a similar 65% COBRA premium subsidy under the American Recovery and Reinvestment Act (ARRA).... While [Notice 2021-31] largely tracks the 2009 guidance, there are certain notable exceptions."
| IRS Weighs In on ARPA COBRA Subsidies, Including Some Surprises |
May 25, 2021
"The Service has offered a definition of 'involuntary termination of employment,' which largely comports to conventional wisdom but includes a couple head-scratching comments.... The IRS effectively eliminated the possibility of a more-than-18-month lookback for individuals with COBRA extensions by requiring that any subsidy-eligible individual riding an extension into the April 1–Sept. 30 subsidy window must have elected COBRA when first offered, and kept that coverage in force."
| ARPA COBRA Subsidy Guidance: IRS Notice 2021-31 and Emergency Relief Notices (PDF) |
Jenner & Block
May 24, 2021
"This alert provides an overview of the reduction in hours and involuntary termination guidance contained in [Notice 2021-31], breaking down the types of terminations or reductions in hours that would give rise to COBRA subsidy eligibility during the subsidy window. This alert also covers the interplay between [the Act, the EBSA and IRS Joint Notice of May 4, 2020, and EBSA Disaster Relief Notice 2021-01]. These aspects of the Notice encompass myriad human resource scenarios that employers encounter on a day-to-day basis."
| IRS Provides Clarity on ARPA COBRA Subsidy's Impact on State Mini-COBRA Plans |
Jackson Lewis P.C.
May 24, 2021
"Generally, the criteria to be an 'assistance eligible individual' for ARPA COBRA subsidy eligibility purposes applies equally to plans regardless of whether they are subject to federal COBRA or State mini-COBRA ... [T]he state continuation coverage need not be equal to or exceed the federal COBRA mandates to be 'comparable'.... The subsidy ... is generally only available for individuals who have either already elected and are paying for state continuation coverage or, who are newly eligible during the ARPA COBRA subsidy period."
| Single Employer Funding Decisions After ARPA: Opportunities and Pitfalls (PDF) |
Cowden Associates, Inc.
May 20, 2021
"If an employer reduces pension contributions in reliance on the new legislation, certain pension plan de-risking strategies may become more difficult to execute ... If employers reduce their pension plan contributions to take advantage of funding rule changes, their unfunded benefit obligations for purposes of calculating variable rate premiums will increase -- potentially resulting in increased liabilities to the PBGC."
| GASB 97 Has Been Released: What's New, What to Do, and What You Need to Know |
Berry, Dunn, McNeil & Parker, LLC
May 13, 2021
"With the issuance of GASB 97, the board stated that it believes Section 457 plans could indeed be pensions. Therefore, Section 457 plans which fit the definition of a pension trigger the same reporting requirements of any other pension plan."
| Points for Employers from the Second Part of the 2022 ACA Payment Notice |
May 13, 2021
"[If] the employer completely eliminates its subsidy so that the COBRA-covered person is paying the full cost, the individual can simply stop paying for COBRA coverage and enroll in individual Exchange coverage. The 2022 Payment Notice confirms that this has to be a complete cessation of employer contributions."
| The ARPA COBRA Subsidy: Guidance to Date, and Unanswered Questions (PDF) |
May 11, 2021
"Employers should be prepared to handle claims for this subsidy for COBRA from individuals claiming their termination was involuntary and to address those through the ERISA claim process.... Employers offering coverage that is subject to state-mandated continuation should be certain not to alter the state-mandated deadlines for elections and notifications when they prepare communications about the mandated notice information[.]"
| Health & Welfare Benefits Update, May 2021 (PDF) |
Alston & Bird
May 10, 2021
23 presentation slides. Topics:  Legislative update;  ARP Subsidy Update;  Health Plan Litigation Developments; and  ERISA Issues Related to Settlements, Refunds, and Recoveries.
| Reconstructing Lost IRA Basis to Avoid Double Taxation |
Nerd's Eye View
May 5, 2021
"After-tax contributions can make their way into Traditional IRAs via two separate routes, either via direct contributions of after-tax amounts or through rollovers of after-tax dollars previously held in an employer-sponsored retirement plan.... In the event Form 8606 was not properly filed to begin with, basis can be reconstructed from scratch."
| Biden Tax Plan Would Spur Sales to ESOPs |
National Center for Employee Ownership [NCEO]
May 5, 2021
"The proposal would significantly increase capital gains taxes for wealthy individuals, marginally increase the top individual tax rate, and increase the top marginal corporate tax from 21% to 28%.... Whether the changes are good economic policy or not, or are likely to pass in any form, will be hotly debated. But their impact on ESOPs could be dramatic."
| CRS Report: A Comparison of Tax-Advantaged Accounts for Health Care Expenses |
Congressional Research Service [CRS]
May 4, 2021
26 pages. "This report provides a brief summary of each tax-advantaged account for health care expenses, highlighting key aspects regarding eligibility, contributions, withdrawals, and the treatment of unused balances for that particular account, as well as data on availability and use. It also provides a side-by-side comparison of these accounts along related topics." [R46782, May 3, 2021]
| COBRA Subsidies: Questions and Answers |
Boutwell Fay LLP
May 4, 2021
"Does this obligation include dental and vision, or just medical insurance? ... If a former employee declines coverage at a new place of employment, does eligibility end? ... Does the employee have an obligation to provide notice of eligibility for new coverage?How will this be enforced? ... Are there any parallel requirements on the state level? ... How do I handle eligible employees who have already made payments?"
| Participant Data: Plan Asset, or Fair Game for Recordkeeper Marketing of Non-Plan Products? |
Apr. 30, 2021
"So far, one district court in the Seventh Circuit and one district court in the Fifth Circuit have found that participant data is not a plan asset.... While this issue plays out further in the courts ... plan fiduciaries [should] review their own recordkeeping agreements and consider adding cross-selling restrictions if they want to preclude their recordkeepers from using participant data for cross-selling purposes in the future."
| IRS Website Updates List of Top Mistakes in VCP Submissions |
Thomson Reuters / EBIA
Apr. 29, 2021
"While many of the submission mistakes listed on the updated webpage are essentially unchanged from the previous list, there are new items relating to the electronic submission of VCP applications on Pay.gov, VCP form errors, the required narrative detailing plan failures and correction methods, and late plan amendments."
| You’ve Sent the COBRA Special Extended Election Period Notices – What’s Next? |
Apr. 28, 2021
"[F]or qualified beneficiaries who become entitled to COBRA coverage during the period from April 1, 2021 through September 30, 2021 ... [t]he normal deadlines for plan administrators to provide COBRA notices apply. However, the rules governing the deadlines for participant elections are a bit more complex."
| Applicability of COVID-19 Relief Legislation and Guidance to Health and Welfare Plans (PDF) |
Groom Law Group, via Thomson Reuters Practical Law
Apr. 27, 2021
"A chart addressing how certain relief provisions for health and dependent care FSAs and COBRA health plan continuation coverage enacted and issued in response to the US COVID-19 pandemic apply to various kinds of health and welfare arrangements."
| A Deeper Dive Into the DOL's First-of-Its-Kind Cybersecurity Guidance |
Apr. 23, 2021
"While this subregulatory guidance does not have the deferential authority of a regulation subject to notice and comment ... [it] provides a window into the DOL's expectations of what ERISA's prudence standards require with respect to cybersecurity matters. This window is particularly important given the specters of a threatened DOL enforcement initiative focusing on cybersecurity and privacy issues, increased private litigation arising out of cybersecurity events, and the general uptick in cybersecurity events affecting employee benefit plans."
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