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<< Older News  |  August 2, 2021

News

All News > Retirement Plan Administration

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Plan Cybersecurity Guidance: DOL Enforcement Warrants Plan Sponsor Action
Poyner Spruill LLP Link to more items from this source
[Guidance Overview]
Aug. 2, 2021

"Although the most detailed piece of the package -- the best practices summary -- is framed as applying to plan service providers (such as recordkeepers and administrators), enforcement actions already implemented suggest that these standards likely also apply to plan-related information maintained by the plan fiduciary.... [P]lan sponsors and fiduciaries should be aware that this cybersecurity guidance likely applies to all plans governed by ERISA, not just retirement plans."

Tags: Health Plan Administration  •  Retirement Plan Administration

DOL Clarifies Lifetime Income Disclosure Requirement
Groom Law Group Link to more items from this source
[Guidance Overview]
Aug. 2, 2021

"The FAQs clarify that plans can provide participants with multiple [lifetime income illustrations (LIIs)].... This clarification may be helpful for plans that want to deliver various LIIs that, for example, take future contributions or in-plan annuity options into account. However, DOL has not extended the SECURE Act's fiduciary safe harbor for LIIs to any LIIs other than those meeting the requirements of the IFR."

Tags: Retirement Plan Administration  •  SECURE Act

Including Long-Term Part-Time Employees in 401(k) Plans
Definiti Link to more items from this source
[Guidance Overview]
Aug. 2, 2021

"[T]he SECURE Act changed the rules that permitted 401(k) plans to exclude individuals who worked less than 1,000 hours in the plan year.... [Unanswered questions include:] Can an equivalency method be used for counting service? How should a plan handle any missed deferral opportunities for [long-term part time (LTPT)] employees? Will LTPT employees be counted as 'participants' for purposes of the Form 5500? Will the LTPT rules apply to 'grandfathered' governmental plans? Will the LTPT rules apply to church 401(k) plans?"

Tags: 401(k) Plans  •  Retirement Plan Administration  •  SECURE Act

Recordings of Phone Calls Made for Quality Assurance Purposes Must Be Disclosed to ERISA Benefit Claimants
Hodgson Russ LLP Link to more items from this source
[Guidance Overview]
Aug. 2, 2021

"Plan administrators should work with their carriers or third party administrators to ensure that such recordings are retained for the relevant limitations period, and are disclosed upon request, even if the recordings were not relied upon in denying the claim."

Tags: Health Plan Administration  •  Retirement Plan Administration

DOL Clarifies Timing of Lifetime Income Disclosures in Benefit Statements
Kilpatrick Townsend Link to more items from this source
[Guidance Overview]
July 30, 2021

"Participant directed plans ... generally must furnish lifetime income disclosures by the benefit statement for the second quarter of 2022 ... For plans that do not allow for participant-directed investment, lifetime income disclosures must be included in the benefit statement for the first plan year ending on or after September 19, 2021, which ... for calendar year plans ... must be furnished no later than October 15, 2022."

Tags: Retirement Plan Administration

DOL Provides FAQs on Interim Final Rule on Lifetime Income Disclosures for DC Plans
Voya Link to more items from this source
[Guidance Overview]
July 30, 2021

"The DOL acknowledges that 'many retirement plans have been providing various types of illustrations for several years.' The DOL notes that the ages in the interim final rule must be used for lifetime income disclosures, but that plan administrators may provide participants with additional lifetime income illustrations[.]"

Tags: Retirement Plan Administration

IRS Giveth New Options for Voluntary Correction But Also Taketh Away
Employee Benefits Law Group Link to more items from this source
[Guidance Overview]
July 30, 2021

"If you are a plan sponsor or you are working with a plan sponsor that has a qualification failure that does not neatly fit within the safe harbor guidelines of EPCRS and you are not sure that you want to reveal your identity to the IRS in a VCP application, you should act fast and file an anonymous VCP application as soon as possible. The last day to file such an application is December 31st[.]"

Tags: Retirement Plan Administration

DOL Cyber Scrutiny Higher for 'Those Running the Systems'
American Retirement Association [ARA] Link to more items from this source
July 30, 2021

"[According to Tim Hauser, Deputy Assistant Secretary for National Office Operations at EBSA, the] most detailed proscriptive best practices in the recent DOL guidance were aimed at recordkeepers and 'those running the systems' -- and the DOL has higher expectations on cybersecurity practices among those organizations. Costs/risk exposure are a relevant consideration -- the [DOL] would expect quite a bit more of those who have more data, and more exposure."

Tags: Cybersecurity  •  Retirement Plan Administration

Enforceability of Arbitration Provisions: There Might Be More to the Analysis
Faegre Drinker Link to more items from this source
July 30, 2021

"When an arbitration provision is found in an ERISA plan document itself, courts have applied state-law principles when evaluating whether the plan document contains a binding agreement to arbitrate between and among the plaintiff, the plan itself and the defendants named in the lawsuit. Yet these courts have either ignored, or not adequately addressed, the fact that ERISA itself contains rules for contract formation. The ERISA rules for contract formation -- and not state-law principles -- might govern whether an agreement to arbitrate exists in an ERISA plan document."

Tags: Fiduciary Duties  •  Retirement Plan Administration  •  Retirement Plan Design

How a Contemporary Benefits Administration Solution Can Elevate Your Employee Experience
bswift Link to more items from this source
July 30, 2021

"Nearly 70% of HR professionals surveyed felt a contemporary ben admin system can help employees better understand their benefit options.... 66% of HR professionals surveyed reported that a contemporary ben admin system improved the relationship between HR and the rest of the organization.... 63% of HR professionals feel a contemporary ben admin system can help employees feel better connected to their healthcare experience."

Tags: Health Plan Administration  •  Retirement Plan Administration

What Empower's Purchase of Pru Retirement Business Means for Advisers
Fred Barstein, via RPA Convergence Link to more items from this source
July 29, 2021

"What is the value of an adviser to record keepers? The overwhelming answer is that advisers sell the plan. They represent a sales force of almost 300,000 with personal relationships with plan sponsors. Providers do not have to recruit, manage or pay these advisers directly. Everything else is ancillary."

Tags: Retirement Plan Administration  •  Retirement Plan Investments

Updated IRS Correction Principles and Changes to VCP Outlined in EPCRS Revenue Procedure 2021-30
Internal Revenue Service [IRS] Link to more items from this source
[Guidance Overview]
July 29, 2021

"Rev. Proc. 2021-30 updates EPCRS, making several major changes and other revisions to the correction programs. [This page provides] highlights of some of these changes.... The Treasury Department and the IRS invite comments from the public on how we can improve EPCRS."

Tags: Retirement Plan Administration

Cybersecurity Best Practices for Employer-Sponsored Benefits
Gallagher Link to more items from this source
July 29, 2021

"Begin with a solid working knowledge of the current cybersecurity threat landscape.... Develop and document a formal cybersecurity program.... How does your service provider selection process investigate an entity's ability to adequately protect data it will create, receive, transmit, or maintain on behalf of your employee benefits program? ... What level of oversight do your service provider agreements allow so that you can ensure the providers' security policy and procedure compliance? ... Train (and retrain) your employees at least annually."

Tags: Cybersecurity  •  Health Plan Administration  •  Retirement Plan Administration

IRS Issues Update to Qualified Plan Correction Procedures
Seyfarth Shaw LLP Link to more items from this source
[Guidance Overview]
July 29, 2021

"[T]he most significant changes to EPCRS relate to the correction of plan overpayments.... [T]he Revenue Procedure has been revised and reformatted to include helpful clarifications relating to the long-standing return of overpayment method, as well as two new correction methods that plan sponsors may use to correct defined benefit plan overpayments."

Tags: Retirement Plan Administration

IRS Goes for Gold with EPCRS Expansion
Eversheds Sutherland Link to more items from this source
[Guidance Overview]
July 29, 2021

"[A chart] shows the key changes from the prior version of EPCRS that are effective beginning July 16, 2021, except as otherwise noted."

Tags: Retirement Plan Administration

Relaxed IRS Self-Correction Rules Provide Opportunity to Correct Failures Now
Morgan Lewis Link to more items from this source
[Guidance Overview]
July 29, 2021

"The increased flexibility of this retroactive plan amendment self-correction option, coupled with the extension of the two-year self-correction period for significant operational failures to a three-year period, is a boon for plan sponsors looking to correct operational failures under their plans and that ... otherwise would have been required to submit a formal application to the IRS under the Voluntary Correction Program (VCP) -- including the payment of a VCP user fee of up to $3,500 -- to obtain the IRS's approval of a proposed correction."

Tags: Retirement Plan Administration  •  Retirement Plan Amendments

DOL Issues FAQs on the Interim Final Rule on Lifetime Income Illustrations Under the SECURE Act
Thomson Reuters Practical Law Link to more items from this source
[Guidance Overview]
July 28, 2021

"[P]lans that must issue quarterly statements under ERISA Section 105(a)(1)(A)(i) can incorporate their first lifetime illustration on any quarterly statement up to the second calendar quarter of 2022, which ends June 30, 2022.... For [non-participant-directed] plans, the lifetime income illustrations must be on the statement for the first plan year ending on or after September 19, 2021."

Tags: Retirement Plan Administration  •  SECURE Act

Editor's Pick DOL Provides Cybersecurity Guidance
Georgetown University Center for Retirement Initiatives Link to more items from this source
[Guidance Overview]
July 28, 2021

"While it is understandable that plan sponsors, prompted by advisers and attorneys, would want their service providers to provide more and better information, the absence of a basic understanding of cybersecurity could result in requests that could inadvertently create greater risks. Service providers recognize the right of plan sponsors to confirm that their participants' data are protected, but have legitimate concerns that some of the information requested, if it becomes more widely available, could help cybercriminals breach systems, thus undermining that very security."

Tags: Cybersecurity  •  Retirement Plan Administration

Ninth Circuit Ruling Reminds ERISA Plans of the Importance of Administrative Accuracy
Faegre Drinker Link to more items from this source
July 28, 2021

"[The Ninth Circuit] vacated the district court's holding that state-law professional and negligent misrepresentation claims were preempted.... The plaintiffs, utilizing [a benefits portal provided by the plan recordkeeper, had] requested statements showing their monthly pension benefit based on participant-entered assumptions. The statements created using these assumptions grossly overestimated the benefits to which they were entitled." [Bafford v. Northrop Grumman Corp., No. 20-55222 (9th Cir. Apr. 15, 2021)]

Tags: ERISA Preemption  •  Retirement Plan Administration

Escalating Litigation of Actuarial Equivalence in Taft-Hartley Plans: No End in Sight
Cohen Milstein Link to more items from this source
July 28, 2021

"To date, eleven class action lawsuits have been filed asserting ERISA violations for the failure to pay actuarially equivalent pension benefits. To date, all lawsuits in this area have involved corporate pension plans. The vast majority survived motions to dismiss in jurisdictions around the country[.]"

Tags: Multiemployer Plans  •  Retirement Plan Administration

2021 Recordkeeping Survey
PLANSPONSOR; free registration may be required Link to more items from this source
July 28, 2021

"Fifty-eight percent of sponsors surveyed ... said their organization has been using its DC plan recordkeeper for more than seven years, and another 12.3% said it has been more than five years but less than seven. So the timing may be right for these sponsors to take a fresh look at the dynamic recordkeeping marketplace and how it has changed since they last did a request for proposals (RFP)."

Tags: Retirement Plan Administration

Form 5500 and New Audit Standard SAS 136
Belfint Lyons Shuman Link to more items from this source
[Guidance Overview]
July 28, 2021

"The AICPA postponed the mandatory effective date of the new audit standard, SAS 136, until next year, but the DOL had already updated Form 5500 to incorporate the new reporting rules. So now what?"

Tags: Reporting to Government Agencies  •  Retirement Plan Administration

Cybersecurity: Another Responsibility for Retirement Plan Sponsors and Fiduciaries
Enterprise Iron Link to more items from this source
July 27, 2021

"Besides the specter of a DOL enforcement action, this guidance should remind plan sponsors that if a cybersecurity breach ever impacts their plan, they need to be prepared. Class action lawsuits that argue that they chose the wrong service provider or that PII was misused or not protected are possible. Service Providers like recordkeepers, TPAs, and advisors will likely be inundated with requests to divulge the precise details of their cybersecurity and information security practices."

Tags: Cybersecurity  •  Fiduciary Duties  •  Retirement Plan Administration

IRS Makes Helpful Changes to EPCRS and Modifies Anonymous Submission Process
Groom Law Group Link to more items from this source
[Guidance Overview]
July 27, 2021

"In its latest EPCRS update, the IRS has made some administrative revisions as well as important changes including: [1] an expanded Self Correction Program (SCP), including an extension of the general correction period, [2] updates to the rules for recovering overpayments, and [3] changes to the anonymous Voluntary Correction Program (VCP) submission process. These changes are generally effective July 16, 2021[.]"

Tags: Retirement Plan Administration

DOL Says Audio Recording Is Relevant to Participant's Denied Claim
Morgan Lewis Link to more items from this source
July 27, 2021

"[DOL Information Letter 06-14-2021] emphasizes that information is relevant if it was generated in the course of making the benefit determination, regardless of whether it was relied upon in making the benefit determination. Thus, contrary to the plan's claim, whether the information was created, maintained, or relied upon for claim administrative purposes is immaterial."

Tags: Health Plan Administration  •  Retirement Plan Administration


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