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May 28, 2020 logo logo
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[Guidance Overview]

DOL eDisclosure Regs Provide Reduction in Paper and Mailing Costs -- But No Guarantee That Documents Have Been Read per Intel Decision

"[T]hese new eDisclosure Regs don't replace the original eDisclosure Regs issued on April 9, 2002, but rather provide additional options for plan sponsors. This FlashPoint will review the new final rules, and will also discuss how eDisclosure meets (or doesn't meet) the 'actual knowledge' standard set up by the Supreme Court in the Intel Case for purposes of starting the statute of limitations on lawsuits for fiduciary breach."

Ferenczy Benefits Law Center

[Sponsored] -- Stay Safe

Sponsored by Burrmont Compliance Labs LLC authors and staff commend you for the extraordinary efforts you are making to serve your clients. Please let us know how we may help and periodically check our webcasts page for updates. Contact us: or 612-605-2266 Learn more

[Guidance Overview]

DOL eDisclosure Regs Finally Bring Plan Administration Into the 21st Century

"If you wish to move to e-delivery, there are a number of steps that you should take: [1] Decide what method you will use for e-delivery ... [2] Identify all covered individuals ... [3] Consider how you will obtain and update e-mail or text addresses.... [4] Decide if you should consolidate disclosures in an annual NOIA during your next open enrollment or at another time, or keep them separate.... [5] Determine how you will track and manage disclosures where the individual does not qualify as a covered individual ... [6] Establish an e-mail or text address capable of e-delivering the NOIA and/or disclosures ... [7] Have your IT department review the e-delivery safe harbors and confirm that your IT system is compliant with the requirements ... [8] Review your current third-party administrator and recordkeeper service agreements to identify any fees for mailing required legal disclosures that might be included in your current monthly or annual fixed fees."

Nelson Mullins

[Guidance Overview]

DOL Issues Final Rule on Electronic Delivery

"For public sector plans ... the Final Rule is not binding, but serves as useful guidance.... As with the 2002 Safe Harbor, the new disclosure methods are optional safe harbor methods. Other reasonable disclosure methods may be used by plan administrators.... The Final Rule does not specify when the administrator must provide the initial paper notice. It simply states that the administrator must provide it 'prior to' relying on the Final Rule with respect to a covered individual."

Ice Miller LLP

[Guidance Overview]

IRS Proposed Regs Address Tax Withholding on Certain Periodic Retirement and Annuity Payments

"The proposed regulations are intended to provide a flexible and administrable rule that leaves the communication of the default rate of withholding on periodic payments to be determined by the IRS in applicable forms, instructions, publications and other guidance. The proposed rule would apply to periodic payments made after Dec. 31, 2020, but taxpayers may rely on these rules until the date of publication of a Treasury Decision adopting this proposed rule as a final regulation. Public comments may be submitted to the IRS electronically by July 27, 2020."

Holland & Knight

Steps to Modernize Your Next Recordkeeper RFP

"While it's true that recordkeeper RFPs are an involved process that requires a generous amount of effort, many advisors fail to take certain steps to help expedite and modernize their RFP process.... [1] Set clear timelines and expectations.... [2] Determine what is most important to your client.... [3] Don't invite everybody to the party! ... [4] Share specific and detailed instructions.... [5] Have a framework for evaluating proposals."


Using DB Pension Plans to Smooth Staff and Payroll Disruptions During COVID-19

"Allow the pension plan to provide in-service distributions (i.e., pension income) to help offset reductions in pay. ... [C]onsider offering a lump sum window.... Another possibility is an early retirement window.... [C]onsideration should be given to the opportunity cost associated with lost future asset returns when lump sums are paid from the plan. However, the strategy may result in a net savings beyond the effects of a reduction in ongoing pay-related costs."


Employer's Failure to Respond to Information Request May Trigger Accelerated Liability Payment

"A multiemployer plan survived a motion to dismiss its claim that a contributing employer's failure to respond to the plan's request for information under ERISA Sec. 4219(a) constituted a default under the governing trust agreement, triggering an accelerated payment of the employer's entire $8.3 million in unpaid withdrawal liability, a federal trial court in New York has ruled. The court cautioned that the larger question -- whether the trust agreement default provision is valid under ERISA -- must be determined initially in the ongoing proceeding initiated by the employer." [National Retirement Fund v. InterContinental Hotel Group Resources, LLC, No. 19-8018 (S.D.N.Y. Apr. 21, 2020)]

Wolters Kluwer; free registration required

The State of DB Plan Finance at the End of May 2020

"If current (end of May 2020), much lower rates persist, ... sponsors will have to live with lower HATFA valuation interest rates for the foreseeable future -- past 2030.... [A]sset performance -- which generally has a more immediate effect on plan funding -- has generally improved since late March -- making near-term asset-driven minimum funding issues less likely for some plans.... Through May 21, [equities] are only off around 11%. And bonds are up 7%-10% on the year."

October Three Consulting


COVID-19 Relief for Retirement Benefits: Open Issues

"[D]espite recent IRS and DOL guidance there are still major outstanding issues preventing Covid-19 victims from obtaining better access to their own accrued benefits, when they are most in need of such access, and may impose undue compliance costs or risks on plan sponsors and administrators."

Albert Feuer, via SSRN

Benefits in General

[Guidance Overview]

DOL and IRS Extend Deadlines for Employee Benefit Plans and Plan Participants

"Notwithstanding the relief provided to plan fiduciaries in the guidance, the Notice reiterates that plan fiduciaries have an ongoing fiduciary duty to act reasonably, prudently, and in the interest of participants. The DOL notes that plans should make reasonable accommodations to prevent the loss of benefits or undue delay in benefits payments, and particularly reduce the risk of participants losing benefits because of the plan's failure to comply with pre-established timeframes."

Slevin & Hart, P.C.

Executive Compensation
and Nonqualified Plans

COVID-19 Effects on Executive Compensation in Private Companies: Deferred Compensation

"[U]nlike hardship distributions from 401(k) plans, there are no safe harbor rules that an employer may rely on, when determining whether an Executive experienced an unforeseeable emergency... [To] permit a distribution, the deferred compensation must be needed because the Executive has no other resources to use such as savings or ceasing elective deferrals into the deferred compensation plan or a 401(k) plan. Therefore, it will likely be difficult for an Executive to meet this burden, and get a distribution, especially if there is money available under a 401(k) plan or the emergency can be met by ceasing deferrals to the 401(k) plan and the deferred compensation plan."

Murphy Austin

Selected Discussions
on the BenefitsLink Message Boards

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What Are the PBGC Criteria for 'Active Participant' in Professional Service DB Plan?

"Is there any regulation for determining who is an active participant under a professional service DB plan? It appears the regulations under ERISA Section 4006.2 may be obsolete. I don't see any regulations under 29 USC Section 1321 (ERISA Section 4021), which sets up the exemption."

BenefitsLink Message Boards

Top Heavy Minimum When Plan Has Dual Eligibility

"There were no age and service requirements for deferral but there was a 1-year wait for all other contributions. My understanding is that, whenever a plan has dual eligibility, those who don't meet the 1-year wait are entitled to the top heavy minimum regardless of what type of safe harbor contribution the plan offers, including a safe harbor match. Some of the participants didn't defer. Please help me better understand the applicable top heavy rules in this situation."

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BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2020, Inc. All materials contained in this newsletter are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of, Inc., or in the case of third party materials, the owner of those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.

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