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[Official Guidance]

Text of Treasury Department Notice of Bricklayers & Allied Craftsmen Local 7 Pension Fund Third Application to Reduce Benefits

"The Board of Trustees of the Bricklayers & Allied Craftsmen Local 7 Pension Fund, a multiemployer pension plan, has submitted an application to reduce benefits under the plan in accordance with [MPRA]. The purpose of this notice is to announce that [the] application ... has been published on the website of the Department of the Treasury, and to request public comments on the application from interested parties[.]"

U.S. Department of the Treasury


SPARK / DCIIA Summer Policy Series

Live virtual event, every Wednesday, July 15 to August 19. Domestic and global topics; general and breakout sessions (live broadcast), exhibitor hall and virtual networking happy hours. Replay on demand. Free to SPARK and DCIIA members. Learn more! Learn more

Sponsored by SPARK and DCIIA

[Guidance Overview]

EBSA Proposal Pours Cold Water on ESG Enthusiasm

"[1] This is a proposed rule, not a final one. [2] DOL says it was concerned about the marketing of ESG products, alongside significant increases in ESG investments by ERISA plans. [3] Until now, [there have] really only been Interpretive Bulletins (IBs) (in 1994, 2008 and 2016) and, more recently, a 2018 Field Assistance Bulletin (FAB) on this subject. The 2016 IB was read as encouraging consideration of ESG factors; the 2018 FAB pulled back on that stance. [4] DOL says this is a separate initiative from the one recently reported regarding inquiries to plan fiduciaries regarding ESG plan investments. [5] The proposed rule maintains the 'all things equal' test, but requires a new level documentation. It also says that ESG is not suitable as a qualified default investment. [6] Comments on the proposed rule are being sought for 30 days."

National Association of Plan Advisors [NAPA]

[Guidance Overview]

IRS Eases COVID Distribution Rules: More Individuals Can Withdraw or Borrow from Retirement Accounts

"[T]he expanded rule effectively looks at the full household for COVID-19 effects ... [Notice 2020-50] provides that plan loan offsets and reductions which are taxable distributions can also qualify as CRDs if they occur during 2020.... [T]he Notice allows a 'qualified individual' to cancel his or her deferral election under a nonqualified deferred compensation plan."

Nelson Mullins

[Guidance Overview]

IRS Provides Rollover Relief for Required Minimum Distributions

"Taxpayers who already took an RMD in 2020 from certain retirement accounts now have the opportunity to roll those funds back into a retirement account.... [T]he 60-day rollover period for any RMDs already taken this year has been extended [by Notice 2020-51] to Aug. 31, 2020."

Journal of Accountancy

[Guidance Overview]

DOL Introduces New Safe Harbor for Retirement Plan Disclosures

"[T]he plan administrator must first provide the participant with an initial notice on paper ('Initial Paper Notice') stating that disclosures will be provided electronically unless the participant opts out.... [This article includes detailed list of what] to include in the Initial Paper Notice, an NOIA, and an email of a document."

Hall Benefits Law

[Guidance Overview]

Electronic Document Delivery: What Plan Sponsors Need to Know

"[It is] likely that the new rule will spread to other aspects of recordkeeper communications. Recordkeepers tend to send many paper documents to participants that are not DOL-required disclosures; look for this to change as well, as paper-fulfillment operations are eliminated or streamlined. This should also benefit the fee equation for plan sponsors.... [T]he participant communication portals of recordkeepers and TPAs should be test-driven by plan sponsors to ensure they offer a suitable alternative to paper communications."

Cammack Retirement Group

[Guidance Overview]

Is Private Equity Coming to Defined Contribution Plans?

"The key point of [DOL Information Letter 2020-06-03] is that plans including private equity investments must offer them as part of an asset allocation fund, and not a stand-alone fund. In other words, plan menus are unable to offer private equity as an individual offering. Instead, the private equity investments need to be embedded in something like a target date fund or balanced fund, which is primarily a mix of traditional stocks and bonds."

Cammack Retirement Group

Plan Sponsor Survey on Impact of Coronavirus

"The results show broad actual or planned implementation (80%+) of all the CARES Act features with two exceptions: Only 42% have implemented or plan to implement 'repayment of previously distributed RMDs' and even less (30%) have implemented or plan to implement the 'increased loan limits up to $100,000.' ... Only 8% of plan sponsors have suspended their employer match and only 3% have reduced their employer match."

Defined Contribution Institutional Investment Association [DCIIA]

401(k) Plans Beware: Identity Fraud Is Headed Your Way

"[Consumer] account takeovers -- where a criminal gains unauthorized access to an online account belonging to someone else -- are trending at the highest loss rate, up 72% over the previous year. This is due in large part to technological advancements that have made it easier for criminals to manipulate and socially engineer information, while making it harder to detect account takeovers without additional security infrastructure."

American Retirement Association [ARA]

Most 401(k) Participants Express Interest in Keeping Assets in Plan After Retirement

"[O]ver 83% of 401(k) participants expressed interest in keeping their savings in their employer plan upon retirement. Of the 83%, 30% of participants said they currently have plans to keep their savings with their employer, and 53% said they would consider keeping their saving in their employer plan if it offered solutions to help generate income."

T. Rowe Price

Estimated Cost of Retiree Pension Risk Transfer Drops Significantly in May 2020

"During May, the estimated cost to transfer retiree pension risk to an insurer dropped significantly from 105.5% of a plan's total liabilities to 103.9% of those liabilities.... Discount rates in May dropped 27 basis points compared to a 10 basis point drop for annuity purchase rates, resulting in the relative cost of annuities decreasing by almost two percentage points."

Milliman Retirement Town Hall

What Construction Contractors Can Expect from Multiemployer Pension Plans Following COVID-19 Crisis

"[An] employer that withdraws in 2020 from a multiemployer plan with a calendar plan year may ... have its withdrawal liability determined based on the funding of the plan as of December 31, 2019 ... Employers with collective bargaining agreements (CBAs) that expire during the 2020 plan year may want to consider negotiating out of the plan to avoid having their withdrawal liability include the anticipated investment losses during the 2020 plan year."

Jackson Lewis P.C.

An Investigation of Policy Incentives for Delaying Public Pension Benefit Claims

"Using Internet survey experiments, the impacts of introducing three potential policies to defer public pension claims are examined: [1] a tax incentive for private term pension premiums, [2] a tax incentive for private term pension benefits and [3] a tax disincentive for financial asset holdings."

Tomoki Kitamura and Kunio Nakashima, via SSRN

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

Focusing on Employer Tax Deposit Timing for Restricted Stock Units

"A key point covered in [Generic Legal Advice Memorandum No. AM 2020-004] is how these deposit rules work in the context of RSUs. For employers, it is important to realize that while, under the facts of the GLAM, the vesting date of the RSUs was determined to be the payment date for valuation and deposit rule time, that result was based on the specific facts of the GLAM. For RSUs, the GLAM stands for the proposition that the payment date is the date the employer initiates settlement of the RSUs in stock. For many RSUs, that will be a different date from the date of vesting. Accordingly, it is important to understand how a specific RSU grant operates and identify the right date for measuring income, as well as timing of the employment tax deposit."

Cohen & Buckmann, P.C.

Selected Discussions
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Forfeitures Did Not Occur for Certain Former Employees But Plan Wants to Terminate

"Company wants to terminate its 401(k) plan and just discovered that, while forfeitures have been occurring when employees terminated employment and either took a distribution or had a 0% vested interest, no forfeitures have occurred for terminated individuals when they incurred 5 consecutive breaks in service. Is a correction required for past years? What would that look like?"

BenefitsLink Message Boards

Vesting in the Time of Coronavirus: Employees Getting Paid But Not at Work

"If an employee is paid during the pandemic but doesn't work, and doesn't work 1000 hours, does the employee get a year of service for vesting? Plan defines a year of service as 1,000 hours."

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Press Releases

Most Popular Items in the Previous Issue

Text of DOL Proposed Regs: Financial Factors in Selecting Plan Investments (PDF)
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

Text of EBSA Fact Sheet: Proposed Regs on Financial Factors in Selecting Plan Investments
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL], Inc.
1298 Minnesota Avenue, Suite H
Winter Park, Florida 32789
(407) 644-4146

Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

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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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