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[Guidance Overview]

DOL Proposes New Regs on ESG Investments in Retirement Plans

"The DOL indicates that a fiduciary may add an ESG investment vehicle to a 401(k) or 403(b) plan investment menu if: [1] The fiduciary uses only objective risk and return criteria ... in selecting and monitoring the investment options offered under the plan; [2] The fiduciary documents its evaluation of such criteria; and [3] The ESG investment vehicle is not used as, or as a component of, the 401(k) or 403(b) plan's qualified default investment alternative (QDIA)."

Ballard Spahr LLP


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]

Proposed DOL Rule Limits Consideration of ESG Factors in Investment Decisions

"The proposed rule expressly clarifies that plan fiduciaries may never subordinate the interests of plan participants and beneficiaries in their retirement income to nonfinancial objectives.... In the rare circumstances where a plan fiduciary determines alternative investments to be economically indistinguishable, and one of the investments is selected based on nonfinancial or ESG factors, the proposed rule adds new language requiring fiduciaries to document why the investments were determined to be indistinguishable and why the selected investment was chosen."

Sidley Austin LLP

[Guidance Overview]

IRS Provides Guidance on 2020 Required Minimum Distribution Waivers and More

"[T]he plan sponsor can elect to apply the 'no new annuity starting date' rule so spousal consent should not apply ... The RMD amount is not an eligible rollover distribution for withholding purposes so mandatory 20% withholding does not apply.... The 2020 RMD waiver does not apply to defined benefit plans."

Groom Law Group

[Guidance Overview]

Puerto Rico Extends Due Date for Coronavirus-Related Distributions from Qualified Retirement Plans

"The Hacienda rules on CRDs remain exactly as described in Circular Letter of Internal Revenue No. 20-23, except for the following two items: [1] Going forward, applications for CRDs are not required to be notarized.... [2] [P]lan administrators, recordkeepers, and trustees now have until December 31, 2020, to complete CRDs to participants (i.e., not just receive the application, but send the payment, either by mail or electronically).... Hacienda did not extend the amendment adoption due date."

Ogletree Deakins

DOL Files Brief Supporting ERISA Preemption of CalSavers

"In an ongoing legislative battle over the legality of the California SECURE Choice Act, which led to the establishment of a state-run automatic individual retirement account (IRA) program, attorneys for the [DOL] have filed a brief explaining how it believes a federal district court got it wrong." [Howard Jarvis Taxpayers Ass'n v. The California SECURE Choice Retirement Savings Program, No. 18-1584 (E.D. Cal. Mar. 10, 2020; on appeal to 9th Cir.)]


Editor's Pick How Restaurant Menus Can Impact Retirement Savings Rates

"If you set the options at 8, 10, and 12 percent, there's a strong likelihood that a majority of people will enroll at 10 percent, choosing the middle option and avoiding the 'high priced' choice (i.e. 12 percent).... By choosing 10 percent, they are enrolling at a much higher percentage than the default and moving much closer (and faster) to the types of savings rate required for a successful retirement."

Greenspring Advisors

Editor's Pick Dividing Retirement Benefits at Divorce: Tips for Self-Represented Individuals (PDF)

"At the time you're going through your divorce, retirement may be the last thing on your mind. However, retirement benefits are very valuable and can ensure your economic security in old age. It's important to know that you can ask for a share of your spouse's retirement benefit in your divorce."

Pension Rights Center

The Role of Affect and Social Norms in Preferences for Guaranteed Income Streams in Retirement

"Decumulation decisions require individuals to consider a range of issues ... An underexplored factor in these decisions is ... the emotional content of retirement messages and the emotions that consumers bring to the decisions. This paper describes a series of empirical analyses and experimental studies that explore the role of affect, as well as the use of social norms messaging, in encouraging interest in annuity uptake."

TIAA Institute

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

IRS Provides Additional Guidance on COVID-19 Cancellation of Compensation Deferral Elections

"[Notice 2020-50] clarifies that if a participant receives a distribution from an eligible retirement plan that constitutes 'a coronavirus-related distribution,' that distribution will be considered a hardship distribution pursuant to Section 409A.... Therefore, a participant who elects and receives a coronavirus-related distribution can cancel his or her a non-qualified plan deferral election at the same time."

Winston & Strawn LLP

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Ways to Digest DB/CB Plan Overfunding After NRA

"Husband and wife DB plan, both passed NRA of 62, are looking to terminate the plan, but plan asset value has exceeded 415 lump sum by $1 million. What are the ways to solve the overfunding issue so they can terminate the plan? One way an actuary suggested to me is having both participants start taking in-service distribution, which can be treated as eligible rollover distribution and rolled over to IRA without tax implications. But it seems to violate one of the exclusions of an eligible rollover distribution: 'a series of substantially equal periodic payments over a period specified in section 402(c)(4)(A)'. Is this really workable?"

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Press Releases

Most Popular Items in the Previous Issue

Fiduciary Exception to Attorney-Client Privilege for ERISA Plans (PDF)
Proskauer Rose LLP, via Lexis Practice Advisor, 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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