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[Official Guidance]

PBGC Regulatory Agenda, Spring 2020

Proposed Rules:

  • Valuation Assumptions and Methods: Interest and Mortality Assumptions for Asset Allocation in Single-Employer Plans and Mass Withdrawal Liability Determination in Multiemployer Plans
  • Multiemployer Plan Guaranteed Benefits
  • Examination and Copying of PBGC Records
  • Improvements to Rules on Recoupment of Benefit Overpayments
  • Penalties for Failure to Provide Certain Notices or Other Material Information

Final Rules:

  • Benefit Payments and Allocation of Assets
  • Methods for Computing Withdrawal Liability
  • Lump Sum Payment Assumptions
  • Adjustment of Civil Penalties
  • Privacy Act Regulation; Exemption for Insider Threat Program Records
  • Procedures for PBGC Guidance Documents

Pension Benefit Guaranty Corporation [PBGC]


ASC Live Webcast: Pros & Cons of Auto Enrollment & More!

In this 2-hour webcast, John P. Griffin J.D., LL.M. discusses the viability of automatic enrollment plans (including ACAs, EACAs and QACAs) from the perspective of employers and service providers. Register Now! Learn more

Sponsored by ASC

[Official Guidance]

Text of DOL Nonsubstantive Correction to Final Regs on Default Electronic Disclosure by Employee Pension Benefit Plans Under ERISA

"The final rule ... made a number of conforming amendments to ... the Code of Federal Regulations.... With respect to a cross reference ... the numbering of [one] paragraph was [incorrect]."

Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

[Guidance Overview]

DOL Issues Proposed Regs on Environmental, Social and Governance Investing

"The effect of the proposal, if finalized as is, would likely suppress investment by ERISA plans in ESG strategies, without regard to their ability to help maximize retirement assets. Perhaps unintentionally, the proposal could also adversely impact investment in actively managed strategies and closed-architecture individual account plan menus, due to the breadth of its language."

Goodwin Procter

[Guidance Overview]

DOL Proposes to Formalize Its ERISA Guidance on ESG Investing

"Asset managers have brought to the market certain products reflecting one or more ESG factors and constructed around the thesis that these products will outperform other investments in their asset category, and have developed research and other materials in support of that thesis.... While it continues to be the case that ESG investing by ERISA plans has generally not proven to be controversial in actual practice, with very little litigation experience to date, investigations into ESG investing by specific plans and investment firms are in progress in various DOL Regional Offices[.]"

Eversheds Sutherland

FAS87 ASC715 Discount Rates and Moody's Rates, June 30, 2020

An unofficial monthly report of the Moody's Daily Long-term Corporate Bond Yield Averages and Moody's Daily Treasury Yield Averages (used as benchmarks by some corporate pension plans).

David Rigby, via BenefitsLink Message Boards

Best Practices for Plan Sponsors to Address Cybersecurity Concerns (PDF)

"The procedures many plan sponsors, third-party administrators, and record keepers currently have in place to exchange data or manage and verify participant withdrawals may no longer be prudent or feasible. Because of the urgency in dealing with this problem, the time is now for plan sponsors, plan fiduciaries and plan service providers to address and reevaluate cybersecurity concerns -- to ensure they and their participants will not fall victim to fraud, hacking or phishing schemes."

The Wagner Law Group

A Primer on Cost-of-Living Adjustments in State and Local Government Pension Plans (PDF)

16 pages; rev. Jun. 2020. 'Periodic cost-of-living adjustments (COLAs) in some form are provided on most state and local government pensions....Public pension COLAs have received increased attention in recent years as many states look to make adjustments to the cost of benefits amid challenging fiscal conditions and the current low-inflationary environment. This brief presents a discussion about the purpose of COLAs, the different types of COLAs provided by government pension plans, and an overview of recent state changes to COLA provisions."

National Association of State Retirement Administrators [NASRA]

Survey of Existing Public Sector Hybrid Retirement Plans (PDF)

12 pages; rev. Jun. 2020. "Although hybrid retirement plans take many forms, this brief examines two types in use in the public sector. ... Despite variability among these plans, most contain core features known to promote retirement security: mandatory participation, shared financing between employers and employees, pooled assets invested by professionals, targeted income replacement with survivor and disability protection, and a benefit that cannot be outlived."

National Association of State Retirement Administrators [NASRA]


SPARK Institute Letter to IRS Requesting Guidance on QBADs (PDF)

"SPARK members have unfortunately been unable to program systems for [qualified birth or adoption distributions (QBADs)] because of the many unanswered questions about how the provision works.... While we appreciate that a formal regulatory project may be necessary, we believe that guidance that can be relied upon until a regulation is issued is critical. Otherwise, participants in plans either will not have access to these distributions, as Congress intended, or plans will be forced to administer the provision without guidance."

The SPARK Institute

Benefits in General

[Official Guidance]

Employee Benefit Items in DOL Regulatory Agenda, Spring 2020

Proposed Rules (EBSA):

  • Fiduciary Rule and Prohibited Transaction Exemptions
  • Grandfathered Group Health Plans and Grandfathered Group Health Insurance Coverage
  • Proxy Voting Update
  • Pooled Employer Plans Under the SECURE Act
  • Financial Factors in Selecting Plan Investments

Final Rules (EBSA):

  • Pension Benefit Statements -- Disclosure Regarding Lifetime Income, SECURE Act
  • Adoption of Amended and Restated Voluntary Fiduciary Correction Program
  • Transparency in Coverage

Prerule Stage (WHD): The Family and Medical Leave Act of 1993

Final Rule (WHD): Paid Leave Under the Families First Coronavirus Response Act

U.S. Department of Labor [DOL]

[Official Guidance]

Employee Benefit Items in IRS Regulatory Agenda, Spring 2020

Prerule Stage: Section 414(m) Affiliated Service Group Rules

Proposed Rules:

  • Further Guidance on the Application of Section 409A to Nonqualified Deferred Compensation Plans
  • Determination of Governmental Plan Status
  • Additional Rules Regarding Pension Plan Funding and Benefit Restrictions
  • Deferred Compensation Plans of State and Local Governments and Tax-Exempt Entities
  • Application of Section 409A to Nonqualified Deferred Compensation Plans
  • Collectively Bargained Welfare Benefit Funds
  • Guidance on Rules Applicable to IRAs Under Sections 408 and 408A
  • Spousal IRAs, SEPs and IRA Technical Changes
  • Requirements for Employee Stock Ownership Plans
  • Reporting and Notice Requirements for Deferred Vested Benefits Under Section 6057
  • Section 72(t) 10 Percent Additional Tax Regulations
  • Excise Tax on High Cost Employer-Sponsored Health Coverage
  • Minimum Vesting Standards
  • Definition of Church Plan
  • Application of Nondiscrimination Requirements, Backloading Limitations, Certain Plan Termination Rules, Benefit Limitations, and Top Heavy Rules to Statutory Hybrid Plans
  • Section 4960 Excise Tax on Tax-Exempt Organization Compensation
  • Voluntary Employees' Beneficiary Association (VEBA) Regulations
  • Extension of Rollover Period for Qualified Plan Loan Offset Amounts
  • Qualified Transportation Fringes and Entertainment Expenses Under Section 274
  • Grandfathered Group Health Plans and Grandfathered Group Health Insurance
  • Income Tax Withholding on Certain Periodic Retirement and Annuity Payments Under Section 3405(a)
  • SECURE Act Modifications to Certain Rules Governing 401(k) Plans
  • Guidance on 401(a)(9) Required Minimum Distributions

Final Rules:

  • Reporting and Notice Requirements for Deferred Vested Benefits Under Section 6057
  • Update to Minimum Present Value Requirements for Defined Benefit Plan Distributions
  • Application of Normal Retirement Age Regulations to Governmental Plans
  • Nondiscrimination Relief for Closed Defined Benefit Plans
  • Minimum Value of Eligible Employer-Sponsored Plans
  • Withholding on Certain Retirement Plan Distributions Under Section 3405(a) and (b)
  • Guidance Under Section 162(m)
  • MEPs and the Unified Plan Rule
  • Regulations Under Section 401(a)(9) Updating Life Expectancy and Distribution Period Tables for Purposes of the Required Minimum Distribution Rules
  • Application of Employer Shared Responsibility Provisions and Certain Nondiscrimination Rules to HRAs and Other Account-Based Group Health Plans Integrated with Individual Health Insurance or Medicare
  • Transparency in Coverage

Internal Revenue Service [IRS], U.S. Department of the Treasury

[Guidance Overview]

IRS Extends July 15, Other Upcoming Deadlines for Tornado Victims in Parts of the South

"Victims of the April tornadoes, severe storms and flooding that took place in parts of Mississippi, Tennessee and South Carolina will have until October 15, 2020, to file various individual and business tax returns and make tax payments ... Currently, this includes Clarke, Covington, Grenada, Jasper, Jefferson Davis, Jones, Lawrence, Panola and Walthall counties in Mississippi, Bradley and Hamilton counties in Tennessee and Aiken, Barnwell, Berkeley, Colleton, Hampton, Marlboro, Oconee, Orangeburg and Pickens counties in South Carolina."

Internal Revenue Service [IRS]

ERISA Advisory Council to Meet July 30

"[O]pen meeting of the Advisory Council on Employee Welfare and Pension Benefit Plans (also known as the ERISA Advisory Council) will be held via a teleconference on Thursday, July 30, 2020.... The purpose of the open meeting is to set the topics to be addressed by the Council in 2020. Also, the ERISA Advisory Council members will receive an update from leadership of the [EBSA]."

Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

IRS Guidance Permits Certain Individuals Affected by COVID-19 to Cancel NQDC Plan Deferral Elections

"The wrinkle until now for many NQDC Plan participants affected by COVID-19 has been meeting the relatively strict qualifications for 'unforeseeable emergency' or 'hardship' under the existing IRS rules.... IRS Notice 2020-50 makes it easier for participants in NQDC Plans to suspend their deferral elections if they have been affected by COVID-19[.]"

Morgan Lewis

Delaware Chancery Court Dismisses Claims Challenging $82.4 Million in Equity Awards to Fox Executives

"The Delaware Court of Chancery has dismissed breach of fiduciary duty and unjust enrichment claims brought by a stockholder of Twenty-First Century Fox, Inc. who argued that the equity awards granted to several Fox executives in anticipation of a corporate transaction were unnecessary and wasteful. The court held that the plaintiff's claims were derivative and the plaintiff lacked standing to bring them." [Brokerage Jamie Goldenberg Komen Rev Tru U/A 06/10/08 Jamie L Komen Trustee for the Benefit of Jamie Goldenberg Komen v. Breyer, No. 2018-0773-AGB (Del. Chanc. Jun. 26, 2020)]

Thomson Reuters Practical Law

Employees with ESPP Purchases During Stock Market Drop Reaped Big Gains In Rebound

"Employees at companies with ESPP purchases during the stock-market lows of March and April 2020 experienced meaningful gains of over 40% in the market rebound as of mid-June ... ESPPs with a discount and a lookback feature are a good deal even in a down market. This discount calculation would come off of the lower purchase date price, even without a lookback."

Bruce Brumberg, in Forbes

Selected Discussions
on the BenefitsLink Message Boards

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Extent of the Waiver of 10% Early Withdrawal Penalty

"Has the 10% early withdrawal on distributions made from a 401(k) plan been waived for all withdrawals across the board for anyone making a withdrawal in 2020, or is that only available for CARES Act related distributions (CRDs), which in turn is only available if the employer has chosen to adopt the CARES Act distribution provisions for the plan?"

BenefitsLink Message Boards

Electronic Signatures OK on Form 5500 (Rather than Handwritten)?

"Is the DOL accepting electronic signatures on the Form 5500, such as an Adobe signature? Or are hand signatures the only signature method?"

BenefitsLink Message Boards

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Press Releases

Most Popular Items in the Previous Issue

DOL Unveils New Fiduciary Rule Proposal
American Retirement Association [ARA], 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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