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[Guidance Overview]

DOL Proposes to Formally Regulate ESG Investing

"[T]he Proposed Rule makes it clear that financial return is paramount by imposing a burden on fiduciaries to carefully document their investment decision-making process whenever a potential investment has a non-pecuniary or collateral objective."

Trucker Huss

[Guidance Overview]

DOL Proposed Regs Impose Burdens on Socially Responsible Investing for ERISA Plans

"While conceding that ESG factors can affect the riskiness of an investment, the proposed regulations impose new documentation requirements on fiduciaries to show exactly how they took ESG factors into account. ... This is the time for fiduciaries to evaluate fund choices and line-ups, and ensure that ESG choices can be justified if the proposed regulations are adopted.... [P]lan governance procedures should be reviewed, in particular, documentation regarding choice of funds."

Davis Wright Tremaine LLP

[Guidance Overview]

Has the DOL Closed the Door on ESG Investing in ERISA Plans?

"Under the proposal, fiduciaries must always prioritize the economic interests of the plan in providing benefits to participants.... The proposal could ... impact fiduciaries struggling with investing ERISA plan assets in accordance with religious laws.... [W]hile a brokerage window may provide a path to allowing participants to invest based on non-pecuniary factors ... under a participant-directed plan, the width of that path is not entirely clear."

Seyfarth Shaw LLP

[Guidance Overview]

DOL Proposes New Rule for ERISA Plans and Fund Sponsors Pursuing ESG

"[By] some estimates, investors have allocated more than US$12tn in U.S. assets to strategies that incorporate ESG criteria.... [M]any investors [are] including ESG inquiries in due diligence questionnaires and in-person evaluations, as well as negotiating a variety of ESG provisions in side letters.... [T]here is recent empirical data to suggest that ESG investment funds have outperformed their conventional peers[.]"

Linklaters LLC

[Guidance Overview]

IRS Provides Guidance on the Waiver of 2020 Required Minimum Distributions

"The IRS previously extended the 60-day deadline to elect a roll over until July 15, 2020 for distributions made between February 1, 2020 and May 15, 2020. [Notice 2020-51 extends] the 60-day rollover deadline to August 31, 2020 for all distributions received in 2020 that would have otherwise been an RMD but for the CARES Act.... [T]his relief also applies to distributions that would have been treated as an RMD in 2020 but for the [SECURE Act] (which increases the age for determining a participant's required beginning date from age 70-1/2 to age 72 for participants who reach age 70-1/2 after December 31, 2019)."

Slevin & Hart, P.C.

[Guidance Overview]

The DOL's New Proposal to Regulate Investment Advice

"[T]he DOL now believes that a recommendation to distribute assets from an IRA or an ERISA-covered plan would be considered investment advice with respect to the first prong of the five-part test.... [D]etermining whether advice to roll over assets meets the 'regular basis' prong depends on the facts and circumstances. So the DOL could view a rollover recommendation that begins an ongoing advisory relationship as meeting the 'regular basis' prong."


[Guidance Overview]

DOL's New Fiduciary Investment Advice Package Presents Significant Compliance Risk

"[T]he DOL indicated that the first prong would encompass advice to a retirement investor as to whether to take a distribution from a plan or whether to roll out of a plan and into an IRA. This is a notable departure from the DOL's previous position ... The second prong would also be interpreted quite broadly."

Stradley Ronon

Risk for Cyberattacks Heightened as Remote Work Continues

"[A]side from a hacker stealing money, there's the drawback that defined contribution plans have an extensive amount of sensitive employee data shared through multiple channels. This distribution of information faces greater risk as plan professionals and participants access unsecured networks at home without proper security protocols."

PLANSPONSOR; free registration may be required

Adoption and Usage of CARES Act Provision

"Across the major recordkeepers [the authors] surveyed, the plan sponsor adoption rate of the increased loan limit (47%) was much lower than the adoption rate for CRDs (70%).... The majority of plan sponsors (71%) allowed participants to suspend their loan repayments through year-end.... Among plans with more than 10,000 participants, 83% have adopted CRDs, compared with only 16% of plans with less than 1,000 participants.... Overall participant use of CRDs was very moderate, with most industries seeing usage of 1% or less."

Portfolio Evaluations, Inc.

What Is the 'Right' Measure of Pension Liability?

"[It is] important to help plan sponsors clarify and identify which liability measure is appropriate to use given the situation. Here's a quick summary of some of the most commonly used measures of liability for a variety of objectives, and the associated calculation bases and assumptions."


Is the '4% Rule' Broken?

"Retirement researcher Wade Pfau discusses why low yields put this withdrawal rule at risk and what strategies retirees can use instead."


Public Pension Funds in an Era of Low Rates and COVID-19

"What is the most prudent strategy for state and local governments confronting low returns on pension investments, aging workforces, and pressure to build portfolios large enough to cover promised future benefits at the same time that these governments face other pressing demands? Presentations at the 2020 Municipal Finance Conference provide contrasting answers to this question."

The Brookings Institution

Benefits in General

Getting Severance Right Through ERISA

"Just because an employer's practices are unwritten and informal doesn't mean that they are unenforceable; they can often create a legal obligation. The result could be an ERISA-covered plan without many of the employer protections that a carefully crafted plan can provide....If an employer designs its severance plan to fall within ERISA, it opens the door for defusing future litigation risks through ... well-established mechanisms for expediting and efficiently resolving ERISA disputes."

Eversheds Sutherland, via Bloomberg

Executive Compensation
and Nonqualified Plans

Final Rules on Compensation Clawback Are High on the SEC's Regulatory Agenda

"The second item on the SEC's Short-Term Agenda -- Spring 2020 ... is 'Listing Standards for Recovery of Erroneously Awarded Compensation' ... Also on the short-term agenda and potentially relevant to executive compensation professionals are: [1] Amendments to Rule 701/Form S-8; [2] Amendments to Exemptions From the Proxy Rules for Proxy Voting Advice; and [3] Modernization and Simplification of Disclosures of Regulation S-K Items 101, 103, and 105."

Winston & Strawn LLP

Press Releases

Most Popular Items in the Previous Issue, 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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