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[Guidance Overview]

IRS Provides Relief on the Waiver of 2020 Required Minimum Distributions -- with a Deadline of Aug. 31

"Generally, the amount that you can roll back into the plan or IRA under [Notice 2020-51] is the amount that would have been all or part of the 2020 RMD, if the 2020 RMD requirement had not been waived under the CARES Act.... [In] the case of 2020 distributions from IRAs that would have been RMDs, the relief ... requires the distribution to be repaid to the IRA from which it was distributed."

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[Guidance Overview]

DOL Guidance Opens New Opportunities for Participant-Directed Investment in Private Equity

"The DOL acknowledged that there may be many reasons why the fiduciary of an individual account-based defined contribution plan might choose to offer an investment option with a private equity component as a part of the plan's investment line-up but noted private equity investments present unique challenges."

Frost Brown Todd LLC

When Do Defaulted Plan Loans Give Rise to Coronavirus-Related Distributions?

"Pursuant to Notice 2020-50, CRD-qualified individuals who experience a loan offset may treat such amounts as CRDs, regardless of whether the plan offers CRDs. Deemed distributions of defaulted loans ... may not be treated as CRDs, and are not eligible for rollover."

Retirement Learning Center, LLC

EBSA Acting Chief Says Initial Paper Notices Can Be Deferred Under COVID-19 Relief

"Responding to a question ... about whether plans, in implementing the new e-disclosure regulations, could defer paper notices for 60 days consistent with the relief provided by the DOL, Acting Assistant Secretary for [EBSA] Jeanne Klinefelter Wilson said that the department will consider plans in compliance if the initial notice is provided via email, as long as there is a good-faith confidence that that communication will be received. Wilson also emphasized that a paper notice will be required as soon as practicable."

American Retirement Association [ARA]

Prevent Cyber Theft of Plan Assets Before It's Too Late

"Plan sponsors can protect themselves and plan participants by ... [1] Identifying (and halting) suspicious distribution requests.... [2] Monitoring other fiduciaries' distribution processes, protocols and activities to remain educated about the state of the art of participant protection. [3] Performing additional due diligence regarding service providers' accounting safeguards such as segregation of duties and personnel background checks. [4] Purchasing cyber theft insurance to help make a victimized plan participant whole and dissuade the plan participant from resorting to litigation to seek restitution."



SPARK/DCIIA Summer Policy Series

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Will PEPs Address the Retirement Plan Woes of Small Employers?

"The SECURE Act allows the [DOL] to extend annual reporting relief that is currently available to retirement plans with fewer than 100 participants to PEPs with up to 1,000 participants. This reporting relief means that assessing the quality of these plans will be significantly hindered as information on their investment lineup will not be included in the filing, and therefore not publicly available. The plan would also be exempt from an annual audit, reducing some of the participant protections."


Stock-Drop Litigation Is on the Rise: Will Your Retirement Plan Be a Target?

"Stock price plunges caused by COVID and current market conditions create fertile ground for stockholder litigation, including claims by participants in retirement plans funded with employer securities that fiduciaries should have eliminated company stock investments to protect against declining values. These claims present a dilemma for plan fiduciaries who owe certain fiduciary duties to the plan and its participants but must also grapple with intricate securities laws governing company stock."

Vinson & Elkins LLP, via Lexology; free registration required

Second Circuit Sends IBM Stock-Drop Case Back to District Court

"On remand, the 2nd Circuit accepted supplemental briefings from the parties and supplemental amicus briefs from the government. In a terse opinion, the court concluded it would not consider the additional arguments since they were either previously raised or had been improperly presented. The 2nd Circuit reinstated its initial 2018 decision and remanded the case to the district court, giving the parties another chance to advance their positions." [Jander v. Ret. Plans Comm. of IBM, No. 17-3518 (2d Cir. Jun. 22, 2020)]


Kroger Reaches Tentative Pension Plan Agreement with Food Unions

"The freshly minted arrangement involves Kroger exiting the current UFCW International Union-Industry Pension Fund, paying a liability of $962 million. Workers will [instead] use a variable-annuity pension plan [under which benefits] will vary yearly according to a formula based on the relationship between a 5.5% hurdle rate of return and actual net investment returns. The plan, if finalized, lasts until 2028 when the unions can opt to renegotiate its terms."

Motley Fool

Sen. Ron Johnson Introduces Bill Linking ESOPs to Federal Aid

"[T]he bill would: [1] Require the Treasury secretary to establish the grant program within 30 days of enactment. [2] Authorize a grant of up to $20,000 per employee who is a participant in the employee stock ownership plan's trust. [3] Authorize up to $50,000 for costs incurred in developing the employee stock ownership agreement. [4] Authorize the Treasury secretary to transfer unobligated CARES Act funding to carry out the grant program."

National Center for Employee Ownership [NCEO]


Editor's Pick American Benefits Council Letter to IRS: Urgent Need for Delay in Due Date for DB Plan Form 5500

"[We] urge you to issue guidance as soon as possible delaying the due date for any defined benefit plan Form 5500 that would otherwise be due during the remainder of this year to no earlier than February 1, 2021. Many Form 5500s are due next week, so the need for this relief is urgent. Otherwise, many such Form 5500s would be required to be filed showing unpaid minimum required contributions (MRCs), which might then need to be amended once the MRCs are made.... If the due date for the Form 5500 is not delayed, then the PBGC variable premium filing will also be due next week (unless otherwise delayed), meaning that any deferred contributions would not be taken into account for determining the amount of the variable rate premium due."

American Benefits Council


Collected Comment Letters Responding to EBSA RFI on Prohibited Transactions Involving Pooled Employer Plans

Published comment letters submitted in response to EBSA's June 17 Request for Information. Deadline for comments was July 20, 2020. (30 letters online, as of July 23.)

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


Platinum 401k's Comment Letter to DOL on Prohibited Transactions Involving Pooled Employer Plans (PDF)

"The 'elephant in the room' with regards to Pooled Plan Provides is the need to minimize the risk of having bad actors involved in the oversight and ongoing operation of Pooled Employer Plans.... [The author] would propose [certain additional] requirements on a Pooled Plan Provider[.]"

The Platinum 401k Inc.


DOL Rule Could Halt 401(k) Plan Social Investing in Its Tracks

"[T]he proposed rule does not recognize that the current generation of socially conscious funds can deliver top-notch performance along with a dose of social progress. And importantly, the rule takes square aim at the best chance for ESG funds to take root in 401(k) plans by making it impossible for plan sponsors to offer them as the default investment option in plans -- most of which use a target-date fund that automatically reduces exposure to stocks as retirement approaches."

Mark Miller, via Reuters


DOL Rule Allowing Private Equity Investments Could Do More Harm Than Good

"Fees for alternative investments are typically 30,000-60,000 percent higher than fees for index funds.... the FBI has raised concerns about private equity and hedge funds as vehicles for money laundering.... Recent bankruptcies of private equity-owned companies include J.Crew and Chuck E. Cheese, and recent research finds that over half of companies that default on their bonds are owned by private equity firms."

The Intercept

Benefits in General

What Do You Mean by 'Financial Wellness'? (PDF)

"Reducing employees' financial stress is the easiest way to increase productivity, and you've come across a myriad of Financial Wellness solutions that all profess to be the best the world has to offer. Choosing the right solution or the right combination of solutions is a daunting task. This [article] is designed to guide you as you evaluate solutions available to build the right program for your situation."

Retirement Advisor Council

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Client Mailed 2018 5500s Instead of Filing Through EFAST -- Now What?

"Just discovered that client mailed their 5500s for 2018 instead of using EFAST. Does anyone know what happens to 5500s that get mailed? I assume they are treated as not having been filed and we need to do a delinquent filing and pay the penalty?"

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Press Releases

Announcing: A New Qualified 401(k) Consultant Credential
American Society of Pension Professionals & Actuaries [ASPPA]

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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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