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[Guidance Overview]

Upcoming Deadline iconPBGC Clarifies Contribution Filing Due Date

"The FAQs give plan sponsors an extra month, until October 15, 2020, to make their 2019 contributions and have that contribution reflected in the calculation of the variable rate premium due on October 15, 2020. Any contributions made for 2019 after the October 15, 2020 deadline may not be used when calculating the variable-rate portion of the sponsor's PBGC premium, even if made before the CARES Act deadline of January 1, 2021."


[Guidance Overview]

Pooled Employer Plans: FAQs for Employers

"[1] What exactly is a PEP? ... [2] What makes a PEP different from a single employer-sponsored 401(k) plan and from multiple employer plans of the past? ... [3] How soon will PEPs be available? ... [4] Will participating in a PEP be expensive or difficult? ... [5] What are the reporting requirements for a PEP? ... [6] Who can an employer use as a Pooled Plan Provider? ... [7] What type of fiduciary liability will an employer that adopts a PEP have with respect to the PEP? ... [8] What terms must a PEP include? ... [9] Will there be any additional guidance issued on PEPs?"

Mayer Brown

Retirement Plans and Coronavirus: Take Steps to Protect Your Employees

"Leverage technology to reach your members more directly than ever before.... Manage plan costs.... Take a conservative approach.... Address the psychology of retirement.... Focus on employee mental health challenges."

HUB International

Musician Union Pension Clashes with U.S. Treasury Over MPRA Application for Reduction in Benefits

"[T]he union organization says it has been informed that the Treasury staff disagrees with two of the actuarial assumptions used in its application. On this basis, Treasury staff will apparently recommend that the Secretary of the Treasury deny the application."


Oregon Public Pension Benefit Reductions Upheld by State Supreme Court

"[N]ine public employees filed suit last August seeking to overturn two benefit reductions the Legislature made ... Their lawyers argued that the changes constituted an impairment of contract under the state and federal constitutions, a 'taking without just compensation' and a breach of public employees' PERS contract rights. In a unanimous decision, the court rejected those arguments, sticking with the principle it established in its 2015 decision on the last round of legal wrangling over PERS: the Legislature is entitled to change employee retirement benefits prospectively, for future service, but benefits earned on service already rendered are sacrosanct." [James v. State of Oregon, No. SC S066933 (Ore. Aug. 6, 2020)]

U.S. News & World Report

Maine Bill Would Create State-Run Retirement Plan with Some Employer Involvement

"David Clough, Maine State Director of the National Federation of Independent Business (NFIB), noted: 'As proposed, LD 594 would apply to all employers that do not offer a federally qualified retirement plan, and require all of those employers to offer its employees the opportunity to contribute to the state-sponsored plan through payroll deductions.... Mandatory offer would require small employers to maintain explanatory literature and forms for an employee to sign up. The employer would go through this process with each new hire and perhaps annually for employees who have opted out from participation.' "

American Retirement Association [ARA]

CalPERS Chief Investment Officer Resigns

"Questions regarding conflict-of-interest disclosures preceded the abrupt resignation of CalPERS Chief Investment Officer Yu Ben Meng on Wednesday, according to the pension fund's board members. The California Public Employees' Retirement System announced Meng's immediate resignation in a late-night email after he had been on the job for less than two years."

The Sacramento Bee

Executive Director of Massive Illinois Teachers Pension Fund Resigns After Investigation Into 'Performance Issues'

"The Teachers' Retirement System board voted unanimously last Friday to place Richard Ingram on administrative leave 'due to performance issues covered by his employment contract' ... Ingram then resigned on Monday. He had been executive director of TRS, the state's largest government retirement fund, for nearly a decade ... The Teachers' Retirement System represents more than 400,000 active and retired teachers in suburban and downstate districts[.]"

Chicago Tribune; subscription may be required

Back-to-School Retirement Savings Checklist for Teachers

"[1] Do you have a pension? If yes, learn the basics of how it works.... [2] Do you have a 403(b) available at work? If yes, do you understand how it works? ... [3] Do you have quality 403(b) vendor(s) available? ... [4] Do you have a 457(b) available at work? Do you understand how it works? ... [5] Do you have quality 457(b) vendor(s) available? ... [6] Do you contribute to Social Security?"


Social Security: Economic Growth and the Funding Shortfall

27 pages. "This report presents the current status of the trust funds, projections for the factors in real economic growth, and how projections for these growth factors are estimated to affect the program's financial status.... The trustees' intermediate assumptions, their best estimates as to the program's future experience, suggest that low growth is contributing to the projected financial shortfall[.]" [R46479, Aug. 6, 2020]

Congressional Research Service [CRS]


ICI Comment Letter to DOL on Proposal for Improving Investment Advice for Workers and Retirees (PDF)

"To achieve these intended goals and truly provide retirement savers with the benefits that an aligned regulatory structure offers, the Department must: [1] Clarify preamble discussion on Five-Part Test to ensure alignment with SEC's Reg BI and the Fifth Circuit's holding in U.S. Chamber of Commerce v. U.S. Department of Labor ... [and] [2] Make certain changes to its Proposed Exemption to ensure it meets its intended purpose."

Investment Company Institute [ICI]


SPARK Comment Letter to DOL on Proposed Class Exemption for Investment Advice Fiduciaries and Preamble Discussion of Five-Part Test for Fiduciary Investment Advice (PDF)

16 pages. "Specifically, [SPARK is] concerned that these new interpretations ... will create significant uncertainty for service providers and participants, and inappropriately lower the bar for determining when a fiduciary relationship exists based on the provision of investment advice. Collectively, these new interpretations will limit the ability of recordkeepers and other service providers to provide many beneficial forms of non-fiduciary education and assistance to retirement savers. Accordingly, we strongly urge the Department to withdraw the preamble's commentary on the five-part test or clarify its new interpretations in a way that is more consistent with the text of the 1975 regulation and the traditional understanding of fiduciary relationships[.]"

The SPARK Institute


ACLI Comment Letter to DOL on Proposal for Improving Investment Advice for Workers and Retirees

"The views expressed by the Department could be read to capture, as fiduciary advice, sales activities in which recommendations are solely incidental to traditional sales activities.... [T]he Department should align the [proposed prohibited transaction exemption's] conflict mitigation provisions with Reg BI, significantly simplify the proposed exemption's retrospective review and certification requirements, and significantly revise the exemption's compliance-related disclosure requirements."

American Council of Life Insurers [ACLI]

Benefits in General

Editor's PickNew Rules for 'Limited Scope' ERISA Audits Aimed at Improving Consistency and Quality (PDF)

"New rules that will add significant detail and transparency to audit reports for retirement plans subject to [ERISA] impose new requirements on plan sponsors, particularly those who instruct their auditors to perform what until now has been known as a 'limited scope audit.' Most of the responsibility to comply with the new rules, however, will rest with the independent auditors who perform the audits. As a result, the retirement plan audit reports that plan sponsors receive from their accounting firms beginning as soon as 2021 will be noticeably longer and more detailed."

Windham Brannon, LLC, via Journal of Pension Benefits

Avoiding COVID-19 Benefits-Related Litigation

"[1] Did employee layoffs trigger a partial termination of your plan that requires accelerated vesting? ... [2] Were there any changes to investments during the COVID-19 pandemic period and, if so, were those actions documented? ... [3] Were decisions whether or not to continue benefits to laid off or furloughed employees made consistently and uniformly? ... [4] Were separating employees timely notified of their COBRA rights and continuation of other benefits? ... [5] Have you recorded any changes to your COVID-19-related benefits strategy in plan documents?"

Hall Benefits Law

Selected Discussions
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TPA Engagement Agreement Authorizes Deduction of Fees Directly from Participants' Accounts

"I was just looking at an engagement agreement that states the TPA will bill the Plan Sponsor for services, then goes on to state that the TPA may deduct the service fees for the services directly from the participants' accounts upon non-payment of fees by the plan sponsor after 60 days. Is there any problem with this from a legal standpoint? Is this a common provision?"

BenefitsLink Message Boards

Do Left-Behind 401(k) Accounts Cause a Problem for Plan Sponsors?

"I heard that when people leave a company, they tend to leave their 401k's behind. Is it a big problem for the employer to keep all those orphaned 401k's? If so, how should we encourage people to rollover their 401k when they leave?"

BenefitsLink Message Boards

401(k) Loan Deemed Distributions Count as CRDs?

"Is it clear that a plan loan 'deemed distribution' (as opposed to a 'loan offset') cannot be treated as a CRD by a CARES Act qualified individual?"

BenefitsLink Message Boards

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View COVID-19 News and Resources, Inc.
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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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