Retirement Plans Newsletter

November 11, 2020

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Webcasts, Conferences

Fall Employee Benefits Briefing
November 17, 2020 WEBCAST
Nixon Peabody LLP

Voluntary Fiduciary Correction Program
November 18, 2020 WEBCAST
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

Abandoned Plan Program
November 18, 2020 WEBCAST
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

The Insiders: A Legal and Legislative Update!
November 19, 2020 WEBCAST
Worldwide Employee Benefits Network [WEB] - Atlanta Chapter

Voluntary Fiduciary Correction Program
November 19, 2020 WEBCAST
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

Inclusive Benefit Distribution for a Changing Workforce
November 24, 2020 WEBCAST
Lorman Education Services

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[Guidance Overview]

Key Considerations: DOL’s New Final Regulation on ERISA’s Investment Duties (ESG-Related or Not)

"The final rule presents five distinct issues worth considering [1] pecuniary factors; [2] comparing investment alternatives; [3] duty of loyalty; [4] special circumstances/non-pecuniary factors/tie-breakers, and [5] QDIAs." Icon to read more

Stradley Ronon

[Sponsored]

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Sponsored by DATAIR Employee Benefit Systems, Inc.


[Guidance Overview]

DOL Puts ESG Investing on Ice

"The Rule preamble largely dismisses the materiality of ESG factors in investment decisions, and adopts the controversial idea that consideration of ESG factors are somehow at odds with financial factors and fiduciary responsibilities of plan sponsors. But rather than mandate a heightened standard of care for non-pecuniary factors in investment decisions, the DOL chose to prohibit them outright, providing that plan fiduciaries must select investments and investment courses of action based solely on financial considerations relevant to the risk-adjusted economic value of a particular investment or investment course of action." Icon to read more

Latham & Watkins

[Guidance Overview]

IRS Issues Final Regs Updating RMD Life Expectancy Tables

"The IRS had previously issued proposed regulations in November of 2019, pursuant to which the updated life expectancy tables and uniform lifetime table would have been applicable to distribution calendar years beginning on or after January 1, 2021. However, under the final regulations, the updated life expectancy tables and uniform lifetime table will apply for distribution calendar years beginning on or after January 1, 2022." Icon to read more

Ice Miller LLP

[Guidance Overview]

DOL Issues Final ESG Rule Restricting ERISA Fiduciary Consideration of Non-Pecuniary Investment Factors

"Although the DOL has cleared a path for ERISA fiduciaries to consider 'ESG' factors when making investment decisions and to offer 'ESG' funds in a 401(k)- or 403(b)-type plan, the path remains relatively narrow as the final rule still requires that selection of the investment option be based solely on pecuniary factors (outside of the 'tie-breaker' context).... [D]ecisions with respect to 'ESG' require careful deliberation, balancing of risks, and documentation." Icon to read more

Proskauer

[Guidance Overview]

New IRS Guidance Will Facilitate 403(b) Plan Terminations

"Revenue Ruling 2020-23, issued ... under the SECURE Act, confirms that a plan administrator or custodian of a 403(b) plan may distribute individual custodial accounts in kind to participants as part of the termination process. This is the case even if the individual custodial account originated as part of a group contract. When combined with Revenue Ruling 2011-7, which blessed the distribution of individual annuity contracts as part of a termination process, this new guidance fills the final gap in the rules governing 403(b) plan terminations." Icon to read more

Verrill Dana LLP

Required Minimum Distributions Under the SECURE Act

"The shift in the RMD age from 70½ to 72 will not change the audit procedures performed, but the RMD holiday gives us an opportunity to revisit a plan sponsor's administrative responsibilities and see whether the processes in place for 2021 RMDs are designed to prevent operational failures. In many cases, changes in the law lead to mistakes when systems and processes are not updated timely. In those cases, correction programs are available to make things right." Icon to read more

Belfint Lyons Shuman

What We Learned About 401(k) Participant Behavior Amid COVID-19 and the CARES Act

"Participation and deferral rates remained largely unchanged year-to-date through September when compared with the same period in 2019.... 12% of participants increased their payroll deferral percentage, vs. 14% last year. 7% of participants decreased their payroll deferral percentage, vs. 6% in 2019. 3% of participants stopped contributing, the same as last year. 24% of participants saw deferral rates rise because of automatic increases, compared with 23% in 2019." Icon to read more

401(k) Specialist

PEPs Carry Evolving Fiduciary Risks of Their Own

"The legal complexities that emerge when a single employer operates a retirement plan for its own staff are already immense; the same will certainly be true when it comes to building pooled employer plans.... [D]iverse PEP delivery models are already emerging ... [T]he risks associated with each model are different, and they apply in different ways to different parties." Icon to read more

PLANSPONSOR; free registration may be required

How a 401(k), Roth IRA Combination May Pay Off for Younger Adults

"[O]ver the long haul, any tax-free growth on Roth IRA (after tax) contributions might have the potential to outperform tax-deferred growth on pre-tax 401K contributions.... [T]his might be the case especially for millennials who have decades of earnings potential ahead. Because their income will likely rise throughout their career, their tax bill today is also likely to be lower than it will be in retirement." Icon to read more

MassMutual

Pension Funding Update, November 2020

"Global stock markets started the month strong, but took a turn for the worse in the last week of the month and ended the month down 2-3%. Pension discount rates were up about 0.10%-0.15% from the previous month, but are still down noticeably for the year. For most pension plans, the equity losses for the month will have outweighed the liability gains due to the increase in the discount rate, leading to an overall decline in funded status." Icon to read more

River and Mercantile Solutions

[Opinion]

How to Make 401(k) Plans More Transparent

"401(k) plans should offer objective value for participants and straightforward fiduciary responsibilities for business owners. Too often, they deliver neither.... [C]ommon sense 401(k) transparency reform can help turn that around ... [1] Define a 'qualified' 401(k) investment menu ... [2] Ban 'hidden' 401(k) administration fees ... [3] Standardize 408b-2 Fee Disclosures ... [4] Reform the Form 5500." Icon to read more

Employee Fiduciary

Benefits in General

Make the Most of Your Employer's Benefits Package

"The [DOL] estimates that your employer-sponsored benefits are worth roughly 30 percent of your salary.... Even if you think you're maxing out your benefits, you owe it to yourself to look at your employer's most recent benefits package. Thirty-four percent of companies increased offerings from mid-2017 into 2018[.]" Icon to read more

MassMutual

Executive Compensation
and Nonqualified Plans

IRS Compliance Strategy: Excess Executive Compensation Paid by Tax-Exempt Organizations

"According to [IRS's Tax Exempt & Government Entities Division (TE/GE)], ongoing review of filing data shows that a high volume of tax-exempt organizations paid compensation in excess of $1 million to at least one covered employee, but the organization did not report the section 4960 excise tax on the designated IRS Form 4720. TE/GE's fiscal year 2021 strategy for compliance with section 4960 will include compliance checks and examinations of Forms 4720." Icon to read more

Faegre Drinker

Selected Discussions
on the BenefitsLink Message Boards

► It's easy to sign up and participate in discussions! Post answers, ask questions, create custom feeds and views. Join your peers (and potential referral sources or customers)—there is no charge.

RPAs for TPAs: Adding Robotic Process Automation

"Our firm is interested in strategizing on best practices for pursuing robotic process automation into our TPA practice. Do any of your firms currently utilize bos and if so, how did you get started? Do you have internal staff who were able to write/program basic bots or did you utilize the services of a different firm/contractor to learn your processes and write these for you?" Icon to read more

BenefitsLink Message Boards

403(b) Non-amender

"I'm struggling a bit with the proper use of the VCP submission forms. The 14568-B doesn't seem to quite 'fit' a 403(b) plan that had a written plan document, yet failed to restate by the extended deadline this summer. Has anyone else submitted one of these yet, and if so, with any results?" Icon to read more

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David Rhett Baker, J.D., Editor and Publisher  davebaker@benefitslink.com
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BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2020 BenefitsLink.com, 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 BenefitsLink.com, 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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