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December 15, 2020 WEBCAST
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[Official Guidance]

Text of DOL Form PR and Instructions: Registration for Pooled Plan Provider (PDF)

14 pages. "The Form PR is used to report information for a person or entity that intends to serve as a pooled plan provider to pooled employer plans within the meaning of sections 3(43) and 3(44) of [ERISA] and section 413(e) of the Internal Revenue Code ... You must file the Form PR electronically through the all-electronic ERISA Filing Acceptance System (EFAST2). You cannot file a paper Form PR by mail or other delivery service. Your Form PR will be initially screened electronically." [Undated; published by EBSA on Nov. 19, 2020.] Icon to read more

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

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[Guidance Overview]

DOL Finalizes Rule Adopting Amendments to the 'Investment Duties' Regulation

"The DOL indicated that the fiduciary is only required to compare alternatives that are reasonably available under the circumstances. The DOL noted that this new provision does not require a fiduciary to 'scour the market' or consider every possible alternative, and also allows for the possibility that the characteristics of a given investment may be sufficiently rare such that a fiduciary could prudently determine (and document) that there were no reasonably available alternatives." Icon to read more

Cadwalader, Wickersham & Taft LLP

[Guidance Overview]

Exceptional Usefulness and Quality iconPBGC to Allow Contributions Made by January 4, 2021 to Count for 2020 PBGC Variable-Rate Premium

"[This] possibility may be significant for, e.g., employers who want to make a CARES Act contribution that reduces 2020 variable-rate premiums but would like to deduct that contribution in 2021.... [S]ome sponsors can reduce 2020 PBGC variable-rate premiums by accelerating 2021 quarterly contributions to January 4, 2021. Under this strategy, the sponsor, in effect, takes the amount of contributions required to be made for 2021 and contributes it for 2019." Icon to read more

October Three Consulting

Is Your 401(k) Plan Too Complicated?

"Recent cases against university-sponsored retirement plans include allegations that these plans are complicating the investment decisions of participants because the plans offer too many investment choices.... Plan administrators might want to put themselves in the shoes of their typical 401(k) participant and conclude that fewer investment options would be better.... Regardless of how many investment options are provided in your 401(k) plan, make sure that its investment array includes low-cost index funds." Icon to read more

Golan Christie Taglia

Scaling Back Your Company's DC Plans: Terminations vs. Mergers

"In some situations, a plan merger may not be an option (or a practical option), and in others, the exact opposite may the case.... For organizations with a choice between the two, plan mergers are typically preferred, as they tend to avoid ... plan leakage ... Mergers can also be less complicated than terminations, requiring a simple board resolution and amendments to the merging plans. By contrast, the asset distribution process in a plan termination can be a chore, and for large plans, an IRS filing may even be prudent." Icon to read more

Cammack Retirement Group

Multiemployer Plan Audits During a Pandemic: Mitigating the Employer’s Risk

"A global pandemic has not stopped multiemployer plans from conducting employer payroll audits.... [The DOL] has yet to issue formal guidance outlining procedures for these audits or provide any reprieve for employers during the COVID-19 pandemic. Responding to these audits can be time-consuming, invasive, and costly. COVID-19 has further complicated the logistics of a traditional in-person audit. It is important for employers to understand their obligations and develop cost-effective strategies to mitigate the risks associated with these audits and the alternatives to an in-person audit." Icon to read more

Jackson Lewis P.C.

Beware of Possible Union Pension Plan Withdrawal Liability

"Tips on avoiding withdrawal liability.... [1] Don't sign a collective bargaining agreement ... without reviewing the current plan financial information, the plan document and the plan participation or joinder agreement.... [2] [S]ome multiemployer pension plans purporting to be well funded for government reporting purposes use a lower interest rate for calculating withdrawal liability than they use for funding purposes, which will result in withdrawal liability when you might not otherwise expect it.... [3] [P]ersonal assets such as rental real estate in an unincorporated business could be exposed to withdrawal liability if that business is in 'common control' with the business that participates in the multiemployer pension plan." Icon to read more

Frost Brown Todd LLC

The Role of Defined Benefit and Defined Contribution Plans in the Distribution of Family Wealth (PDF)

20 presentation slides. "Research Questions: [1] How is family wealth in the form of employer-sponsored defined benefit (DB) and defined contribution (DC) plans distributed? [2] How did the distribution of retirement assets change between 1989 and 2019, and how did it change for families with various socioeconomic characteristics? [3] How did the phaseout of DB plans affect the concentration of family wealth? [4] How sensitive are the estimates of wealth concentration to different inputs into the imputation of DB wealth?" Icon to read more

Congressional Budget Office [CBO]

ESOP Repurchase Obligations: What to Record When Buying Back Shares

"Disclosures must include the number of allocated shares and the fair value of those shares as of the balance sheet date.... [T]he intention is to communicate maximum repurchase obligation exposure. If redemptions subsequent to the balance sheet date require material and imminent use of cash, the company should consider whether it is required to disclose them as a subsequent event (including amounts) under ASC Topic 855, Subsequent Events." Icon to read more

Berry, Dunn, McNeil & Parker, LLC

New TSP Recordkeeper Will Ease Management of Retirement Savings, and More

"[T]he Thrift Savings Plan has awarded a new recordkeeping services contract to Accenture Federal Services ... Following an 18-month transition period to the new vendor, ... participants can expect to see a variety of new features that will make managing their accounts easier.... New features will include a mutual fund window, e-signature capabilities and a mobile app, which is set to be available in mid-2022." Icon to read more

Government Executive


Collected Comment Letters to EBSA on Proposed Regs for Pension Benefit Statements: Lifetime Income Illustrations

Published comment letters submitted in response to EBSA's September 18 interim final regs on Lifetime Income Illustrations to be provided to participants with annual pension benefit statements. Deadline for comments was November 17, 2020. (36 letters are online as of Nov. 18.) Icon to read more

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


Why Public Pensions Are Cheaper Than Other Retirement Plans Like 401(k)s

"[C]losing public pension plans and moving all newly hired public employees into defined-contribution plans like a 401(k) or cash balance hybrid plans ... can increase costs.... [1] Closing a defined-benefit plan can increase unfunded liabilities.... [2] Public pensions are cheaper to administer than defined-contribution plans.... [3] Closing a defined-benefit plan can create higher public employee turnover, leading to increased training costs." Icon to read more

National Public Pension Coalition


Actuaries Submit Comments on LISE Calculation and Disclosure Rules

"[A]dditional information ... may be more efficiently and inexpensively provided via a more robust modeling tool that could be made available to everyone (including non-DC plan participants) on the DOL/EBSA website or elsewhere. While additional benefit statement [Lifetime Income Stream Equivalents (LISEs)] may help financial planning, they may also be confusing, and they are clearly not called for in the enabling SECURE Act legislation. Performing the additional calculations desired by the Academy would also be more expensive than proposed by EBSA." Icon to read more

Ken Steiner, FSA Retired

Benefits in General

[Official Guidance]

Text of IRS Final Regs: Unrelated Business Taxable Income Separately Computed for Each Trade or Business (PDF)

135 pages. "This document contains final regulations that provide guidance on how an exempt organization subject to the unrelated business income tax determines if it has more than one unrelated trade or business, and, if so, how the exempt organization calculates unrelated business taxable income. The final regulations also clarify that the definition of 'unrelated trade or business' applies to individual retirement accounts. Additionally, the final regulations provide that inclusions of 'subpart F income' and 'global intangible low-taxed income' are treated in the same manner as dividends for purposes of determining unrelated business taxable income.... The final regulations are effective on [the date published in the Federal Register]." Icon to read more

Internal Revenue Service [IRS]

Persuasive Perks: A Simple Chart to Help Your Business Prioritize Employee Benefits

"The winning combination is probably a mix of established ideas (such as the bedrock of company health insurance) and new ones shaped by the pandemic (more flexible schedules). This simple chart organizes benefits into a hierarchy according to cost to the employer -- as well as tiers within each price level to show which benefits tend to be more foundational. This may help you set or adjust your priorities for 2021." Icon to read more

Principal Financial Group

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Converting 403(b) Plan to 401(k) Plan -- What Are the Issues?

"Plan sponsor has 403(b) plan which complies with ERISA, and each participant has individual account. Plan sponsor makes matching contributions each payroll. Wants to convert plan to 401k as of 7/1/2021. Are there any special legal issues in terminating the existing plan or starting the new plan, considering that participants are not terminating employment?" Icon to read more

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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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