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November 23, 2020 logo logo
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[Guidance Overview]

The ESG Rule That Wasn't

"The watering down of the Final Rule is welcome news to many retirement plan sponsors and those who work with them, as the Proposed Rule was generally viewed as a heavy-handed solution to a problem that barely existed in the DC retirement plan marketplace ... However, one aspect plan fiduciaries should consider in regard to the removal of all ESG references from the Final Rule is that the provisions of the Rule now apply in the context of any investment." Icon to read more

Cammack Retirement Group


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It’s the Final Countdown for PEPs

"[Pooled employer plans (PEPs)] are expected to be attractive to plan sponsors because of the ability to lower plan fees and expenses by leveraging assets, simplifying administration, and shifting fiduciary risk to the PEP provider.... Expect to see both national PEPs offered by well-known providers as well as smaller regional PEPs. While the strategy of pooling assets may have been aimed at smaller plans -- since those plans seem to have the most to gain from a cost cutting perspective -- it appears that PEPs will be marketed to larger plans ($100M+ plans) as well." Icon to read more

Holland & Hart LLP

High Risk Issue iconForm 5500 Penalties Increased by How Much?

"Tenfold. That's how much the SECURE Act increased the penalty for the late filing of a Form 5500 --TENFOLD! Before the Act, the IRS could assess a civil penalty of $25 for each day that the Form 5500 was late up to $15,000, but now, add a zero: the penalty is $250 per day not to exceed $150,000." Icon to read more

Belfint Lyons Shuman

Teva Dispenses $2.6 Million to Resolve ERISA Claims

"The plaintiffs filed suit in December, alleging that plan fiduciaries should have considered offering collective investment trusts instead of mutual funds, saying that the collective investment trusts were cheaper than comparable existing mutual fund options. They said the plan should have offered lower-cost share classes of mutual funds that were the 'exact same investment' as options in the plan." Icon to read more

Pensions & Investments

A Look at the Current State of ERISA Class Action Litigation

"2020 was set to be a landmark year for ERISA litigation in the Supreme Court. Going into its 2019 term, the Supreme Court expressed a renewed interest in ERISA litigation, granting certiorari in three cases and delaying a fourth until its October 2020 term. But overall, the Court's decisions provided more questions than answers." Icon to read more

Dechert LLP

IRS Sets Fiscal 2021 Compliance Priorities for Tax-Exempt Entities

"The 2021 program letter provides few specifics on TE/GE's priorities but explains the division's goals in broad terms. With respect to employee benefit plans, the letter suggests that TE/GE will pay close attention to retirement plans of closely held businesses, such as employee stock ownership plans (ESOPs), and will develop a tool to help individuals avoid making excess 401(k) plan contributions." Icon to read more


Principal Provisions in the Proposed SECURE Act 2.0

"[H]ighlights include: [1] Requiring newly established 401(k), 403(b) and SIMPLE plans to automatically enroll participants; [2] Expanding self-correction opportunities, including for participant loan errors and employee elective deferral failures; [3] Permitting plan sponsors to contribute an employer match for participants who are repaying student debt; ... [4] Increasing the required distribution beginning date age to 75; [5] Increasing tax credits for small employers that adopt new plans; ... [6] [P]ermitting 403(b) plans to be established as multiple employer plans; ... and [7] Creating a national database to assist taxpayers to locate lost retirement savings." Icon to read more


Defined Contribution Plan Participants’ Activities, First Three Quarters of 2020 (PDF)

20 pages. "In the first three quarters of 2020, 3.4 percent of DC plan participants took withdrawals, compared with 3.3 percent in the first three quarters of 2019 and 2.6 percent in the first three quarters of 2009 (another time of financial market stress).... Only 1.2 percent of DC plan participants took hardship withdrawals during the first three quarters of 2020, compared with 1.6 percent in the first three quarters of 2019 and 1.3 percent in the first three quarters of 2009." Icon to read more

Investment Company Institute [ICI]


DCIIA Comments to EBSA on Proposed Regs for Pension Benefit Statements -- Lifetime Income Illustrations (PDF)

"DCIIA believes it is important for the Department to provide reassurance that, and specific examples as to how, good actors seeking to help plan participants achieve secure retirements can safely, without the threat of costly litigation, provide lifetime income information and education to participants and beneficiaries as 'investment education' and not fiduciary 'investment advice' under [ERISA].... This support would assist plan fiduciaries, administrators and service providers who are committed to strengthening retirement security and wish to go beyond the assumptions and form of the model disclosure covered by the Rule[.]" Icon to read more

Defined Contribution Institutional Investment Association [DCIIA]

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

San Francisco to Impose Tax on Companies with 'Disproportionate' Executive Pay

"San Francisco voters on November 3 approved Proposition L, which imposes an additional tax on businesses whose highest paid executive makes 100 times or more than the median salary of the business's employees based in San Francisco.... [T]he tax applies to any company doing business in San Francisco, not just businesses headquartered in San Francisco.... Proposition L is effective for tax years beginning on or after January 1, 2022." Icon to read more

Morgan Lewis

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Cross-Testing: Excluding Terminated Employees Who Had Less Than 500 Hours of Service

"If we have everyone in their own group, and no allocation conditions, can we exclude those with less than 501 hours and terminated, for testing purposes?" Icon to read more

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View COVID-19 News and Resources, Inc.
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(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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