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January 22, 2021 logo logo
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[Guidance Overview]

DOL Guidance on Missing Pension Plan Participants

"Although FAB 2020-1 provides relief for plan fiduciaries and QTAs to use the PBGC Missing Participant Program, it does not preclude the DOL from pursuing violations of ERISA for a plan fiduciary's failure to [1] maintain adequate plan and employer records and [2] diligently search for participants prior to a transfer of accounts to the PBGC.... [P]lan fiduciaries should establish procedures described in the DOL's Best Practices guidance and use the PBGC's Missing Participant Program for participants and beneficiaries that cannot be located only after the fiduciaries have completed diligent participant searches." Icon to read more

Verrill Dana LLP

[Guidance Overview]

Dealing with Missing Participants in Terminating Puerto Rico 401(k) Plans

"[T]he only feasible alternative for disposing of the accounts of missing participants in a terminating 401(k) or other defined contribution retirement plan qualified only in Puerto Rico is, after making reasonable efforts to locate the missing participants, depositing with the proper state unclaimed property fund(s) the retirement money of those participants who cannot be located. Sending the money to the [PBGC], completing direct rollovers into individual retirement accounts or annuities (IRA), and opening bank accounts for the missing participants generally are not viable options." Icon to read more

Ogletree Deakins

[Guidance Overview]

The Truth About S Corporation ESOPs

"The tax savings opportunities for S corporation ESOPs are substantial, providing fertile ground for creative tax structuring and strategies.... [In 2001,] Internal Revenue Code Section 409(p) was added to limit the tax benefits of ESOPs maintained by S corporations to those in which the ESOP is designed to provide a meaningful benefit to a broad base of rank-and-file employees. Section 409(p) is essentially an ownership concentration test designed to assure broad-based employee ownership within the ESOP." Icon to read more

Employee Benefits Law Group

[Guidance Overview]

Does the Recently Amended Investment Duties Regulation Change How Fiduciaries Should Make Investment Decisions?

"President Biden signaled that his administration will review the Final Rule on Investment Duties ... [T]he DOL [Final Rule] eliminated all overt references to consideration of ESG factors.... The Investment Duties regulation left standing instead changes how all fiduciaries are to approach all investment decision-making in connection with all types of employee benefit plans. Under the new rule, fiduciaries are instructed to make investment decisions by considering only 'pecuniary' factors, as defined by the DOL, to the exclusion of 'non-pecuniary' factors, with limited exceptions. The new standard adopts the idea that loyalty to plan interests requires the exclusion of any other interest, including collateral benefits or goals of an investment, which could include ESG factors." Icon to read more

The Wagner Law Group

Public Pensions' Funded Ratio Soars in Q4 2020

"Public pensions had a stellar final quarter of 2020, with the funded status of the Milliman 100 plans increasing from 72.6% at the end of September to 78.6% as of December 31. This funded ratio is the highest recorded in the history of Milliman's Public Pension Funding Study and marks quite a swing from Q1 2020, at the onset of the COVID-19 pandemic, when the funded ratio hit a low of 66.0%." Icon to read more

Milliman Retirement Town Hall

Multiemployer Funding Reform Bill Reemerges in the House

"House Ways & Means Committee Chairman Richard Neal (D-MA) on Jan. 21 introduced the Emergency Pension Plan Relief Act of 2021 (EPPRA), which is an updated version of the Butch Lewis Act ... One of the key provisions is the creation of a special partition program that would expand PBGC's existing authority to partition certain troubled multiemployer pension plans, increase the number of eligible plans and simplify the application process." Icon to read more

American Retirement Association [ARA]

Schlichter Strikes Again, This Time Against Takeda Pharma's 401(k)

"The lawsuit alleges that plan fiduciaries selected unproven TDFs for the plan, failed to monitor them and failed to replace them when they underperformed." [Ford v. Takeda Pharmaceuticals U.S.A., Inc., No. 21-10090 (D. Mass. complaint filed Jan. 19, 2021)] Icon to read more


Benefits in General

ERISA Exhaustion Defense Still Viable in Some Jurisdictions (PDF)

"A recent decision out of the U.S. District Court for the Northern District of Georgia  ... reminds us that defending ERISA breach of fiduciary duty claims based on a plaintiff's failure to exhaust a plan's administrative remedies is a viable option in some federal court jurisdictions." [Fleming v. Rollins, Inc., No. 19-5732 (N.D. Ga. Nov. 23, 2020)] Icon to read more

Barclay Damon LLP

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

Executive Decision: IRS Finalizes Section 162(m) Regs

"The final regulations did not make substantial changes to the proposed regulations, which themselves were similar to the initial guidance on new section 162(m) contained in Notice 2018-68. However, there were some clarifications that will affect some taxpayers; a number of these are shown in [a chart]." Icon to read more

Eversheds Sutherland

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"We have some plans done by a former administrator that have individual brokerage type accounts. I believe these accounts were set up using the employer's EIN instead of a an EIN for the plan's trust. What are the ramifications of this, if any?" Icon to read more

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56 Creeksong Road
Whittier, North Carolina 28789
(407) 644-4146

Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2021, 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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