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[Official Guidance]

DOL Confirms Effective Date for Investment Advice Exemption

Improving Investment Advice for Worker & Retirees, an exemption for investment advice fiduciaries, will go into effect as scheduled on Feb. 16, 2021. In the coming days, [EBSA] will publish related guidance for retirement investors, employee benefit plans and investment advice providers.... The temporary enforcement policy stated in [FAB 2018-02] will remain in place until Dec. 20, 2021."

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

[Guidance Overview]

'You're Gonna Miss Me When I'm Gone'

"Each of these pieces of guidance, when taken collectively, demonstrate an effort on the part of the DOL to target current plan procedures that ultimately lead to future issues with Missing Participants. In other words, current actions that plan fiduciaries take to minimize Missing Participant issues in the future are as important as the actions they take to find Missing Participants once the issue arises."

Frost Brown Todd LLC

PBGC Describes New Assumption for Contributions to Single-Employer Pension Plans in PIMS Modeling (PDF)

18 pages. "The single-employer contribution assumption adopted for the FY 2019 Projections Report is intended to reflect plan sponsor behavior that has been observed in recent years.... This should represent actual plan sponsor behavior better than the prior assumption and allow for modeling of proposed legislative changes, such as changes in minimum funding rules and premium rate changes, in a more effective way."

Pension Benefit Guaranty Corporation [PBGC]

IRS Says 'Disregard Those Recent 2019 Form 5500 Extension Letters'

"If your plan sponsor clients have recently received approval of a filing extension requested last summer for their 2019 Form 5500 -- they don't need to do anything."

American Retirement Association [ARA]

Retirement Planning Gives Bigger Role to Theft Prevention as Risks Lurk Online

"Federal law limits consumer liability for fraudulent credit- and debit-card charges. But there is no similar protection for retirement accounts, where many people have saved a lot more money than in bank accounts.... While record-keepers generally promise to reimburse consumers for such losses, there are no guarantees."

The Wall Street Journal; subscription may be required

How DC Plan Sponsors Can Assess Retirement Income Solutions

"There are many factors to consider when discussing if a retirement income solution makes sense and, if so, which are the appropriate ones. [Here] are some key questions to help guide the discussion."


ESG Needs Financial Metrics for Participant Sustainability

"[T]he $51.1 billion net flow into sustainable investing open-end mutual funds and ETFs during 2020 was by far a record ... However, the flows are dominated by institutional investors ... [J]ust 3% of 401(k) plans offer an ESG fund option and such funds account for less than 1% of total 401(k) assets."

401(k) Specialist

DOL Signals Policy Shift on California State Retirement Savings Program

"[The DOL] has dropped its support for a lawsuit that seeks to invalidate a California state retirement-savings program for people who lack access to 401(k) plans at work.... Currently, three states -- California, Oregon and Illinois -- are enrolling workers in such plans. Other states, including New Jersey, Maryland, Colorado and Connecticut, are developing similar programs."

The Wall Street Journal; subscription may be required

Illinois Teachers' Retirement System Announces New Supplemental Savings Plan

"TRS is requiring school districts to participate in the Plan, with Board action and return of the specified documents by no later than March 31, 2021.... [T]here may be some potential issues and complications with the Plan, especially for those districts which already offer, or might choose to offer, their own 457(b) plan."

Franczek P.C.

Providence's Troubled Pension System Bet Big on Hedge Fund, and Lost

"The financially troubled Providence, R.I., pension system has placed more than 9 percent of its total investment portfolio in a Renaissance Technologies hedge fund that lost almost 20 percent last year.... Providence's investment in the Renaissance fund also fell 5.8 percent in January[.]"

Institutional Investor

Summary of the Butch Lewis Emergency Pension Plan Relief Act of 2021

"[T]he multiemployer plan relief provisions in the House bill released two weeks ago have changed.... Democrats apparently have the votes to pass this bill in both the House and Senate.... This bill ... will provide the much needed relief to the plans that are struggling financially, and do so without imposing a major burden on the rest of the multiemployer system."

Cowden Associates, Inc.

Multiemployer Plan Bailout Proposal Caps Retirement Plan Contributions and Benefits

"[T]he Butch Lewis Emergency Pension Plan Relief Act of 2021 ... would impose a cost-of-living freeze on: the Code Section 415(c) annual contribution limit for defined contribution plans; the Section 415(b)(1)(A) annual defined benefit limit; and the Section 401(a)(17) annual compensation limit ... starting in calendar year 2030.... [T]he freeze to the cost-of-living adjustments would not apply to collectively bargained plans."

American Retirement Association [ARA]

How Many Mulitemployer Plans Would Be Eligible for Bailout Under Proposed Butch Lewis Act?

"Of 1,220 plans who filed Schedule MBs for 2018 there were: [1] 118 in Critical and Declining status; [2] 638 with more retired than active participants; 1202 with unfunded liabilities; [and] [3] $685 billion in net unfunded liabilities."



Pension Rights Center Letter to House Ways and Means Committee Endorsing the Butch Lewis Emergency Pension Plan Relief Act of 2021 (PDF)

"Even before the pandemic, according to the [PBGC], there were 124 multiemployer pension plans facing insolvency, endangering the hard-earned benefits of approximately 1.5 million participants and their spouses ... The pandemic has severely exacerbated this crisis, placing even financially stable plans at increased risk."

Pension Rights Center

Selected Discussions
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SARSEPs Sponsored by Non-Profits -- Aren't They Grandfathered?

"My organization adopted a SARSEP while they were still permissible. Later, the organization incorporated as a non-profit. The IRS has told us that nonprofits cannot have a SARSEP. I see in the code where a nonprofit can't create a SARSEP, but if an existing SARSEP is in place and then nonprofit status is attained, is that a bar to keeping a SARSEP?"

BenefitsLink Message Boards

Plan Wants to Borrow Money to Purchase Real Estate

"Client wants to purchase real estate in the plan but doesn't have enough of cash balance in his account. He's asking whether the plan can take out a bank loan to purchase the real estate for the plan. (Apparently there is current property in the plan that would be used as collateral for a loan.) Wouldn't this be a prohibited transaction?"

BenefitsLink Message Boards

New Doctor/Employee Gets Credit for Prior Service with Another Employer

"Medical practice hires a new doctor, NOT as an owner or partner. Plan has 1-year eligibility for everything but they want to let this doctor in immediately. Amends plan to credit service with prior employer so that doctor enters immediately. This doctor will not be a HCE for 2021, as there is no lookback year comp, so it doesn't technically seem discriminatory. Thoughts?"

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Financial Factors in Selecting Plan Investments under ERISA (PDF)
Groom Law Group, for National Society of Compliance Professionals [NSCP]

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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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