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Retirement Plans Newsletter

March 10, 2021


[Official Guidance]

Text of DOL Enforcement Policy Statement on Final Rules on ESG Investments and Proxy Voting by Employee Benefit Plans (PDF)

"Until it publishes further guidance, the Department will not enforce either final rule or otherwise pursue enforcement actions against any plan fiduciary based on a failure to comply with those final rules with respect to an investment, including a Qualified Default Investment Alternative, or investment course of action or with respect to an exercise of shareholder rights. This enforcement statement does not preclude the Department from enforcing any statutory requirement under ERISA, including the statutory duties of prudence and loyalty in section 404 of ERISA."  MORE >>

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

[Guidance Overview]

DOL Will Not Enforce Final Rules on ESG Investments, Proxy Voting by Employee Benefit Plans

" 'These rules have created a perception that fiduciaries are at risk if they include any environmental, social and governance factors in the financial evaluation of plan investments, and that they may need to have special justifications for even ordinary exercises of shareholder rights,' said Principal Deputy Assistant Secretary for [EBSA] Ali Khawar. 'We intend to conduct significantly more stakeholder outreach to determine how to craft rules that better recognize the important role that environmental, social and governance integration can play in the evaluation and management of plan investments, while continuing to uphold fundamental fiduciary obligations.' "  MORE >>

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

[Guidance Overview]

DOL Clarifies Deadline Relief for Retirement Plans and Participants

"Last year, ... DOL and the Treasury Department issued a joint rule giving participants and beneficiaries more time to file benefit claims and appeal adverse benefit determinations ... Disaster Relief Notice 2021-01 [issued Feb. 26, 2021] ... explains that the disregarded period is applied individually to each deadline that arises during the outbreak period."  MORE >>


[Guidance Overview]

Exceptional Usefulness and Quality icon The Array of ERISA Compliance Solutions for Rollover Advice (PDF)

"[F]inancial services providers have an immediate need to come to terms with DOL's position and consider their alternatives for continuing to be of service to retirement investors while operating on an ERISA-compliant basis."  MORE >>

Eversheds Sutherland, via Bloomberg Tax Management Compensation Planning Journal

$40 Million Settlement Approved in Reliance Excessive Fee Case

"Reliance will pay $39,800,000 ... Those still in the plan will have it deposited into their 401(k) accounts; those who have since left the plan will be given the choice of either a cash distribution or of having it rolled over into another tax-deferred account. Class counsel [Schlichter Bogard & Denton LLP] will receive a percentage-based attorney's fee of $13,266,266[.]"  MORE >>

American Retirement Association [ARA]

New York Life Sued Over 401(k) In-House Funds, Default Investment

"[The suit] accuses the insurer of improperly profiting off its workers' retirement savings by defaulting certain retirement plan participants into an undiversified general account insurance fund. [The suit alleges that the] fund -- called the Fixed Dollar Account -- isn't a permissible 401(k) default investment[.]" [Krohnengold v. New York Life Ins. Co., No. 21-1778 (S.D.N.Y. complaint filed Mar. 2, 2021)]  MORE >>

Cohen Milstein

How Your Retirement Plan Advisor Should Add Value

"[1] Formal and ongoing ERISA training ... [2] Review and maintenance of an investment policy statement ... [3] Investment manager due diligence ... [4] Plan fee analysis and negotiation ... [5] Review plan's effectiveness, but keep looking forward."  MORE >>

Francis Investment Counsel LLC

Retirement Plan Document Restatements: What Employers Need to Know

"Items incorporated in this restatement include, but are not limited to, an updated definition of spouse, the ability to use forfeiture monies to offset additional types of employer contributions (such as safe harbor), the ability to amend a safe harbor plan mid-year and permitting in-plan Roth conversions."  MORE >>


Survey Reveals Widespread Lack of Knowledge About Retirement Account Fees

"Over half of Americans surveyed (57%) falsely believe that they pay either no fees, or very low fees, to maintain their retirement investment accounts.... 66% of those surveyed have changed their approach to retirement investing as a result of COVID-19, with 62% saving more for retirement as a result of COVID-19.... 51% of those surveyed unsure of the breakdown of their investments between stocks and bonds."  MORE >>


Repeated Exposure to Fraud Awareness Education Reduces Susceptibility to Investment Scams

"The educational interventions were centered on the five techniques fraudsters often employ when engaging in investment fraud. Researchers measured fraud susceptibility immediately after the initial intervention and again six months later[.]"  MORE >>

Financial Industry Regulatory Authority [FINRA]

Quick Reference Guide to the Taxation of Retirement Plan Distributions

"The taxation of the distribution depends on the type of distribution, when the distribution takes place, whether the distribution is eligible for rollover, and the age of the participant or beneficiary." [Includes chart and discussion.]  MORE >>

Belfint Lyons Shuman

Which Multiemployer Plans Will Get the Bailout?

"[T]o qualify for a single lump sum without any repayment obligation [under the newly-passed Butch Lewis Act], a multiemployer pension plan must meet one of four conditions ... So who are these plans?"  MORE >>


Total Annuity Sales Fell 9% in 2020

"U.S. annuity sales totaled $219 billion in 2020, 9% lower than sales in 2019 ... In the fourth quarter, annuity sales rebounded to pre-pandemic levels. Total annuity sales were $58.6 billion, up 2% from 2019."  MORE >>


Puerto Rico Files New Debt-Restructuring Plan

"The plan includes a proposed cut of up to 8.5% to monthly pensions of at least $1,500."  MORE >>

NBC News

Benefits in General

Employee Rewards in M&A Transactions: Comparability Provisions

"[H]ow employees are treated once a deal closes depends largely on the buyer's deal strategy.... [Why include] comparability provisions ... given that they appear to restrict the buyer? What do these provisions typically cover? And what are best practices?"  MORE >>

Willis Towers Watson


American Benefits Council Comment Letter to IRS on Mandatory 60-Day Postponement of Certain Tax-Related Deadlines

"Notwithstanding [the] apparent legislative intent, the proposed regulations indicate that the new 'mandatory' 60-day extension will only apply if the IRS first uses its discretion to extend deadlines for a given disaster.... [T]his proposed interpretation ... would preserve the discretionary nature of deadline relief[.]"  MORE >>

American Benefits Council

Press Releases

Unison Risk Advisors Announces Launch of New Pooled Employer Plan

Unison Risk Advisors

Webcasts and Conferences

Technology Trends That Are Changing the Retirement Plan Industry

March 18, 2021 WEBCAST


Long-Term Part-Time Employees

April 6, 2021 WEBCAST

Nova 401(k) Associates

Public Pension Plan Maturity Metrics and How to Use Them Webcast

May 19, 2021 WEBCAST

Society of Actuaries

Last Issue's Most Popular Items

DOL Missing Participant Guidance Follows Years-Long Enforcement Initiative (PDF)

Groom Law Group, via Bloomberg Tax Management Compensation Planning Journal

Retirement Plan Cybersecurity: Considerations for ERISA Fiduciaries (PDF)


Questions for Plan Sponsors to Consider Before Signing That New Service Agreement (PDF)

Boutwell Fay LLP

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

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