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Retirement Plans Newsletter

March 11, 2021

2 Jobs Today (scroll to view)


[Guidance Overview]

DOL Won't Enforce New ESG and Proxy Voting Rules

"This probably signals the end of the DOL's current enforcement effort around ESG usage by ERISA plans, although open DOL investigations may continue to the extent the DOL is examining other fiduciary compliance issues."  MORE >>

Morgan Lewis

[Guidance Overview]

Stimulus Bill Brings Significant Pension Reforms, Expands Scope of 162(m) Compensation Deduction Limit

"This client alert addresses Title IX, Subtitle H of the new legislation, which includes significant pension reforms for multiemployer and single-employer pension plans, and expands the number of covered employees for the limitation on the deductibility of executive compensation under Section 162(m) of the Tax Code."  MORE >>


[Guidance Overview]

Pension Funding Relief, Union Plan Reforms Near Enactment

"The legislation contains two key forms of single-employer funding relief ... [1] continued interest rate relief beyond 2020 and [2] permanent lengthening of the amortization period for funding shortfalls.... [T]he final measure lets employers elect to reflect these amortization changes starting in any year from 2019 to 2022."  MORE >>


[Guidance Overview]

Stimulus Bill Provides Relief for Multiemployer Pension Plans

"The 'special financial assistance' is a lump-sum and in an amount sufficient to guarantee benefits without suspensions or reductions through 2051. The 'special financial assistance' must be invested in investment-grade bonds and ... segregated from plan assets.... [T]he 'special financial assistance' is not a loan and does not need to be repaid."  MORE >>

Fox Rothschild LLP

Johnson & Johnson Prevails Again in Stock-Drop Suit

"[The judge found that] 'issuing a corrective SEC disclosure revealing the alleged truth about the over inflation of J&J stock and/or the asbestos in the company's talc products, is not a viable alternative action because it is not one which could be taken in a fiduciary capacity, but only in a corporate one[.]' " [Perrone v. Johnson & Johnson, No. 19-0923 (D.N.J. Feb. 26, 2021)]  MORE >>

Pensions & Investments

Cybertheft Lawsuit: Court Dismisses Fiduciary Breach Claims Against Plan Sponsor for a Second Time

"The court has also required Abbott Labs to complete its document production as part of the discovery process notwithstanding the dismissal.... [W]hile the latest dismissal is a helpful decision from a plan sponsor perspective, it serves as yet another reminder of the continuing importance of cybersecurity in the ERISA space." [Bartnett v. Abbott Laboratories, No. 20-2127 (N.D. Ill. Feb. 8, 2021)]  MORE >>

Groom Law Group

Social Security COLA Likely to Jump to 3% in 2022

"The cost of living adjustment would be fueled by rising gas prices and the recently passed stimulus package that could spur additional consumer spending.... This would be the largest increase since 2012 when Social Security benefits ticked up 3.6%."  MORE >>


COVID-19 Longevity Scenarios: Bump in the Road, or Catalyst for Change? (PDF)

12 pages. "This paper ... introduces four longevity scenarios that pension plans can use to help understand the increased longevity risk introduced by the pandemic and to stress test their funding strategies.... [T]he impact of 2020 in isolation on liabilities will be small.... What is more important is the knock-on impact of COVID-19 on future improvements in life expectancy in 2021 and beyond."  MORE >>


Is 3% the New 4%? Is That the Right Question?

"[H]oming in on a specific percentage skips a key step in the process of crafting a durable withdrawal system. A better starting point when thinking about portfolio withdrawals is to determine your own tolerance for variation in your in-retirement cash flows."  MORE >>


Tyrannosaurus Rex in the Distance: Is 'Retirement Investing' a Dinosaur for Younger Savers?

"If retirement plan sponsors and the retirement community cannot reach financially savvy people ... with the message that saving for retirement is important, how can we move the needle with the vast majority who are not nearly as financially literate?"  MORE >>

Cammack Retirement Group

Annuity Purchases Are a Fiduciary Responsibility [video]

"[A panel discusses] the important items that plan fiduciaries need to be aware of to implement a successful annuity purchase including an understanding of whether or not their service providers are acting in a fiduciary capacity."  MORE >>

River and Mercantile


Congress Passes Legislation to Protect Retirees' Pensions

"The Butch Lewis Act will not only protect retirees' pensions from devastating cuts, but also will stabilize their financially struggling plans while helping keep intact the federal [PBGC] multiemployer insurance program that backstops their benefits."  MORE >>

Pension Rights Center


Congress Undermines More Retirement Plans with Union Pension Rules

"The budget bill adopts [a] flawed multiemployer-like approach, completely and permanently divorcing the measurement of pension promises from reality by instituting a 5% floor on discount rates, which is ten times the most recent rate for shorter term bonds, 0.50%.... Participants in troubled plans will be hurt the most."  MORE >>

Aharon Friedman, via Washington Examiner

Benefits in General

[Official Guidance]

Text of DOL NPRM: Withdrawal of Final Regs Defining Independent Contractor Status

37 pages. "The Department proposes to withdraw the Independent Contractor Rule, which has not yet taken effect. The Department's reasons for proposing to withdraw the Rule are explained [in this NPRM], and the Department requests comments on its proposal."  MORE >>

Wage and Hour Division [WHD], U.S. Department of Labor [DOL]

[Official Guidance]

Text of IRS Disaster Relief Notice for Louisiana Severe Winter Storm Victims

"Victims of Winter Storms that occurred February 11-19, 2021 now have until June 15, 2021, to file various individual and business tax returns ... [A]ffected taxpayers in all 64 parishes will receive tax relief.... Taxpayers also have until June 15 to make 2020 IRA contributions." [LA-2021-02]  MORE >>

Internal Revenue Service [IRS]

[Guidance Overview]

Congress Finalizes Stimulus Legislation with Health, Tax, and Retirement Changes

"[The American Rescue Plan Act of 2021 includes] temporary COBRA and [ACA] subsidies intended to help people maintain health insurance coverage during the pandemic, and funding for COVID-19 vaccines and testing. The Act also includes ... extended funding stabilization for single-employer pension plans, financial assistance for certain multiemployer pension plans, and changes to the executive compensation rules."  MORE >>

Groom Law Group

[Guidance Overview]

Impact of the American Rescue Plan Act on Employers and Employees

"The Act includes a much-anticipated COBRA premium subsidy, pension plan funding relief, and several employer and employee protections for those hit hard by COVID-19."  MORE >>

Thompson Hine

Employee Benefits Jobs

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Blue Ridge ESOP Associates


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for Blue Ridge ESOP Associates View job as ESOP Administrator -- Sign-on bonus!
for Blue Ridge ESOP Associates

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Blue Ridge ESOP Associates


Selected New Discussions

401(k) Death Benefit for Second Spouse Despite Designation of First Spouse?

"This involves a fairly standard 401(k) plan that started in 2016. All participants completed a beneficiary form. One participant named his spouse as primary and his son as contingent. In 2018 the participant divorced. Then marries spouse #2, but for whatever reason there is no change to the beneficiary form. In 2020, the participant dies. Is the new spouse the beneficiary?"

BenefitsLink Message Boards

Retroactive Amendments as Affected by CARES Act and SECURE Act

"Our interpretation of the CARES/SECURE act enables the adoption of a DB (or CB) plan effective 1/1/2020 as long as it is adopted no later than their tax filing. Does this also apply to a retroactive amendment increasing benefit formula or unfreezing plan? Adopt as late as tax filing rather than the 'normal' 2-1/2 months?"

BenefitsLink Message Boards

Can a Qualified Replacement Plan (QRP) Pay for Retiree Medical Benefits?

"Terminating overfunded defined benefit plan (DB) -- small plan covering husband & wife -- both over age 72. Overfunded portion will be rolled over into a QRP (a profit sharing plan). Can they pay their retiree medical benefit directly from the overfunded portion?"

BenefitsLink Message Boards

Webcasts and Conferences

Pension Reform in our Time? What Butch Lewis Means for Multiemployer Plans and Participating Employers

March 24, 2021 WEBCAST

Seyfarth Shaw LLP

Last Issue's Most Popular Items

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

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

Retirement Plan Document Restatements: What Employers Need to Know


Quick Reference Guide to the Taxation of Retirement Plan Distributions

Belfint Lyons Shuman

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

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