[Official Guidance]

Text of PBGC Interest Rate Assumptions for Valuing Benefits in Single-Employer Plans, Second Quarter 2021

"The second quarter 2021 interest assumptions will be 1.82 percent for the first 20 years following the valuation date and 1.68 percent thereafter. In comparison with the interest assumptions in effect for the first quarter of 2021, these interest assumptions represent no change in the select period, an increase of 0.13 percent in the select rate, and an increase of 0.02 percent in the ultimate rate."  MORE >>

Pension Benefit Guaranty Corporation [PBGC]

[Guidance Overview]

Pump the 'Pecuniary' Brakes: DOL Won't Enforce the New Rule on Financial Factors in Selecting Plan Investments

"As reasoning for its change of heart, the DOL noted concerns brought by a variety of stakeholders as to whether the two final rules properly reflected the scope of fiduciaries' duties of prudence and loyalty under ERISA."  MORE >>

Bradley

[Guidance Overview]

DOL Will Not Enforce Recently Issued Final Rules on ESG Investments and Proxy Voting

"The DOL's enforcement policy statement applies to two final rules: [1] Financial Factors in Selecting Plan Investments, [which addresses] when retirement plan fiduciaries may consider non-pecuniary factors, such as ESG factors, in selecting plan investments without violating their fiduciary duties ... [2] Fiduciary Duties Regarding Proxy Voting and Shareholder Rights[.]"  MORE >>

Thomson Reuters Practical Law

[Guidance Overview]

Pension Changes for Single-Employer Plans in the American Rescue Plan Act

"While changes to the multi-employer system were designed to provide funding to significantly underfunded plans, the single-employer changes were designed to reduce the funding requirements for plans for the rest of the decade."  MORE >>

Findley

[Guidance Overview]

Pension Funding Relief Included in the American Rescue Plan Act

"[For single-employer plans, ARPA] eliminates any existing shortfall amortization bases for historical years preceding the 2022 plan year. This effectively provides plan sponsors a clean slate; prior shortfalls will not be factored into minimum required contribution calculations."  MORE >>

CAPTRUST

[Guidance Overview]

The American Rescue Plan Act's Effect on Multiemployer Pensions

"[CBO] estimates that 185 multiemployer pension plans will be eligible for relief in the form of special financial assistance under the Rescue Plan which is expected to provide $86 billion in aid to the plans."  MORE >>

Segal

[Guidance Overview]

ARPA's Bailout of Multiemployer Pension Plan: Great for Some Participants, But Not So Good for Taxpayers and Employers

"[The PBGC] will now be given the authority to decide how plans that receive a bailout should determine each employer's withdrawal liability.... [It] is conceivable that it could become advantageous for some employers who previously withdrew from a multiemployer pension plan to rejoin the plan[.]"  MORE >>

Miller Johnson

DC Plan Executives See Retaining Coping Strategies Post Pandemic

"Ninety-four percent of respondents said they are likely to continue greater use of virtual technology for external meetings and 80% said they are likely to increase their use of virtual technology for internal meetings.... The post-pandemic DC world also will feature more flexibility in how, when and where people work."  MORE >>

Pensions & Investments

What's the Value of Retail Annuities for DC Plan Participants at Retirement? (PDF)

"The first cohorts reliant on defined contribution pensions are now entering retirement ... [T]ake-up of annuities is low, with their expected cost cited as a main explanation. This brief ... explores trends in the value of retail annuities[.]"  MORE >>

Center for Retirement Research at Boston College

Buying a Life Annuity is Expensive -- But It Might Be More Than Worth It

"There is no question that life annuities today are expensive relative to historical costs.... [A]dding five or eight years to your estimated life expectancy ... or using a 25% probability of survival in developing a lifetime planning period may make annuities more attractive vehicles for funding your Floor Portfolio."  MORE >>

Ken Steiner, FSA Retired

[Opinion]

Will Fourth Time Be the Charm for Pension Funding Reform?

"The American Rescue Plan (ARP) of 2021 follows a familiar pattern, but its stabilizing effect on future pension funding is more robust than previous laws. There are also signs that bond rates may have finally bottomed, so perhaps ARP 2021 is the castle that will stay up."  MORE >>

The Principal Blog

[Opinion]

Senate Throws a Curveball to Multiemployer Pension Plan Employers

"If employers terminate plans after the bailout, the assistance would be based on phantom accruals, possibly leaving plans with more taxpayer funds than liabilities. The complexity, uncertainty and immense amounts at stake will likely result in years of litigation."  MORE >>

Pension Research Council, The Wharton School of The University of Pennsylvania

[Guidance Overview]

Principal Benefit Plan Provisions in the American Rescue Plan Act

"[1] Dependent care assistance ... [2] 100% COBRA subsidy ... [3] Single employer defined benefit plans ... [4] Multiemployer pension plan reform ... [5] Code Section 162(m)."  MORE >>

The Wagner Law Group

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American Rescue Plan Act Changes Shortfall Amortization -- What Practical Effect on 1/1/2020 Completed Valuations?

"The Rescue Plan Act adjusts (increases) the segment rates for minimum funding starting in 2020, and (optionally for plan years starting in 2019, 2020, and 2021, and starting for everyone in 2022) replaces the 7-year shortfall amortization with a 15-year amortization. How are you planning to handle the changes? Hopefully most of us have our 1/1/2020 valuations finished by now. Are you contacting your clients to let them know they should expect a new minimum contribution calculation?"

BenefitsLink Message Boards

Refund of Roth Funds to Correct ADP Failure -- Earnings Are Taxable?

"I was looking over some correspondence that a national carrier put together for sponsors to send HCEs before they get ADP refunds. One of the blurbs says that Roth excess contributions are not taxable, and pre-tax contributions are taxable. But it also says that the earnings on BOTH Roth and pre-tax contributions are always taxable. Is that true? Even if the Roth account is eligible for a qualified distribution (i.e., the 5-year rule was satisfied)?"

BenefitsLink Message Boards

Any Contribution Caps Arising from Auto-Enrollment/Auto-Escalation?

"I know there is a 10% limit for the first year, and a 15% limit for all subsequent years, on automatic contributions under a QACA. However, if a plan has just a straight auto-enrollment/auto-escalation (not an EACA or QACA), are there any legal limits on how high the level of contributions can be? I'm not finding any, but proving a negative is always hard."

BenefitsLink Message Boards

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IRI Announces New Board of Directors Officers, Members

Insured Retirement Institute [IRI]

Strategic Benefits Advisors Launches ‘Lightning Benefits Survey' Series for Plan Sponsors

Strategic Benefits Advisors

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Retirement Committee Field Guide: The Basics of Retirement Committee Organization and Operation, Part 1

RECORDED

Mintz

COVID-19 Legislative Update: Health, Pension and Tax Provisions in the American Rescue Plan Act

March 16, 2021 WEBCAST

Groom Law Group

Annuities in 2021

March 30, 2021 WEBCAST

InvestmentNews

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

Proskauer

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

Groom Law Group

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

ClubVITA