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Retirement Plans Newsletter

June 2, 2021

2 New Job Opportunities


[Guidance Overview]

DOL Cybersecurity Guidance: Managing Risks to Employer-Sponsored Retirement Plans

"The DOL provides suggested questions to ask potential service providers in order to gauge that service provider's cybersecurity practices.... The DOL has identified a 12-point best practice system for use by recordkeepers for plan-related IT systems and for use by plan fiduciaries in making prudent decisions regarding cybersecurity measures."  MORE >>

Fisher Phillips

[Sponsor] -- Who is Answering Your ERISA Questions?

Noted author and speaker S. Derrin Watson, J.D. is answering questions in our Ask the Author service. Get your answers from Derrin in four business hours or less. Contact us ag: or 612-605-2266

Sponsored by Burrmont Compliance Labs LLC

[Guidance Overview]

Best Interest Standard of Care for Advisors, Part 52

"[T]herein lies the reason for the 'rule' -- greater regulation of the treatment of benefits that have been accumulated in retirement plans, but are moving to the retail world of IRAs, with its lower standards of care and more conflicts of interest. The DOL is trying to regulate the 'decumulation' of retirement benefits."  MORE >>

DOL Asks Supreme Court to Take 403(b) Excessive Fee Case

"The [DOL's amicus brief makes it] clear that fiduciaries should not consider costs alone when establishing an investment menu for plan participants but should consider all relevant factors. However, ... '[if] petitioners prove their allegations that respondents had the opportunity to offer those identical lower-cost institutional-class investments for the plans, then there is no apparent justification for respondents' failure to do so,' [the brief states]." [Hughes v. Northwestern Univ., No. 18-2569 (7th Cir. Mar. 25, 2020; cert. pet. filed Jun. 19, 2020; brief for U.S. as amicus curiae filed May 25, 2021)]  MORE >>

PLANSPONSOR; free registration may be required

Lowe's Reaches Settlement in 401(k) Case Over Investment Option

"The core of the lawsuit challenges the selection and retention of the Aon Hewitt Growth Fund for the plan.... [The] agreement ... provides for a $12.5 million settlement fund that will be allocated to eligible class members after deductions for attorneys' fees and costs, administrative expenses and a class representative service award,"  MORE >>


U.S. Bancorp Defeats Class Certification in Challenge to Early Retirement Benefits

"The court concluded that the plaintiffs' alternative actuarial models proved 'unworkable' ... because not all putative class members would benefit from any single model.... [T]he plaintiffs' expert also conceded that at least 251 class members currently received actuarially equivalent benefits, which meant they were not injured by the plan and therefore lacked standing." [Thorne v. U.S. Bancorp, No. 18-3405 (D. Minn. May 18, 2021)]  MORE >>

Jackson Lewis P.C.

Exceptional Usefulness and Quality icon ERISA Litigation in Defined Contribution Plans: Background, History, Current Status and Risk Management Techniques (PDF)

12 pages. "How did we get to a point where the simple act of sponsoring a defined contribution retirement program exposes plan sponsors to potentially uninsurable litigation risks? ... [H]ow can plan sponsors protect themselves against the risks associated with their plans -- namely, litigation risk ... and also insurability risk, as fiduciary liability insurance providers increasingly move to reduce coverage limits, materially increase retention, or perhaps even cancel coverage?"  MORE >>

SageView Advisory Group LLC

Where and When Do 401(k) Fees Still Matter?

"While required disclosure of 12(b)-1 fees makes them stick out in the bright light, underreported -- and even legally unreported -- revenue sharing fees continue to dwell in the murky darkness of, well no one knows for sure, which is exactly the point."  MORE >>

Fiduciary News; free registration required

2021 Reference Point: Annual 401(k) Plan Benchmarking Report (PDF)

75 pages. "This [report] provides data and actionable insights into plan and participant actions taken in 2020, year over year, and through the lens of the pandemic.... [T]he financial, physical, and emotional strains caused by the coronavirus had, and will continue to have, repercussions on plan design and employee retirement savings outcomes.... [O]verall, plan sponsors and participants continued to understand the value of retirement savings programs last year."  MORE >>

T. Rowe Price

Exceptional Usefulness and Quality icon The True Cost of Forgotten 401(k) Accounts (PDF)

22 pages. "As of May 2021, [the authors] estimate that there are 24.3 million forgotten 401(k)s holding approximately $1.35 trillion in assets, with another 2.8 million left behind annually. Leaving behind a forgotten 401(k) account has the potential to cost an individual almost $700,000 in foregone retirement savings over a lifetime."  MORE >>


Pandemic Reveals Demand for Virtual and Self-Serve 401(k) Education

"Workers flocked to online retirement education in 2020 and were less likely to cancel attendance and more likely to choose on-demand sessions than in 2019. One third of all participants in Schwab's 2020 education sessions chose to view virtual material at a time of their choosing rather than attending live online sessions, representing a 207% increase in attendance at on-demand sessions compared to 2019."  MORE >>

Charles Schwab

How to Evaluate Insurers for Pension Risk Transfers

"The search for a provider or insurer must evaluate factors relating to a potential annuity provider's claims paying ability and creditworthiness.... In a case where one annuity provider is only marginally safer than another, sponsors can take other factors into account. But, there are other considerations when selecting a sound insurer for the purpose of a PRT."  MORE >>


Pension Risk Transfer Annuity Placement Pricing Is Better Than Ever. Will It Last? (PDF)

"[T]en insurers [have] entered the PRT market since 2014, ... which has resulted in more competition to win deals regardless of the size of the deal ... PRT insurers continue to refine their mortality assumptions and evaluate factors that drive mortality ... leading to a more accurate assessment of mortality risk and better pricing ... PRT insurers are increasingly making use of differentiated investment strategies for their portfolios backing these liabilities, and also using reinsurance as a means to improve pricing."  MORE >>

BCG Pension Risk Consultants

FAS87 ASC715 Discount Rates and Moody's Rates, May 28, 2021

An unofficial monthly report of the Moody's Daily Long-term Corporate Bond Yield Averages and Moody's Daily Treasury Yield Averages (used as benchmarks by some corporate pension plans).  MORE >>

BenefitsLink Message Boards

Internal Documents Show How Pennsylvania's Biggest Pension Fund Got Key Financial Calculation Wrong

"After Pennsylvania's biggest pension plan botched a crucial financial calculation, the FBI launched an investigation, the fund's board began its own probe, and 100,000 public school employees suddenly faced paying more into the retirement system.... [Newly-obtained] internal fund documents ... [trace] the error to 'data corruption' in just one month -- April 2015 -- over the near-decade-long period reviewed for the calculation."  MORE >>

The Philadelphia Inquirer, via WITF

Benefits in General

Exceptional Usefulness and Quality icon ERISA Plan Fiduciaries: 2021 Update (PDF)

74 presentation slides. Topics: [1] Legislative and regulatory priorities; [2] Remote governance issues; [3] Update on general fiduciary issues: claims and appeals issues, service provider issues, data security/fraud prevention; [4] Fiduciary breach litigation; [5] Update on fiduciary investment issues: ESG investing, proxy voting, DOL fiduciary rule, DOL private equity investments guidance; [6] Annual review process: plan document compliance, operational compliance.  MORE >>

Hanson Bridgett LLP

Exceptional Usefulness and Quality icon Public Sector Plan Fiduciaries: 2021 Update (PDF)

78 presentation slides. Topics: [1] Legislative and regulatory priorities; [2] Remote governance issues; [3] Update on general fiduciary issues: Why we care about ERISA/brief overview, service provider issues, data security/fraud prevention; [4] Fiduciary breach litigation; [5] Update on fiduciary investment issues: ESG investing, proxy voting, DOL fiduciary rule, DOL private equity investments guidance; [6] Annual review process: plan document compliance, Operational compliance.  MORE >>

Hanson Bridgett LLP

Are ERISA Breach of Fiduciary Duty Claims Arbitrable?

"One court recently recognized that 'whether any benefits plan may agree to submit to arbitration and/or whether an individual employment agreement may compel claims on behalf of a benefits plan to proceed to arbitration are not issues of clearly settled law.' This issue is before two circuit courts of appeal this year. So far, the court rulings in the cases seem to provide some guidance while also creating further uncertainty."  MORE >>


Employee Benefits Jobs

View job as Associate, Compensation and Benefits
for Alvarez & Marsal Associate, Compensation and Benefits

Alvarez & Marsal

Greenwood Village CO

View job as Account Services Representative (Entry-Level)
for Newport Account Services Representative (Entry-Level)


Folsom CA

Selected New Discussions

402(f) Notice Not Needed with RMD Paperwork?

"We always provided the 402f notice with RMD paperwork just to be on the safe side, but I stumbled upon this article that suggests that Notice 2020-62 clarifies that this is not necessary. I can see why it wouldn't be, but I'm just being overly-cautious. Any thoughts?"

BenefitsLink Message Boards

What to Do with Large Investment Returns in a Cash Balance Plan?

"We are the actuary for a cash balance plan that uses the actual rate of return for plan assets as the annual interest credit. The interest credit percentage is limited to 6%. The plan had an asset return of 21% for the 2020 plan year. As a result, the assets exceed the participant account balances by a considerable amount. Any suggestions on how to use these extra assets for the participants? Can we have an ad-hoc interest credit or pay credit to bring the account balances up to the assets? I want to make sure we do not violate the accrual rules or discrimination testing."

BenefitsLink Message Boards

Release Required Independent of Payment Schedule

"A nonqualified deferred compensation plan provides for payment of benefits in annual installments each March. Termination of employment generally results in a forfeiture of further payments. However, under certain conditions, such as termination by company other than for cause, payments are to continue when otherwise due under the plan, but conditioned upon the participant signing a release of claims (no deadline specified). Where the release is not a payment trigger (rather, failure to sign a release apparently results in a forfeiture), is it necessary to set a deadline for the release to be returned/and for the revocation period to expire?"

BenefitsLink Message Boards

Press Releases

T. Rowe Price Develops New Framework for Defined Contribution Plan Sponsors to Evaluate Retirement Income Solutions

T. Rowe Price

UKG Acquires EverythingBenefits, Inc.

UKG, Inc.

Sue Reibel Named CEO of John Hancock Retirement

John Hancock Retirement

HUB International Acquires the Assets of Massachusetts-Based Epstein Financial Group LLC

HUB International

OneDigital Acquires The Ashley Group


Kolb and Associates Welcomes Kathleen Salas Bass

Kolb & Associates PLLC

Webcasts and Conferences
(Retirement Plans or Exec Comp)

2021 Annual Employee Benefits Plan Fiduciaries Update for Public Sector Plans


Hanson Bridgett

2021 Annual Employee Benefits Plan Fiduciaries Update for Private Sector Plans


Hanson Bridgett

5500 Under the Hood: How to Use 5500 Warnings and Plan Features to Build and Maintain Your Practice

June 9, 2021 WEBCAST

Restricted Stock and RSU Financial Planning: Advanced Bootcamp

June 10, 2021 WEBCAST

Building an Effective Digital Health & Communication Strategy

June 10, 2021 WEBCAST

Segal Benz

Cybersecurity Risks for Plan Sponsors & Fiduciaries

June 24, 2021 WEBCAST

Frost Brown Todd LLC

Last Issue's Most Popular Items

Multiemployer Pension Plans Potentially Eligible for Special Financial Assistance Under ARPA

Congressional Research Service [CRS]

Understanding the Impact of the Low Interest Rate Environment on Retirement Security in the U.S. (PDF)

Society of Actuaries

Senate, House Considering Bills to Continue to Improve Retirement Savings

Pensions & Investments

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

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