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Retirement Plans Newsletter

June 24, 2021

3 New Job Opportunities


[Official Guidance]

Text of DOL Notice of Reopening of Comment Period on Proposed Amendments to Class PTEs to Remove Credit Ratings

"The proposed amendments relate to the use of credit ratings in the conditions of these class exemptions.... [The] Dodd-Frank Wall Street Reform and Consumer Protection Act requires the Department to remove any references to or requirements of reliance on credit ratings from its class exemptions and to substitute standards of creditworthiness as the Department determines to be appropriate. This reopening of the comment period provides interested persons with the opportunity to submit additional comments ... since the proposal was originally published in 2013."  MORE >>

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

[Guidance Overview]

IRS Issue Snapshot: Hardship Distributions from 401(k) Plans

"This Snapshot examines the criteria for current hardship distributions. Different restrictions applied to hardship distributions made before 2020 (the mandatory effective date of the new rules under Reg. Section 1.401(k)-1(d)(3)), although employers could apply all or some of the new rules earlier)." [Updated Jun. 23, 2021. Prior version addressed provisions of the Bipartisan Budget Act of 2018.]  MORE >>

Internal Revenue Service [IRS]

[Guidance Overview]

Alert (High Risk Issue) icon DOL's Cybersecurity Auditors Have Arrived: Here's the Request for Policies and Documents One Employer Received

"Knowing the information that will likely be sought during an audit can help companies and plan sponsors tailor and revise their cybersecurity compliance plans. Documented cybersecurity compliance efforts can minimize liability in the event of an audit.... [The authors] are already aware of several investigations that the DOL has commenced regarding cybersecurity practices."  MORE >>

Nixon Peabody LLP

[Guidance Overview]

DOL Ups Its Game on Cybersecurity Program Oversight, Begins Audits

"In light of the DOL's cybersecurity audit initiative, employers and fiduciaries should act now to ... [1] Review internal cybersecurity programs ... [2] Analyze service providers' cybersecurity programs and update service contracts ... [3] Review participant messaging around cybersecurity awareness and the importance of monitoring retirement plan accounts."  MORE >>

Pillsbury Winthrop Shaw Pittman LLP

[Guidance Overview]

Butch Lewis Brings No Good News for Contributing Employers

"Payments will be made to more than ninety funds. There is no cap on this payment, no requirements for repayment, and funding predictions will be performed on a 'deterministic basis.' ... The Butch Lewis portion is otherwise a clean canvas to be augmented by PBGC regulations.... Organized labor contends 'all benefits due during the period' is defined as future benefit payment cash flows, not merely accrued benefits or unfunded liability. This concept will cost significantly more than 86 billion dollars."  MORE >>

Jackson Lewis P.C.

Transamerica to Pay $5.4 Million to Settle ERISA Claims

"Transamerica will pay $5.4 million into a settlement fund, which will be allocated among class members in the 401(k) plan, and has agreed to continue providing fiduciary training to plan trustees and retaining an outside investment consultant[.]"  MORE >>

Pensions & Investments

Duke Restores 403(b) Match, and Takes It One Step Further

"Not only have many entities reinstated matching contributions they suspended last year during the pandemic as cost-saving measures; some are even providing lump-sum payments to cover at least some of the contributions they missed out on during the suspension."  MORE >>

401(k) Specialist

Schwab 401(k) Participant Survey 2021 (PDF)

"[M]ore than half (53%) say they are very likely to achieve their retirement goals, compared to 37% in 2020.... On average, plan participants in 2021 believe they need to save $1.9 million for retirement, the same amount as in 2020. Ninety-one percent say their financial health is very good or pretty good.... 401(k) plans and health insurance again top the list of desired workplace benefits with more than 80% of participants saying these are 'must-haves.' "  MORE >>

Charles Schwab

Exceptional Usefulness and Quality icon The Effect of the Employer Match and Defaults on Federal Workers’ Savings Behavior in the Thrift Savings Plan

"The effects of an employer match, automatic enrollment, and other defaults on employees' savings behavior have been studied extensively. However, most of the previous literature has examined such changes in defined contribution plans in the private sector ... [This study] uses two sources of exogenous variation stemming from policy changes to the retirement benefits of federal workers to estimate the effects of matching and defaults on their savings behavior." [37 presentation slides, follow-up to CBO Working Paper 2019-06.]  MORE >>

Congressional Budget Office [CBO]

GAO Report on Retirement Savings: Federal Workers' Portfolios Should Be Evaluated for Possible Financial Risks Related to Climate Change

"This report examines [1] what is known about retirement plans' exposure to climate change-related investment risks, [2] what comparable retirement plans in other countries have done to address risks from climate change and how they communicate this information to the public, and [3] what steps FRTIB has taken to address investment risks from climate change." [GAO-21-327, published May 25, 2021, released Jun. 24, 2021]  MORE >>

U.S. Government Accountability Office [GAO]

What Participant-Level Records Should Your California Governmental 401(a) or 457(b) Plan Keep?

"Although governmental plans generally are not subject to ERISA, the inclusion of ERISA-like fiduciary duties and responsibilities in authorities such as the California Constitution, definitely make the guidance and rules promulgated by the [DOL] relevant to California's public sector plans. Based on the DOL's guidance, and plain common sense, here are a few suggestions regarding the retention of participant-level records:"  MORE >>

Best Best & Krieger LLP

Benefits in General

[Guidance Overview]

DOL Says Claimant May Request Phone Call Recordings Relevant to Benefits Claim

"DOL concluded that a recording of a conversation with a participant would not be excluded from disclosure merely because the plan or claims administrator does not include the recording in its administrative record; does not treat the recording or transcript as part of the claim activity history through which the insurer develops, tracks and administers the claim; or because the recording or transcript was generated for quality assurance purposes."  MORE >>

The Wagner Law Group

Courts Split on Class Action Waivers, Arbitration Provisions in ERISA Litigation (PDF)

"Courts have taken various approaches in determining whether class action waivers and arbitration provisions are enforceable in ERISA-based litigation.... [1] Lack of consideration ... [2] Lack of agreement between the ESOP and the company ... [3] Plan consent ... [4] Consistent with ERISA."  MORE >>

Holland & Knight, via Practical Guidance

What Is the Lifetime Risk of Needing and Receiving Long-Term Services and Support?

"70 percent of adults who survive to age 65 develop severe [long-term services and support (LTSS)] needs before they die and 48 percent receive some paid care over their lifetime. Only 24 percent of older adults receive more than two years of paid LTSS care, and only 15 percent spend more than two years in a nursing home. Lengthy spells of severe LTSS needs and paid care are more common among older adults with few financial resources."  MORE >>

Urban Institute

Executive Compensation and Nonqualified Plans

Judge Denies Dismissal of SERP Benefits Claim Suit

"The judge found that the defendants did not substantively respond to the plaintiff's repeated communications about his claim, except for sending a delayed letter -- outside the relevant 90 day window -- indicating that the 'senior vice presidents' had voted to deny the plaintiff's claim. 'Therefore, [the] plaintiff has exhausted his administrative remedies,' [the judge] concluded." [Delauter v. The Nissan Supplemental Executive Retirement Plan II, No. 20-609 (M.D. Tenn. Jun. 18, 2021)]  MORE >>


Employee Benefits Jobs

View job as Pension Plan Administrator
for DeMars Pension Consulting Services, Inc. Pension Plan Administrator

DeMars Pension Consulting Services, Inc.

Overland Park KS

View job as Pension Plan Administrator
for DeMars Pension Consulting Services, Inc.

View job as Retirement Plan Marketing Manager/Vice President
for Union Bank and Trust Retirement Plan Marketing Manager/Vice President

Union Bank and Trust

Lincoln NE

View job as Supervisory Health Insurance Specialist
for Centers for Medicare & Medicaid Services [CMS] Supervisory Health Insurance Specialist

Centers for Medicare & Medicaid Services [CMS]

Telecommute / Washington DC

Selected New Discussions

Can Former Shareholders of Plan Sponsor Be Held Liable for Plan Error in This Circumstance?

"Plan sponsor is judicially dissolved due to a shareholder dispute and a receiver is appointed to liquidate the company. Receiver terminates the 401(k) plan and distributes assets to plan participants. Plan audit for final 5500 reveals numerous errors in plan operation which, individually, are not significant. The cost to correct the errors would be very significant, however, and would result in participants receiving very small amounts. If the receiver chooses not to correct the errors, would the receiver be liable if the plan is audited? What about the former shareholders of the company?"

BenefitsLink Message Boards

401(k) Hardship Withdrawal for Non-Safe Harbor Reasons

"This 401k plan does permit hardships for non-safe harbor reasons. But does that mean it can be any hardship that the Plan Administrator deems to be an acceptable hardship reason? Assuming it meets the immediate and heavy financial need, would an employee purchasing a new furnace for which she has no other means other than the plan be acceptable?"

BenefitsLink Message Boards

Am I Required to Give a Copy of a Plan Document to the TPA Who Is Replacing Me?

"Am I required to give a copy of the plan document to the new TPA who is replacing me?"

BenefitsLink Message Boards

Problems Obtaining Information from Feisty Prior Actuary

"We were recently engaged by a new client to take over their actuarial work. The client messaged the prior actuary asking them to share historical plan information and discuss the plan with us. We followed up with a formal request for data and heard nothing. After repeated requests with no response we started calling the prior actuary with no response and no ability to leave a voicemail. Well, today I got through on the phone. I introduced myself and the prior actuary immediately hung up. I called back a few hours later and was told, "**** you!" and he immediately hung up. Any thoughts?"

BenefitsLink Message Boards

409A Program -- Are Deferrals Allowed After a Payment Event?

"Elective deferral plan states that upon attainment of age 65 deferred amounts will be distributed in 120 monthly installments. A new director joined in May 2019, elected to defer his fees, and turned 65 six months later (Nov. 2019). He's been allowed to continue deferring his fees. No distributions have been made. I'm trying to identify exactly what the failure(s) are here. Should he have been allowed to defer after age 65? If not, the entire amount deferred after age 65 must be paid out this year, and the entire amount deferred in prior years is likely subject to penalties."

BenefitsLink Message Boards

Press Releases

Recently Launched: Benetic's Platform Takes Off and More Advisors Join Every Day


IRI Names Two New Members to Board of Directors

Insured Retirement Institute [IRI]

FuturePlan by Ascensus Expands Sales Team


Evio Pharmacy Solutions Established to Tackle Affordability, Outcomes, and Experience with Medications


American Trust Company Signs Agreement to Acquire LT Trust Company

American Trust

NFP Acquires Emphasis Benefits to Further Expand Group Benefits Business

NFP Corp.

Webcasts and Conferences
(Retirement Plans or Exec Comp)

Retirement Participant Website User Experience Best Practices

June 24, 2021 WEBCAST

Corporate Insight

HSA University

July 8, 2021 WEBCAST


HSA University

September 30, 2021 WEBCAST


Benefits - The Strategic Game Changer in Your Total Rewards Package

November 12, 2021 in SC

Southeast Benefits Education Network [SBEN]

Last Issue's Most Popular Items

Colorado Court Finds ERISA Preempts State Divorce-Revocation Statute


What Are the Most Common Matching Formulas?

American Retirement Association [ARA]

What Happens to a Defaulted Plan Loan?

Newport Group

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

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