[Official Guidance]

Text of IRS Rev. Proc. 2021-30: Employee Plans Compliance Resolution System (PDF)

140 pages. This Rev. Proc. adds two new benefit overpayment correction methods that encourage employers to avoid seeking recoupment of benefit overpayments made to participants and beneficiaries, either by not requiring correction if the plan satisfies a specified funding level, or by limiting the amount to be recouped under certain circumstances. In addition, the revenue procedure eliminates the VCP anonymous submission procedure and adds an anonymous, no-fee, VCP pre-submission conference procedure. The revenue procedure also expands correction by plan amendment under SCP, extends the end of the SCP correction period for significant failures by one year, and extends the sunset of the safe harbor correction method for certain missed elective deferrals by three years.  MORE >>

Internal Revenue Service [IRS]

[Official Guidance]

Text of IRS Notice 2021-44: Weighted Average Interest Rates, Yield Curves, and Segment Rates for July 2021 (PDF)

"This notice provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates ... and the 24-month average segment rates ... [as well as] the interest rate on 30-year Treasury securities ... as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate[.]"  MORE >>

Internal Revenue Service [IRS]

[Guidance Overview]

PBGC Issues Guidance on New Special Financial Assistance Program for Troubled Multiemployer Pension Plans

"[T]he IFR provides that plans are permitted to use SFA to pay benefits and administrative expenses before using other plan assets.... [This] allows plans to preserve more of their other plan assets that are not subject to the [stated] investment restrictions. Had plans been required to use their non-restricted assets first, they would be forced to invest a growing proportion of their assets in a lower returning asset class for decades. This likely would have caused a number of plans to become insolvent prior to 2051 notwithstanding ARPA's stated intent."  MORE >>

Proskauer

Actuarial Equivalence Lawsuits: Plaintiffs May Defeat Motions to Dismiss, But Can They Win Class Cert?

"[M]any of the courts have held that ERISA's actuarial equivalence requirement demands the use of reasonable actuarial assumptions, and given the standard applied to motions to dismiss ... [and] have been quick to find that plaintiffs state some claim for potential relief.... In the two actuarial equivalence cases where class certification has been litigated ... the court has denied class certification."  MORE >>

Groom Law Group

Workers More Receptive to Auto-Features, Post-COVID-19

"Eighty-four percent of workers who have been automatically enrolled into their workplace retirement plan say they are glad that their savings has been jump-started.... [O]nly one-third of employers [surveyed] currently offer auto-enrollment. Among the employers ... using auto-enrollment in their plan designs, 21% are deferring their employees' salary at 6%[.]"  MORE >>

planadviser

Retirement Plan Performance at Mid-Year 2021

"The 'home run' here -- for a DB plan sponsor and for a DC participant -- is when [both] stock values and interest rates go up.... This century (and prior to 2021), only 2013 produced such a result ... This 'home run' scenario recurred between last July, when interest rates bottomed out, and March of 2021, when rates peaked.... The question, here at mid-year 2021, is whether this (relatively short term) trend will continue."  MORE >>

October Three Consulting

Plan Sponsors: How to Know When It's Time to Update Your Investment Options

"You're seeing lower fees among similar plans ... If something is no longer fulfilling its original role in your plan's menu, consider taking a second look.... Performance has been subpar over the long-term ... [R]eplacing funds from time to time is critical to ensuring your plan participants have access to the best funds possible."  MORE >>

PlanPILOT

Target Date Funds Face Increasing Congressional, Regulatory, and Legal Scrutiny

"[As] TDFs have grown in popularity, there are signs of increasing scrutiny around TDFs used in participant-directed defined contribution ERISA plan investment lineups. This increasing scrutiny is expected to raise new regulatory initiatives generating new questions and may favor increased process review by ERISA plan fiduciaries."  MORE >>

Morgan Lewis

Side-by-Side Comparison of Provisions in SECURE 2.0 and Cardin-Portman Proposals (PDF)

"The Cardin-Portman bill is the latest legislative effort by Senators Ben Cardin (D-MD) and Rob Portman (R-OH), the duo who have worked together on retirement issues for years. The Senate Finance and Health, Education, Labor and Pensions Committees may mark up retirement legislation, including provisions from the Cardin-Portman bill, later this year."  MORE >>

Groom Law Group

Estimate of the Program Cost Effects for the Federal Supplemental Security Income (SSI) Program of Enacting the 'Supplemental Security Income Restoration Act of 2021' (PDF)

"For the combined effect of enactment of all provisions [of S 2065], effective January 1, 2022, including the interaction among the provisions, we estimate an increase in Federal SSI payments of $510 billion over the calendar year period 2021 through 2030. The enclosed Table 1 provides our estimates of cost increase on an annual basis through 2030 by age group of SSI recipients (under 18, 18 to 64, and 65 and older), and in total.... This Bill would not have any direct effects on the financial status of the Social Security trust funds."  MORE >>

U.S. Social Security Administration [SSA]

Enhancing Cybersecurity When Employees Work Remotely

"[1] Ensure access to dedicated and skilled information technology resources ... [2] Manage the devices accessing your systems ... [3] Require strong passwords and implement multifactor authentication ... [4] Update, test and train employees ... [5] Monitor employee access and activity ... [6] Promptly terminate access ... [7] Develop and maintain an incident response plan ... [8] Implement a telecommuting/telework policy ... [9] Restrictive Covenant Agreements."  MORE >>

Godfrey & Kahn S.C.

District Court Ruling Contradicts Intent of ERISA Disability Benefits Plans

"[The question presented was] whether retirement benefits transferred directly into a rollover account could be offset against the plaintiff's ERISA-governed disability insurance benefits. Although the rollover was not considered receipt of the funds for tax purposes, the court upheld the insurer's finding that the funds [the participant] received reduced her disability payments." [DeBold v. Liberty Life Assurance Co. of Boston, No. 20-11802 (D. Mass. Jun. 28, 2021)]  MORE >>

DeBofsky Sherman Casciari Reynolds P.C.

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Old Frozen 403b / Individual Contracts / Fiduciary Liability?

"Client has an old 403b; pre-1/1/09 contracts. They need to sign off on distributions and she wants to know if she has any fiduciary liability with respect to these old contracts. They are all individual contracts, such that they cannot move them to a new provider without consent and they cannot change the funds available as they would in a 401k because they are essentially IRAs. I gather the answer is 'yes'."

BenefitsLink Message Boards

Questionnaire to Prospective Client as to Existence of Affiliated Service Group?

"Have a prospect (existing plans) that may be in an ASG and may not be aware of the rules. Does anyone know of a fairly simple questionnaire that can be sent to the prospect to start the screening for this?"

BenefitsLink Message Boards

403(b)(9) Church Plan: Some Questions on Plan Administration

"We have our first 403(b)(9) church plan with discretionary profit sharing that is allocated at a rate of 12% of comp per year. Is there any type of testing required? A few other questions I'm getting stuck on: Do forfeitures need to be separately accounted for by person? Can church plans utilize auto-rollovers or cash out provisions?"

BenefitsLink Message Boards

Can Forfeitures Be Used for QNECs to Fund Correction of Late Deferrals?

"Can a plan's forfeiture account be used to fund QNECs due from late deposit of deferrals and the attendant earnings?"

BenefitsLink Message Boards

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IRA Beneficiary Distributions - Part 2

August 19, 2021 WEBCAST

Ascensus

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District Court Denies Interlocutory Appeal for Novel Issue of 'Hardwired' 401(k) Plans

Proskauer

Summertime Blues for Your 401(k) Plan, Part 2: Eligibility Failures

E is for ERISA

A Close Look at 401(k) Plans, 2018 (PDF)

Brightscope and Investment Company Institute [ICI]