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Retirement Plans Newsletter

July 20, 2021

5 New Job Opportunities


[Guidance Overview]

IRS Updates the EPCRS Correction Program

"The most significant changes for plan sponsors include the: [1] addition of a free and anonymous VCP pre-submission conference procedure; [2] extended correction period for significant failures under the SCP; [3] expanded availability to correct errors by plan amendment; and [4] new guidance on the recoupment of overpayments."  MORE >>

Ice Miller LLP

[Guidance Overview]

IRS Updates the Employee Plans Compliance Resolution System (EPCRS)

"Two new overpayment corrections for defined benefit plans ... Threshold amount for overpayments not requiring correction is increased from $100 to $250 ... Elimination of the requirement that self-correction by plan amendment must affect 'all eligible participants' ... Extension of safe-harbor correction method for some missed elective deferrals."  MORE >>


[Guidance Overview]

Exceptional Usefulness and Quality icon ARPA Guidance on Multiemployer Plans: A Contributing Employer Perspective

"When calculating a plan's unfunded vested benefit liability (UVB) and the withdrawing employer's share, the fund should include SFA assets as part of the total assets. This is good for withdrawing employers. To determine a plan's vested benefit liability, the plan shall use the interest rates that would be used in a mass withdrawal ... [Those rates] are currently in the vicinity of 2.2%.... [T]his will be bad for certain withdrawing employers."  MORE >>

October Three Consulting

[Guidance Overview]

PEPs and MEPs: Compliance and Fiduciary Considerations Under the SECURE Act

"Participating employers retain a fiduciary obligation and liability for making sure that the sponsor of the group or association MEP, PEO MEP or PEP has been prudently selected and is operating the plan in a prudent manner and in the best interests of plan participants.... [S]ponsors and participating employers should have in place robust governance practices and comprehensive operational compliance procedures that provide evidence of a thorough investigation and an independent validation of procedural and substantive process standards that demonstrate that the plan fiduciaries and participating employers have acted in a prudent manner."  MORE >>

Greenberg Traurig

SEC Extracts $96 Million Settlement from TIAA Subsidiary for Rollover Practices

"[The authors] believe that this action by the SEC is meant to be fair warning and that other advisors can expect the SEC to bring charges for their rollover practices.... it is clear that paying different compensation for different advisory products brings conflicts of interest and so does paying more to roll assets outside of an employer-sponsored plan.... It is critical that advisors maintain appropriate policies and procedures, monitor that the procedures are being followed, and keep adequate records of their findings."  MORE >>

The Wagner Law Group

Who Is Liable for Withdrawal Liability? Seventh Circuit Explains an Expansive Definition

"[T]he Court of Appeals for the Seventh Circuit affirmed a judgment against two individuals contending that their ownership interest in the contributing company's principal place of business was a purely passive investment." [Local 705 Int'l Brotherhood of Teamsters Pension Fund v. Pitello, No. 20-2142 (7th Cir. Jul. 7, 2021)]  MORE >>


Judge Moves Forward Lawsuit Challenging Use of Active TDF Suite

"[The judge] noted that of the 29 Fidelity funds in the active TDF suite, 17 of them trailed their respective benchmarks over their respective lifetimes ... [T]he active suite also had a significantly higher expense ratio than the index suite, despite consistently underperforming the index suite ... The defendants continued to use the active suite as the plan's [QDIA] for as long as it was an option in the plan's investment menu." [In re Prime HealthCare ERISA Litigation, No. 20-1529 (C.D. Cal. Jul. 16, 2021)]  MORE >>

PLANSPONSOR; free registration may be required

Has the IRS Changed Its Position on VCP-Triggered Audits?

"Nothing in the [Internal Revenue Manual] requires a referral and there has been no other policy change regarding referrals. Plan sponsors who are concerned about their ability to reach an agreement on correction methodology should consider submitting their applications anonymously before Jan. 1, 2022, and after 2021, requesting the new anonymous pre-submission conference announced in Revenue Procedure 2021-30 to determine whether the desired correction may be permissible."  MORE >>

American Retirement Association [ARA]

Pooled Employer Plans: More Than a Small Plan Solution

"While small employers will certainly benefit from the added focus that will come from outsourcing their retirement plan, there are several other types of businesses who will find PEPs to be a superior alternative. [1] U.S. subsidiaries of a global company ... [2] Private equity-owned companies ... [3] Francishors and franchisees."  MORE >>


Do Required Minimum Distribution 401(k) Rules Matter, and for Whom?

"[The authors'] calibrated lifecycle model measures the impact of RMD rules on financial behavior of heterogeneous households during their worklives and retirement.... [P]roposed reforms to delay or eliminate the RMD rules should have little effects on consumption profiles but more impact on withdrawals and tax payments for households with bequest motives."  MORE >>

Vanya Horneff, Raimond Maurer, and Olivia S. Mitchell, via SSRN


Supreme Court Has Opportunity to Bring Clarity to ERISA Fee Litigation

"The Supreme Court agreeing to review Hughes v. Northwestern presents the very real possibility that finally someone -- the Supreme Court -- will say something authoritative about exactly what a plan fiduciary's obligations are in building a fund menu. Must the fiduciary inspect every fund to make sure it carries the lowest possible fee? Or is simply giving participants an adequate choice, including low-cost index funds -- the sort of choice an ordinary investor has -- 'good enough?' "  MORE >>

Michael P. Barry, via American Retirement Association [ARA]


State Auto-IRAs Are Building Momentum

"In the past year alone, Maine, Virginia, and Colorado have passed bills requiring private employers without a retirement plan to automatically enroll their workers in IRAs, with workers allowed to opt out. New York City ... approved its program in May. And other states are either starting to implement programs or looking at their options.... These mandatory programs are the only practical way to close the coverage gap ... Numerous voluntary plans created by the federal government ... have failed to measurably increase coverage."  MORE >>

Squared Away Blog, by the Center for Retirement Research at Boston College

Benefits in General

[Official Guidance]

ERISA Advisory Council to Meet August 26 and 27

"[T]he 207th open meeting of [the ERISA Advisory Council] will be held via a teleconference on Thursday, August 26 and Friday, August 27, 2021.... The purpose of the open meeting is for Advisory Council members to hear testimony from invited witnesses and to receive an update from [EBSA]. The Advisory Council will study the following topics: [1] Gaps in Retirement Savings Based on Race, Ethnicity and Gender, and [2] Understanding Brokerage Window Prevalence, Usage, and Implementation."  MORE >>

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

Executive Compensation and Nonqualified Plans

The Tao of Stock Options: Exercise Strategies

"[1] Waiting to exercise is often best ... [2] Risk versus reward ... [3] Taxes ... [4] Understand the stock plan documents ... [5] Seek help from a qualified advisor."  MORE >>

Employee Benefits Jobs

View job as Distribution Specialist II
for Nova 401(k) Associates Distribution Specialist II

Nova 401(k) Associates

Telecommute / Houston TX

View job as Sr. Retirement Analyst
for Baldwin Risk Partners Sr. Retirement Analyst

Baldwin Risk Partners

Telecommute / FL

View job as Employee Benefits Investigator
for Employee Benefits Security Administration [EBSA] Employee Benefits Investigator

Employee Benefits Security Administration [EBSA]

Telecommute / Pasadena CA

View job as Compliance Analyst
for Smart Retire USA Compliance Analyst

Smart Retire USA

Nashville TN

View job as Retirement Plan Administration Supervisor
for Harding Shymanski & Co. Retirement Plan Administration Supervisor

Harding Shymanski & Co.

Telecommute / Evansville IN

Press Releases

HealthPartners UnityPoint Health Now Offering Health Insurance to Small Businesses in Iowa

HealthPartners UnityPoint Health

Integrated Pension Services Combines Forces with Friedman LLP's Benefits 21

Integrated Pension Services

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

A Mid-Year Check-In for Retirement Plan Sponsors


CAPTRUST Financial Advisors

Advisor Requests for Proposals (RFPs) in a Post-Pandemic World: Best Practices and Fundamentals

August 12, 2021 WEBCAST

CAPTRUST Financial Advisors

Safe Harbor 401(k) Plans

September 9, 2021 WEBCAST

Nova 401(k) Associates

Last Issue's Most Popular Items

IRS Releases Updated EPCRS Guidance


IRS Makes 'Significant Changes and Revisions' to EPCRS Correction Program

American Retirement Association [ARA]

IRS Provides Escheatment Guidance for Qualified Plans (PDF)

Groom Law Group, via Journal of Pension Benefits

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

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