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Retirement Plans Newsletter

July 21, 2021

8 New Job Opportunities


[Guidance Overview]

IRS Plays Musical Chairs With Voluntary Correction Programs

"[T]he IRS is retiring Anonymous VCP and will not accept any more Anonymous VCP submissions after December 31, 2021. In its place the IRS is introducing a new program effective January 1, 2022, which it refers to as an 'anonymous, no-fee VCP pre-submission conference.' ... The IRS will only confirm in writing that a VCP pre-submission conference took place but will not appear to provide anything substantive in writing about what was discussed. VCP pre-submission conferences are held only at the discretion of the IRS and 'as time permits.' "  MORE >>

E is for ERISA

[Guidance Overview]

Exceptional Usefulness and Quality icon The Newest EPCRS: All Good News (Except When It's Not)

"Under Rev. Proc. 2021-30 ... a plan may self-correct an operational failure or a document failure up until the last day of the third plan year following the plan year of the failure. Similarly, the deadline for self-correcting an ADP/ACP failure is now the last day of the fourth plan year following the plan year of the failure.... Rev. Proc. 2021-30's change [for fixing a failure to enroll a participant in a 401(k) plan] relates primarily to the elimination of the QNEC requirement for automatic enrollment plans under a special 'safe harbor' rule. "  MORE >>

Ferenczy Benefits Law Center

[Guidance Overview]

IRS Releases Revised Employee Plans Compliance Resolution System

"[T]he IRS makes a number of changes to the EPCRS that benefit plan sponsors, including: [1] Providing additional methods correcting overpayments.... [2] Making it easier to correct failures by retroactive amendment.... [3] Increasing the dollar amount threshold under which certain failures are considered de minimis.... [4] Extending the time period in which significant failures can be corrected using SCP.... [5] Allowing pre-submission anonymous conferences with the IRS prior to submitting a VCP application."  MORE >>


[Guidance Overview]

New Requirements for Discretionary 401(k) Plan Matching Contributions

"[If] you choose a fully discretionary match, which is one where you do not pre-select the rate or period of the matching contribution, then you must satisfy two requirements when approving a discretionary match: [1] You must provide the plan administrator (or trustee, if applicable), [specific] written instructions ... [2] Participants who receive the discretionary matching contribution must be notified of the same items ... within 60 days following the date the discretionary match is made to the plan."  MORE >>

Foley & Lardner LLP

[Guidance Overview]

Best Interest Standard of Care for Advisors, Part 59

"PTE 2020-02 offers relief from prohibited transactions resulting from recommendations to participants to rollover their accounts into IRAs. However, it does not provide relief from the fiduciary/best interest standard of care. In that case, financial institutions and investment professionals must engage in a prudent process to gather and assess the relevant information. That fiduciary requirement already applies and is not delayed until December 21."  MORE >>

Mitigating Fiduciary Risk: Lessons Learned About the Prudent Person Rule After 15 Years of Fee Litigation

"Many of the complaints in these cases are now formulaic, and plaintiffs have attacked fiduciaries of participant-directed retirement plans (401(k) or 403(b) plans) which range in size from tens of millions to multiple billions in assets.... As courts have grappled with questions of fiduciary responsibility, a body of case law has developed that provides valuable guidance on methods plan fiduciaries may use to mitigate their risk if faced with a lawsuit or government investigation. This article addresses the duty of prudence in monitoring plan investments, thereby mitigating fiduciary risk through the lens of that body of case law."  MORE >>

Trucker Huss

Fifth Circuit Affirms Dismissal of Putative Class Action Against American Airlines for Allegedly Imprudent 401(k) Plan Investment Options

"[The appellate court] disagreed with the district court that Plaintiffs had standing to sue FCU because they incurred a cognizable injury by receiving a lower interest rate in the FCU Option.... Lastly, the court found that the district court did not abuse its discretion in denying preliminary approval of the settlement. Even if the terms of the settlement agreement did not provide for further appellate review of the district court's decision, the court found that Plaintiffs cannot now challenge the district court's assessment of the settlement itself." [Ortiz v. American Airlines, Inc., No. 20-10817 (5th Cir. Jul. 19, 2021)]  MORE >>

Roberts Disability Law

Annuity Purchase Update, July 2021

"Annuity purchase interest rates decreased slightly for both Annuity Plan 1 and Annuity Plan 2. Pension Risk Transfer activity and insurance company competition remain high. Annuity purchase cost for retirees has consistently been between 98%-104% of the pension accounting value (GAAP PBO)."  MORE >>

October Three Consulting

Third-Party Investors Throw Another $70 Million at Vestwell

"Vestwell just raised $70 million in fresh venture capital, after tripling in the past year the number of retirement plans it shepherds for administration, compliance, recordkeeping and trust and custody.... The New York City startup has now raised $112.5 million from outsiders after white labeling its software to giants like Morgan Stanley, BNY Mellon and Voya Financial, formerly ING U.S. It's still counting the days until it turns a profit, but sees light at the end of the tunnel."  MORE >>


How Should Retirees Respond to Inflation?

"[Y]our savings may be better able to cope with inflation than you might expect. For example, stock returns hold up better against both inflation and taxes than bonds and cash investments.... Your personal rate of inflation may be higher or lower than someone else's ... depending on your spending needs and goals.... [Take] the time to stress test the assumptions behind your retirement plan and portfolio. You may find that your financial plan already has some robust inflation expectations built in."  MORE >>

Charles Schwab

Fixed Income: Preparing for the Big Shift

"Low yields, new capabilities, and structural changes are driving a move towards indexing across the fixed income (FI) spectrum.... ETF performance during 2020 pandemic-related market stress highlights new investment possibilities for institutions.... No longer only for equities, ESG is coming for fixed income in a major way.... Most institutions will maintain or increase Emerging Markets exposure, and China's entry into key indexes is a rich source of potential."  MORE >>

State Street Global Advisors


Retirement Plan Family Attribution Rules: What You Don't Know Can Hurt You

"The results of the Section 1563 family attribution rules required to be used under Section 414 ... are outdated and illogical in the current economic environment. They were enacted long before most households had two working parents.... The application of these outdated rules is ... hindering the ability of small businesses to adopt new plans and expand participant coverage.... In late April, a bill was introduced in the U.S. House that seeks to correct the archaic and unfair family attribution rules."  MORE >>

TriStar Pension Consulting

Benefits in General

Health and Retirement Benefit Obligations for California Public Agency Seasonal Workers

"The number of seasonal workers you hire may impact whether your agency is subject to certain ACA obligations.... [S]easonal workers may be entitled to paid sick leave under California's Healthy Workplaces, Healthy Families Act.... Careful consideration is required when determining whether 'seasonal' workers are entitled to membership in the Public Employees' Retirement System (PERS)."  MORE >>

Liebert Cassidy Whitmore

IRS Form 5500 Reminders for Employers Maintaining Employee Benefit Plans

"[This article describes] a few common issues to keep in mind and tips that are aimed at lessening the chances of examination and/or the imposition of penalties.... Do not blindly rely on the individual who may have entered the data onto the form. Understand it is your filing under penalty of perjury, and that it should be complete and accurate."  MORE >>

Hawley Troxell

Executive Compensation and Nonqualified Plans

[Guidance Overview]

Do the New IRS Nonqualified Plan Audit Guidelines Mean Section 409A Audits Are Coming?

"[T]he 2021 Guide is ... clearly intended to be used as a reference to assist IRS auditors as they audit nonqualified deferred compensation plans.... What we do know is that [1] audit activity in this area has declined in recent years, but that the IRS has requested substantial budget increases, [2] Congress may be inclined to encourage more enforcement in this area to help fund certain other government initiatives, and [3] with this new 2021 Guide, the IRS is prepared to audit more nonqualified deferred compensation plans."  MORE >>

Foley & Lardner LLP

Nonqualified Plans Important Incentive in Return to Normalcy

"When properly structured, NQDC can be an important tax management and supplemental retirement planning tool for participants.... Companies can set themselves apart from competitors by communicating to newly hired and potential high value recruits that the NQDC and executive benefit plans offered are informally funded with reserved assets."  MORE >>


Employee Benefits Jobs

View job as HR Specialist - Compensation & Benefits
for American Century Investments HR Specialist - Compensation & Benefits

American Century Investments

Kansas City MO / KS

View job as HR Specialist - Compensation & Benefits
for American Century Investments

View job as Distribution Specialist
for Spectrum Employee Benefits, Inc. Distribution Specialist

Spectrum Employee Benefits, Inc.

Remote / MN / ND / SD / WI

View job as Distribution Specialist
for Spectrum Employee Benefits, Inc.

View job as DB/DC Combo-Plan Administrator
for Retirement Plan Specialists, Inc. DB/DC Combo-Plan Administrator

Retirement Plan Specialists, Inc.

Remote / Oviedo FL

View job as 401(k) Recordkeeping Manager
for July Business Services 401(k) Recordkeeping Manager

July Business Services

Remote / Woodway TX

View job as MEP/PEP Relationship Manager
for Nova 401(k) Associates MEP/PEP Relationship Manager

Nova 401(k) Associates

Remote / Houston TX / Dallas TX / Scottsdale AZ

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

Centers for Medicare & Medicaid Services [CMS]

Remote / Woodlawn MD

View job as Benefits Manager
for Merchants Bank of Indiana Benefits Manager

Merchants Bank of Indiana

Carmel IN

View job as Retirement Plan Administrator
for Spectrum Employee Benefits, Inc. Retirement Plan Administrator

Spectrum Employee Benefits, Inc.

Remote / MN / ND / SD / WI

Selected New Discussions

Will a Recordkeeper Deliver Its Customer's 404a-5 Notice?

"ERISA requires an administrator of an individual-account retirement plan that provides participant-directed investment (even if no fiduciary seeks ERISA Section 404(c) relief) to furnish regularly a disclosure document that meets several requirements specified in the rule. Although the rule's command applies to a plan's administrator, for most plans a recordkeeper or other service provider does the work. What happens if a plan's administrator wants the delivery service but not the assembly service?"

BenefitsLink Message Boards

Press Releases

Empower Retirement to Acquire Full-Service Retirement Business of Prudential Financial, Inc.

Empower Retirement

Allianz Life Announces Entry into Defined Contribution Market with Launch of Allianz Lifetime Income+ Annuity


Morgan Stanley at Work Creates Powerful Retirement Recordkeeper Value Proposition for Plan Sponsors Through Partnership with Vestwell

Morgan Stanley

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

ERISA Litigation: Navigating Through Complexities


Knowledge Group

401(k) Fee Disclosure Rules: Demystifying Trends, Developments, and Best Practices


Knowledge Group

Trends and Developments on Executive Compensation: A Comprehensive Guide to Avoid Potential Threats


Knowledge Group

EPCRS Dance Moves: Two Steps Forward, One Step Back

August 3, 2021 WEBCAST

Executive Compensation and the COVID-19 Pandemic: Key Issues and Best Practices

August 20, 2021 WEBCAST

Knowledge Group


September 24, 2021 WEBCAST


Last Issue's Most Popular Items

IRS Updates the EPCRS Correction Program

Ice Miller LLP

IRS Updates the Employee Plans Compliance Resolution System (EPCRS)


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


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

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