logo logo

Retirement Plans Newsletter

October 13, 2021

2 New Job Opportunities 2 New Job Opportunities


[Official Guidance]

Text of DOL Proposed Regs: Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights

106 pages. "The [DOL] in this document proposes amendments to the Investment Duties regulation under Title I of [ERISA], to clarify the application of ERISA's fiduciary duties of prudence and loyalty to selecting investments and investment courses of action, including selecting qualified default investment alternatives, exercising shareholder rights, such as proxy voting, and the use of written proxy voting policies and guidelines.... The amendments proposed in this document are intended to address uncertainties regarding aspects of the current regulation and its preamble discussion relating to the consideration of ESG issues, including climate-related financial risk, by fiduciaries in making investment and proxy voting decisions, and to provide further clarity that will help safeguard the interests of participants and beneficiaries in the plan benefits.... [T]he proposal makes clear that climate change and other ESG factors are often material and that in many instances fiduciaries to should consider climate change and other ESG factors in the assessment of investment risks and returns.... Although the changes to the regulation ... are limited, the entire regulation is being republished in this proposal."  MORE >>

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


Every 401(k) at your Fingertips!

Judy Diamond Associates is the place to go for 401(k) plan information. JDA provides the comparisons and metrics that you need to win new business from plan sponsors. Get Plan Scores, Red Flags, and Talking Points for almost 800,000 ERISA plans.

Sponsored by ALM

[Official Guidance]

Social Security Announces 5.9 Percent Benefit Increase for 2022, Wage Cap Will Increase as Well

"The 5.9 percent cost-of-living adjustment (COLA) will begin with benefits payable to more than 64 million Social Security beneficiaries in January 2022.... [T]he maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $147,000 from $142,800."  MORE >>

U.S. Social Security Administration [SSA]

[Official Guidance]

Text of 2021 IRS Form 5500-EZ: Annual Return of a One-Participant (Owners/Partners and Their Spouse) Retirement Plan or a Foreign Plan (PDF)

"This form is required to be filed under section 6058(a) of the Internal Revenue Code. Certain foreign retirement plans are also required to file this form[.]" [Because the form is a fillable PDF, it may not open correctly in some web browsers.]  MORE >>

Internal Revenue Service [IRS]

[Guidance Overview]

DOL Fact Sheet on Proposed Regs for Prudence and Loyalty in Selecting Plan investments and Exercising Shareholder Rights (PDF)

"The Department has consistently recognized in its various interpretive guidance that ERISA does not prohibit fiduciaries from making investment decisions that reflect ESG considerations depending on the facts and circumstances. Likewise, the interpretive guidance has recognized that the exercise of voting rights as well as other shareholder rights connected to shares of stock are fiduciary acts subject to ERISA's prudence and loyalty requirements. Differences in the tone and tenor in different Administration's iterations of sub-regulatory guidance during this period, however, have created confusion about these investment issues and have been described by stakeholders as an unhelpful regulatory game of 'ping pong.' ...

"The NPRM retains the core principle that the duties of prudence and loyalty require ERISA plan fiduciaries to focus on material risk-return factors and not subordinate the interests of participants and beneficiaries (such as by sacrificing investment returns or taking on additional investment risk) to objectives unrelated to the provision of benefits under the plan.... The NPRM, however, addresses the Department's concern that the 2020 Rules have created uncertainty and are having the undesirable effect of discouraging ERISA fiduciaries' consideration of climate change and other ESG factors in investment decisions, even in cases when it is in the financial interest of plans to take such considerations into account. This uncertainty may deter fiduciaries from taking steps that other marketplace investors take in enhancing investment value and performance, or improving investment portfolio resilience against the potential financial risks and impacts associated with climate change and other ESG factors."  MORE >>

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

[Guidance Overview]

Exceptional Usefulness and Quality icon Are You a Wealth Manager Who Thinks ERISA Does Not Impact Your Rollover Advice to IRA Owners? Think Again. Now.

"Recommending a move from a brokerage account to an advisory arrangement is likely fiduciary investment advice under the rule. Wealth managers commonly recommend such transfers, believing them to be in the best interest of the client. These recommendations are now subject to the DOL's new interpretation of what is a prohibited transaction."  MORE >>

The Wagner Law Group

[Guidance Overview]

Alert (High Risk Issue) icon Best Interest Standard of Care for Advisors, Part 69: Compliance with PTE 2020-02 -- Factors to Evaluate for an IRA-To-IRA Rollover Recommendation (Part 5)

"Unfortunately, neither the PTE nor the preamble provided much information about the process for determining whether a recommendation to rollover or transfer an IRA to another IRA is in the best interest of the investor. However, the PTE contains a best interest definition that provides some help."  MORE >>

Be Careful What You Wish For: Employer Can't Escape Hundreds of Arbitration Awards

"The court minced no words in applying judicial estoppel: 'DST's post hoc suggestion that…this court should sweep aside final arbitration awards in hundreds of cases is anathema.... DST was not dragged into arbitration against its will. It initiated these arbitrations. The only thing that would be unfair would be to let DST escape the consequences of the arbitration proceedings in which it voluntarily participated because they did not turn out as DST hoped they would.' " [Hursh v. DST Systems, Inc., No. 21-9017 (W.D. Mo. Oct. 4, 2021) ]  MORE >>

Kantor & Kantor

A Primer on DOL Probes for ERISA Plan Service Providers (PDF)

"How are service provider investigations different from plan sponsor investigations? ... How does the DOL choose which providers to investigate? ... What's the process and how long does an investigation take? ... What are the key risks for service providers? ... How should service providers respond to an investigation? ... What are some common issues in service provider investigations? ... What is the most important thing service providers should keep in mind?"  MORE >>

Groom Law Group, via Law360

Auto IRAs and Voluntary Marketplaces: States Respond to the Retirement Crisis (PDF)

"A growing number of states have implemented state-sanctioned private sector retirement savings programs. Employers should carefully navigate the varying compliance considerations created by these new plans."  MORE >>

benefits magazine, a publication of the International Foundation of Employee Benefit Plans [IFEBP]

Despite Pandemic, Nonprofit Workers Boost Participation in 403(b) Employer Retirement Plans

"Despite COVID-19 hitting nonprofit organizations particularly hard last year, nonprofit workers participated in 403(b) retirement plans at the highest level since tracking began in 2008 ... The increase in plan participation coincided with a continued emphasis by nonprofits on automatic enrollment in 403(b) plans. Nearly 30% of organizations said they use the feature, a 50% increase from just five years ago."  MORE >>

Principal Financial Group and Plan Sponsor Council of America [PSCA]

Is Congress Closing the Backdoor to Roth IRAs?

"If revenue-generating provisions of the Build Back Better Act are enacted as currently proposed, Roth conversions of after-tax IRA and after-tax 401(k) plan assets would be eliminated after 12/31/2021; and Roth conversions of pre-tax IRA and plan assets would cease after 12/31/2031."  MORE >>

Retirement Learning Center, LLC

Benefits in General

[Official Guidance]

ERISA Advisory Council to Meet via Teleconference on November 19

"The purpose of the morning session of the open meeting is ... to finalize observations and recommendations on the issues [the members of the council] studied in 2021. During the afternoon session, the members ... will present their observations and recommendations to the [DOL] and receive an update from leadership of [EBSA]. The issues studied ... in 2021 [were]: [1] Gaps in Retirement Savings Based on Race, Ethnicity and Gender, and [2] Understanding Brokerage Windows in Self-Directed Retirement Plans."  MORE >>

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

Additional Standing Issues Under ERISA (PDF)

"Currently ... there is agreement among the courts that ERISA's standing requirements are to be strictly construed and 'absent a valid assignment of a claim, non-enumerated parties lack standing under ERISA, even if they have a direct stake in the outcome of the litigation.' That is why, for example, that a health care provider with no assignment has no standing. However, there remain areas in which the courts are divided and nuances of which practitioners should be aware."  MORE >>

The Wagner Law Group, via Benefits Law Journal

Motion for Class Certification Denied: Plaintiff Who Released ERISA Claims Deemed Unfit to Lead Class

"Can a former employee serve as a class representative for ERISA claims when she has signed a general release agreement and has waived her right to participate in class actions? According to a recent decision by the District Court for the Western District of Oklahoma, the answer may very well be 'no.' " [Myers v. Administrative Committee, Seventy Seven Energy, Inc. Retirement & Savings Plan, No. 17-200 (W.D. Okla. Sep. 29, 2021)]  MORE >>

Jackson Lewis P.C.

Exceptional Usefulness and Quality icon Employee Benefits, Executive Compensation, and Employment Law Practice: Ten Years in Review

"This article reviews some of the most significant ... legal, regulatory, and practice developments of the past ten years [in the fields of employee benefits, executive compensation and employment law], including key insights and predictions for the future[.]"  MORE >>

Thomson Reuters Practical Law

Employee Benefits Jobs

View job as DC Plan Administrator
for United Benefit Pensions Inc. DC Plan Administrator

United Benefit Pensions Inc.

Melville NY

View job as DC Plan Administrator
for United Benefit Pensions Inc.

View job as HRS Internal Service Support Specialist
for Paychex, Inc. HRS Internal Service Support Specialist

Paychex, Inc.

Rochester NY / Phoenix AZ / Saint Petersburg FL / Indianapolis IN / Baton Rouge LA / Auburn ME / High Point NC / Albuquerque NM / Franklin OH / Allentown PA / Nashville TN

Selected New Discussions

Filing File 5500 Without Audit; Essentially Provides a 45-Day Extension?

"The following sentence is above the signature line of the 5500:

Under penalties of perjury and other penalties set forth in the instructions, I declare that I have examined this return/report, including accompanying schedules, statements and attachments, as well as the electronic version of this return/report, and to the best of my knowledge and belief, it is true, correct, and complete. (Emphasis mine.)

Does that sentence mean nothing to those CPAs and those under Circular 230 who recommend filing without an audit? Filing without the audit seems to just be a way to buy another 45 days of 'extension' and the DOL seems to be OK with it."

BenefitsLink Message Boards

1% Is Reasonable Rate of Interest?

"A plan dropped its interest rate down to 1% due to the pandemic. I'm not sure that 1% is a 'reasonable rate of interest' per IRS standards. If it's not, then isn't there a risk that the 'loans' would be considered distributions?"

BenefitsLink Message Boards

'Clawing Back' Erroneous Employer 403(b) Contributions

"ERISA 403(b) plan has been operationally botched for 4 years or more, so VCP all the way unless ERISA attorney advises them to ignore the problems and start clean next year. People ineligible for employer nonelective contributions have received them. 100% immediate vesting. Has anyone SUCCESSFULLY negotiated with the IRS to have such contributions removed from their accounts and reallocated?"

BenefitsLink Message Boards

Press Releases

Fiduciary Decisions Announces Redesigned User Experience for DOL PTE 2020-02 Solution

Fiduciary Decisions

Deadline Extended to Compete For the 401(k) Champion® Award

401(k) Champion

Employee Fiduciary Launches New 401k Fee Savings Calculator

Employee Fiduciary, LLC

Executive Compensation and Employee Benefits Lawyer Daniel McClain Joins Reed Smith

Reed Smith

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

Cybersecurity Risk on the Rise: Is your Firm’s Framework in Place?

October 21, 2021 WEBCAST

Broadridge Financial Solutions, Inc.

The Paper Chase: New Rules on Electronic Disclosures and Lifetime Income Illustrations

October 27, 2021 WEBCAST

Western Pension & Benefits Council

Last Issue's Most Popular Items

Do You Really Need to Save That Much for Retirement?


Text of IRS Notice 2021-57: Funding Relief for Multiemployer DB Pension Plans Under the American Rescue Plan Act of 2021 (PDF)

Internal Revenue Service [IRS]

Modern Portfolio Theory, the Prudent Investor Rule and Fiduciary Investing

The Prudent Investment Fiduciary Rules

Unsubscribe  |   Change Email Address

Search Past Issues   |   Privacy Policy

Submit an Article   |   Contact Us   |   Advertise Here

Copyright 2021, Inc. All materials contained in this newsletter are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of, Inc., or in the case of third party materials, the owner of those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.

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

Links to web sites other than and are offered as a service to our readers. We are not involved in their production and are not responsible for their content.