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Retirement Plans Newsletter

October 21, 2021

6 New Job Opportunities 6 New Job Opportunities


[Official Guidance]

Text of IRS Notice 2021-60: Weighted Average Interest Rates, Yield Curves, and Segment Rates for October 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]

DOL Proposes Form 5500 Updates, New ESG Regs

"Under the [proposed revisions to Form 5500], ... the DOL proposes to change the method to counting only participants with account balances at the beginning of the plan year. So, if a plan has 150 eligible participants, but only 20 have account balances, no independent audit would be needed if the NPRM gets finalized. The DOL estimates that this would result in nearly 20,000 plans currently paying for an audit to being audit-free.... SECURE Act Section 202 created the occasionally misused term, 'group of plans.' ... The DOL has taken what should have been a simplifying measure and made things much, much more complicated for such plans."  MORE >>

Ferenczy Benefits Law Center

[Guidance Overview]

SAS 136 Is Here: A Review of All SAS 136 Changes

"SAS 136 brings clarification to the responsibilities of plan management and employee benefit plan auditors. As a result, the engagement letter, audit report, representation letter and other communications will have a new look. There are also new requirements and new terminology for limited-scope audits which are common for 401(k) Plans."  MORE >>

Lindquist LLP

[Guidance Overview]

Thoughts on the DOL's Proposed ESG Regulation

"[F]iduciaries should proceed with caution until the DOL's back-and-forth on ESG has settled into a durable set of rules. The partisan reactions to the proposed regulation that have appeared to date suggest that the back-and-forth is far from over.... Genuine clarification of the law and its application will always be helpful, but reversals in policy that purport to be mere clarifications seem to invite more of the same from future regulators."  MORE >>

Verrill Dana LLP

Plaintiffs Seek Supreme Court Review of CalSavers ERISA Pre-Emption Case

"The lawsuit ... sought to block the CalSavers Retirement Savings Program on the grounds that the ERISA ... pre-empts CalSavers, therefore invalidating the program. These claims were previously rejected by both the 9th Circuit and the District Court for the Eastern District of California." [Howard Jarvis Taxpayers Association v. California Secure Choice Ret. Savings Program, No. 20-15591 (9th Cir. May 6, 2021; cert. pet. filed Oct. 12, 2021)]  MORE >>


Parties in Dignity Health Church Plan Lawsuit Finally Get Preliminary Approval of Settlement

"Dignity Health will contribute $50 million to the plan for the 2020 plan year and will contribute either another $50 million or the amount of the minimum contribution recommendation calculated by the plan's actuaries for the 2021 plan year, if it's greater than $50 million. For calendar years 2022, 2023 and 2024, Dignity Health has agreed to make contributions to the plan in the amount of the minimum contribution recommendation calculated by the plan's actuaries." [Rollins v. Dignity Health, No. 13-1450 (N.D. Cal. Oct. 19, 2021)]  MORE >>

PLANSPONSOR; free registration may be required

Upcoming Deadline icon 401(k) Plan Year-End Top 10 List

"This 401(k) list highlights issues for sponsors and administration committees between now and year-end for calendar year plans (now that the IRS Form 5500 filing deadline has generally passed for sponsors who have calendar year-end plans)."  MORE >>

Foley & Lardner LLP

The 'Defensive' 401(k) Plan (PDF)

"The Roberts Court's ERISA jurisprudence has re-awakened the idea that one of ERISA's key tenets is that a plan's written terms matter.... This column identifies some ways in which plan sponsors can amend plan language to manage and/or mitigate exposure to claims for benefits and other ERISA claims."  MORE >>

Jenner & Block, via Employee Relations Law Journal

Data Issues Are Biggest Barrier to Greater ESG Adoption

"Almost half (49 percent) of investors say a lack of robust ESG data is 'holding back' their organization's further adoption of ESG ... A lack of consistency in ESG scores from ratings firms is 'a stumbling block' when incorporating research data into the investment decision-making process for half (53 percent) of investors globally."  MORE >>

Corporate Secretary

Understanding Return Forecasts for Public DB Plans: Comparing Actuarial vs. Consultant Rates of Return

"Public defined benefit plans face intensifying pressure as modest expectations for future investment returns continue to fall short of actuarial discount rates.... [D]ecision makers ... face a critical dilemma affecting the plan's future financial health: How to distinguish between the actuarial discount rates used to measure plan benefit obligations and the return expectations used to inform decisions on long-term strategic asset allocation."  MORE >>



New DOL Proposal May Be ERISA's Zero-to-One ESG Moment

"[T]he DOL fleshed out various types of ESG risks, and, in considerable detail, the multi-dimensional aspects to an ESG factor.... The proposal's granularity on different ESG risks will likely enhance broader understanding of these risks by fiduciaries, thus aiding adoption."  MORE >>

Stradley Ronon


New Bill Could Throw a Monkey Wrench Into Retirement Planning

"[If] it passes in its current form, this bill could not only impact those looking to buy certain asset classes in the future, it could also impact current investment holders who made these investments with no knowledge of what was to come."  MORE >>

Forbes; subscription may be required


Arnerich Messina Comment Letter to Legislators on IRA Investment Choice Limitations in House Reconciliation Bill (PDF)

"[W]hile the SEC worked to be more inclusive in their definition of accredited investor, this proposal eliminates retirement funds as a source these investors can use to fund these small businesses, completely reversing the intent of allowing more Americans to invest in the people who need their capital to get their businesses off the ground."  MORE >>

Arnerich Massena

Benefits in General


Comments Submitted to DOL on Proposed SECURE Act Revisions to Form 5500

DOL has posted comments received on proposed SECURE Act changes to Form 5500. As of October 20, six comment letters have been posted. Comments are due on or before November 1, 2021.  MORE >>

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

Executive Compensation and Nonqualified Plans

Return of the Clawback Rule

"On October 14, 2021, the [SEC] issued a release reopening the comment period for the clawback rules initially proposed on July 14, 2015 to implement the provisions of Section 954 of the Dodd-Frank Act.... While the SEC's release was styled largely as questions for the investment community and their advisors to consider, the tenor of the questions suggests that the SEC is gearing up to offer an expansive view of clawback rules, with particular focus on the types of restatements that trigger applicability of the rules."  MORE >>

Debevoise & Plimpton LLP

Checklists for Executive Compensation Committees

"[The goal of this publication] is to provide committee members a list of 'stuff' they might receive to do their jobs, exercise their oversight and make their decisions with a level of competency that is expected given the magnitude of their responsibilities." [15-page e-book; Compensation Committee checklist starts on page 10.]  MORE >>

McDermott Will & Emery

Employee Benefits Jobs

View job as Plan Compliance Analyst (Administrator)
for RPA Plan Compliance Analyst (Administrator)


Remote / Falls Church VA

View job as Attorney Advisor - Excepted Service
for Pension Benefit Guaranty Corporation [PBGC] Attorney Advisor - Excepted Service

Pension Benefit Guaranty Corporation [PBGC]

Remote / Washington DC

View job as DB/DC Administrator
for Primark Benefits DB/DC Administrator

Primark Benefits

Remote / Burlingame CA

View job as 401(k) Consultant
for Creative Retirement Systems 401(k) Consultant

Creative Retirement Systems

Remote / Cincinnati OH

View job as Financial Analyst - DE
for Pension Benefit Guaranty Corporation [PBGC] Financial Analyst - DE

Pension Benefit Guaranty Corporation [PBGC]

Remote / Washington DC

View job as Retirement Plan Administrator - 401(k)/DC Specialist
for Altigro Pension Services, Inc. Retirement Plan Administrator - 401(k)/DC Specialist

Altigro Pension Services, Inc.

Fairfield NJ

Selected New Discussions

ADP Safe Harbor Match / Non-ACP Discretionary Match-- Allocation Conditions Allowed?

"Plan has a basic SH match to satisfy the ADP safe harbor requirements. It also has a discretionary match, which is not intended to satisfy the ACP safe harbor test. If the discretionary match imposes a 1,000 hour or last day requirement, does that blow the ADP safe harbor because it could cause an HCE who works all year to get a higher rate of match than a non-HCE who leaves during the year?"

BenefitsLink Message Boards

Was Loan Provision Needed for CARES Loans?

"Did a plan document need to have loan provisions already in place before they issued CARES loans? We have a client that issued an $80,000 loan without having a loan provision in the plan. Could we retroactively amend the plan to allow for loans?"

BenefitsLink Message Boards

DC Plan with Life Insurance Strategy: DOL PTE 92-6

"PC and wife (66/70 yrs) have $20 million in IRAs's. Already used lifetime gifting on other highly appreciated assets with a FLP many years ago. I'm told these assets are outside of his FLP.

He has said one strategy he's looking at has the following steps: [1] Set up qualified Defined Contribution (DC) plan. [2] Roll over $20 million tax-free from IRA into DC. [3] Use funds to purchase High Cash Value insurance at $2.5 million per year premium for 4 years. Per spouse. [4] After year 4, sell insurance policies to his FLP, relying on DOL PTE 92-6. My reading is that the DOL essentially allows sale of insurance policy out of insured's qualified plan. [5] PTE 92-6 seems to say that the fair market value to purchase the insurance policy is its cash surrender value. Which is far less than the tax if PC were to distribute all IRA funds.

I'm beginning to review for pitfalls/risks and asking the collective wisdom of the group if they have researched this transaction.

Q: My initial thought is that a traditional defined contribution plan has a limit of 51% insurance and max of 49% annuities. Is that correct? Therefore, under the above facts, it's doubtful a majority of funds can be used to purchase life insurance.

Q: Didn't IRS the IRS challenge welfare plans in the 2000's regarding their having a springing cash value in future years? Even if the insurance policy is purchase after year 4, this transaction seems to have similar issues. Or at least the potential issue for the IRS to raise in Tax Court.

I believe IRC 269 is the govt catchall fraud argument for any abusive transaction. Thoughts and comments appreciated."

BenefitsLink Message Boards

Press Releases

FAIR Health Elects Phyllis Borzi to Board of Directors

FAIR Health

Last Issue's Most Popular Items

New IRS Correction Rules for Retirement Plans

Carol V. Calhoun of Venable LLP, for Strafford

Rollovers as Business Start-Ups: What to Know When Financing a Business Using Your 401(k), IRA or Other Retirement Funds

Ice Miller LLP

Managing Fiduciary Responsibility Using Liability Insurance


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