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Retirement Plans Newsletter
October 28, 2021
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16 New Job Opportunities
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[Guidance Overview]
The DOL's Proposed Rule on ESG Factors and the Exercise of Shareholder Rights
"The Proposed Rule would amend the 'Investment Duties' regulation in three principal ways ... [1] A plan fiduciary acts prudently when it considers ESG factors in making investment decisions ... [2] Changes to the Tie-Breaker Rule ...
[3] Plans can now offer QDIAs with non-pecuniary objectives like ESG ... The Proposed Rule makes four noteworthy changes to the exercise of shareholder rights ... [1] Eliminating the 'No Vote' Rule ... [2] Eliminating the Special Monitoring Requirements ... [3] Eliminating the Proxy Voting Policy Safe Harbors ... [4] Eliminating the proxy voting records
requirement." MORE >>
Frost Brown Todd LLC
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[Sponsor]
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[Guidance Overview]
Proposed ERISA Regulation May Facilitate ESG in Retirement Plans
"The 2021 Proposal would change key aspects of the 2020 Regulations, in each case removing perceived barriers to consideration of ESG factors. [A chart] summarizes the most significant changes." MORE >>
Eversheds Sutherland
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[Guidance Overview]
DOL Proposes to Warm the Climate for ESG Investing
"The proposal would maintain the requirement for fiduciaries to focus on factors material to a risk-return analysis but, unlike the current rule, would make clear that this evaluation may include ESG factors -- including climate-change risks.... The proposal would lift the
restrictions on investments that incorporate nonpecuniary factors from being considered qualified default investment alternatives (QDIAs). DOL also proposes to remove the current rule's proxy-voting policy safe harbors and cumbersome written documentation requirements." MORE >>
Mercer
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Retirement Income, Inflation, and Retirement Finance
"[A chart shows that an] example DC participants' retirement income position has improved considerably over 2021, with improvements in asset values and increases interest rates offsetting the effect of inflation. Not so the DB participant, who saw the real value of his
annuity decline by the amount of inflation. What explains these results?" MORE >>
October Three Consulting
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The Good News About Retirement Income
"A lower starting withdrawal percentage is advisable largely because core investment assets -- stocks and bonds -- have performed so well so long. That means that at the very same time that investors are being urged to lower their withdrawal rates, most investors'
portfolio balances are enlarged. Because the lower starting withdrawal rate is calculated on a larger amount, the net effect for most retirees' actual spending is apt to be minimal." MORE >>
Morningstar
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Hearing Before Senate Special Committee on Aging: Building a Stronger Retirement System for All Americans
Video of Oct. 28 hearing, with testimony by: [1] Dr. John Scott, The Pew Charitable Trusts; [2] Shai Akabas, Bipartisan Policy Center; [3] Dr. Nari Rhee, University of California at Berkeley Center for Labor Research and Education; and
[4] J. Spencer Williams, Retirement Clearinghouse. MORE >>
Special Committee on Aging, U.S. Senate
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Many DB Plan Sponsors Adjusting LDI Strategies
"Defined benefit plan sponsors have positive views of the direction interest rates will take and of equity markets, but they remain wary of how a continued pandemic will impact their plans." MORE >>
PLANSPONSOR; free registration may be required
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Retirement, Mega Roth Provisions Dropped from Reconciliation Bill
"[A] series of sweeping retirement-related provisions have now all been axed.... [including] a requirement that most employers ... begin automatically enrolling their employees in IRAs or 401(k)-type plans, as well as the establishment of a new type of Section 401(k)
deferral-only arrangement; an increase in credit limitation for small employer pension plan startup costs, including for automatic contribution arrangements ... [and] provisions designed to close the so-called 'back door' Roth IRA, impose contribution limits on higher-income individuals with large account balances, and prohibit IRA investments conditioned on the account holder's status." MORE >>
American Retirement Association [ARA]
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Pension Risk Transfer Monitor, October 2021 (PDF)
"Almost a year after the US Pension Risk Transfer (PRT) market had one of the largest quarters on record, over $15 billion in Q4 20201, market volume during Q3 this year rose even higher.... [T]otal volume for Q3 [is estimated] to be over $16 billion, which would make
it the second largest quarter to date, surpassing the $8.8 billion ... during Q1 and Q2 of this year combined and more than triple of Q3 2020's sales." MORE >>
Legal & General Retirement America
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What Happens to Participants' 457(b) Deferral Elections When They Pass Away?
"[Most] forms and documents ... do not address whether a deferral election is revoked upon the participant's death ... [T]here does not appear to be any case law addressing whether the employee's death automatically revokes plan election.... [W]hat are your
choices?" MORE >>
Best Best & Krieger LLP
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[Opinion]
Trickle-Down Social Security
"Despite a modest increase in the age at which people can claim full Social Security benefits (from 65 to 67), future retirees are scheduled to collect benefits for longer than current retirees. The additional benefits paid by the failure to adjust the retirement age for
increased life expectancy accrue disproportionately to higher-income retirees.... Policymakers could better protect lower-income retirees by increasing the retirement age and devoting the resulting savings to raising payments or other supports to those in the bottom half of the income distribution." MORE >>
Urban Institute
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Benefits in General |
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[Guidance Overview]
Does Your Plan Use a Limited Scope Audit for Form 5500 Financial Reporting?
"Under SAS 136, a plan administrator will need to agree to the following conditions in its engagement letter with the auditor: [1] to provide the auditors with copies of the current plan document, [2] to provide auditors with a copy of the draft Form 5500 for
review and to reconcile inconsistencies, and [3] to discuss with their auditor any reportable findings, including a discussion of any prohibited transactions that have not been properly reported in the supplemental schedules." MORE >>
The Wagner Law Group
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Employee Benefits Jobs |
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Selected New Discussions |
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Beneficiary If No Form On File -- Biological Child vs. Several Stepchildren
"Just took over a case where they didn't have any beneficiary forms on file. A participant recently passed away. He has an ex-wife, whom he divorced before the plan ever started (so I don't believe she's a factor here). He has one biological child and several
step-children. Would his entire balance go to the biological child?"
BenefitsLink Message Boards
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TPA Missed Filing of 2019 Form 5500
"I'm a TPA. I did not file a client's 5500 that was due Jan. 15, 2021 for the 2019 plan year. (The deadline was extended because of Hurricane Sally, therefore it was due on January 15, 2021.) I'm willing to pay the $750 DFVC fee myself, but I'm coming here in
hopes that someone knows of a way I can plead my case."
BenefitsLink Message Boards
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Using Owner's Pension Plan Assets to Jointly Buy an Apartment Complex
"Client wants to purchase an apartment building. He informs me that he is in escrow to purchase, that he intends to get a loan, AND that wants to use some of his pension plan's money in order to complete the deal. Is it a prohibited transaction because he will benefit
personally? Without the plan's investment, he wouldn't be able to purchase the apartment building."
BenefitsLink Message Boards
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Press Releases |
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Anne Lester Named 2020 EBRI Lillywhite Award Recipient
EBRI [Employee Benefit Research Institute]
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Health at Scale and HealthComp Partner to Prevent Low-Value Care for Employers
Health at Scale
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Webcasts and Conferences
(Retirement Plans / Executive Compensation) |
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Looking Ahead: Three Important Plan Governance Practices for 2022
November 4, 2021 WEBCAST
Groom Law Group
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Last Issue's Most Popular Items |
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Cybersecurity Preparedness Checklist for Plan Fiduciaries (PDF)
Keightley & Ashner LLP, via Bloomberg Law
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Surviving a DOL Cybersecurity Audit (PDF)
Keightley & Ashner LLP, via Bloomberg Law
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IRS Lifts Barriers to Help Address Labor Shortage Due to COVID-19
Ogletree Deakins
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BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587.
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