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Retirement Plans Newsletter

November 15, 2021

6 New Job Opportunities 6 New Job Opportunities


[Guidance Overview]

DOL's ESG Proposed Rule: A Retirement Committee Perspective

"The Proposal's most fundamental change is that a fiduciary is no longer constrained by the pecuniary factor limitation and its corresponding documentation requirement ... [A] fiduciary is free to consider ESG factors when crafting a plan's menu of investment options and when selecting a QDIA. Additionally, a retirement committee seeking to apply the tie-breaker test is no longer subject to an impossibly narrow standard."  MORE >>


[Guidance Overview]

More ESGcitement from the DOL: New Proposed Investment/Proxy ERISA Regs (PDF)

15 pages. "Some may be reading the Proposed Regulation's operative language as requiring fiduciaries to consider certain ESG and ESG-type factors when making their investment and investment-related decisions.... Competing policy objectives may well be at play here, with those favoring a more expansive use of ESG factors to advance a climate-based agenda confronting the very real legal safeguards imposed by ERISA in connection with Plans' economic returns."  MORE >>

Dechert LLP

[Guidance Overview]

A Practical Description of the Voluntary Fiduciary Correction Program (PDF)

9 pages. "This practice note sets forth the specific violations covered by the VFCP, methods for correcting violations, including calculation of plan restitution amounts, and describes the VFCP application process."  MORE >>

Fox Rothschild LLP, via LexisNexis Practical Guidance

Self-Directed 401(k) Investors Stay the Course in Q3, See Balances Increase 12.8% Year-Over-Year

"The third quarter SDBA Indicators Report overall showed steady investing behavior among participants. Trading volumes were similar to trades from one year ago and slightly lower than last quarter at an average of 13.1 trades per account compared to 13.8 in Q2. Participant holdings also remained similar to last quarter, with a slight increase in cash holdings."  MORE >>

Charles Schwab

Retirement Measures Cut from Legislation, But Still Priority

"An idea that experts said would have reshaped the country's retirement landscape by requiring employers that don't offer retirement plans to automatically enroll employees in individual retirement accounts or 401(k)-type plans has been stripped out of Democrats' Build Back Better Act ... [R]etirement industry members are still hopeful another major retirement security package, dubbed SECURE Act 2.0, with dozens of provisions to help workers increase retirement savings, gets passed this session."  MORE >>

Pensions & Investments

Why Don't More 401(k) Plans Have Lifetime Income Options?

"[Here are some recent] changes ... [that] encourage annuity options[:] ... [1] New fiduciary safe harbor for annuity purchases ... [2] Annuity contract portability ... [3] Annuities with deferred start dates ... [4] Changes in the marketplace ... Lifetime annuity projections ... are likely to result in participant questions about whether their plans can provide annuities."  MORE >>

Carol Buckmann, via RPA Convergence


Inflation, Retirement Saving and Retirement Income

"[A]nnuitization in a DC plan/for a DC participant, unless what is involved is a (very expensive and hard to find) inflation-protected annuity, triggers inflation risk.... In the current context ... with the possibility of significant future inflation, annuitization is especially exposed to this risk. That possibility should cause us to do two things: rethink how we communicate to participants about DC retirement income and retirement income risk; and consider (e.g., as a fund menu option) investments that are explicitly designed to hedge that risk."  MORE >>

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


Rethinking Costs in 401(k) Litigation

"[It] can be argued that a fiduciary's duty of prudence and the duty to avoid unnecessary costs requires that a fiduciary factor in an investment's implicit costs.... Many expect SCOTUS to uphold the notice pleading rule generally applied in the courts. If so, it would make sense that the Court will also rule that plan sponsors, rather than plan participants, have the burden of proof with regard to causation, or the prudence of their plan's investment options."  MORE >>

The Prudent Investment Fiduciary Rules

Benefits in General

Steps to a Smooth Employee Benefit Plan Audit

"[1] Take a hard look at your auditors ... [2] Invest time and effort to prepare ... [3] Discuss the audit plan ... [4] Be available and involved during your audit ... [5] Seek actionable feedback from the audit report ... [6] Keep your auditors informed all year."  MORE >>

Clark Schaefer Hackett

Employee Benefits Jobs

View job as Conversions Specialist
for BlueStar Retirement Services, Inc. Conversions Specialist

BlueStar Retirement Services, Inc.


View job as Conversions Specialist
for BlueStar Retirement Services, Inc.

View job as Retirement Plan Administrator
for Compensation Planning Inc. Retirement Plan Administrator

Compensation Planning Inc.

Remote / Warwick RI

View job as Sales Executive
for Custodia Financial, LLC Sales Executive

Custodia Financial, LLC

Remote / Dallas TX

View job as Sales Development Representative
for Custodia Financial, LLC Sales Development Representative

Custodia Financial, LLC

Dallas TX

View job as 401(k) Administrator [TESTING]
for Creeksong TPA, Inc. [TESTING] 401(k) Administrator [TESTING]

Creeksong TPA, Inc. [TESTING]

Remote / Whittier NC

View job as Retirement Plan Benefits Consultant
for Compass Retirement Consulting Group Retirement Plan Benefits Consultant

Compass Retirement Consulting Group

Remote / Stratham NH

Selected New Discussions

401(a)(17) Limit for HCE Who Terminates After First Quarter of Plan Year

"HCE terminates 3/31 of a calendar plan year. The plan does not terminate or have a short plan year. HCE earns $300,000 for that plan year. For purposes of benefit calculations, for 2021 for example, would the comp be limited to $290,000, or instead be limited to $290,000/4 ($72,500)?"

BenefitsLink Message Boards

Limit on 401(k) Deferrals in Short Plan Year of Termination

"Generally when a plan terminates, testing is done for the short plan year. A plan is terminating in November. Will the 401k limit be the affected for the participants?"

BenefitsLink Message Boards

How to Handle RMD for Non-Owner Who Terminated and Was Rehired Part-Time?

"I have a 401(k) plan whereby a non-owner participant who is older than 70-1/2 terminated on 11/02/2020. Her First Distribution Calendar Year was 2020. She was rehired on 02/26/2021 and has been working part-time. Does she need to take a RMD for 2021 and future years?"

BenefitsLink Message Boards

Press Releases

The Cerrado Group Announces AimPoint Pension as Newest Member Firm

The Cerrado Group

Faced with Rising Taxes and Ongoing Market Uncertainty, Pre-Retirees Lean on New Investment Options to Maximize Savings Potential

Lincoln Financial Group

Last Issue's Most Popular Items

Infrastructure Legislation Includes Employee Benefits Provisions

Thomson Reuters Practical Law

Establishing a Solo 401(k) Under the New Rules

The Retirement Advantage

KPMG Swaps 401(k) Match for Automatic Employer Contributions, Expands Parental Leave, and Reduces Employee Healthcare Premiums

HR Dive

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

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