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Retirement Plans Newsletter

November 16, 2021


[Official Guidance]

Text of OPM Notice: Civil Service Retirement System and Federal Employees' Retirement System: Same-Sex Spouses of Deceased Federal Employees or Annuitants Whose Marriages Lasted Less Than Nine Months

"Same-sex spouses of deceased federal employees or annuitants whose spouse died prior to the time the 9-month marriage requirement could be satisfied may have been prevented or frustrated from satisfying this eligibility requirement as a result of provisions enacted under the Defense of Marriage Act (DOMA) or state laws prohibiting same sex marriages ... [T]his notice provides information about when, and under what circumstances, OPM will deem the 9-month marriage requirement satisfied, notwithstanding the actual duration of the marriage, to provide affected applicants with benefits they could have obtained had they been permitted to marry earlier in their states of residence."  MORE >>

U.S. Office of Personnel Management [OPM]

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[Guidance Overview]

Reminder: No Rush to Adopt Retirement Plans, ESOPs Included, by End of 2021 for Tax Deduction Purposes

"[E]ffective December 31, 2019, Section 201 of the SECURE Act extended that deadline from the end of the applicable tax year to the due date, including extensions, of the plan sponsor's income tax return for the applicable tax year. Accordingly, under the SECURE Act, if a plan is adopted by the extended due date, it will be treated as having been adopted as of the last day of that year."  MORE >>

Morgan Lewis

[Guidance Overview]

Best Interest Standard of Care for Advisors, Part 73: IRA 'Rollovers' Are Covered by the Rule, But What Is an IRA?

"While it may be unexpected to learn that a recommendation to transfer an IRA is a 'rollover recommendation' subject to the fiduciary definition and prohibited transaction rules, it is even more unexpected to learn that an IRA is more than an IRA. This post discusses the many meanings of 'IRA' for purposes of the DOL's new guidance and the requirement to provide retirement investors with a written statement of why the rollover recommendation is in their best interest."  MORE >>

PBGC Releases FY 2021 Annual Report

"The Multiemployer Insurance Program's positive net position of $481 million at the end of FY 2021 is in sharp contrast to the agency's deep deficit of $63.7 billion at the end of FY 2020, a dramatic improvement of $64.2 billion. The agency's Multiemployer Insurance Program -- which was expected to run out of money in FY 2026 -- is now likely to remain solvent for more than thirty years, due to the enactment of the American Rescue Plan Act of 2021 (ARP). PBGC's Single-Employer Program remains financially healthy with a positive net position of $30.9 billion at the end of FY 2021, compared to $15.5 billion at the end of FY 2020, an improvement of $15.4 billion." [Full text of the 157-page 2021 Annual Report is available here.]  MORE >>

Pension Benefit Guaranty Corporation [PBGC]

Proposal Would Revamp Social Security's Windfall Elimination Provision for Federal Retirees

"[The Equal Treatment of Public Servants Act (HR 5834)] would replace a provision that reduces Social Security benefits for federal, state and local agency employees who spent time in the private sector with a new formula that accounts for their time outside of government, and provide rebates for current retirees."  MORE >>

Government Executive

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

"[Recent changes that encourage annuity options include:] [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." [Editor's note: This article appeared in yesterday's newsletter with incorrect author information. We regret the error!]  MORE >>

Carol Buckmann, via RPA Convergence

Overestimating Liquidity Needs Can Undercut the Return Potential of Pension Plans

"While each plan sponsor requires unique investment solutions, all plans would be well served by actively considering supply and demand curve dynamics as they manage their liquidity needs. Targeting a liquidity supply to liquidity demand ratio of 2x--3x can help ensure a conservative portfolio profile that is well suited to tolerating periods of market stress."  MORE >>

Cambridge Associates

Competitive Pricing Rate for Pension Risk Transfer Drops in October

"During October, the average estimated cost to transfer retiree pension risk to an insurer decreased from 102.7% of a plan's total liabilities to 102.5% of those liabilities.... [T]he average estimated retiree PRT cost for the month is now 2.5% more than those plans' retiree accumulated benefit obligation (ABO)."  MORE >>



Excessive Fee Lawsuits Without Excessive Fees: The Case of the $30 Recordkeeping Fee

"The complaint alleges that the Kroger 401k Plan had a $30 recordkeeping [fee], which they claim is 50% too high, but in reality is lower than nearly every plan in America today. The case shows how the Supreme Court needs to step in and halt the ability of the plaintiffs' bar to impose improper liability on the fiduciaries of America's retirement plans, absent legitimate proof of real fiduciary imprudence and harm to participants. If the Kroger plan can be sued with a low recordkeeping fee, then every plan sponsor in America is at risk of being sued, and ERISA is no longer the fiduciary law that Congress intended." [Sigetich v. The Kroger Co., No. 21-0697 (S.D. Ohio complaint filed Nov. 5, 2021)]  MORE >>

Euclid Specialty Managers

Benefits in General

[Official Guidance]

More California Wildfire Relief from IRS: Deadlines Further Extended to Jan. 3 for Certain Areas

"Wildfire victims in parts of California now have until January 3, 2022, to file various individual and business tax returns and make tax payments ... Under relief provided in August, these extensions were generally due to run out on November 15.... [T]he IRS is now providing more time to any area of California designated by FEMA for either individual or public assistance. Currently, this includes Lassen, Nevada, Placer, Plumas, Tehama and Trinity counties."  MORE >>

Internal Revenue Service [IRS]

[Official Guidance]

Test of IRS Notice 2021-63: Temporary 100% Deduction Applies to Meal Portion of 2021 and 2022 Per Diem Rate or Allowance (PDF)

"This notice provides guidance regarding the temporary 100-percent deduction for expenses that are paid or incurred after December 31, 2020, and before January 1, 2023, for food or beverages provided by a restaurant for purposes of Section 274(n)(2)(D) of the Internal Revenue Code. In particular, the notice sets forth a special rule for applying the temporary 100-percent deduction to the meal portion of a per diem rate or allowance."  MORE >>

Internal Revenue Service [IRS]

[Guidance Overview]

Upcoming Deadline icon Year-End Considerations for Employer-Sponsored Retirement and Health Plans

"This client alert provides insight to employers and plan sponsors on the impact and implications associated with new health and welfare and retirement benefits legislation and guidance, including the CARES Act, SECURE Act, ARPA COBRA tax credits, CAA No Surprises Act, required qualified retirement plan amendments, updates to the EPCRS, and more."  MORE >>

Troutman Pepper

Selected New Discussions

Shutting Down a Solo 401(k) -- 5500-EZ Question

"My account was closed and all assets were dispersed earlier this year from my Solo 401k plan. Would the 5500-EZ need to be filed within 7 months from the month of full distribution and account closure or can I file the 5500-EZ by July 31, 2022 if I'm on a calendar year schedule? Does any of this depend on when the 1099-R is received?"

BenefitsLink Message Boards

Plan Terminated in 2018 But Still Has Assets -- Document Needs Restatement?

"Plan terminated in 2018. Owner still has assets and continues to file Form 5500, including life insurance. The plan still needs to be restated, correct?"

BenefitsLink Message Boards

Partial Plan Termination Means Full Vesting for Two Participants Who Quit Shortly After Mass Termination?

"Client has a profit sharing plan (non-401k). He lets about 15 people go, which results in over 20% of the participants being terminated. Then two more quit within two weeks of the others being let go. The question is about the two who voluntarily quit. Are they also 100% vested or not? I have no idea if they were encouraged to quit or not."

BenefitsLink Message Boards

Press Releases

Portfolio Evaluations Welcomes New Senior Fiduciary Consultant to the Team

Portfolio Evaluations, Inc.

Riskalyze Integrates with Dynamic Retirement Planner Income Lab


Fidelity Investments® and Paylocity Team Up to Provide Integrated Payroll Capabilities for Fidelity Advantage 401(k) Clients

Fidelity Investments

Transamerica and FuturePlan Expand Retirement Plan Access with Innovative New Pooled Plan Solution


Webcasts and Conferences
(Retirement Plans / Executive Compensation)

It’s Not Too Late! What Employers Need to Do With Their Retirement Plans Before Year End

November 23, 2021 WEBCAST

Groom Law Group

The Road to Fiduciary Excellence: Learn, Grow, and Differentiate in an Evolving Financial Services Landscape.

December 1, 2021 WEBCAST

Broadridge Financial Solutions, Inc.


January 15, 2022 WEBCAST

NIPA [National Institute of Pension Administrators]

Last Issue's Most Popular Items

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

Fox Rothschild LLP, via LexisNexis Practical Guidance

DOL's ESG Proposed Rule: A Retirement Committee Perspective


Retirement Measures Cut from Legislation, But Still Priority

Pensions & Investments

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

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