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Retirement Plans Newsletter

December 14, 2021

5 New Job Opportunities 5 New Job Opportunities


[Official Guidance]

Text of PBGC Interest Rate Assumptions for Valuing Benefits in Single-Employer Plans, First Quarter 2022

"The first quarter 2022 interest assumptions will be 2.37 percent for the first 20 years following the valuation date and 2.03 percent thereafter. In comparison with the interest assumptions in effect for the fourth quarter of 2021, these interest assumptions represent no change in the select period (the period during which the select rate (the initial rate) applies), a decrease of 0.03 percent in the select rate, and a decrease of 0.08 percent in the ultimate rate (the final rate)."  MORE >>

Pension Benefit Guaranty Corporation [PBGC]

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[Guidance Overview]

Best Interest Standard of Care for Advisors, Part 77: Compliance with PTE 2020-02: Mitigation of Incentive Effects of Payout Grids

"In effect, the DOL is saying that, if one investment pays more to the firm (for example, 8%), and another pays less to the firm (e.g., 4%), and if the firm passes through a set percent of the commission to the investment professional (e.g., 80%), the firm has an arrangement that passes through its incentive to make more money to the financial professional. The question, then, is, how can the conflict be mitigated? One obvious answer it to levelize the investment professional's compensation regardless of which investment is recommended. While that should effectively mitigate the conflict, it may not be a practical 'solution.' "  MORE >>

Determining a 'Meaningful Mix' of Investment Options: Takeaways from the Hughes v. Northwestern Supreme Court Oral Argument

"Anyone hoping for a clear indication as to how the Supreme Court will rule in the Hughes v. Northwestern case will be disappointed.... The Justices spent most of their time asking factual questions specific to the Northwestern plan, which misses the larger context of the meritless claims being filed against defined contribution plans when courts apply a low pleading standard.... The biggest disappointment ... was the failure to discuss the proper standard to allow courts to dismiss meritless or implausible cases." [Hughes v. Northwestern Univ., No. 18-2569 (7th Cir. Mar. 25, 2020; oral arg. transcript Dec. 6, 2021)]  MORE >>

Euclid Specialty Managers

Transamerica Hit with Lawsuit Over Data Breach

"The proposed class action lawsuit was filed on behalf of individual participants in plans served by Transamerica who had their PII accessed by unauthorized parties after a data breach that occurred in or around June. The lawsuit says the plaintiff was not notified by Transamerica until nearly four months after Transamerica became aware of the breach." [Giannini v. Transamerica Retirement Solutions, LLC, No. 21-10282 (S.D.N.Y. complaint filed Dec. 3, 2021)]  MORE >>

PLANSPONSOR; free registration may be required

Plan Sponsors Are Getting No Answers from Excessive Fee Lawsuits

"Excessive fee lawsuit activity has ramped up with no major decisions by the courts; however, a pending decision by the U.S. Supreme Court in one case could impact the amount of activity going forward.... In short, there is a great deal of activity when it comes to ERISA excessive fee lawsuits, but very few answers." [Hughes v. Northwestern Univ., No. 18-2569 (7th Cir. Mar. 25, 2020; oral arg. transcript Dec. 6, 2021)]  MORE >>

PLANSPONSOR; free registration may be required

Supreme Court Declines to Hear 401(k) Investment Diversification Cases

"Participants in both 401(k) plans sued their respective companies and plan fiduciaries, arguing that offering parent-company stock violated ERISA's guidelines on plan menu diversification.... The debate in both cases focused on whether a DC plan's lineup as a whole was diversified or whether each option -- other than the employer's stock -- must be diversified." [Gannett Co. v. Quatrone, No. 19-1212 (4th Cir. Aug. 11, 2020; cert. pet. denied Dec. 13, 2021, S. Ct. No. 20-609); Schweitzer v. The Investment Comm. of the Phillips 66 Savings Plan, No. 18-20379 (5th Cir. May 22, 2020; cert. pet. denied Dec. 13, 2021, S. Ct. No. 20-1255)]  MORE >>

Pensions & Investments

Is PBGC Adding 'Early Warning' and 'Follow-On' to Its Toolbox for Multiemployer Plans?

"PBGC may now be using these tools in the multiemployer arena.... PBGC takes exception to newly formed multiemployer plans that jeopardize legacy plans when bargaining parties divert too many contribution dollars to them. In its 2021 Annual Report, the agency says that it is investigating seven of these cases ... Though not mentioned in the Annual Report or in the New Year's Day announcement of the FELRA settlement, PBGC's actions seem to implicate both its Early Warning policy and its Follow-on policy."  MORE >>

The Wagner Law Group

DB Plan Terminations: Some Basics

"Cost ... Encouraging lump sums to reduce cost ... Assets: Not enough or too much ... Managing the plan to termination: market effects ... Managing contributions ... Managing liabilities: hedging ... Managing to full funding in changing market conditions ... Emerging regulatory issues."  MORE >>

October Three Consulting

Five Good Reasons to Correct Retirement Plan Errors

"[1] To preserve the tax-qualified status of your plan.... [2] To correct prohibited transactions.... [3] To minimize penalties in the event of a plan audit.... [4] To ensure the saleability of your business.... [5] Because it's the right thing to do."  MORE >>

E is for ERISA

Missing the Target? Retirement Expectations and Target Date Funds

"[R]espondents systematically underestimate their long-run labor participation on average by 4.8 years ... [E]rrors in expectations compound over time, costing the median respondent 4% of total wealth, equivalent to 0.2% a year. These estimates suggest that the choice architecture of target-date funds should be modified to improve the financial adequacy of future retirees."  MORE >>

Byeong-Je An and Kunal Sachdeva, via SSRN

The Difference Between 'Settlor' and 'Fiduciary' Functions

"In deciding a plan's provisions, an employer or other plan sponsor need not ground its choices on an ERISA fiduciary's exclusive purpose of providing the plan's benefits ... to the plan's participants and their beneficiaries. Instead, a sponsor may consider a wide range of purposes and interests. That could include choosing provisions that serve an employer's business purposes. Once a plan's provisions are set, choices about how to implement those provisions often involve fiduciary choices."  MORE >>

Fiduciary News; free registration required


DCIIA Comment Letter to EBSA on Proposed Regs for Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights (PDF)

"DCIIA supports the Proposed Rule's principles-based approach and asks the Department to reconsider the proposed inclusion of specific, enumerated examples of ESG factors.... DCIIA appreciates the Department's efforts to remove barriers to considering collateral benefits but believes this could be accomplished without the tiebreaker.... DCIIA applauds the Department's changes to the proxy voting rules and requests an expansion to include separately managed accounts.... DCIIA would like to add context to the Department's economic-impact analysis."  MORE >>

Defined Contribution Institutional Investment Association [DCIIA]

Benefits in General

[Official Guidance]

For Kentucky Tornado Victims, IRS Extends 2021 Tax Filing Deadline, Other Deadlines to May 16

"Victims of this weekend's tornadoes in Kentucky will have until May 16, 2022, to file various individual and business tax returns and make tax payments.... [T]he IRS is providing this relief to taxpayers affected by storms, tornadoes and flooding that took place starting on December 10 in parts of Kentucky. Currently, relief is available to affected taxpayers who live or have a business in Caldwell, Fulton, Graves, Hopkins, Marshall, Muhlenberg, Taylor and Warren counties."  MORE >>

Internal Revenue Service [IRS]

[Guidance Overview]

Exceptional Usefulness and Quality icon Summary of 2022 Benefits-Related Cost-of-Living Adjustments (PDF)

22 pages. "The IRS, [PBGC], Social Security Administration (SSA), and [CMS] have issued 2022 cost-of-living adjustments (COLAs) for retirement, health and fringe benefit plans; Medicare; and Social Security and Supplemental Security income (SSI). Puerto Rico's Treasury Department has not yet announced 2022 limits for retirement plans qualified in Puerto Rico, but those figures are tied to U.S. limits."  MORE >>


Executive Compensation and Nonqualified Plans

Year-End Planning 2021: Items for Your Stock Comp Checklist

"[1] Should you plan for tax-law changes by Congress? ... [2] Income-shifting and multi-year planning.... [3] Withholding may not cover taxes owed.... [4] Incentive stock options.... [5] Year-end planning for pre-IPO and IPO companies.... [6] Confirm dates for exercise and vesting: 2021 or 2022?"  MORE >>

Employee Benefits Jobs

View job as Implementation Specialist
for Nova 401(k) Associates Implementation Specialist

Nova 401(k) Associates

Remote / Houston TX / Dallas TX / Scottsdale AZ

View job as Retirement Client Services Manager
for Newport Retirement Client Services Manager


Remote / Folsom CA / Chicago IL / Saint Petersburg FL / Lake Mary FL / La Crosse WI / Charlotte NC / Mobile AL / Overland Park KS / Dallas TX / West Des Moines IA / Los Angeles CA / Pittsburgh PA

View job as Sr. Actuarial Analyst
for Newport Sr. Actuarial Analyst


Chicago IL / Dallas TX

View job as Investment Consultant Analyst / Associate Consultant - Fiduciary Consulting Services
for Newport Investment Consultant Analyst / Associate Consultant - Fiduciary Consulting Services


Lake Mary FL / Saint Petersburg FL

View job as DB/DC Consultant
for Nova 401(k) Associates DB/DC Consultant

Nova 401(k) Associates

Remote / Houston TX / Dallas TX / Scottsdale AZ

Selected New Discussions

Controlled Group Arises Due to Minor Children?

"DC plan sponsored by Company A (an M.D. office). Company A is owned by Dad 75% and Son 25%. They have employees who are covered under the plan. Company B (a dental office) is owned by Son's wife 100%. This company has 2 employees. Son and wife have minor children. Do I have controlled group issues? Not sure how and if attribution plays a role in here."

BenefitsLink Message Boards

Plan Was Amended to Waive Eligibility Requirements for a Particular NHCE

"We are looking at taking on a new client for 2022. They have an existing 401k plan; non-safe harbor. In reviewing the adoption agreement and plan document, the current TPA drafted an amendment in 2021 that provided a waiver of eligibility for one specific NHCE participant. The reason being is that participant was allowed into the plan before they were eligible (not eligible until 1/1/2022) and made salary deferrals to the plan in 2021. I've never heard of this approach of a waiver for a single NHCE employee; thoughts?"

BenefitsLink Message Boards

Press Releases

Nelu Expands Into the United Kingdom and Launches Global DE&I in Benefits Certification Suite

Nelu Diversified Consulting Solutions

Prime Pensions Acquires Pension Planners Northwest

Prime Pensions

K&L Gates Adds Antitrust, Employee Benefits Partners to Washington, D.C., Office

K&L Gates

Federal Court Holds Wisconsin Business Owner in Contempt for Failing to Comply with the Court's Prior Order to Restore $53,122 to Employee Benefit Plan

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

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

Comparing the Financial Status of Baby Boom, Generation X, and Millennial Families

January 19, 2022 WEBCAST

EBRI [Employee Benefit Research Institute]

Navigating the New Rollover Reality

January 19, 2022 WEBCAST

The Retirement Advantage [TRA]

Fundamentals of Qualified Retirement Plans for 2022 - Session 3

February 3, 2022 WEBCAST


Fiduciary Investment Advice and the Evolving Retail Investor Landscape 2022

February 15, 2022 WEBCAST

PLI [Practising Law Institute]

Washington Pulse: Practical and Tactical Actions for Plan Sponsors

February 23, 2022 WEBCAST

The Retirement Advantage [TRA]

Fundamentals of Qualified Retirement Plans for 2022 - Session 4

February 24, 2022 WEBCAST


ESG Investing

April 20, 2022 WEBCAST

The Retirement Advantage [TRA]

Last Issue's Most Popular Items

Late-Filed 5500? Boy, Are You in Trouble Now! Uh, Maybe Not!

Ferenczy Benefits Law Center

December 31 Reminders for Retirement Plan Sponsors


DOL Regulatory Agenda, Fall 2021, Including Employee Benefit Items

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

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

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