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Retirement Plans Newsletter

December 22, 2021

4 New Job Opportunities 4 New Job Opportunities


[Official Guidance]

Text of EBSA Supplemental Statement on Private Equity in Defined Contribution Plan Designated Investment Alternatives

"This statement supplements the [DOL's] June 3, 2020 Information Letter regarding the use of private equity (PE) investments in designated investment alternatives made available to participants and beneficiaries in individual account plans, such as 401(k) plans, subject to [ERISA].... A plan-level fiduciary that has experience evaluating PE investments in a defined benefit pension plan to diversify investment risk may be suited to analyze these investments for a participant-directed individual account plan, particularly with the assistance of a qualified fiduciary investment adviser. The Department cautions against application of the Information Letter outside of that context."  MORE >>

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

[Guidance Overview]

DOL Rolls Over Relief for Investment Fiduciaries Into 2022

"[FAB 2021-02] provides for two extensions of relief. First, ... for the period from December 21, 2021 through January 31, 2022, the DOL will not pursue claims against investment advice fiduciaries or treat such fiduciaries as violating the applicable Prohibited Transaction rules who are working in good faith to comply with the 'Impartial Conduct Standards'. Second, the DOL will not enforce the documentation disclosure requirement for rollovers ... through June 30, 2022."  MORE >>


[Guidance Overview]

ARPA Final Rule Expected in January

"[In] its recent Statement of Regulatory and Deregulatory Priorities ... the PBGC reported that it expects to publish in January 2022 a final rule on multiemployer pension relief for troubled plans, known as 'special financial assistance.' ... [T]roubled multiemployer plans and other interested parties are watching carefully to see whether PBGC's final rule changes some of the more troubling provisions in its interim final rule. Perhaps the most likely provision to change is the definition of permissible investments."  MORE >>


[Guidance Overview]

ESOP Diversification and Plan Sponsor Responsibilities

"Internal Revenue Code Section 401(a)(28) allows employees to diversify a portion of their stock once they meet certain eligibility requirements. There are specific age and service requirements outlined by the IRS to determine who is a Qualified Participant, however your plan may allow for rules that are less restrictive."  MORE >>

Blue Ridge ESOP Associates

PBGC Approves First Special Financial Assistance Application

"The Local 138 Pension Plan (Local 138) based in Baldwin, N.Y., which covers 1,723 participants in the transportation industry, will receive $112.6 million in special financial assistance, including interest to the expected date of payment to the plan. The plan had been projected to run out of money in 2022."  MORE >>

Pension Benefit Guaranty Corporation [PBGC]

DOL Warns Investment Advisers About Conflicts Lurking in Payout Grids

"The [DOL] has expressed concerns about the escalating payout grids for dually registered advisors -- especially the way the grids might encourage financial advisors to push one product over another.... Firms should be 'very careful about structures that disproportionately increase compensation at specified thresholds,' the DOL said. This type of compensation can undermine the best interest standard and create incentives for investment professionals to make recommendations based on their own financial interest, rather than on the retirement investor's interest."  MORE >>

Financial Advisor

Retirement Rebound: Financial Steps for Going Back to Work

"A 2018 survey by Rand Corp. found that 40 percent of American workers 65 and older who were employed indicated that they had previously retired at some point. The survey, which dubs the trend 'unretirement,' also found that nearly half (46 percent) of retirees age 50 and older would return to work under the right conditions."  MORE >>


The Effect of Different Savings Mechanisms in Pension System Design

"[S]ubjects overconsume at the early stages across all systems. However, subjects save more when a voluntary but binding savings mechanism is available. In contrast, obligatory savings do not induce people to save more overall because subjects react by reducing voluntary savings."  MORE >>

Martin Angerer, Michael Hanke, Ekaterina Shakina and Wiebke Szymczak, via SSRN

Auto-Enrollment Retirement Plans in OregonSaves

"Within the small- to mid-sized firms served by OregonSaves, estimated average after-tax earnings are low ($2,365 per month) and turnover rates are high (38.2% per year). Younger employees and employees in larger firms have been less likely to opt out of the OregonSaves program, but participation rates fall over time.... As of April 2020, 67,731 accounts had positive account balances ... The average balance was $754[.]"  MORE >>

Michigan Retirement and Disability Research Center, Univ. of Michigan

Meet the Architect of the 401(k) Plan

"[Ted] Benna has developed an alternative savings plan for small employers that want to help their employees save for retirement but find traditional 401(k) plans costly and cumbersome to administer.... [His] recommendation is to require small employers that don't have a 401(k) plan to offer a savings plan for their employees that has payroll deduction and auto-enroll them as well."  MORE >>


Don't Let Your Retirement Account Be a Cybersecurity Risk

"[1] Even if your account is automatically set up through auto enrollment, be sure to register your account and create a strong password. [2] Check your account regularly.... [3] Avoid using public Wi-Fi when it comes to banking and personal information and set up a VPN to protect your personal information. [4] Set up two-factor authentication for an extra layer of security.... [5] If you notice that your account has been hacked, contact your record keeper and HR department, and file a police report immediately."  MORE >>


Benefits in General

[Official Guidance]

Hurricane Ida Tax Relief Extended to February 15 for Part or All of Six Qualifying States (PDF)

"Victims of Hurricane Ida in six states now have until Feb. 15, 2022, extended from Jan. 3, to file various individual and business tax returns and make tax payments ... The updated relief covers the entire states of Louisiana and Mississippi, as well as parts of New York, New Jersey, Connecticut and Pennsylvania.... The updated relief postpones various tax filing and payment deadlines that occurred starting on dates that vary by state: [1] Aug. 26, 2021 for Louisiana, [2] Aug. 28, 2021 for Mississippi, [3] Aug. 31, 2021 for Pennsylvania and [4] Sept. 1, 2021 for New York, New Jersey and Connecticut....[A]ffected individuals and businesses will have until Feb. 15, 2022, to file returns and pay any taxes that were originally due during this period."  MORE >>

Internal Revenue Service [IRS]

Employee Benefits Jobs

View job as DB / DC Plan Consultant
for Small NY Actuarial TPA Firm DB / DC Plan Consultant

Small NY Actuarial TPA Firm

Remote / CT / NJ / NY

View job as DB / DC Plan Consultant
for Small NY Actuarial TPA Firm

View job as Plan Administrator
for Southern Pension Services Plan Administrator

Southern Pension Services

Remote / Tampa FL

View job as Plan Administrator
for Southern Pension Services

View job as Retirement Plan Consultant
for Long Island Employee Benefits Group Ltd. Retirement Plan Consultant

Long Island Employee Benefits Group Ltd.

Remote / Huntington NY

View job as Retirement Plan Consultant
for Long Island Employee Benefits Group Ltd.

View job as Regional Director
for Employee Benefits Security Administration [EBSA] Regional Director

Employee Benefits Security Administration [EBSA]

Remote / Kansas City MO

Selected New Discussions

Distribution of Deferrals Under the Permissible Withdrawal Rules -- Count in ADP Test?

"If a participant opts out after auto enroll and deferrals are distributed under the permissible withdrawal rules, are those contributions included in the ADP test?"

BenefitsLink Message Boards

Confused About Correction of Excess 2020 Deferrals

"I am confused regarding correcting an excess 2020 deferral post-April 15. [1] Does being taxable in the year of deferral imply issuing a 2020 1099-R for the excess (if so, what would be the codes?), or instead making sure the 2020 return includes the excess in wages? [2] Do we wait and distribute the excess until otherwise distributable or distribute currently with earnings? If distributed currently, is the correct code E?"

BenefitsLink Message Boards

In-Service Roth Rollovers -- 411(d)(6) Protected Benefit?

"Plan allows for in-plan Roth rollovers at any time as long as the funds are 100% vested. Is this a protected benefit?"

BenefitsLink Message Boards

Participant Wants COVID Distribution

"Has the window for a COVID distribution totally closed?"

BenefitsLink Message Boards

Client Never Should Have Filed 5500s

"A client brought us a one participant plan that filed 4 years worth of 5500s electronically late (they received bad advice that they could transmit them electronically and then do DFVCP instead of properly mailing them in). When I looked at the asset amounts, the plan never had over $250,000 in assets. This money was all cashed out this year and a final 5500 is due for 2021 regardless of the mistaken 'late' filings. My question is, to try to help this client, do we electronically file the final 5500 and then send the IRS a letter that they never should have filed in the first place until now, and here is the final, or should I just mail the final 5500 to the IRS with an explaining letter?"

BenefitsLink Message Boards

Press Releases

TRA Completes Acquisition of The Law Offices of R. David Danziger, P.C.

The Retirement Advantage [TRA]

Last Issue's Most Popular Items

Annuities vs. Qualified Plan Periodic Payments: What Is the Difference and Which Is Right for Me?


A Changing Workplace: Predictions for 2022


Comment Letter from 23 States to DOL Opposing Proposed Regs for ESG Investments in ERISA Plans (PDF)

Officials of the State of Utah and 22 other states

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

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