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Retirement Plans Newsletter

January 24, 2022

7 New Job Opportunities 7 New Job Opportunities


[Guidance Overview]

DOL Updates Form 5500 for PEPs and MEPs; No Decision Yet on Group of Plan Issues

"[T]he Final Rule does not include a finalized Schedule MEP, which the Final Rule implies will be published in advance of the 2022 Form 5500 filing deadline. Additionally, the Final Rule does not directly address Form 5500 filings for 'groups of plans' (GoPs, referred to in the NPRM as 'defined contribution groups' or DCGs), which were discussed at length in the NPRM."  MORE >>

Morgan Lewis

Exceptional Usefulness and Quality icon Supreme Court Opinion: Seventh Circuit Erred in Relying on Participants' Ultimate Choice Over Their Investments to Excuse Allegedly Imprudent Decisions by Plan Fiduciaries (PDF)

"Petitioners claim that respondents violated their duty of prudence by, among other things, offering needlessly expensive investment options and paying excessive recordkeeping fees. The Court of Appeals for the Seventh Circuit held that petitioners' allegations fail as a matter of law, in part based on the court's determination that petitioners' preferred type of low-cost investments were available as plan options. In the court's view, this eliminated any concerns that other plan options were imprudent. That reasoning was flawed. Such a categorical rule is inconsistent with the context-specific inquiry that ERISA requires and fails to take into account respondents' duty to monitor all plan investments and remove any imprudent ones.... Accordingly, we vacate the judgment below and remand the case for reconsideration of petitioners' allegations." [Hughes v. Northwestern Univ., No. 19-1401 (S. Ct. Jan. 24, 2022)]  MORE >>

Supreme Court of the United States

Northwestern University Set for Second Act in Retirement Plan Fracas

"Northwestern University employees who lost their challenge against retirement plan fees persuaded the Supreme Court ... to grant them another round of litigation. At just six pages in length, the decision is short, finding that the Seventh Circuit put too high a value on the fact that retirement plan participants had choice over their investments." [Hughes v. Northwestern Univ., No. 19-1401 (S. Ct. Jan. 24, 2022)]  MORE >>

Courthouse News Service

New Decision Sends Excessive Fee Suit to Arbitration

"[F]ederal courts dealing with motions to compel arbitration of these disputes have issued inconsistent decisions on the requirements to force arbitration of ERISA fiduciary breach claims and class action waivers. A decision just issued by a federal district court judge in Florida has upheld a plan's mandatory arbitration policy and highlights the importance of adding plan language setting out a plan's mandatory arbitration policy in a plan amendment." [Holmes v. Baptist Health South Florida Inc., No. 21-22986 (S.D. Fla. Jan. 20, 2022)]  MORE >>

Cohen & Buckmann, P.C.

Arbitration of ERISA Claims, Part 2: Courts Continue to Grapple with Competing Considerations (PDF)

"[T]he Seventh Circuit ... reasoning differs slightly from the lower court in at least one significant respect that is supportive of the idea that ERISA claims can be arbitrated. But in other respects, the Seventh Circuit's decision points to some possible limits on what plan sponsors may require be arbitrated. The upshot is continued uncertainty that plan sponsors will have to navigate to the extent they wish to require arbitration of ERISA claims." [Smith v. Bd. of Directors of Triad Mfg., Inc., No. 20-2708 (7th Cir. Sept. 10, 2021)]  MORE >>

Jenner & Block, via Employee Relations Law Journal

Competitive Pricing Rate for Pension Risk Transfer Drops in December

"During December, the estimated cost to transfer retiree pension risk to an insurer in a competitive bidding process decreased from 99.9% of a plan's total liabilities to 99.3% of those liabilities.... [T]he average annuity purchase costs across all insurers also decreased, from 103.2% to 102.8%."  MORE >>


Texas Teacher Pension System Signals Continued Interest in Alternative Assets

"Pension funds ... have spent the last decade seeking out higher investment yields from alternative investments like private equity in response to stagnating returns from more traditional investments. Recently a few funds have started to experiment with even more non-traditional vehicles such as cryptocurrencies and NFTs to improve investment results."  MORE >>

Reason Foundation

DOL Letter, Intel Ruling Pave Way for Private Equity in DC Plans

"While private equity has long been a part of defined benefit plan investment portfolios, DC plan sponsors have historically steered clear of incorporating alternative assets in their plans due to litigation concerns and structural issues such as liquidity and valuation needs."  MORE >>

Pensions & Investments

Will Required Minimum Distributions Exhaust My Savings and Leave Me in Penury?

"The worst decade for balanced fund returns in the US was located, but even with this bad start the crudest sort of balanced portfolio could still be made to sustain income to age 101.... In the 20th century US, the analyses find a 30/70 allocation to be inferior to a 60/40 allocation when the goal is to sustain inflation-adjusted income for as long as possible ... [T]wo centuries of global market history indicate that exhaustion of tax-sheltered retirement savings before the age of 100 is unlikely to occur for retirees who model their asset mix after those seen in Target Date funds."  MORE >>

Edward F. McQuarrie, via SSRN

Benefits in General

Preparing for New Employee Benefit Plans Audit Standards

"Determine whether the plan qualifies for an ERISA Section 103(a)(c)(3) audit.... Be prepared for additional information requests.... Be open to additional audit feedback for ways to strengthen your plan."  MORE >>

Clark Schaefer Hackett

Top Employee Benefit Trends for 2022 (PDF)

"[1] More ESG (environment, social and governance) investment options in workplace savings plans.... [2] Addition of retirement income options as a part of a workplace savings plans.... [3] 'Dependent-related benefits' that provide a range of caregiving support, spanning from daycare to elder care.... [4] Helping employees create an emergency savings fund to address financial emergencies.... [5] Student debt repayment options."  MORE >>


Employee Benefits Jobs

View job as Member Services Supervisor
for DC Retirement Board Member Services Supervisor

DC Retirement Board

Remote / Washington DC

View job as Member Services Supervisor
for DC Retirement Board

View job as Pension Administrator
for Actuaries Unlimited, Inc. Pension Administrator

Actuaries Unlimited, Inc.

Remote / Los Angeles CA

View job as Pension Administrator
for Actuaries Unlimited, Inc.

View job as Plan Administrator
for NFP Corp Plan Administrator

NFP Corp

Appleton WI

View job as Pension Defined Benefit Plan Administrator (Entry Level)
for MGKS Pension Defined Benefit Plan Administrator (Entry Level)


Remote / Phoenix AZ

View job as DC Administrator with a Life!
for Nova 401(k) Associates DC Administrator with a Life!

Nova 401(k) Associates

Remote / Houston TX / Dallas TX / Scottsdale AZ

View job as MEP/PEP Relationship Manager
for Nova 401(k) Associates MEP/PEP Relationship Manager

Nova 401(k) Associates

Remote / Houston TX / Dallas TX / Scottsdale AZ

View job as Client Transition Supervisor
for Alerus Client Transition Supervisor



Selected New Discussions

Plan Can Permit 100% QJSA But Not 50% QJSA?

"The requirement is that a QJSA must provide a spousal benefit of 50% to 100% of the participant's benefit. Most plans allow the participant to elect a 50%, 75% or 100% QJSA. A company wants to amend its plan to make the 100% QJSA mandatory unless spousal consent is obtained. While this clearly meets the IRC QJSA spousal consent requirements, doesn't this raise other plan concerns? For example, the plan participant, by being forced to elect the 100% QJSA, will be receiving a significantly reduced annual benefit. Is this problematic?"

BenefitsLink Message Boards

Nonprofit Employer Trying to Choose New Plan: 401(k) vs. 403(b)

"Client is a non-profit organization with a 401(k) plan. I know they could have either type of plan: 403b or 401k.They want a nutshell reason why a 401k is better than a 403b or/an explanation of the primary differences in the two. Does anybody have a concise answer or opinion on this. They don't have many participants yet."

BenefitsLink Message Boards

Exclusions from Compensation in Plan Document

"Generally when we put in exclusions from compensation in the document we state specific items to be excluded. I have a client that basically wants the document to state that compensation excludes 'All Non-Base Compensation.' Would this type of generalized exclusion be acceptable to the IRS? The software would support it, under the 'Other' exclusion option."

BenefitsLink Message Boards

Press Releases

TriNet Teams with Empower to Provide an Industry-leading TriNet 401(k) Plan for Clients

TriNet Group

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

The New Alphabet Soup of Plan Design: What Are MEPS, PEPS, & DCGS & Why Should I Care?

February 17, 2022 WEBCAST

Boutwell Fay LLP

Assumed Rates of Return and Discount Rates in a Low-Yield Market

February 23, 2022 WEBCAST

Conference of Consulting Actuaries

Last Issue's Most Popular Items

New Audit Responsibilities for Plan Sponsors Take Effect

Society for Human Resource Management [SHRM]; membership may be required to view article

Class Certified in Lawsuit by 401(k) Plan Trustees Against John Hancock


Not Spending Enough in Retirement? Now May Be Good Time to Spend More

Ken Steiner, FSA Retired

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

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