"The second quarter 2022 interest assumptions will be 2.40 percent for the first 20 years following the valuation date and 2.12 percent thereafter. In comparison with the interest assumptions in effect for the first quarter of 2022, these interest assumptions represent no change in the select period (the period during which the select rate (the initial rate) applies), an increase of 0.03 percent in the select rate, and an increase of 0.09 percent in the ultimate rate (the final rate)."  MORE >>

"[Compliance Assistance Release 2022-01] implies that [DOL] will presume that fiduciaries making cryptocurrencies available have acted imprudently.... DOL seems to indicate that fiduciaries may have an obligation to prudently select and monitor cryptocurrencies offered through a bona fide brokerage window. This is important as the implications of DOL's position may extend beyond cryptocurrencies."  MORE >>

"Given the agency pronouncements and the executive order, it is very difficult to justify cryptocurrency as a prudent investment at this time.... The SEC has approved a cryptocurrency futures fund, but it has been asked to approve direct ETF cryptocurrency funds, and has not yet done so. If the SEC does approve some ETF cryptocurrency funds, they will have professional management and pooled investments, and there will be a formal trading platform. The DOL could also change its position on self-directed brokerage accounts. If either of these changes happens, or agencies begin to regulate the market, the legal and risk scenarios may change."  MORE >>

"Any fiduciaries that make these investments available in their plans should expect questioning surrounding the prudent evaluation process that was deployed (hint -- it'll be difficult, if not impossible, to present a defensible case, especially in light of the latest guidance)."  MORE >>

"[F]rom the DOL's perspective, monitoring is not generally required. But, if a complex or risky investment is recommended to a retirement investor, and the retirement investor lacks the ability to monitor the investment without help, 'the advice fiduciary should clearly explain the need for monitoring to the investor when making the recommendation.' However, the investment professional and financial institution do not need to provide those monitoring services."  MORE >>

"[1] Designate someone at the Plan Sponsor as being in-charge and responsible for the audit.... [2] Provide minutes from meetings plan oversight committee.... [3] Keep a summary list of key plan amendments and changes during the year.... [4] Provide your audit firm with a list of key subsequent events occurring after the end of the plan year.... [5] Were there any plan testing failures? ... [6] Has there been any correspondence from the [DOL] or IRS? ... [7] Have there been changes in key personnel working with the plan? ... [8] Were there any changes in the TPA, custodian, recordkeeper, or payroll provider during the year under audit?"  MORE >>

"[T]he court's reasoning in dismissing [the claims against Partners Healthcare] is unique as compared to courts that have dismissed other actuarial equivalence claims on different grounds ... Unlike the Partners ruling, the CITGO court stated that 'it cannot possibly be the case that ERISA's actuarial equivalence requirements allow the use of unreasonable mortality assumptions.' " [Belknap v. Partners Healthcare System, Inc., No. 19-11437 (D. Mass. Mar. 4, 2022); Urlaub v. Citgo Petroleum Corp., No. 21-4133 (N.D. Ill. Feb. 22, 2022)]  MORE >>

"The court then found that the Pension Fund reasonably interpreted its terms to determine that Helgemo's post-retirement work fell within the same industry or the same trade or craft. The pension plan does not define 'industry,' but applying the [DOL's] definition of industry to mean 'the business activities of the types engaged in by any employers maintaining the plan,' it was reasonable for the Fund to find that both employers engaged in Great Lakes marine work or work in the maritime industry." [Helgemo v. Operating Engineers Loc. 324 Pension Fund, No. 21-2951 (6th Cir. Mar. 7, 2022; unpub.)]  MORE >>

"On average, frozen pension plans held above 56% of their assets in debt and cash investments versus less than 50% for sponsors of open plans.... [A]verage allocations to public equities declined by roughly 14 percentage points since 2009, while allocations to debt increased by almost 16%.... While larger plans allocated 9.5% to alternative investments, smaller plans only hold around 3.4% of their portfolios in these investment vehicles."  MORE >>

"A four-year cushion should be enough to help you manage your risk in most bear markets.... [F]rom the 1960s through 2021, the average peak-to-peak recovery time for a diversified index of stocks in bear markets was about three and a half years.... Consider the following steps to minimize the impact of a down market on your retirement portfolio: [1] Know how much you can spend ... [2] Look for ways to reduce your spending ... [3] Look for other cash solutions ... [4] If you must tap your savings, be strategic."  MORE >>

"The Road Carriers Local 707 Pension Plan in Hempstead, N.Y., ... which began cutting benefits after becoming insolvent in 2017, notified its members on February 24 that it had received the grant ... [PBGC] paid the plan more than $812 million, including interest.... More than 90 percent of the plan's retirees have been receiving reduced benefits since the plan became insolvent."  MORE >>

"[T]he plan sponsor must acknowledge responsibility to the auditor in writing for the administration of the plan ... [P]lan sponsors may need to spend more time preparing for and ensuring that they fully understand their responsibilities before an audit. Completion of Form 5500 also must occur earlier than in past years so that the auditor has adequate time to review it before the audit.... [T]he audit report is likely to be lengthier than in past years."  MORE >>