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Retirement Plans Newsletter

July 26, 2022

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[Official Guidance]

Text of DOL Proposed Amendment to Prohibited Transaction Class Exemption 84-14 (QPAM Exemption)

99 pages. "[T]his amendment to the QPAM Exemption [would]: [1] require a one-time notice to the Department that a QPAM is relying upon the exemption, [2] require up-front terms in a written management agreement that apply in the event of ineligibility, [3] update the list of crimes in current Section I(g) to explicitly include foreign crimes that are substantially equivalent to the listed crimes, [4] expand the circumstances that may lead to ineligibility, [5] provide a one-year winding-down period to help Plans avoid or minimize possible negative impacts of changing QPAMs or adjusting their asset management arrangements when a QPAM becomes ineligible, and [6] instruct entities applying for individual exemption relief based on ineligibility under Section I(g) to review the Department's most recent individual exemptions involving Section I(g) ineligibility with an expectation that similar conditions will be required if an exemption is proposed and granted.

"The amendment also would: [1] make a clarifying revision to Section I(c) that specifies that the terms of the transaction, commitments, investment of fund assets, and any corresponding negotiations are the sole responsibility of the QPAM; [2] increase the asset management and equity thresholds in the QPAM definition in Section VI(a) commensurate with changes in the Consumer Price Index since 1984; and [3] add a standard recordkeeping provision in new Section VI(t)."  MORE >>

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


ERISApedia -- Form 5500 eSource

The 5500 eSource. A complete guide to Form 5500 preparation with comprehensive analysis and explanations. Includes 1,000 data element format specifications and over 400 edit checks to help you avoid rejected filings. 612-605-2266

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[Guidance Overview]

DOL Proposes Amendment to QPAM Exemption to Protect Benefit Plans, Participants, and Beneficiaries

"The amendment would protect plans and their participants and beneficiaries by: [1] Addressing perceived ambiguity as to whether foreign convictions are included in the scope of the exemption's ineligibility provision. [2] Expanding the ineligibility provision to include additional types of serious misconduct. [3] Focusing on mitigating potential costs and disruption to plans and IRAs when a QPAM becomes ineligible due to a conviction or participates in other serious misconduct. [4] Updating asset management and equity thresholds in the definition of 'Qualified Professional Asset Manager.' [4] Adding a standard recordkeeping requirement that the exemption currently lacks. [6] Clarifying the requisite independence and control that a QPAM must have with respect to investment decisions and transactions."  MORE >>

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

[Guidance Overview]

Alert (High Risk Issue) icon Big Changes for Employers Participating in Multiemployer Plans

"The PBGC released its new Final Rule on Special Financial Assistance ... which will ... subject contributing employers to higher withdrawal liability assessments compared to the Interim Final Rule.... [T]he D.C. Circuit rejected a plan's use of a risk-free discount rate for calculating withdrawal liability, placing into dispute withdrawal liability discount rates used by many plan actuaries ... Finally, the pending PBGC regulations on prescribed discount rate assumptions are coming soon. Employer beware."  MORE >>

Seyfarth Shaw LLP

2022 401(k) Participant Study (PDF)

13 pages. "Just under half of workers feel they are very likely to meet their retirement goals, fewer than last year. On average, workers think they need $1.7 million saved for retirement.... One third of plan participants do not know how long their savings are likely to last, but those who do expect their savings to last 23 years on average. One quarter say the pandemic will delay their retirement."  MORE >>

Charles Schwab

DOL Preparing to Finalize Proposed Regs on ESG Investing and Shareholder Rights

"The DOL received more than 22,000 comment letters for the proposed regulation. Ninety-seven percent of respondents support the proposed changes ... While some respondents asked the DOL to revisit the tie-breaker provision and other specifics of the proposed rule, many respondents agreed that the proposed rule clears the way for fiduciaries to consider adding ESG investment options to benefit plans."  MORE >>


Alert (High Risk Issue) icon Expected Retirement Law Changes May Spark ERISA Suits (PDF)

"Collective investment trusts, or CITs, and 403(b) plans have played recurring -- though separate -- roles in the surge of excessive fee lawsuits that have been filed against retirement plan fiduciaries over the past decade and a half. Congress is poised to pass bipartisan retirement legislation that could bring these two currents together to form a new wave of litigation[.]"  MORE >>

King & Spalding, via Law360

Seventh Circuit: County Pension Plan's Benefit Differences for Retirees with Disabilities Are Not Discriminatory

"An Indiana county pension plan that provides cost-of-living increases for nondisabled retirees, but not for retirees with disabilities, does not constitute unlawful discrimination, according to the [Seventh Circuit] ... The appeals court noted that the county had a legitimate interest in providing pension plans that meet the differing needs of distinct groups. The cost-of-living adjustment is only one of several differences in the plans." [Ostrowski v. Lake Cty., Nos. 21-1674, 21-2580 (7th Cir. May 11, 2022)]  MORE >>

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

PBGC Approves $715 Million in Special Financial Assistance for Western Pennsylvania Teamsters and Employers Pension Plan

"[PBGC] has approved the application submitted to the [SFA] Program by the Western Pennsylvania Teamsters and Employers Pension Plan. The plan, based in Pittsburgh, Pennsylvania, covers 21,110 participants in the transportation industry.... PBGC's approval ... enables the plan to restore all benefits suspended under the terms of MPRA and to make payments to retirees to cover prior benefit suspensions.... The plan will receive $715 million in SFA, including interest to the expected date of payment to the plan."  MORE >>

Pension Benefit Guaranty Corporation [PBGC]

Competitive Pension Risk Transfer Buyout Rate Dips During June

"During June, the estimated cost to transfer retiree pension risk to an insurer in a competitive bidding process decreased from 98.6% of a plan's total liabilities to 98.3% of those liabilities.... During the same time period, the average annuity purchase costs across all insurers climbed from 102.5% to 103.0%. This means that the competitive bidding process is estimated to save plan sponsors on average around 4.7% of PRT costs as of June 30."  MORE >>


Measuring Public Pension Health: New Metrics and New Approaches (PDF)

68 pages. "This report describes a 'scorecard', a standardized summary of pension valuation results, as well as three new metrics, of varying degrees of novelty, to appear on it ... In addition, this report includes a discussion of the practice of computer simulation of pension systems ... The discussion includes suggestions about increasing the comparability of stress tests and the ways in which such tests may or may not acquire meanings useful to plan managers and policy makers."  MORE >>

Pension Accounting Working Group, National Conference on Public Employee Retirement Systems [NCPERS]

Executive Compensation and Nonqualified Plans

Stock Options and RSUs: Navigating Market Volatility

"[1] Listen to your risk tolerance.... [2] Welcome new option grants, but have a layoff plan.... [3] Don't forget the big picture, but revisit your cash position.... [4] Try to be logical rather than emotional.... [5] Watch your estimated taxes; look ahead to future grants.... [6] Now is the time to seek professional financial advice."  MORE >>

Employee Benefits Jobs

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Santa Rosa CA

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Press Releases

State of North Carolina and Empower Partner to Deliver Retirement Services to State Employees

Empower Retirement

OneDigital Launches Stop Loss Center of Excellence


Webcasts and Conferences
(Retirement Plans / Executive Compensation)

SFA: Solvency Through 2051?

August 9, 2022 WEBCAST


State-Facilitated Retirement Savings Programs: Legal Implications and Policy Developments

August 23, 2022 WEBCAST

American Bar Association Joint Committee on Employee Benefits [JCEB]

Help Business Owners Benefit from the Maryland Retirement Mandate

August 24, 2022 WEBCAST

The Retirement Advantage [TRA]

Executive Compensation for Tax Exempt Organizations: A Primer On Section 457(b) And 457(f) Plans

August 25, 2022 WEBCAST

American Bar Association Joint Committee on Employee Benefits [JCEB]

IRA University

September 28, 2022 WEBCAST


Securing Your Estate Plan: Fundamentals of Retirement Plan Distributions After the SECURE Act

September 29, 2022 WEBCAST

ALI CLE [American Law Institute Continuing Legal Education]

Last Issue's Most Popular Items

EIN Confusion: Employer, Trust, Payor -- When to Use Which

Holland & Hart LLP

Restatement Window for IRS Pre-Approved DC Plans Closes This Month (PDF)

Skapars & Associates, P.C.

401(k)ology: Participant Loans, Part 1


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

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