Updated Jul. 19, 2023, to include two sets of new SFA questions and answers: [1] The Permissible Investments SFA questions and answers explain and provide examples of permissible investment grade fixed income (IGFI) securities and return-seeking assets (RSA). [2] The Withdrawal Liability Condition and Make-up Payments of Previously Suspended Benefits SFA questions and answers focus on the withdrawal liability condition requiring phase-in of SFA assets. They clarify the calculation methodology for plans that paid make-up payments of previously suspended benefits.  MORE >>

"Notice 2023-43, provided in a question-and-answer format, is intended to assist taxpayers by providing interim guidance in advance of an update to Rev. Proc. 2021-30. Notably, the guidance confirms that failures that occurred before SECURE Act 2.0 was enacted on December 29, 2022, may be corrected in accordance with the new rules. The guidance is not comprehensive and does not address the recovery of plan overpayments, correction of automatic contribution errors, or any elements over which the DOL has authority."  MORE >>

"[Notice 2023-54] provides much-needed 2023 required minimum distributions (RMD) relief by: [1] Extending the effective date of the final RMD regulations (for all plan types) for another year -- now not effective before the 2024 distribution calendar year; [2] Providing rollover relief to plan sponsors and participants/IRA owners who were born in 1951 (as well as their surviving spouses) -- which includes extending the rollover period through September 30, 2023; and [3] Eliminating the need for 2023 RMD payments for beneficiaries under the combination of the 10-year rule and the 'at least as rapidly' rule."  MORE >>

"The short-term relief relating to the change in the required beginning date under the SECURE 2.0 Act is of special importance to plan administrators because it obviates the need for mandatory withholding and section 402(f) notices for distributions mistakenly treated as RMDs rather than eligible rollover distributions."  MORE >>

"[E]very trust created prior to the SECURE Act and named as an IRA beneficiary must be reviewed, potentially rewritten, or scrapped altogether. What was a perfectly effective planning strategy a couple of years ago could be totally useless now. Here's how and why."  MORE >>

"Does a plan investment consultant breach fiduciary duties when it sells other investment services to the plan? And does a delegated fiduciary act disloyally or imprudently when it selects a proprietary investment fund for the plan? ... [T]he U.S. Court of Appeals for the Fourth Circuit addressed both questions and ... [upheld] the district court's judgment in favor of Aon Hewitt Investment Consulting, Inc. that it did not breach its ERISA duties of prudence or loyalty when serving as an investment consultant and as the delegated fiduciary to the Lowe's Home Improvement 401(k) Plan." [Reetz v. Aon Hewitt Investment Consulting Inc., No. 21-2267 (4th Cir., July 17, 2023)]  MORE >>

"[T]he court found that Aon was not acting as an ERISA fiduciary when it engaged in cross-selling of additional services at the time that it was recommending that Lowe's restructure its retirement plan.... Second, the court found that Aon did not violate its ERISA fiduciary duty of loyalty by recommending that the plan adopt a streamlined investment menu which happened to play to its interest." [Reetz v. Aon Hewitt Investment Consulting Inc., No. 21-2267 (4th Cir., July 17, 2023)]  MORE >>

"[I]mplementation of these enhancements requires thoughtful planning so as to create the least amount of disruption to users' continued operation of their plans. Timely guidance on unanswered questions is not expected to be forthcoming, making the task of producing timely updates even more difficult for software vendors. All service providers will be forced to make good-faith efforts to apply the rules in their services and software. Still, certain updates may be delayed as we await guidance."  MORE >>

"At the hearing, ... commonly recommended modifications informed by changes to the insurance market since 1995 ... included: [1] consideration of the ownership structure and business model of the insurance company, [2] the insurer's use of re-insurance, and [3] the insurer's use of off-shore and arbitrage strategies. The investment portfolio of the insurance company, already required to be considered under IB 95-1, was also highlighted by multiple speakers as an essential consideration."  MORE >>

"The debate over investment of retirement plan funds based on environmental, social, and corporate governance (ESG) factors continues to make waves. This post provides a high-level overview of the current state of play for plans that are subject to ERISA."  MORE >>

"Until now, all courts before which the matter reached trial ... have read the Supreme Court's precedent holding monetary damages to be legal damages narrowly, because that case dealt with a suit by a fiduciary against a non‐​fiduciary. These courts have instead applied the 'previously available in equity' test strictly, holding that the collection sought in these cases is surcharge, an exclusively equitable remedy. These reeds are too thin, though, for the denial of a constitutional right, as the court in Yale rightly held."  MORE >>