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Retirement Plans Newsletter

July 3, 2024

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[Guidance Overview]

DOL Releases Interim Final Rule for Abandoned Plans

"The interim final rule modifies the Special Terminal Report for Abandoned Plans (STRAP) that QTAs file with the DOL and creates an optional online method used to file the STRAP and other notices. The DOL also expands the Abandoned Plan Program to include individual pension plans covered by [ERISA], whose sponsors are under Chapter 7 bankruptcy."  MORE >>


[Guidance Overview]

IRS Provides Guidance on Plan Distributions for Emergency Personal Expenses and Domestic Abuse Victims

"Both new exceptions [to the additional 10% tax]: [1] are optional ... [2] may be documented by written certifications from the participants, [3] may be drawn from any combination of elective deferrals, matching contributions, or other employer contributions in the participant's account balance, [4] are not considered 'eligible rollover distributions' or subject to the mandatory 20% income tax withholding requirement, and [5] are effective January 1, 2024."  MORE >>

Calfee, Halter & Griswold LLP

[Guidance Overview]

Rhode Island SECURE Choice Becomes Law

"Rhode Island Secure Choice will provide retirement plan coverage for eligible employees age 18 and over who work for an employer with five or more employees that does not offer a plan. The program also will provide education, counseling, and objective employee-specific plan advice to participants."  MORE >>

National Tax-Deferred Savings Association [NTSA]

Trial on DOL's ESG Rule Will Be First Test of Chevron Ruling's Impact

"Both Utah and the DOL have filed documents with the appeals court referencing the Chevron deference case. The former said the Supreme Court's decision means the appeals court should overturn the lower court's decision on the 401(k) rule. The latter said it never cited the Chevron deference case even before the Supreme Court scrapped the standard." [Utah v. Su, No. 23-0016 (N.D. Tex. Sep. 21, 2023; on appeal to 5th Cir. No. 23-11097)]  MORE >>

Pensions & Investments

Overturning of Chevron Standard Could Spark More Lawsuits Against Defined Contribution Plans

"The Supreme Court's majority opinion said scrapping the Chevron deference would create more predictability for businesses because they wouldn't be whipsawed by the changing policies of changing political administrations -- an assertion that ERISA attorney Stephen Rosenberg said is misguided.... [Attorney Carol I. Buckmann] acknowledged that overturning Chevron deference could reduce the regulatory flip-flopping that accompanies changes in political administrations. 'The question is whether that outweighs the negative factors,' she said." [Loper Bright Enterprises, Inc. v. Raimondo, Sec. of Comm., No. 22-451 (S. Ct. Jun. 28, 2024)]  MORE >>

Pensions & Investments

ESG Litigation Proceeds to Trial in Texas

"At a minimum, regardless of the outcome of the trial, this action demonstrates the potential risk plans may face if they are committed to ESG principles, and could cause fiduciaries of ERISA plans to pause before pursuing ESG strategies or even invest in vehicles that utilize ESG." [Spence v. American Airlines, Inc., No. 23-0552 (N.D. Tex. February 21, 2024; order setting trial date filed Jun. 5, 2024)]  MORE >>

Kantor & Kantor

Every Retirement Plan Needs Practices and Procedures for Self-Correction

"[F]or an error to be eligible for self-correction, the practices and procedures must be designed to facilitate compliance in both 'form and operation.' They also must have been in place when the error occurred.... If a policy document is adopted, it should be implemented operationally, updated regularly, and utilized to conduct retrospective reviews of operations. The policy document should provide high-level guidelines and avoid being too specific or technical."  MORE >>


Considering the Hot Private Market Space for DC Plans

"[A]dvancements in DC investment systems may further the potential for private investments to make it into qualified plan ... [As] a plan fiduciary there must be a careful assessment of the risk for participants who are being defaulted into their savings, he notes."  MORE >>


SBA Simplifies Valuation Requirements for ESOP Transactions

"The U.S. Small Business Administration (SBA) has issued procedural guidance ... providing that a valuation done for an ESOP trustee to obtain a fair market value for shares purchased by the ESOP in a leveraged transaction using an SBA loan guarantee under the Main Street Employee Ownership Act of 2018 will satisfy the SBA's requirement for a valuation of the stock. Before this guidance was issued, SBA officers could and often did ask for a separate valuation to be performed following SBA standards."  MORE >>

National Center for Employee Ownership [NCEO]

Pension Finance Update, June 2024

"Pension finances ended June on a positive note, capping an excellent six month start to 2024. Both model plans ... enjoyed positive experience again in June, as higher stock markets more than offset the impact of lower interest rates. Plan A improved a fraction of 1% last month, ending June up more than 8% this year, while Plan B also gained a fraction of 1% in June and is now up 2% through the first half of 2024[.]"  MORE >>

October Three Consulting

Chicago's Unfunded Pension Debt Rises Again: Now at $37 Billion

"Chicago's unfunded pension liability rose by another 5.2% in 2023 -- from $35.4 billion to $37.2 billion -- thanks to 'changes in pension assumptions and legislation,' according to the certified annual financial report for 2023 by the accounting firm of Deloitte & Touche."  MORE >>

Chicago Sun-Times

Benefits in General

After Overturning Chevron, SCOTUS Opens Wide Yet Another Door to Future Litigation

"Largely overshadowed by the recent U.S. Supreme Court decision rejecting the Chevron doctrine's judicial deference to federal agencies, another 6-3 decision has thrown the door open for more litigation.... [T]he majority held that 'An APA claim does not accrue for purposes of Section 2401(a)'s 6-year statute of limitations until the plaintiff is injured by final agency action.' " [Corner Post v. Bd. of Gov. of the Federal Reserve System, No. 22-1008 (S. Ct. Jul. 1, 2024)]  MORE >>

American Retirement Association [ARA]

The End of Chevron Deference and Its Impact on Employee Benefits

"ERISA and other employee benefits statutes often involve complex and ambiguous provisions. Without Chevron deference, the [DOL] and other agency interpretations of these ambiguities may face heightened challenges in court, creating a period of uncertainty as new judicial precedents are established." [Loper Bright Enterprises, Inc. v. Raimondo, Sec. of Comm., No. 22-451 (S. Ct. Jun. 28, 2024)]  MORE >>

Snell & Wilmer L.L.P.

Open Season for Regulatory Challenges: Supreme Court Overturns Chevron Deference and Expands Opportunities to Attack Federal Rules

"For heavily-regulated employee benefit plans and health insurance, the Loper Bright decision could have significant impacts both in terms of cabining agency flexibility, requiring Congressional action for the imposition of additional regulatory requirements, and creating uncertainty as finalized rules may face greater odds of being overturned." [Loper Bright Enterprises, Inc. v. Raimondo, Sec. of Comm., No. 22-451 (S. Ct. Jun. 28, 2024)]  MORE >>

Groom Law Group

Executive Compensation and Nonqualified Plans

Using a Donor-Advised Fund to Reduce Taxes from RSUs or Stock Options

"When your restricted stock units vest or you exercise stock options, you may have a sudden big spike in your taxable income for the year. To reduce your taxable income and therefore stay out of a higher tax bracket, one technique ... is to create a donor-advised fund (DAF) ... A DAF lets you make both smart tax-planning decisions and charitable donations to causes you care about."  MORE >>

Employee Benefits Jobs

View job as Insurance Analyst for Nolan Financial

Insurance Analyst

Nolan Financial


View job as Insurance Analyst for Nolan Financial

Selected New Discussions

Penalty for Filing 5500-SF Rather Than a 5500-EZ?

"Suppose you have a 1-person plan with over 250k in assets, so subject to filing a 5500-EZ. Suppose a 5500-SF is filed instead. Is there a PENALTY for filing the SF? Are you considered to have not filed?"

BenefitsLink Message Boards

Is This Alternative Investment a Non-Starter?

"Can a participant have a racehorse as an alternative investment in a 401(k) Plan? A participant would like to purchase part of a racehorse using their 401(k) account and then hold the ownership in the Plan as an asset. Other than keeping all of it 'at arm's length' and watching for obvious prohibited transactions and possible Unrelated Business Income, is there anything preventing this type of alternative investment from being held in a 401(k) Plan?"

BenefitsLink Message Boards

Last Issue's Most Popular Items

Chevron Deference Is No More: ERISA, Employee Benefits and Executive/Equity Compensation Rule-Making Is Likely to Be Affected


Chevron Doctrine Overruled: Potential Impacts on Plan Sponsors and Employee Benefit Plans

Smith, Gambrell & Russell, LLP

GE Joins List of Companies Sued Over PRT Deal with Athene

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

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