Changes from the Fall 2024 PBGC Regulatory Agenda:

Added to Proposed Rule Stage:   Technical Amendments: Special Financial Assistance [1212-AB61]

Moved from Proposed Rule Stage to Final Rule Stage: Miscellaneous Updates, Clarifications, and Improvements [1212-AB51]

Added to Final Rule Stage:

• Interest Assumptions for Valuing Benefits [1212-AB62]
• Valuation of Benefits and Assets; Expected Retirement Age; Missing Participants Mortality Assumption [1212-AB63]

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"What's changed? So far, nothing really.... Will there be additional rulemaking? Eventually.... Are there practical and operational constraints in connection with investments in alternative assets? Yes.... Is there anything to do now?"  MORE >>

"[T]he SEC has historically limited how participant-directed defined contribution plans have been able to access most privately offered alternative investment vehicles.... Practically speaking, this guidance made it impracticable for any such fund to allow investment by participant-directed plans unless they complied with those requirements.2 The Order expressly contemplates the need for the SEC to revisit its existing guidance to facilitate access to alternative investments by defined contribution plans. "  MORE >>

"The Trump Administration has shifted away from Biden-era rules related to certain investments, like alternative asset investments, ESG, and cryptocurrency in 401(k) plans.... [P]lan fiduciaries interested in alternative assets as an investment offering should carefully monitor forthcoming guidance from the DOL, SEC and the Treasury."  MORE >>

"Because PEPs are still a relatively new retirement plan arrangement, many smaller employers may not yet be aware of them, let alone understand how ERISA applies to them or how to review and select a potential PEP provider.... [T]he DOL stated it was issuing the RFI with the goal of addressing these challenges 'which may impede small employers from taking advantage of PEPs.' "  MORE >>

"[T]he Sixth Circuit Court of Appeals upheld the lower court's decision ... holding that, in making a determination of multiemployer plan withdrawal liability, the plan's actuary may not consider 'policy issues' -- in this case, choosing an (exceptionally low) plan valuation interest rate 'that gave the remaining employers a lower chance of getting stuck having to pay extra in the future' -- in making his 'best estimate' of the current value of the plan's unfunded vested benefits.' [Ace-Saginaw Paving Co. v. Operating Eng"rs Loc. 324 Pension Fund, Nos. 24-1288, 24-1305 (6th Cir. Aug. 6, 2025)]  MORE >>

"While the result is different than most of these cases to date, it's not the only one to find the claims plausible. Moreover, even though most of these cases have seen their motion to dismiss granted, nearly every one of those has allowed the plaintiffs additional time to amend their suits[.]" [Becerra v. Bank of America Corp., No. 24-0921 (W.D. N.C. Aug. 12, 2025)]  MORE >>

"Certain options strategies are allowed in traditional and Roth IRAs as long as the account is approved for options trading by the financial institution that holds the retirement account. These strategies may be used to enhance income or manage downside risk without violating IRS rules. Riskier options positions -- such as naked calls or short puts -- are generally not allowed because those strategies have the potential for unlimited losses to the retirement account."  MORE >>

"ESOPs tend to create wealth for a broader set of employees than 401(k) plans because they generally do not require employee contributions to the plans ... [T]he average ESOP account balance was found to be more than double the average account balance at a comparable conventional firm ($132,000 vs. $64,000). Further, nearly 80% of S corporation ESOPs also offer a 401(k) plan, either separate from or combined with the ESOP."  MORE >>

"With the Federal Reserve expected to cut rates before year-end, the Pension Risk Transfer market may experience increased volatility, which significantly narrows the current window of opportunity for plan sponsors to transact under more stable conditions."  MORE >>

"The EO also instructs the SEC to explore ways to expand access to alternative assets for participants in those plans. This is a significant step forward ... The quickest and most direct way to fulfill the EO's call ... is to promote capital formation in exchange-listed products that offer retail investors diversified exposure to these assets and are purchasable through self-directed brokerage accounts available in many 401(k) plans."  MORE >>

"If you're a business owner, a CFO, an HR manager, or anyone with fiduciary responsibility over a retirement plan -- this case should give you chills. Because the story here isn't just about one company's failure. It's about what happens when fiduciary oversight breaks down entirely. The DOL is watching. Participants are empowered. And when things go wrong, the consequences are swift and severe." [Micone v. iProcess Online, Inc., No. 24?0061 (D. Md. Apr. 21, 2025)]  MORE >>

Changes to benefits-related items from the Fall 2024 DOL Regulatory Agenda:

Added to Proposed Rule Stage:

• Improving Transparency into Pharmacy Benefit Manager Fee Disclosure [1210-AB37]
• Transparency in Coverage [1210-AC30]
• Default Electronic Disclosures by Employee Welfare Benefit Plans Under ERISA [1210-AC35]
• Employee or Independent Contractor Classification Under the Fair Labor Standards Act [1235-AA46]

Moved from Final Rule Stage to Proposed Rule Stage:

• Performance Benchmarks for Multi-Asset Class Investments [1210-AC26]

Added to Final Rule Stage:

• Removal of Interpretive Bulletins Relating to [ERISA] of 1974 [1210-AC32]
• Selection of Annuity Providers -- Safe Harbor for Individual Account Plans [1210-AC33]
• Removal of 2550.401c-1, Definition of 'plan assets'-insurance company general accounts [1210-AC34]
• Investment Advice Fiduciary Under ERISA [1210-AC36]
• Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights [1210-AC37]

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Changes from the Fall 2024 IRS Regulatory Agenda:

Added to Proposed Rule stage:

• Indian Tribal Governmental Plans [1545-BI19]
• Minimum Vesting Standards [1545-BN49]
• Electronic Furnishing of Payee Statements Regarding Digital Asset Sales by Brokers [1545-BR47]
• Modification to Section 415(c) Compensation Definition Relating to Back Pay [1545-BR49]
• Determination of Target Normal Cost and Funding Target for Single-Employer Defined Benefit Pension Plans [1545-BR50]
• Transparency in Coverage (CMS-9882) [1545-BR51]

Moved from Proposed Rule stage to Final Rule stage:

• Regulations Governing Practice Before the Internal Revenue Service [1545-BQ12]
• Automatic Enrollment Requirements under Section 414A [1545-BR08]
• SECURE 2.0 Act Updates to Catch-up Contribution Rules Under Section 414(v) [1545-BR11]

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"In light of the IRS' proposed regulations and the FTC's pending noncompete ban, plan sponsors ... face increased compliance risk. These employers must closely assess whether noncompete provisions used to structure [substantial risks of forfeiture (SRFs)] remain enforceable under state law and whether they satisfy the IRS' standard for deferral eligibility."  MORE >>

"Say-on-pay support stays steady ... DEI metrics disappearing from incentive plans ... Perks under pressure ... Reduced visibility into institutional voting behavior and rationales."  MORE >>