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COLLECTED WISDOM™ on Compliance and Regulatory Related Issues

This page gathers relevant information for 401k plan managers, sponsors, administrators, recordkeepers and others with plan fiduciary and administrative responsibilities. It covers many aspects of compliance and regulatory related issues.

This archive contains not only the most current material on the topic, but also older items that are still relevant, provide background, perspective or are germane to the topic.

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DOL Clarifies Lifetime Income Disclosure Requirement

Section 203 of the SECURE Act amended ERISA to require 401k and other DC plans to include an LII annually as part of participant benefit statements. On July 26, 2021, the DOL issued a brief set of Frequently Asked Questions clarifying certain issues related to the interim final rule implementing the lifetime income illustration.

Source: Groom.com, July 2021

Khawar: Cryptocurrency Guidance on the Horizon

Speaking July 27 at the 2021 NAPA D.C. Fly-In Forum, the Acting Assistant Secretary for the DOL's Employee Benefits Security Administration outlined the key areas the department is working on, including both cryptocurrency and cybersecurity issues.

Source: Asppa.org, July 2021

DOL Official Sheds Light on Rollover Recommendations

Cautioning those looking to "game the system," a senior Labor Department official affirmed July 27 that suggesting investments that could occur after a rollover is tantamount to recommending the rollover, and if it meets the rest of the five-part test will constitute fiduciary advice regardless of how it's phrased.

Source: Asppa.org, July 2021

Gomez Nominated for EBSA Post

President Biden has nominated Lisa M. Gomez for Assistant Secretary of Labor for the Employee Benefits Security Administration. Ms. Gomez is a partner at the law firm of Cohen, Weiss and Simon and chair of the firm's management committee.

Source: Ascensus.com, July 2021

EBSA Addresses Timing of Lifetime Income Disclosures

Under a set of Frequently Asked Questions issued by the DOL, participant-directed plans now have a firm compliance date to provide lifetime income illustrations. Plans which must issue quarterly statements under ERISA Section 105 can incorporate their first LII on any quarterly statement up to the second calendar quarter of 2022, ending June 30, 2022.

Source: Napa-net.org, July 2021

Updates to EPCRS Correction Programs Encourage Employers to Self-Identify, Correct Mishaps

On July 16, 2021, the IRS issued Revenue Procedure 2021-30, the most recent comprehensive official guidance concerning the IRS's Employee Plans Compliance Resolution System. This article is intended as a general overview of Rev. Proc. 2021-30 as it affects 401k plans and is not meant to address the details of plan qualification.

Source: Compliancedashboard.net, July 2021

DOL Plan Audits Updated to Include Several Questions About Compliance With Its Cybersecurity Guidelines

The DOL updated its audit inquiries to include probing questions for plan fiduciaries about their compliance with agency cybersecurity guidelines. So, what do those inquiries look like? In short, the DOL is asking plan sponsors to produce: "all documents relating to any cybersecurity or information security programs that apply to the data of the Plan, whether those programs are applied by the sponsor of the Plan or by any service provider of the Plan."

Source: Benefitslawadvisor.com, July 2021

Form 5500 and SAS 136

The AICPA postponed the mandatory effective date of the new audit standard, SAS 136, until next year, but the DOL had already updated Form 5500 to incorporate the new reporting rules. So now what?

Source: Belfint.com, July 2021

Industry Best Practice: Fraud Controls

The protection of retirement accounts can only be fully realized with a partnership between plan sponsors, fiduciaries, recordkeepers, participants, and where applicable advisors. There must be layered controls as there is not a single solution to protect accounts. These controls should be a combination of preventative, detective, and responsive controls. This fraud control chart is intended to highlight a minimum set of controls that should be considered and set expectations for all parties involved.

Source: Sparkinstitute.org, July 2021

DC Plan Distributions: Considerations and Recommendations

The COVID-19 pandemic has challenged individuals and organizations to continue operating during a time where face-to-face interaction may not be plausible, and access to organizational resources may be restricted. However, life has not stopped, and participants in your employee benefit plan may continue to make important decisions based on their financial needs. To help you prepare for a potential IRS examination, this article has listed some requirements for participants to receive Required Minimum Distributions, hardship distributions, and coronavirus-related distributions, recommendations of actions you can perform, and documentation to retain as added internal controls.

Source: Berrydunn.com, July 2021

IRS Proposes Electronic Filing Requirements for Certain Information Returns

The IRS has released a pre-publication version of proposed regulations amending rules intended to increase the filing of electronic returns in accordance with the Taxpayer First Act of 2019. Additionally, the IRS has withdrawn previously proposed regulations regarding electronic filing that were published on May 31, 2018. The new proposed regulations reduce the threshold by which filers must electronically file from 250 to 100 returns for the 2022 calendar year.

Source: Ascensus.com, July 2021

401k Plan Restatements Required By July 2022

Every six years, the IRS requires employers with qualified, pre-approved plans to restate their plan documents to reflect changes that have occurred since the plan documents were created or last restated. For defined contribution plans, the current restatement cycle -- called Cycle 3 -- opened on Aug. 1, 2020, and will close on July 31, 2022, meaning all plan documents need to be not only restated by then, but also certified by the IRS, and adopted by employers. Missing this deadline will force plans out of compliance and may result in IRS penalties.

Source: Bdo.com, July 2021

IRS Plays Musical Chairs With Voluntary Correction Programs

On July 16, 2021, the IRS published the latest EPCRS upgrade in Revenue Procedure 2021-30, in which, like musical chairs, some ground is gained while some is taken away. Here is a summary of some of the key changes.

Source: Eforerisa.com, July 2021

Missing Participants Matter: How to Overcome the Issue

CAPTRUST's Mike Webb provides an expert look at the problem of missing retirement plan participants. Armed with institutional insights on why it happens, why plan sponsors should care, and what they can do to break the cycle. Webb digs in on reuniting participants with their money.

Source: Captrust.com, July 2021

A Mid-Year Check-In for Retirement Plan Sponsors

Jennifer Doss and Scott Matheson provide a mid-year check-in on the retirement themes making headlines -- including environmental, social, and governance investing SECURE Act 2.0, and the double-edged sword of technology.

Source: Captrust.com, July 2021

IRS Releases Updated EPCRS Guidance

The IRS has released Revenue Procedure 2021-30, which contains long-awaited guidance updating the Employee Plans Compliance Resolution System. Plan sponsors use EPCRS to correct certain plan qualification failures. EPCRS is composed of the Self-Correction Program, the Voluntary Correction Program, and the Audit Closing Agreement Program, and there are several noteworthy changes.

Source: Ascensus.com, July 2021

New Escheatment Guidance for Qualified Plans

Most of the focus on missing participants has been with the DOL and its retirement plan audits, but over the last few years, the IRS also has been getting into the game with targeted guidance in this area. In this 4-page article, Groom Law principal Elizabeth Thomas Dold provides a review of this guidance in question and answer format.

Source: Groom.com, July 2021

The DOL-Approved Way to Handle Missing Participant Accounts

Although not considered formal guidance, it identifies prudent considerations for retirement plan administration that can minimize and mitigate the problems associated with missing participants while providing evidence of a company's efforts to comply with Safe Harbor standards. This guidance is less aimed at the solutions available once a participant is determined to be missing. Rather, it is intended to provide advice on ways plan sponsors can minimize or eliminate their incidences of missing participants, to begin with.

Source: Penchecks.com, July 2021

New EPCRS Rev. Proc. 2021-30

This revenue procedure updates the comprehensive system of correction programs for sponsors of retirement plans that are intended to satisfy the requirements of sections 401(a), 403(a), 403(b), 408(k), or 408(p) of the Internal Revenue Code, but that have not met these requirements for a while. This system, the Employee Plans Compliance Resolution System ("EPCRS"), permits Plan Sponsors to correct these failures and thereby continue to provide their employees with retirement benefits on a tax-favored basis. The components of EPCRS are the SelfCorrection Program ("SCP"), the Voluntary Correction Program ("VCP"), and the Audit Closing Agreement Program ("Audit CAP").

Source: Irs.gov, July 2021

IRS Highlights Top Mistakes in Retirement Plan Correction Submission Filings

The IRS has updated its Top Mistakes in Voluntary Correction Program Submissions webpage to ensure submissions by plans sponsors or their representatives are free of errors that could result in a delay of the IRS' review of the submission as well as a holdup in issuing the compliance statement. The updated list includes new items concerning the electronic submission of VCP.

Source: Hallbenefitslaw.com, July 2021

Summertime Blues for Your 401k Plan, P.2: Eligibility Failures

This is the second installment in five posts covering the most common 401k plan operational issues that arise during Form 5500 prep season for calendar year plans, which happens to be summertime. This part will focus on a few selected errors related to eligibility under the plan: who gets to participate in the plan and when.

Source: Eforerisa.com, July 2021

Form 5500 Filing Date Fast Approaching

DB plans, DC plans, and 403b annuity arrangements with calendar year plan years, the Form 5500 filing deadline for the 2020 plan year is not far off. In most years that would mean July 31, but not in 2021. The form must be filed by the end of the seventh month after the end of a plan year. Since most plans set their plan years to the calendar year, most plans have to file by July 31.

Source: Asppa.org, July 2021

DOL Intensifies Cyber Readiness Inquiries Among Retirement Plan Administrators

In light of recent reports of an increase in cybersecurity inquiries by the DOL, retirement plan administrators should accelerate their preparedness strategies for avoiding and addressing cybersecurity attacks against retirement plans. Media outlets are reporting that the DOL has begun asking plan sponsors questions related to cybersecurity policies and procedures.

Source: Debevoise.com, July 2021

Summertime Blues for Your 401k Plan, Pt. 1

Summertime is for fun, relaxation, and a break from work, but it is also a crucial period for calendar year 401k plans. This is the first in a series of five posts covering the 401k mishaps that are as reliable a feature of my summers as are the 4th of July, outdoor barbecues, and sunscreen.

Source: Eforerisa.com, July 2021

Physical Presence Relief for Elections and Consents

On June 24, 2021, the IRS issued Notice 2021-40 which further extends the temporary relief from the "physical presence requirement" previously granted to certain 401k plan elections and consents, and hinted that permanent relief from the requirement might be forthcoming.

Source: Compliancedashboard.net, July 2021

IRS Now Requires an Employer Discretionary Match to Be "Definitely Determinable"

"Definitely Determinable" is one of those pre-ERISA concepts that are still applicable. It means that for a retirement plan to be considered "qualified," a participant's retirement benefit had to be determined following a stipulated formula that is not subject to the discretion of the employer. The purpose of which is, of course, to eliminate the possibility of benefits favoring the higher paid employees. It's long been required for defined benefit pension plans in which it's a straightforward matter. But what about those 401k plans?

Source: Retirementplanblog.com, July 2021

IRS Extends "Physical Presence" Relief

The IRS has extended for one year its temporary option to use e-signatures and video for any participant elections that a plan representative or a notary public must physically witness. In particular, this allows plans to continue to obtain spousal consent to participant waivers of benefit forms for another year without the participant and spouse having to be present in person. Additionally, the IRS is seeking input on this temporary relief.

Source: Segalco.com, June 2021

DOL to Accept Comments on Amendments to 2013 Proposed Class Exemptions

The DOL on June 23 announced that it is reopening the comment period for amendments to class exemptions from prohibited transaction rules set forth in ERISA and the Internal Revenue Code. The proposed amendments, which were originally proposed in 2013, are relevant to certain transactions involving employee benefit plans and IRAs and would remove credit ratings references and create better alignment with the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Source: Asppa.org, June 2021

DOL Ups Game on Cybersecurity Program Oversight, Begins Audit Initiative

In light of a new DOL audit initiative and increasing cybersecurity threats to ERISA benefit plans, ERISA plan sponsors and fiduciaries should be prepared to answer some important questions: Do the cybersecurity programs of you and your service providers comply with DOL guidance? Do your contracts with service providers include appropriate data protection provisions? Are you and your service providers doing enough to protect your employees and ERISA plan participants?

Source: Pillsburylaw.com, June 2021

The DOL Commences Cybersecurity Audit Activity

The Department of Labor is moving quickly to audit cybersecurity protocols. Businesses that have not yet addressed their cybersecurity practices and compliance plans must do so immediately. Example DOL audit questions provided.

Source: Nixonpeabody.com, June 2021

IRS Releases Final Regs on Deadline Extensions for Federally Declared Disasters

The IRS issued its Final Regulations on the subject of the mandatory, minimum 60-day postponement of certain tax-related deadlines due to "federally declared disasters" under the Taxpayer Certainty and Disaster Tax Relief Act of 2019, passed as part of the Further Consolidated Appropriations Act of 2020. The Final Regulations, which affect retirement plans (including 401k plans), are substantially unchanged from Proposed Regulations which were issued on January 13, 2021.

Source: Compliancedashboard.net, June 2021

Plan Terminations: A Refresher

A defined contribution plan can be terminated by a stand-alone resolution to terminate, by plan amendment, or by a combination of resolution and amendment. Kelsey Mayo, ASEA Director of Regulatory Policy and Partner at Poyner & Spruill LLP, suggested reviewing the plan to ensure that any specifically required action is taken and setting the termination date. In this article, Mayo discusses a variety of specific matters relevant to DC plan terminations.

Source: Asppa.org, June 2021

IRS Again Extends Temporary Relief from Physical Presence Requirement for Retirement Plan Consents

The IRS issued Notice 2021-40, extending guidance released under Notice 2020-42 and previously extended by Notice 2021-03, which provided temporary relief from the physical presence requirements for certain elections that are made by participants and beneficiaries in qualified retirement plans and other tax-favored retirement arrangements. The additional extension provides relief through June 30, 2022.

Source: Ascensus.com, June 2021

The IRS Required Restatement of 401k Plans: A Plain Language Explanation in Q & A Format

If you're an employer who has adopted an IRS pre-approved defined contribution plan such as 401k, you'll need to have the Compliant box checked no later than July 31, 2022. Plan document compliance to be specific. It's the IRS requirement that a retirement plan document must be up to date to qualify for favorable tax treatment. IRS pre-approved plans must be rewritten, reviewed, and approved every six years. Once approved, employers who use them must adopt the new plan documents by a certain date. This is called the Restatement process, and as noted in the headline, this Restatement is called Cycle 3 with a July 31, 2022 deadline. The Questions and Answers that follow provide a plain language explanation of what you should know about Cycle 3.

Source: Retirementplanblog.com, June 2021

Ten Reasons Why You Need Clean Retirement Plan Data

Sourcing and validating retirement plan data is key to a plan's success. However, the sheer abundance of data coming across the transom can be cumbersome and overwhelming to manage, leading to fiduciary and compliance risks. Having accurate information is important to everyone involved in managing and administering the plan. That's why it's vital to make sure plan data is current and error-free. Here are the top 10 reasons why clean data matters.

Source: Fiduciarydecisions.com, June 2021

SAS 136: The New Audit Standard for Employee Benefit Plans and Its Impact on Plan Sponsors

The American Institute of Certified Public Accountants issued a new audit standard for employee benefit plans in July 2019. The new standard is commonly referred to as SAS 136. Although SAS 136 imposes new duties on auditors, plan sponsors also have increased responsibilities under this new standard. So plan sponsors may want to become familiar with the new rules now to ensure they are prepared.

Source: Ogletree.com, June 2021

DOL Begins Its Cybersecurity Audit Initiative and It's a Doozy

The DOL has begun issuing information and document requests under their new cybersecurity practices initiative, and the requests are probing and indicate serious inquiry by the DOL. News of the DOL beginning this audit program should not come as a surprise. However, it is fair to say that both the pace with which the DOL has begun its audits and the depth and breadth of the initial round of requests is surprising.

Source: Morganlewis.com, June 2021

ERISA Expense Account Considerations

Many 401k plans contain spending accounts funded by revenue-sharing generated by a plan's mutual fund holdings. These accounts are often referred to as ERISA expense accounts, revenue-sharing accounts, or plan expense reimbursement accounts, and can cause complications for plans if not administered properly. A misstep with the use of these funds could result in participant claims. Accordingly, before utilizing these funds, plan sponsors should use care and consider the questions reviewed here.

Source: Haynesboone.com, June 2021

Primer on the Code's Required Minimum Distribution Rules: Post SECURE Act

In discussing how monies are distributed from a qualified retirement plan, employees generally fall into one of three camps: those that want distributions as quickly as possible; those that want the distributions during and for the sole purpose of retirement; and those that wish to defer having any distributions paid to them, to continue the tax shelter for as long as possible. This article is directed to the employees within the last camp. In a nutshell, the minimum distribution rules have been devised as a tax penalty provision to prevent employees and their beneficiaries from totally deferring benefits under a qualified retirement plan, an IRA, a 403b plan, or a 457 eligible deferred compensation plan, and thereby transferring such monies income tax-free to the subsequent generations.

Source: Wagnerlawgroup.com, June 2021

Here Are the Top 10 EBSA Enforcement Categories

A new report from the Government Accountability Office sheds new light on enforcement activities of the DOL's Employee Benefits Security Administration. The 56-page report provides what amounts to a tutorial about EBSA's enforcement activities. It found that the 10 most frequent violation categories account for almost 97% of all violations. In the retirement space, the most common ERISA violation categories are summarized here.

Source: Napa-net.org, June 2021

GAO Report Illuminates DOL Enforcement of ERISA

In a report released on May 27, 2021, the US Government Accountability Office published the results of a 15-month inquiry into the enforcement of the ERISA by the DOL. GAO last conducted such an inquiry in 2007. The stated purpose of the inquiry was to examine DOL's management of and strategies to improve the ERISA enforcement process and the immediate and long-term challenges presented by COVID-19. In the process of doing so, the report elaborates or confirms several instructive details about the ERISA enforcement process.

Source: Eversheds-Sutherland.com, June 2021

Missing Participants: What Comes Next?

Washington has shifted again. In 2009, Democrats had complete control of Congress and the presidency. By 2017, complete control had shifted to the Republicans. Now the Democrats are back. One constant is sure to continue: a focus on missing participants in retirement plans. While much of the focus in recent years has been on the DOL, the IRS has a key role to play as well.

Source: Napa-net.org, June 2021

5500 Filing Rejected: How Could Plan Sponsors Have Known Their Auditor Was Deficient?

Each year, the plan sponsor's Forms 5500 get rejected (it had always been previously accepted) when the DOL determined that the plan sponsor's auditor's work was deficient. They are often flabbergasted by the news that they had a responsibility to assess their CPA's qualifications to perform a retirement plan audit. Like going to a new doctor, how can you know whether a licensed professional is good at his or her job? It's not easy.

Source: Belfint.com, June 2021

Essential Form 5500 Filing Guidance for 401k Plan Sponsors

It's important to understand that the signer of Form 5500 is considered a plan fiduciary who has potential personal liability for the compliant administration of the 401k plan. This includes being responsible for the accuracy of the information contained on Form 5500. Accuracy is important not only because it's part of operating compliantly but because errors on Form 5500 can raise a red flag for the IRS or the Department of Labor and trigger an audit.

Source: Alliant401k.com, June 2021

DOL Is Pursuing Fewer Cases, but Much Bigger Payouts

DOL investigations are resulting in the biggest 401k recoveries the agency has ever seen, even as the number of cases it closes has been declining. The agency has been pursuing bigger investigations, part of an initiative started in 2013 to go after plan violations that affect a larger number of participants. The recent numbers suggest that the effort is paying off.

Source: Investmentnews.com (registration may be required), June 2021

Missing Participant Best Practices

The DOL has developed a list of best practices plan fiduciaries can implement to reduce missing participant issues and ensure participants and beneficiaries receive their plan benefits. According to EBSA, the first step in addressing any problem is knowing there is one. If your plan has one or more of the "red flags" listed here, you potentially have a missing participant issue.

Source: Employeebenefitslawblog.com, May 2021

Use of Nonelective or Matching Contributions to Satisfy the Nondiscrimination Safe Harbor

Question: We are redesigning our 401k plan to use the Code Section 401(k)(13) nondiscrimination safe harbor for plans that make automatic deferrals. That safe harbor will also require our company to make nonelective or matching contributions. How do we decide which type of employer contribution to make?

Source: Thomsonreuters.com, May 2021

Requesting Plan Documents: What's Included?

A participant has requested copies of plan committee meeting minutes and notes for the last four quarters. Does the committee have to comply with this request?

Source: Retirementlc.com, May 2021

Compliance Connections: Reviewing and Reprioritizing Your Retirement Plans

Recent developments for qualified retirement plans have received significant attention among plan administrators, but some may have flown beneath the radar. When you're an ERISA fiduciary, new developments occur quickly. With information coming to you from many directions, this article highlights some of the significant developments, so you can quickly connect the alignment of your existing retirement plan with the most current information, rules, and guidance.

Source: Ajg.com, May 2021

Recovering Retirement Plan Overpayments: Process Is Key

A qualified retirement plan paying more in distributions than a participant is entitled to occur frequently. While unfortunate for participants who received an overpayment, a plan sponsor must recover overpayments on behalf of the retirement plan to protect the plan's tax-qualified status and comply with the sponsor's fiduciary responsibilities under ERISA. A recent court case involving the recovery of an overpayment highlights the value of having a robust administrative process for dealing with the inevitable overpayment issues that arise.

Source: Dickinson-wright.com, May 2021

DOL Electronic Retirement Rule Reminders

Just shy of a year ago on May 27, 2020, the DOL provided welcomed relief to employers and plan administrators concerning required disclosures for retirement plans subject to ERISA. This article is a reminder of the e-Delivery Rule requirements that are currently in effect as we move into year two of the rule.

Source: Withum.com, May 2021

Designing Your 401k Plan for Combined Testing

Thousands of 401k plans are designed each year to promote savings in the most cost-effective manner. Most are established as stand-alone plans and will remain that way for their entire existence. Some, however, are initially set up as stand-alone, only to be paired with a cash balance plan down the road. Since most cash balance plans are designed to provide owners with the majority of the benefits, they cannot pass the nondiscrimination tests, so combining the cash balance plan with the 401k plan creates a cost-effective method to pass testing.

Source: Dwc401k.com, May 2021

IRS Releases Updated Operational Compliance List, Includes Secure Act Changes

The IRS posted on its website its most recent updated operational compliance list for qualified retirement plans, including 401k plans. Revisions made to the newly updated list that are effective in 2021 include changes in the 401k plan participation standards that are part of the Setting Every Community Up for Retirement Enhancement Act. There is also a change effective in 2022.

Source: Compliancedashboard.net, May 2021

IRS Clarifies Partial Plan Termination Relief Under 2020 Legislation

On April 27, the Internal Revenue Service issued informal guidance on partial plan terminations as part of the COVID-related tax relief provided under The Taxpayer Certainty and Disaster Tax Relief Act of 2020, part of the Consolidated Appropriations Act of 2021. The Relief Act was intended to provide a measure of relief for qualified plan sponsors that experienced layoffs due to COVID-19.

Source: Groom.com, May 2021

You're Notified of a Pending DOL Investigation -- Here's What to Expect

What are the chances of getting your plan investigated by the DOL? It's not common, but it happens, and for various reasons such as a participant complaint that escalates to a case opening, information in Form 5500, bankruptcy or extreme financial distress, and other targeting that the DOL regional offices do. This article summarizes the process.

Source: 401kspecialistmag.com, May 2021

Participant Data: Plan Asset or Fair Game for Recordkeepers to Use to Market Non-Plan Products?

In an emerging theory of liability, plan fiduciaries' treatment of participants' data is coming under scrutiny. Over the last five years, we have seen how the collection of many individuals' data can become a valuable asset in the right hands, whether it's used to influence an election, design a marketing plan that targets individuals based on their specific preferences and needs, or just to compile large troves of information to analyze trends.

Source: Truckerhuss.com, May 2021

IRS FAQs Address COVID-19 Partial Plan Termination Issues

The IRS supplemented its online FAQs on COVID-19 relief for retirement plans and IRAs with information related to relief from partial plan terminations.

Source: Eforerisa.com, April 2021

What's Missing From Many Plans? Current Addresses for Participants

So many extraordinary developments took place last year that some trends fell under the radar. One of these, the sharp uptick in migration out of large U.S. cities, can make a significant impact on sponsors and their plans.

Source: Benefitnews.com, April 2021

IRS Q&A Clarifies Partial Plan Termination During COVID-19 Pandemic

The IRS released a five-part Q&A on the temporary partial plan termination rules for qualified retirement plans under the Taxpayer Certainty and Disaster Tax Relief Act of 2020. Generally, there is a presumption that a partial plan termination has taken place when an employer's turnover rate is at least 20 percent during the plan year. Partial plan termination requires those participants covered under the portion of the plan that is terminated to be fully vested.

Source: Ascensus.com, April 2021

Update to Employee Plans Compliance Resolution System

The EPCRS is a system of IRS-approved corrections that allow sponsors of retirement plans to resolve various types of failures and continue to maintain the plan’s tax-favored status. The most recent EPCRS update was released in April 2019 and expanded self-corrections to include certain plan document failures, correction options, and possible relief from deemed distributions associated with certain failures involving plan loans made to participants, and created additional opportunities for correcting certain operational failures by plan amendment.

Source: Consultrms.com, April 2021

CAA Expanded 401k Loan and Withdrawal Provisions Differ From CARES Act

The Consolidated Appropriations Act of 2021 HAS provisions that impact 401k plans. This article is intended to clarify the differences between that legislation and similar provisions included in the earlier CARES Act.

Source: Compliancedashboard.ne, April 2021

DOL Guidance for Retirement Plan Fiduciaries in Search of Missing Participants

The DOL recently issued important guidance for retirement plan sponsors and fiduciaries on their obligations to find missing participants entitled to retirement plan benefits. Retirement plan sponsors and fiduciaries are at greater risk given the uptick in missing participant audits by the DOL. The Guidance generally addresses the three components of the missing participant issue.

Source: Ebglaw.com, April 2021

Cybersecurity Program Best Practices

The DOL has prepared these best practices for use by recordkeepers and other service providers responsible for retirement plan-related IT systems and data, and for plan fiduciaries making prudent decisions on the service providers they should hire.

Source: Dol.gov, April 2021

Cybersecurity: New DOL Guidance for Retirement Plans

As part of its efforts to protect an estimated $9.3 trillion in retirement plan assets from increasing internal and external cybersecurity threats, the DOL has issued its first guidance ever concerning cybersecurity and retirement plans. The guidance is intended for three interested groups with a stake in retirement plan administration: the sponsors and fiduciaries of retirement plans, the entities providing administrative and other services to retirement plans, and plan participants and beneficiaries.

Source: Bradley.com, April 2021

DOL Releases Additional Prohibited Transaction Exemption Guidance

The DOL has issued two pieces of guidance on its new fiduciary advice prohibited transaction exemption, PTE 2020-02. The first piece is intended to educate retirement savers about considerations when choosing a potential advisor. The second piece of guidance, which is briefly highlighted here below, is titled, "New Fiduciary Advice Exemption: PTE 2020-02 Improving Investment Advice for Workers & Retirees," and is a detailed set of frequently asked questions.

Source: Ascensus.com, April 2021

401k: Deadline for Returning 2020 Excess Deferrals Remains April 15, 2021

On April 8, 2021, the IRS announced on the "Employee Plan News" section of its website that the deadline for returning excess deferrals made to 401k retirement plans has not been extended along with the general federal income tax deadline.

Source: Compliancedashboard.net, April 2021

DOL Approves PBGC Missing Participant Program for Defined Contribution Plans

FAB 2021-01 now provides that until the DOL updates its safe harbor rules, the agency will not pursue fiduciary violations when missing participants' balances are transferred to the PBGC instead of to IRAs. However, the bulletin does not provide complete protection against enforcement.

Source: Hallbenefitslaw.com, April 2021

Is Data a Plan Asset: Another Court Says No

Last week marked a key development in the nascent and still evolving body of case law addressing the status of 401k plan participant data as an ERISA "plan asset." The U.S. District Court for Southern District of Texas granted Fidelity Investments' dismissal motion in Harmon v. Shell Oil, based on the Court's inability to draw a conclusion that plan participant data is a "plan asset," the exercise of control over which would give rise to fiduciary responsibility (and potential liability) under ERISA.

Source: Groom.com, April 2021

DOL to Hold Online VFCP Events

The Department of Labor's Employee Benefits Security Administration (EBSA) has announced that it will be holding online events concerning the DOL's Voluntary Fiduciary Correction Program.

Source: Asppa.org, April 2021

Meaning Well Is Not Always Enough: Watch Your VCP Submission

The IRS's Voluntary Correction Program provides a means by which filers can correct errors before they are told to do so, but the good intentions entailed in using it do not guarantee that there will not be errors in the filings intended to correct mistakes. The IRS has outlined the top mistakes made by those who use it.

Source: Asppa.org, April 2021

Retirement Plans Included in IRS Update of Compliance Strategies

The IRS Tax-Exempt and Government Entities Office has updated its compliance program. That includes compliance strategy initiatives that affect some retirement plans.

Source: Asppa.org, April 2021

QBAD Distribution Limits When One Spouse Doesn't Participate in a Retirement Plan

Experts from Groom Law Group and CAPTRUST answer questions concerning retirement plan administration and regulations, in this case, on QBAD Distribution Limits.

Source: Planadviser.com, April 2021

Effects of Extended Tax Filing on Benefit Plans

Similar to the relief granted in 2020, the IRS has again announced special filing and payment relief deadlines for individuals in response to COVID-19 through Notice 2021-21. The Notice postpones the Federal income tax return and payment due dates from April 15, 2021, to May 17, 2021. The IRS guidance also affects the world of benefit plans and will result in the changes reviewed here.

Source: Graydon.law, April 2021

American Rescue Plan Act Contains Many Employee Benefits Related Provisions

On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law. Many of the provisions in this sweeping legislation bring changes to the employee benefits world of which employers should take note of and which are summarized here.

Source: Benefitsnotes.com, April 2021

Top Mistakes in Voluntary Correction Program (VCP) Submissions

Before you (or your representative) send your VCP submission to the IRS, check to make sure it's error-free. If your submission has errors, it takes longer to review and delays the issuance of the compliance statement. The top mistakes noticed in VCP submissions are listed in this March 31, 2021 article update.

Source: Irs.gov, April 2021


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