Tag Archives: Regs and guidance

Regulatory roundup

More retirement-related regulatory news for plan sponsors, including links to detailed information.

BLS publishes chart on lump-sum distributions related to DC plans
The Bureau of Labor Statistics (BLS) has published a new chart highlighting the most common payment option for participants in defined contribution (DC) retirement plans. According to the BLS, “As workers approach retirement, they might wonder how their retirement savings will be paid out. Among private industry workers in defined contribution plans in 2017, most participated in savings and thrift plans (73 percent). Other common plan types include deferred profit sharing (25 percent) and money purchase pensions (18 percent). A lump sum was the most common payment option available to workers in these plans. A lump sum provides retiring workers the full amount of their retirement savings and earnings with no further benefits received from the plan.”

To learn more, click here.

Final rule aimed at improving investors’ experience issued by SEC
The Securities and Exchange Commission (SEC) issued a final rule aimed at improving investors’ experience when investing in mutual funds, exchange-traded funds (ETFs), and other investment vehicles. The rule permits asset managers to deliver shareholder reports by making them publicly accessible on a free website and sending investors a paper notice of each report’s availability via mail. If an investor prefers to continue receiving shareholder reports by mail, they may do so. The new rule goes into effect January 21, 2021.

To learn more about the final rule, click here.

Regulatory roundup

More retirement-related regulatory news for plan sponsors, including links to detailed information.

IRS umbrella closing agreement program allows providers of preapproved plan to correct missed deadlines
The April 30, 2016, deadline for preapproved plan adopters to sign a restated plan that complies with the Pension Protection Act has passed. After the first six-year cycle for preapproved plans ended on April 30, 2010, many Voluntary Correction Program (VCP) submissions were received from plan sponsors who didn’t sign a restated plan by the deadline.

While plan sponsors may continue to make VCP submissions for correcting a failure to restate their plans by the deadline, the Internal Revenue Service (IRS) invites financial institutions or other service providers to submit proposals for umbrella closing agreements to correct the same failure on a larger scale by addressing employers affected by the failure as a group.

To learn more, click here.

PBGC issues comment request notice on locating and paying participants
The Pension Benefit Guaranty Corporation (PBGC) requests that the Office of Management and Budget (OMB) extend approval, with modifications, of a notice to enable PBGC to pay benefits to participants and beneficiaries.

This information collection is needed to pay participants and beneficiaries who may be entitled to pension benefits from plans that have terminated. It consists of information participants and beneficiaries are asked to provide in connection with an application for benefits. In addition, in some instances, PBGC requests individuals to provide identifying information so that it may determine whether the individuals may be entitled to benefits. All requested information is needed so that PBGC may determine benefit entitlements and make appropriate payments

To learn more, click here.

Regulatory roundup

More retirement-related regulatory news for plan sponsors, including links to detailed information.

DOL announces temporary nonenforcement policy on fiduciary conflict rules
The U.S. Department of Labor (DOL) released Field Assistance Bulletin (FAB) 2018-02, which announces a temporary enforcement policy on prohibited transaction exemption (PTE) rules applicable to investment advice fiduciaries. The FAB states that, temporarily, the DOL will not pursue prohibited transaction claims against investment advice fiduciaries (advisers and broker-dealers) who are working diligently and in good faith to comply with the 2016 fiduciary rule that became applicable June 9, 2017. The nonenforcement period will extend until after the DOL issues regulations or exemptions or other administrative guidance.

For more information, click here.

Regulatory roundup

More retirement-related regulatory news for plan sponsors, including links to detailed information.

Employee Plans Compliance Unit report on complete discontinuance of contributions
The Employee Plans Compliance Unit (EPCU) of the Internal Revenue Service (IRS) designed the Complete Discontinuance of Contributions Project to determine whether profit-sharing plans, including IRC Section 401(k) plans, may have experienced a complete discontinuance of contributions. If there is a complete discontinuance of contributions in a profit-sharing plan, the plan is treated as terminated for vesting purposes and affected employees must be 100% vested in their accrued benefits.

For more information, click here.

FAB issued clarifying issues regarding proxy voting, shareholder engagement, and economically targeted investments
The Employee Benefits Security Administration (EBSA) of the U.S. Department of Labor (DOL) released a Field Assistance Bulletin (FAB) providing guidance to EBSA’s national and regional offices regarding proxy voting, shareholder engagement, and economically targeted investments by fiduciaries of private-sector employee benefit plans covered by ERISA. FAB 2018-01, clarifies earlier interpretations set forth in Interpretive Bulletins (IBs) 2015-01 and 2016-01. In IB 2015-01, the DOL held that fiduciaries may not sacrifice returns or assume greater risks to promote collateral environmental, social, or corporate governance (ESG) policy goals when making investment decisions. In IB 2016-01, the DOL addressed issues surrounding written statements of investment policy, proxy voting, and other exercises of shareholder rights by fiduciaries when managing plan assets that are corporate stock.

For more information, click here.

Regulatory roundup

More retirement-related regulatory news for plan sponsors, including links to detailed information.

Standard and distress termination forms and instructions posted
The Pension Benefit Guaranty Corporation (PBGC) published standard and distress terminations forms and instructions. Key changes include a new option for submitting these filings by email and the ability to request a prefiling consultation to determine whether a distress filing application is warranted. In addition, because the rules related to missing participants differ depending on whether the date of plan termination is before January 1, 2018, the post-distribution certifications (i.e., Forms 501 and 602, for standard and distress terminations, respectively), have been modified slightly so that they can be used for both pre-2018 and post-2017 terminations.

The new forms and instructions can be found here.

House approves bill for IRS Form 1099 Series Internet platform
The U.S. House of Representatives approved the “21st Century IRS Act” (H.R. 5445), which aims to improve cybersecurity and taxpayer identity protection. It also aims to modernize information technology at the Internal Revenue Service (IRS). The bill includes a provision to develop an internet platform that would allow persons to prepare, file, and distribute IRS Form 1099 series (Information Return), including 1099-R (Distributions From Pensions, Annuities, Retirement, etc.), by January 1, 2023. The bill requires Senate approval.

Regulatory roundup

More retirement-related regulatory news for plan sponsors, including links to detailed information.

Comments requested regarding potential expansion of determination letter program for individually designed plans
The Internal Revenue Service (IRS) released Notice 2018-24, requesting comments on the potential expansion of the scope of the determination letter program for individually designed plans during the 2019 calendar year, beyond provision of determination letters for initial qualification and qualification upon plan termination.

In reviewing comments submitted in response to this notice, the U.S. Department of the Treasury and the IRS will consider the factors regarding the scope of the determination letter program set forth in section 4.03(3) of Revenue Procedure 2016-37, 2016-29 I.R.B. 136. The Treasury Department and the IRS will issue guidance if they identify any additional types of plans for which plan sponsors may request determination letters during the 2019 calendar year. Comments are due to the IRS by June 4, 2018.

For more information, click here.

PBGC releases data tables for single-employer and multiemployer pension plans
The Pension Benefit Guaranty Corporation (PBGC) has published the first installment of tables for the 2016 Data Book. Information in the claims and summary tables has been updated.

For more information, click here.

IRS issues tax withholding and estimated tax publication
The IRS released Publication 505, Tax Withholding and Estimated Tax, for use by employees to determine how much income an employer should withhold for tax payments.

The publication had been referenced by IRS as a key resource for employees to use when deciding on allowance amounts to apply on Form W-4, Employee’s Withholding Allowance Certificate. Form W-4, used by employers in calculating withheld tax amounts, was updated to reflect changes under the new tax law (Pub. L. 115-97). Forms W-4 are completed by employees to inform employers of marital status and the number of withholding allowances to be claimed for federal income tax purposes. The amount of one withholding allowance on an annual basis increased to $4,150 in 2018 from $4,050 in 2017.

For more information, click here.

Guidance for multiemployer plan alternative terms and conditions to satisfy withdrawal liability
The PBGC has issued guidance on alternative terms and conditions that multiemployer plans can use to satisfy withdrawal liability claims. The guidance describes the types of information PBGC finds helpful in evaluating plan proposals, and the factors the agency considers in its evaluation.

For more information, click here.