Legislative updates

Industry & Regulatory News

2022 Form 5500 Series Informational Copies Released

The Department of Labor’s Employee Benefits Security Administration (EBSA), the IRS, and the Pension Benefit Guaranty Corporation (PBGC) jointly released the 2022 Form 5500, Annual Return/Report of Employee Benefit Plan, and the 2022 Form 5500-SF, Short Form Annual Return/Report of Small Employee Benefit Plan, and their respective instructions and schedules.

In an accompanying news release, EBSA reminds filers that these are informational copies of the Form 5500 series and cannot be used for filing. The news release and accompanying instructions highlight the following changes for 2022:

  • For multiple-employer plans, new plan characteristic codes have been added to identify pooled employer plans, association retirement plans, PEO multiple-employer plans, and other multiple-employer plans.
  • Updated instructions to reflect the cost-of-living adjustment increase of the civil filing penalty from $2,259 to $2,400.
  • Revised the instructions for Schedule MB relating to multiemployer defined benefit plans and certain money purchase plan actuarial information.
  • Revised Schedule R to require plans to report identifying information about any participating employer who either contributed more than five percent of the plan’s total contributions or was one of the top-ten highest contributors.
  • Revised Schedule SB for single employer defined benefit plan actuarial information to require an attachment of a projection of expected benefit payments and require filers to indicate the first plan year that the extended amortization rule was applied under the American Rescue Plan Act of 2021.

The news release further explains EBSA is “modernizing” the EFAST2 website and that the existing EFAST2 user ID and password log-in process is being phased out. Beginning January 1, 2023, EFAST2 will begin using the unified Login.gov single sign-on process for U.S. government websites. Existing EFAST2 users will have until September 1, 2023, to transition their log-in.

December 08 2022

Industry & Regulatory News

Class Certification in Lawsuit Against TIAA Overturned

On December 1, 2022, the U.S. Court of Appeals for the Second Circuit has overturned a lower court decision to certify a class action complaint against Teachers
Insurance and Annuity Association of America (TIAA) asserting that it engaged in prohibited transactions and facilitated fiduciary breaches by servicing collateralized plan loans to participants for approximately 8,000 qualified retirement plans. The plaintiffs argue that TIAA improperly receives certain earnings on the investment of the collateral assets.

The lower court had previously certified participants who received approximately 500,000 loans. The Second Circuit ruled that the lower court had not properly evaluated whether the transactions were too individualized to be combined into a class action case. The case was remanded to the lower court for a ruling on this issue.

Industry observers are closely watching this case as it presents a new approach to retirement plan litigation.

December 02 2022

Industry & Regulatory News

Bill Proposed to Amend Family Attribution Rules

Senator Mark Kelly (D-AZ) and co-sponsor Senator Bill Cassidy (R-LA) have introduced S. 5125 the Family Attribution Modernization Act. The proposal would modify controlled group rules under IRC 414(b) pertaining to family attribution as follows:

  • Community property laws shall be disregarded for purposes of determining ownership
  • Stock owned by minor children of the spouse under IRC 1563(e)(6) is not attributed when the exception to spousal attribution also applies under IRC 1563(e)(5). This generally occurs if the spouse – 1) does not directly own stock, 2) is not a director or employee, 3) no more than 50% of company earnings are derived from royalties, rent, dividends, etc., and 4) spousal rights to dispose of stock are not restricted or run in favor of minor children
  • Stock owned in different corporations that is attributed to a child under section 1563(e)(6)(A) from each parent, and is not attributed to such parents as spouses under section 1563(e)(5), shall not by itself result in the corporations being a controlled group

To the extent these proposed changes result in a change in controlled group status, the transition rules under IRC 410(b)(6)(C) would apply. The disregarding of community property laws would apply under IRC 414(m) for affiliated service groups as well.


November 28 2022

Industry & Regulatory News

Hardship Distributions May Be Permitted for South Carolina Hurricane Ian

The Federal Emergency Management Agency (FEMA) has issued a disaster declaration for Hurricane Ian in South Carolina, beginning September 25, 2022, and ending October 4, 2022.

Employers with qualified retirement plans may allow participants to take hardship distributions if

  • they have incurred expenses and losses because of a FEMA-declared disaster, and
  • their principal residence or place of employment at the time of the disaster is located in an area designated by FEMA as eligible for individual disaster assistance.

If the employer permits hardship distributions for expenses and losses related to a federally declared disaster, participants can check fema.gov/locations to determine if they are located in a disaster area designated for individual assistance.

The IRS may also issue relief related to this disaster for certain tax-related deadlines. Additional information can be found at irs.gov/newsroom/tax-relief-in-disaster-situations.

November 25 2022

Industry & Regulatory News

DOL Releases Updated VFCP

The Department of Labor (DOL) has released a proposed amendment to its Voluntary Fiduciary Protection Program (VFCP), along with a proposed amendment to Prohibited Transaction Exemption (PTE) 2002-51, to permit certain transactions identified in the VFCP transaction exemption.

The VFCP allows plan officials to avoid potential civil enforcement actions and civil penalties under ERISA if eligible transactions are voluntarily corrected in a manner that meets the program’s requirements. Correction of these transactions under the current Voluntary Fiduciary Correction Program requires plan officials to submit an application to EBSA for review and approval. According to a DOL press release, EBSA’s proposed changes will do the following:

  • Clarify some existing transactions that are eligible for correction under the program.
  • Expand the scope of other transactions currently eligible for correction and simplify administrative or procedural requirements under the program.
  • Amend the associated prohibited transaction class exemption, known as PTE 2002-51.

Most notable among the proposed changes is the addition of a self-correction component. This feature will enable employers and other plan officials to notify EBSA electronically that they have self-corrected certain failures to send participant contributions and loan repayments to pension plans on time. The proposed self-correction component can be used only if the following conditions are met:

  • Participant contributions or loan repayments to the plan must be remitted no more than 180 calendar days from the date of withholding or receipt.
  • Lost earnings must not exceed $1,000 calculated from date of withholding or receipt.
  • The plan or self-corrector must not be under investigation as defined in the program.
  • Self-correctors must use the program’s online calculator to calculate lost earnings and an online web tool to complete and file the self-correction component notice. Self-correctors must also complete and retain the self-correction retention record checklist.


Comments on the proposed changes can be made within 60 days of publication in the Federal Register. The proposals will be reviewed, and additional details provided.

November 21 2022

Industry & Regulatory News

PBGC Extends Comment Period for Withdrawal Liability Proposed Rule

The Pension Benefit Guaranty Corporation (PBGC) is extending the comment period for a proposed rule that would provide interest rate assumptions that may be used by a plan actuary in determining a withdrawing employer’s liability under a multiemployer plan. PBGC published the proposed rule in the Federal Register on October 14, 2022, with a comment period that was scheduled to end on November 14, 2022. After receiving a request to extend the comment period to provide a total of at least 60 days from October 14, 2022, PBGC is extending the comment period through December 13, 2022. Release of the proposed rule was previously announced.

November 09 2022

Industry & Regulatory News

SEC Adopts Rules to Enhance Proxy Voting Disclosures

The Securities and Exchange Commission (SEC) has finalized rules to amend Form N-PX, Annual Report Of Proxy Voting Record of Registered Management Investment Company, to enhance the information mutual funds, exchange-traded funds (ETFs), and certain other funds currently report annually about their proxy votes and to make that information easier to analyze. The rule and form amendments will also require institutional investment managers subject to the Securities Exchange Act of 1934 to report annually on Form N-PX how it voted proxies relating to executive compensation matters.

The rule is effective July 1, 2024.

November 03 2022

Industry & Regulatory News

SEC Re-Proposes Mutual Fund “Hard Close”

The Securities and Exchange Commission (SEC) has released a proposed rule titled “Open-End Fund Liquidity Risk Management Programs and Swing Pricing; Form N-PORT Reporting.”

November 03 2022

Industry & Regulatory News

PBGC Proposes Modifications to Form 5500 Schedule R and SB Reporting

The Pension Benefit Guarantee Corporation (PBGC) has submitted to the Office of Management and Budget an information collection request and extension related to Form 5500 series annual reporting requirements. Specifically, the request proposes modifications to Schedule R, Retirement Plan Information, and Schedule SB, Single-Employer Defined Benefit Plan Actuarial Information.

November 03 2022

Industry & Regulatory News

Auto-Portability Legislation Introduced in House

Representatives Brad Schneider (D-IL) and Ron Estes (R-KS) have introduced HR 9252, Advancing Auto-Portability Act, to reduce retirement leakage by allowing automatic rollovers of certain accounts to follow workers to another employer plan.

October 31 2022