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Industry & Regulatory News
Small Business Retirement Proposals Introduced in Senate
May 11, 2022 – Senator John Hickenlooper (D-CO) has introduced two retirement bills in the Senate. The Simplifying Small Business Retirement Savings Act, co-sponsored by Senator Susan Collins (R-ME), would require a group of plans filing a single Form 5500 under the SECURE Act to have an individual audit opinion for each plan that would otherwise be subject to an audit requirement. Additionally, the proposal would allow the designation of a fiduciary (other than an employer) to be responsible for collecting contributions to the plan in a pooled employer plan (PEP). The bill also directs the Secretary of Labor to conduct a study on PEPs.
The Incentivizing Small Business Retirement Savings Act would provide a tax credit for employer contributions of up to $1,000 per non-highly compensated employee, with a 2 percent reduction or phaseout of the credit for each employee that exceeds 50 employees. The credit would equal 100 percent in the first tax year and would be reduced by 25 percent each tax year for years 2-4.
Industry & Regulatory News
Financial Freedom Act Proposed in Senate
May 10, 2022 – Senator Tommy Tuberville (R-AL) has introduced the Financial Freedom Act, legislation aimed at prohibiting the Department of Labor (DOL) from restricting the types of investments that plan participants can choose through participant directed accounts and self-directed brokerage accounts. The bill is in response to regulatory guidance released by the DOL and announced in March.
Industry & Regulatory News
SEC Extends Comment Period for ESG Reporting Proposal
May 9, 2022 – The SEC has extended the period to comment on its proposed rule regarding climate-related disclosures initially released in March, and published in the federal register on April 11, 2022. The proposal would require publicly traded companies to include certain climate-related disclosures in registration statements and periodic reports such as the annual Form 10-K. Additional details were previously announced in March. The comment deadline was extended from May 20 2022, to June 17, 2022.
Industry & Regulatory News
Washington Pulse: IRS Issues Proposed MEP Rule
Employers of all types have expressed interest in learning more about multiple employer plans (MEPs). But the unified plan rule, sometimes known as the “one bad apple rule,” has discouraged some employers from pursuing MEP participation.
Industry & Regulatory News
Proposed Lump-Sum Buyout Disclosure Legislation Reintroduced
Senators Patty Murray (D-WA), Tina Smith (D-MN), and Tammy Baldwin (D-WI) reintroduced the Information Needed for Financial Options Risk Mitigation (INFORM) Act of 2022. The proposal would require pension plan sponsors to provide retirees and participants with certain information when being offered a lump-sum buyout from their defined benefit plan.
Industry & Regulatory News
DOL Launches Roundtable Discussions on Retirement
The Department of Labor (DOL) has kicked off what is to be a series of roundtable discussions on how to improve retirement security for workers. Labor Secretary Marty Walsh and Kathleen Kennedy Townsend, the Secretary’s representative for pensions and retirement, joined several state officials, trade group representatives, educators, and others in New York City to review current retirement security policies.
In the coming months, Kennedy Townsend will host similar discussions around the country to promote retirement security reform and open a dialogue between various stakeholders. Topics of focus will include encouraging automatic enrollment, improving portability of benefits as workers move from job to job, and leveraging affordable lifetime income options.
Industry & Regulatory News
IRS Announces Applicable Federal Rates for May 2022
The IRS has issued Revenue Ruling 2022-9, which contains the applicable federal rates (AFR) for May 2022. These rates are used for such purposes as calculating distributions from retirement savings arrangements that meet the requirements for substantially equal periodic payments (a 10 percent early distribution penalty tax exception), also referred to as “72(t) payments.”
Industry & Regulatory News
Penalty-Free Distributions for Domestic Abuse Victims Proposed in Senate
Senators Catherine Cortez Masto (D-NV) and John Cornyn (R-TX) have introduced the Savings Access for Escaping and Rebuilding Act of 2022 (SAFER Act). The bill would provide for penalty-free distributions up to the lesser of $10,000 or 50 percent of the nonforfeitable account balance from tax-exempt retirement plans for survivors of domestic abuse. Eligible distributions can be made within a one-year period of the domestic abuse and can be self-certified by the plan participant. The withdrawn funds could be replaced over a three-year period from the date the distribution was received.
Industry & Regulatory News
Washington Pulse: U.S. House Passes Significant Retirement Bill
The U.S. House of Representatives passed the Securing a Strong Retirement Act of 2022 (SSRA) by a 414-5 vote on March 29, 2022. H.R. 2954 (also commonly referred to as “SECURE 2.0”) contains over 50 retirement plan provisions—nearly double the number as the original Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019. The U.S. Senate is expected to take up a similar bipartisan bill later this year, which could result in the need for a conference committee to reconcile differences between the two bills.
Industry & Regulatory News
Comment Period for Prohibited Transaction Exemption Guidance Extended
The Department of Labor’s Employee Benefit Security Administration has announced the extension of the public comment period for proposed amendments to procedures governing the filing and processing of prohibited transaction exemption applications. The comment period was initially set to expire on April 14, 2022, but has been extended an additional 45 days through May 29, 2022.
The agency has received multiple requests from interested parties to grant additional time to develop and submit comments. Details of the proposal were previously announced and can be found here.