DOL

Industry & Regulatory News

Proposals Supporting ESG in Retirement Plans Introduced

Representative Suzan DelBene (D-WA) and co-sponsors Sean Casten (D-IL), Juan Vargas (D-CA), and Dean Phillips (D-MN) have introduced the Freedom to Invest in a Sustainable Future Act.

February 28 2023

Industry & Regulatory News

Additional Final Form 5500 Guidance Issued

The Department of Labor’s (DOL’s) Employee Benefits Security Administration, the IRS, and the Pension Benefit Guaranty Corporation (PBGC) have released a third and final phase that implements a September 2021 regulatory proposal.

February 23 2023

Industry & Regulatory News

EBSA Proposes VFCP Amendments

The Department of Labor’s Employee Benefits and Security Administration (EBSA) recently released a proposed amendment to the Voluntary Fiduciary Correction Program (VFCP) to include a Self-Correction Component (SCC) for transactions eligible for correction under the program.

February 14 2023

Industry & Regulatory News

DOL Extending Comment Period for VFCP Update

The Department of Labor’s (DOL) Employee Benefits Security Administration (EBSA) is reopening the comment period for its proposed amendments to the Voluntary Fiduciary Correction Program (VFCP) and amendments to Prohibited Transaction Exemption 2002-51, as originally proposed in November 2022. In reopening the comment period that had originally closed January 20, 2023, EBSA is citing section 305 of the SECURE 2.0 Act of 2022 that provides for the expansion of the IRS’s Employee Plans Compliance Resolution System (EPCRS).

February 13 2023
DOL

Industry & Regulatory News

PBGC Announces 2023 Inflation Adjustments for Civil Penalties

The Pension Benefit Guaranty Corporation has published in the Federal Register inflation-adjusted penalty amounts for failure to provide certain notices or other material information and for failure to provide certain multiemployer notices.

  • Daily penalty under ERISA Section 4071 rises from $2,400 to $2,586
  • Daily penalty under ERISA Section 4302 rises from $320 to $345

These adjustments for 2023 are made under the authority of the Federal Civil Penalties Inflation Adjustment Act and are in effect for any of the described penalties that are assessed after January 12, 2023.

January 17 2023
DOL

Industry & Regulatory News

DOL Announces 2023 Inflation Adjustments for Civil Penalties

The Department of Labor has published in the Federal Register several inflation-adjusted penalty amounts for certain failures associated with qualified retirement plans.

  • Per day, for failure to properly file a plan annual report (Form 5500 series); penalty rises from $2,400 to $2,586
  • Per day, for failure to properly provide a plan black-out notice, or notice of right to divest employer securities (each recipient being a separate failure); penalty rises from $152 to $164
  • Per day, for failure to provide DOL-requested documents; penalty increases from $171 to $184 (not to exceed $1,846 per request)
  • Failure to properly provide benefit statements and maintain records vis-à-vis former participants and beneficiaries; penalty rises from $33 to $36 per required statement
  • Failure of a fiduciary to comply with the prohibition on certain types of distributions from defined benefit pension plans with certain liquidity shortfalls; maximum penalty rises from $18,500 to $19,933 (penalty will be the amount of any distribution, if less)

 

Additionally, penalty amounts for certain failures associated with group health plans have been updated as follows.

  • Failure to provide the Summary of Benefits and Coverage (“SBC”); penalty rises from $1,264 to $1,362 per failure
  • Failure to comply with the Genetic Information Nondiscrimination Act (GINA), and failure to comply with disclosure requirements under Medicaid or the Children’s Health Insurance Program (CHIP); penalty rises from $127 to $137 per participant, per day
  • Failure to meet filing requirements for multiple employer welfare arrangements (MEWA); penalty increases from $1,746 to $1,881 per day


These adjustments for 2023 are made under the authority of the Federal Civil Penalties Inflation Adjustment Act and are in effect for any of the described penalties that are assessed after January 15, 2023.

January 13 2023

Industry & Regulatory News

Department of Labor's Final ESG Rule Clarifies Duties

Retirement plan assets should be invested prudently to obtain the best possible financial returns, of course. But what if your plan invests in a company that conducts business in a way that violates your ethical values? For example, is it okay for a plan administrator to buy stock in a company with a record of environmental violations and polluting with impunity? Should that behavior affect whether a company qualifies as a suitable retirement plan investment? Is it possible, or even likely, that a company that responsibly produces a similar product may actually be a better choice, measured both by investment returns and by other factors?

December 21 2022

Industry & Regulatory News

IRS Announces Deadline Relief for Florida Hurricane Nicole Victims

The IRS has announced the postponement of certain tax-related deadlines for victims of Hurricane Nicole in Florida. The tax relief postpones various tax filing deadlines that began on November 7, 2022. Affected individuals and households who reside or have a business in Brevard, Duval, Flagler, Indian River, Lake, Martin, Nassau, Palm Beach, Putnam, St. Johns, St. Lucie, and Volusia counties, as well as taxpayers with records located in the covered area that are needed to meet covered deadlines, qualify for relief.
 
In addition to extending certain tax filing and tax payment deadlines, the relief includes completion of many time-sensitive, tax-related acts described in IRS Revenue Procedure 2018-58 and Treasury Regulation 301.7508A-1(c)(1). Affected taxpayers with a covered deadline on or after November 7, 2022, and before March 15, 2023, will have until March 15, 2023, to complete the acts. This includes filing Form 5500 series returns that are required to be filed on or after November 7, 2022, and before March 15, 2023.
 
“Affected taxpayer” automatically includes any individuals who live, and businesses whose principal place of business is located, in the covered disaster area. Those who reside or have a business located outside the covered disaster area, but have been affected by the disaster, may contact the IRS to request relief.

December 19 2022

Industry & Regulatory News

Federal Prime Interest Rate Increased to 7.50 Percent

Effective December 14, 2022, the federal prime interest rate increased from 7 percent to 7.50 percent. The prime interest rate is largely determined by the federal funds rate, as set by the Federal Reserve’s Federal Open Market Committee (FOMC). As Department of Labor regulations require a retirement plan loan interest rate to be comparable to interest rates charged by entities that are in the business of lending money in similar circumstances, plan sponsors typically use a benchmark such as the prime rate to set the interest rate on plan loans. As a reminder, for a participant who is on active duty in the uniformed services, the Servicemembers Civil Relief Act of 2003 prescribes an interest rate limitation of 6% for loans that were secured before the military service period started.

The next FOMC meeting is scheduled for February 1, 2023.

December 14 2022

Industry & Regulatory News

PBGC Updates Interest Assumptions for Valuing Benefits for the First Quarter 2023

The Pension Benefit Guarantee Corporation (PBGC) has issued a final rule updating interest assumptions under the asset allocation regulation for plans with valuation dates in the first quarter of 2023. These interest assumptions are used for valuing benefits under terminating single-employer plans. The rule is scheduled to be published in the Federal Register on December 15, 2022, and is effective January 1, 2023.

December 14 2022