Defined contribution plan

Industry & Regulatory News
IRS Issues Deadline Relief for Island of St. Croix, U.S. VI Water Shortage

The IRS has announced the postponement of certain tax-related deadlines for victims of a water shortage and health impact from unprecedented sargassum seagrass influx on the island of St. Croix, U.S. Virgin Islands. The tax relief postpones various tax-filing deadlines that began July 15, 2022. Affected individuals and households who reside or have a business on the Island of St. Croix, as well as taxpayers with records located in the covered area that are needed to meet covered deadlines, qualify for relief.


August 03 2022
Industry & Regulatory News
Federal Prime Interest Rate Increased to 5.50 Percent

Effective July 27, 2022, the Federal prime interest rate increased from 4.75 percent to 5.50 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. The next FOMC meeting is scheduled for September 20 and 21, 2022.

July 28 2022
Industry & Regulatory News
Temporary Waiver of RMDs Proposed in House

July 19, 2022 - Representative Warren Davidson (R-OH) has introduced HR 8331, a bill that would provide for a suspension of required minimum distributions (RMDs) from retirement plans and IRAs for the 2022 calendar year.

July 19 2022
Industry & Regulatory News
DOL Proposed Amendment for QPAM Exemptions Has Left OMB

A Proposed Rule titled “Proposed Amendment to PTE 84-14 for Plan Asset Transactions Determined by an Independent Qualified Plan Asset Manager” (QPAM) has left the Office of Management and Budget—suggesting that official release may come soon.

ERISA generally prohibits a number of transactions between a plan and a “party in interest”—including fiduciaries and those providing services to the plan—unless an exemption is granted. PTE 84-14 is a class exemption regarding certain transactions between a party in interest with respect to an employee benefit plan and an investment fund that is managed by a QPAM. An employee benefit plan includes an employee welfare benefit or pension benefit plan, a trust defined under IRC. Secs. 401(a) or 403(a), IRAs, HSAs, MSAs, and ESAs. QPAMs are independent fiduciaries that are a bank, savings and loan, insurance company, or registered investment advisor meeting certain asset/net worth thresholds. 

July 18 2022
Industry & Regulatory News
Lawsuit Filed in Another Cybertheft of Plan Assets

A plaintiff in a 401(k) plan sponsored by Colgate-Palmolive Co. has filed a lawsuit against several parties after an unknown individual defrauded the plan of her entire $750,000 account. The plaintiff has named the plan sponsor, the recordkeeper Alight Solutions, and the plan trustee Mellon Bank, as defendants in the lawsuit. The plaintiff alleges the parties breached their fiduciary duty by failing to safeguard her assets.

July 11 2022
Industry & Regulatory News
PBGC Special Financial Assistance for Multiemployer Plans Final Rule Released

The Pension Benefit Guaranty Corporation (PBGC) has released a final rule outlining terms for underfunded multiemployer plans seeking special financial assistance (SFA) under the American Rescue Plan (ARP) Act of 2021. ARP allows certain financially troubled multiemployer plans to apply for special financial assistance in accordance with rules developed by PBGC. The rule is scheduled to be published on July 8, 2022.

 

July 07 2022
Industry & Regulatory News
Senate Finance Committee Advances EARN Act

The Senate Finance Committee conducted a hearing today to consider the Enhancing American Retirement Now (EARN) Act. The bill was unanimously approved out of committee with one minor amendment. While text of the bill has not yet been made available, details of a summary released by the committee were previously announced. During the hearing, several other amendments were discussed and, while not included, many had broad support and could be included in the final full Senate version of the bill.

June 22 2022
Industry & Regulatory News
DOL Releases Spring 2022 Regulatory Agenda

The Department of Labor has posted online its upcoming guidance priorities. A number of the guidance items deal with retirement savings arrangements, including the following.

  • Two items in the “prerule” stage include improving the effectiveness of retirement plan disclosures and guidance on pooled employer plans
  • A former initiative to modernize the Form 5500 appears in the proposed rule stage
  • A rulemaking to amend the definition of fiduciary to include persons who render investment advice for a fee to employee benefit plans and IRAs
  • Revised procedures for granting prohibited transaction exemptions
  • A final rule regarding pension benefit statement lifetime income illustrations as required under the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019
  • Updates to the Voluntary Fiduciary Correction Program
  • A third final rule concerning Form 5500 changes related to the SECURE Act
  • A final rule regarding prudence and loyalty in selecting plan investments and exercising shareholder rights
  • Amendments to the abandoned plan program

 

June 22 2022
Industry & Regulatory News
Washington Pulse: Some Big Changes May be in Store for the Davis-Bacon Act

The Davis-Bacon Act (DBA) has played a major role in the construction industry for over 90 years. Passed in 1931, it has been described by the Supreme Court as a “minimum wage law designed for the benefit of construction workers.” The DBA generally requires payment of locally prevailing wages under direct federal contracts and for covered contractors and their subcontractors. The employer’s obligation can be met by paying the applicable prevailing wage entirely as cash wages or by a combination of cash wages and employer-provided, bona fide fringe benefits—including pension and health benefits.

June 21 2022
Industry & Regulatory News
Auto-Portability Legislation Introduced

Senators Tim Scott (R-SC) and Sherrod Brown (D-OH) have introduced the Advancing Auto Portability Act of 2022, aimed at reducing retirement “leakage” by allowing for automatic rollovers of certain accounts to follow workers to another employer plan.

June 17 2022