Defined contribution plan

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
Industry & Regulatory News
Starter-K Companion Legislation Introduced in House

Representatives Linda T. Sánchez (D-CA) and Darin LaHood (R-IL) introduced the Starter-K Act, legislation intending to expand access to retirement savings for more Americans. Companion legislation was introduced in the Senate by Senators John Barrasso (R-WY) and Tom Carper (D-DE).

June 17 2022
Industry & Regulatory News
IRS Announces Pre-Examination Compliance Pilot

According to an Employee Plans News release, the IRS is piloting a pre-examination retirement plan compliance program beginning in June 2022. Plan sponsors of retirement plans that have been selected for examination would be notified by letter and given a 90-day period to review plan documents and operations to determine if there are compliance issues. Mistakes found that qualify for the Self Correction Program under the Employee Plans Compliance Resolution System can be corrected in that manner. For items that don’t qualify, the plan sponsor can request remediation through a closing agreement with the IRS. The IRS will review documentation and either issue a closing letter or conduct a limited or full scope examination. The goal of the pilot program is to reduce taxpayer burden and reduce time spent on retirement examinations. The duration of the pilot was not specified, but the IRS will evaluate the effectiveness of the program to determine if it will become part of their overall compliance strategy. 

June 03 2022
Industry & Regulatory News
Financial Freedom Act Proposed in House

Representative Byron Donalds (R-FL) and several Republican co-sponsors have introduced HR 7860, the Financial Freedom Act of 2022. This is companion legislation to S 4147 introduced earlier this month by Senator Tommy Tuberville (R-AL). The proposal would prohibit 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 bills are in response to regulatory guidance released by the DOL and announced in March.

May 27 2022
Industry & Regulatory News
Senate HELP Committee Releases Retirement Bill Discussion Draft

Senators Patty Murray (D-WA) and Richard Burr (R-NC)—chair and ranking members of the Senate Health, Education, Labor and Pensions Committee respectively—have released a discussion draft of compiled retirement provisions from several bills into the Senate’s latest version of what has been coined SECURE Act 2.0. The RISE & SHINE Act shares some similarities to, and builds upon the Securing a Strong Retirement Act bill that passed the House in March.

 

May 27 2022
Industry & Regulatory News
SEC Proposes Enhanced Disclosures About ESG Investment Practices

The Securities and Exchange Commission (SEC) has issued a proposed rule that would add reporting requirements for registered investment advisors, registered investment companies, certain advisers that are exempt from registration, and business development companies to provide additional information regarding their environmental, social, and governance (ESG) investment practices.

May 26 2022
Industry & Regulatory News
Emergency Savings Proposal Introduced

Senators Todd Young (R-IN), and Cory Booker (D-NJ) have introduced the Emergency Savings Act of 2022. The proposal would allow “pension-linked” savings accounts for participants of up to $2,500 (subject to cost-of-living adjustments) to be used for unexpected expenses. The accounts would be treated in the same manner as after-tax contributions, and plan sponsors could automatically enroll a participant with a compensation deferral percentage not to exceed three percent. The account can be invested as cash, in an interest-bearing deposit account, or an investment product designed to preserve principal and provide a reasonable rate of return—and is not subject to any unreasonable fees, restrictions, expenses or charges in connection with the account or withdrawals.

May 26 2022