On July 16, 2021, the Internal Revenue Service (“IRS”) published an updated version of its correction procedures for qualified retirement plans, Revenue Procedure 2021-30, the Employee Plans Compliance Resolution System (“EPCRS”).
The revisions to EPCRS include a number of changes that are intended to help simplify and provide additional flexibility for correcting certain retirement plan failures. Below is a summary of the major changes:
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President Biden signed an executive order on May 20 on climate-related financial risk that seeks to change the rules regarding the use of environmental, social, and governance (ESG) investments in retirement plans. The order specifically directs the Employee Benefits Security Administration (EBSA) bureau of the Department of Labor (DOL) to consider suspending, revising, or rescinding the Trump-era “Financial Factors in Selective Plan Investments” rule regarding ESG retirement investments. The executive order is consistent with the expectation that the Biden administration will move to encourage the consideration of ESG factors when selecting retirement plan investments given the emphasis on climate change initiatives.
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The Setting Every Community Up for Retirement Enhancement (“SECURE”) Act made a number of changes designed to increase the availability of lifetime income options in defined contribution retirement plans, such as 401(k) plans. Among those changes was a new fiduciary safe harbor for choosing an annuity provider, including an “in-plan” annuity-type product. Although this provision may not have received as much attention due to the COVID-19 pandemic, plan sponsors and committees should be aware of the new safe harbor option, particularly in light of the upcoming requirement to provide lifetime income disclosures to participants, which is set to become effective later this year (discussed here).
Continue reading “Reminder: The SECURE Act’s Safe Harbor for Lifetime Annuity Options Opens New Possibilities for Defined Contribution Plan Sponsors”
As people across the country react to the quickly changing COVID-19 pandemic, Congress passed another piece of legislation providing guidance and relief on a variety of issues — the Coronavirus Aid Relief and Economic Security (CARES) Act, signed into law on March 27, 2020. This article includes brief summaries of what employers should know about key benefits-related components of the CARES Act. Plan sponsors should review their plans to assess the impact of these changes and take appropriate steps to implement the changes (some of which are required).
Continue reading “CARES Act Brings Much-Needed Relief (and New Obligations) for Benefit Plans”