ML BeneBits

EXAMINING A RANGE OF EMPLOYEE BENEFITS
AND EXECUTIVE COMPENSATION ISSUES
The US Department of Labor (DOL) recently announced that it is seeking comment on the impact of climate change on retirement security and what actions, if any, the agency should take to protect retirement savings from such risks.
The US Department of Labor (DOL) issued a final regulation (Final Rule) on December 29, 2021, updating the 2021 Form 5500 to reflect certain statutory changes included in the Setting Every Community Up for Retirement Enhancement Act (SECURE Act). The Final Rule focuses primarily on changes to accommodate pooled employer plans (PEPs) and other defined contribution multiple employer plans (MEPs).

The Department of Labor (Department) issued Field Assistance Bulletin No. 2021-03 (FAB) on December 30, 2021, announcing a temporary enforcement policy for group health plan service provider disclosures under ERISA Section 408(b)(2)(B).

Although variable annuity pension plan (VAPP) designs have been permissible for decades, they have not yet seen widespread adoption—particularly in the Taft-Hartley multiemployer plan space.

Recently, however, we have seen a trend of employers and unions (or existing multiemployer plan boards of trustees) agreeing to set up VAPPs as an alternative to the traditional multiemployer defined benefit plan design (hereafter, “Traditional DB Plan”).

At the end of each fiscal year, the US Department of Labor’s (DOL’s) Employee Benefits Security Administration (EBSA) compiles the monetary results it obtained through various initiatives meant to ensure compliance with the Employee Retirement Income Security Act (ERISA).
While considering year-end tasks and planning for the upcoming year, qualified plan sponsors should think about whether they need to revise and/or reissue their summary plan descriptions (SPDs) in 2022.
New York Governor Kathy Hochul enacted an auto-IRA law, effective October 21, which requires certain New York employers to either offer their employees a qualified retirement plan or join the state-run IRA program. The new law amends the New York’s Secure Choice Savings Program, a voluntary IRA program that has been in place since 2018 and is run by the New York State Secure Choice Savings Program Board.

The IRS recently issued FAQs to address workforce issues and labor shortages resulting from the COVID-19 pandemic. The guidance seems to be in response to well-publicized labor shortages affecting schools and the education industry, although it is not limited to that industry. The FAQs reaffirm prior IRS guidance, but may give comfort to employers who are contemplating rehiring retirees as they try to manage workforce issues “related to” the pandemic.

President Joseph Biden signed the Infrastructure Investment and Jobs Act (IIJA) into law on November 15, 2021. The IIJA will provide funding to overhaul the country’s physical infrastructure and will serve to give the nation’s roads and bridges a much-needed facelift, but squirreled away in the legislation are tweaks that will give defined benefit plans a bit of a nip and tuck too. The new law also provides further relief for taxpayers facing filing deadlines after a disaster and updates the list of such disasters to include wildfires.
The American Rescue Plan Act (ARPA) provided relief from certain annual notice and funding requirements to multiemployer plans reeling from COVID-19–related investment and experience losses. IRS Notice 2021-57, issued on October 8, 2021, gives plan sponsors a roadmap for electing relief.