The regulatory scheme governing the registration and sales of securities and the regulatory scheme governing retirement plan investments have historically developed separately from each other. The SEC and the U.S. Department of Labor’s Employee Benefits Security Administration (the “EBSA”) had worked independently of each other for decades, with their regulatory paths only occasionally crossing. Indeed, not only had there been little coordination between the SEC and EBSA, there had always been a bit of regulatory animosity…

The Department of Treasury has fulfilled its portion of the directive under Executive Order (the “EO”)13847 by issuing its proposed regulation giving relief to under the “one bad apple” rule. That EO had two MEP directives: the DOL was directed to propose regs which we permit unrelated employers to adopt MEPs (which it has done); and the Treasury was directed to issue rules which would prevent the disqualification of a Multiple Employer Plan under Code…

As the restatement process for 403(b) plans continues on, a familiar “vestige” of certain past practices of a major vendor continues to bubble its way to the top. That “vestige” is the 403(b) “Money Purchase Plan.” It is a very common practice in the 403(b) market for an employer to specifically identify the percentage of compensation it will deposit as an employer contribution to their 403(b) plan: percentages as high as 8, 10 or 12%…

The Portman-Cardin Bill, the Retirement Security and Savings Act – 2019 introduces sweeping changes to 403(b) plans by expanding their investment universe. These changes, however, also required modification to the Securities Laws otherwise applicable to 403(b) plans in order for them to work. A few critical issues have gone unanswered in the legislation, and there are a number of transition issues which we will have to be addressed. Technically, the Act expands 403(b) custodial account…

For all the noisy support being generated for the changes to Multiple Employer Plan arrangements in RESA and SECURE, little notice is being given to the provisions which are likely to have a much more meaningful impact on the ability for smaller plans to obtain the advantages of scale: the rules permitting the “Combined Annual Report for Groups of Plans.” These rules are based upon old DOL regulations called “Group Insurance Arrangements (or “GIAs) for…

One of the more curious results of the failure of the Bipartisan Budget Act of 2018 to amend 403(b)(11) to provide for the same hardship relief that was granted to 401(k) plans is that the “hardship” distribution of 403(b) QNECs and QMACs aren’t really hardship distributions. This has a very real practical and operational effect. The IRS describe the rule  well in its preamble to their proposed regulation on the new hardship distribution rule: “Section…

This link is to the TAG Resources’ comment to the proposed MEP regulation which was filed with the DOL last week. The comment letter addresses the DOL’s main concern in initially prohibiting non-PEO commercial enterprises from becoming MEP sponsors. The Department is concerned that allowing any commercial enterprise to sponsor a MEP  would turn ERISA into a purely “commercial” statute; that without the sort of employment sort of relationships that PEOs brings the table, ERISA…