Pension News - What's New in 2021?

The following list tracks important guidance that are released during 2021. Except where noted, these items are summarized in detail, with appropriate commentary, in our quarterly newsletter, eRISA Update. See our Newsletters page to sign up for eRISA Update.

Last Updated: May 10, 2021

Legislative Developments

• Pension provisions in the American Rescue Plan Act provide funding relief for multiemployer and single-employer pension plans [Citation: American Rescue Plan Act of 2021, P.L. 117-2 (March 11, 2021)]
  Text available at: https://www.congress.gov/117/bills/hr1319/BILLS-117hr1319enr.pdf

Treasury Regulations

• Regulations define qualified plan loan offsets eligible for extended rollover period [Citation: Treas. Reg. §1.402(c)-3, 86 F.R. 464 (January 6, 2021)]
  Text available at https://www.govinfo.gov/content/pkg/FR-2021-01-06/pdf/2020-27151.pdf
• Proposed regulations would clarify how extensions under IRC §7508A are applied, would implement IRC §7508A(d), and eliminate ambiguity in legislative language referring to disaster declarations [Citation: Prop. Treas. Reg. §§1.165-11(b)(1) and 301.7508A-1(g) and (h), 86 F.R. 2607 (January 13, 2021)]
  Text available at https://www.govinfo.gov/content/pkg/FR-2021-01-13/pdf/2021-00185.pdf

IRS Guidance

• 2021 annual update of general procedures for obtaining Employee Plans private letter rulings and determination letters, user fees for Employee Plans submissions, including VCP [Citation: Rev. Proc. 2021-4, 2021-1 I.R.B. (January 4, 2021)]
  Text available at https://www.irs.gov/pub/irs-irbs/irb21-01.pdf
• Temporary relief that waives physical presence requirement for spousal consent if certain conditions are met is extended to June 30, 2021 [Citation: Notice 2021-03, 2021-2 (January 11, 2021; advance notice on December 22, 2020), modifying Notice 2020-42, 2020-26 I.R.B. (June 22, 2020)]
  Text available at https://www.irs.gov/pub/irs-drop/n-21-03.pdf
• IRS issues 2021 covered compensation table [Citation: Rev. Rul. 2021-3, 2021-5 I.R.B. (February 1, 2021; advance release on January 15, 2021)]
  Text available at https://www.irs.gov/pub/irs-drop/rr-21-03.pdf
• IRS guidance on legislative changes applicable to cafeteria plans [Citation: Notice 2021-15, 2021-10 I.R.B. (March 8, 2021); advance publication on February 18, 2021)]
  Text available at: https://www.irs.gov/pub/irs-drop/n-21-15.pdf
• IRS website provides FAQs regarding the partial termination relief enacted as part of Consolidated Appropriations Act [Citation: Partial Termination of a Qualified Retirement Plan Under Section 209 of the Taxpayer Certainty and Disaster Tax Relief Act of 2020, Coronavirus-related relief for retirement plans and IRAs questions and answers, www.irs.gov (April 27, 2021)]
  Text available at:
  https://www.irs.gov/newsroom/coronavirus-related-relief-for-retirement-plans-and-iras-questions-and-answers#partial-termination

DOL Regulations

• DOL revises its interpretation of independent contractor status under the FLSA to promote certainty for stakeholders, reduce litigation, and encourage innovation in the economy [Citation: DOL Reg. §§795.100-795.115, 29 C.F.R. Part 795, 86 F.R. 1168 (January 7, 2021)] The DOL has proposed withdrawing this regulation. See the March 12, 2021, entry below,
  Text available at https://www.govinfo.gov/content/pkg/FR-2021-01-07/pdf/2020-29274.pdf
• Civil penalty adjustments for 2021 [Citation: DOL Federal Civil Penalties Inflation Adjustment Act Annual Adjustments for 2021, DOL Reg. §2575.3, 86 F.R. 2964 (January 14, 2021)]
  Text available at https://www.govinfo.gov/content/pkg/FR-2020-01-15/pdf/2020-00486.pdf
• DOL rescinds 2020 update of its procedures for non-regulatory Guidance Documents [Citation: 29 C.F.R. Part 89 [removed], 86 F.R. 7237 (January 27, 2021)]
  Text available at https://www.govinfo.gov/content/pkg/FR-2021-01-27/pdf/2021-01746.pdf
• DOL will not enforce 2020 regulations regulation the use non-pecuniary factors in a fiduciary’s selection of plan investment or designated investment alternatives, and in exercising proxy voting and other shareholder rights [Citation: Statement Regarding Enforcement of DOL Reg.§2550.404a-1 (March 10, 2021)]
  Text available at: https://www.dol.gov/sites/dolgov/files/ebsa/laws-and-regulations/laws/erisa/statement-on-enforcement-of-final-rules-on-esg-investments-and-proxy-voting.pdf
• DOL withdraws regulations that would change standards for determining whether a worker is an employee or an independent contractor under the FLSA [Citation: Independent Contractor Status Under the Fair Labor Standards Act; Withdrawal, 86 F.R. 24303 (May 6, 2021)]
  Text available at: https://www.govinfo.gov/content/pkg/FR-2021-05-06/pdf/2021-09518.pdf

DOL Formal Guidance/Prohibited Transaction Exemptions

• DOL confirms in News Release that will not delay PTE 2020-02 [Citation: News Release dated February 12, 2021]
  Text available at https://www.dol.gov/newsroom/releases/ebsa/ebsa20210212
• DOL explains how the continuation of the COVID-19 period for more than one year affects the deadlines extended under DOL/IRS Joint Notice and EBSA Disaster Relief Notice 2020-1 [Citation: EBSA Disaster Relief Notice 2021-1 (posted March 29, 2020)]
  Text available at: https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/disaster-relief/ebsa-disaster-relief-notice-2021-01
• DOL issues FAQs on PTE 2020-02 and publishes guide for retirement investors receiving investment advice [Citation: New Fiduciary Advice Exemption: PTE 2020-02 Improving Investment Advice for Workers & Retirees -Frequently Asked Questions and Choosing the Right Person to Give You Investment Advice: Information for Investors in Retirement Plans and Individual Retirement Accounts, www.dol.gov (April 2021)]
  Text available at:
  https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/new-fiduciary-advice-exemption.pdf (PTE 2020-02 FAQs)
  https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/choosing-the-right-person-to-give-you-investment-advice (Retirement investor information)
• IRS updates Operational Compliance List to reflect changes effective through 2020 [Citation: Operational Compliance List (last updated April 27, 2021), www.irs.gov]
  Text available at https://www.irs.gov/retirement-plans/operational-compliance-list

PBGC Regulations and Other Guidance

• Civil penalty adjustments for 2021 [Citation: PBGC Adjustment of Civil Penalties for Inflation, PBGC Reg. §§4071.3 and 4302.3, 86 F.R. 2541 (January 13, 2021)]
  Text available at https://www.govinfo.gov/content/pkg/FR-2021-01-13/pdf/2021-00297.pdf
• PBGC rescinds 2020 update of its procedures for non-regulatory Guidance Documents [Citation: 29 C.F.R. Part 4908 [removed], 86 F.R. 17066 (April 1, 2021)]
  Text available at: https://www.govinfo.gov/content/pkg/FR-2021-04-01/pdf/2021-06734.pdf

EBSA Advisory Opinions, Field Assistance Bulletins and other informal guidance from the DOL

• Temporary nonenforcement policy for use of PBGC missing participant program to rollover accounts from terminated defined contribution plans (including abandoned plans) [Citation: Field Assistance Bulletin (FAB) 2021-01 (January 12, 2021)]
  Text available at: https://www.dol.gov/agencies/ebsa/employers-and-advisers/guidance/field-assistance-bulletins/2021-01
• Follow-up DOL letter withdraws earlier letter that said criminal convictions under foreign law did not violate prohibition on QPAM criminal convictions under PTE 84-14 [Citation: Letter from Kate O’Scannlain, Solicitor, DOL, to Lisa Bleier, Managing Director & Associate Legal Counsel of the Securities Industry and Financial Markets Association (SIFMA), issued November 3, 2020 (withdrawn March 23, 2021)]
  Withdrawal discussed in following article:https://www.erisapracticecenter.com/2021/03/what-happens-abroad-apparently-does-not-stay-abroad-dol-revokes-trump-administration-guidance-that-provided-relief-to-qpams-for-convictions-under-foreign-law/

ERISA Litigation

• Divorce decree met the requirements of a QDRO when it specified that all insurance benefits would be paid to the former spouse [Citation: Festini-Steele v. ExxonMobil Corporation, No. 20-1052, ___ F.3d ___ (10th Cir. February 18, 2021)]
  Text available at https://www.ca10.uscourts.gov/opinions/20/20-1052.pdf
• Arbitration agreement did not apply to participant’s ERISA §502(a)(2) claims for fiduciary breach because the claims did not “relate to” his employment [Citation: Cooper V. Ruane Cunniff & Goldfarb Inc., No. 17-2805, ___ F.3d ___ (2nd Cir. March 4, 2021)]
  Text available at: https://www.ca2.uscourts.gov/decisions/isysquery/ce309246-12c2-4409-94bd-fac1616a78dc/1/doc/17-2805_complete_opn.pdf#xml=https://www.ca2.uscourts.gov/decisions/isysquery/ce309246-12c2-4409-94bd-fac1616a78dc/1/hilite/
• Fees charged by Fidelity to mutual funds in order to be included on Fidelity’s platform of investment options do not make Fidelity a fiduciary with respect to plans that contract with Fidelity [Citation: Wong v. FMR, LLC, No. 20-1286, ___ F.3d ___ (1st Cir. March 5, 2021)]
  Text available at: http://media.ca1.uscourts.gov/pdf.opinions/20-1286P-01A.pdf
• Claimant deemed to have exhausted administrative remedies because of plan’s deficient claims procedure [Citation: Theriot v. Building Trades United Pension Trust Fund, No. 20-30126, ___ F.3d ___ (5th Cir. March 12, 2021)]
  Text available at: https://www.ca5.uscourts.gov/opinions/unpub/20/20-30126.0.pdf
• Employer may proceed with state law breach of contract, promissory estoppel and fraud claims against ESOP trustee that pulled out of refinancing deal with respect to ESOP loan [Citation: Dansko Holdings, Inc. v. Benefit Trust Co., Nos. 19-3847 & 19-3892, ___ F.3d ___ (3rd Cir. March 16, 2021)]
  Text available at: https://www2.ca3.uscourts.gov/opinarch/193847p.pdf
• Ninth Circuit upholds forum selection clause in plan that required suit to be brought where the plan is administered [Citation: In re Becker (Becker v. Wells Fargo), No. 20-72805, ___ F.3d ___ (9th Cir. April 1, 2021)]
  Text available at: https://cdn.ca9.uscourts.gov/datastore/opinions/2021/04/01/20-72805.pdf
• Eleventh Circuit rules that ERISA attorney’s fees cannot be assessed against legal counsel [Citation: Peer v. Liberty Life Assurance Company of Boston, No. 19-13974, ___ F3d ___ (11th Cir. April 6, 2021)]
  Text available at: https://media.ca11.uscourts.gov/opinions/pub/files/201913974.pdf
• Named fiduciary cannot be liable for fiduciary breach due to non-fiduciary actions performed by fiduciary’s delegate; electronic requests recognized as a writing; professional negligence and negligent misrepresentation claims against non-fiduciary service provider are not preempted by ERISA [Citation: Bafford v. Northrop Grumman Corp., No. 20-55222, ___ F.3d ___ (9th Cir. April 15, 2021)]
  Text available at: https://cdn.ca9.uscourts.gov/datastore/opinions/2021/04/15/20-55222.pdf
• Dudenhoeffer pleading standard remains elusive as Ninth Circuit rejects claim for failure to disclose nonpublic information about publicly-traded stock based on general economic principles regarding delayed disclosure [Citation: Wilson v. Craver, No. 18-56139, ___ F.3d ___ (9th Cir. April 19, 2021)]
  Text available at: http://cdn.ca9.uscourts.gov/datastore/opinions/2021/04/19/18-56139.pdf
• PBGC’s denial of lump sum payment requested prior to the company’s filing of a distress termination NOIT from trusteed DB plan was not arbitrary or capricious [Citation: Fisher v. PBGC, No. 20-7063, ___ F.3d ___ (D.C.Cir. April 20, 2021)]
  Text available at: https://www.cadc.uscourts.gov/internet/opinions.nsf/C5C55F772DAF955C852586BD004DE0BC/$file/20-7063-1895224.pdf
• California CalSavers program, providing an IRA program to employees of employers that do not offer an ERISA plan, held not to be preempted by ERISA [Citation: Howard Jarvis Taxpayers Association v. California Secure Choice Retirement Savings Program, No. 20-15591, ___ F.3d ___ (9th Cir. May 6, 2021)]
  Text available at: https://cdn.ca9.uscourts.gov/datastore/opinions/2021/05/06/20-15591.pdf

Miscellaneous Guidance

• Executive order places temporary freeze on new regulatory action, requires review of regulations that have not gone into effect as of January 20, 2021 [Citation: Regulatory Freeze Pending Review, Memorandum For The Heads of Executive Departments and Agencies from Ronald A. Klain, Assistant to the President and Chief of Staff (January 20, 2021)]
  Text available at: https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/regulatory-freeze-pending-review/