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DOL Issues Missing Participant Guidance

The DOL issued three pieces of guidance relating to missing participants in tax-qualified retirement plans. In response to the new guidance, described in more detail below, employers should again review their plan documents and any plan policies and procedures, to ensure they align with the DOL?ÇÖs requirements and best practices for avoiding and handling missing participants. In Field Assistance Bulletin No. 2021-01, the DOL issued a temporary enforcement policy on the use of the Pension Benefit Guaranty Corporation?ÇÖs (?Ç£PBGC?Ç¥) Defined Contribution Missing Participants Program for terminating defined contribution plans. Under the temporary enforcement policy, the DOL will not pursue violations under ERISA?ÇÖs fiduciary rules if the plan fiduciary of a terminating defined contribution plan transfers the benefits of missing participants to the PBGC under the program and otherwise follows the requirements of the DOL fiduciary safe harbor regulation at 29 CFR 2550.404a-3. In Compliance Assistance Release No. 2021-01, the DOL issued… Continue Reading

The DOL Says Certain Private Equity Investments May Be Permissible Designated Investment Alternatives Under Individual Accounts Plans

On June 3, 2020, the DOL issued an information letter addressing the possibility of including a private equity type investment as a ?Ç£designated investment alternative?Ç¥ under a participant directed individual account plan. The DOL concluded that, as a general matter, ?Ç£a plan fiduciary would not . . . violate [ERISA?ÇÖs fiduciary duties] solely because the fiduciary offers a professionally managed asset allocation fund with a private equity component as a designated investment alternative for an ERISA covered individual account plan in the manner described in [the] letter.?Ç¥ The DOL observed that private equity investments ?Ç£involve more complex organizational structures and investment strategies, longer time horizons, and more complex, and typically, higher fees?Ç¥ and they generally have ?Ç£different regulatory disclosure requirements, oversight, and controls?Ç¥ and ?Ç£often have no easily observed market value.?Ç¥ In addition to these considerations, the DOL listed several factors that plan fiduciaries should evaluate when considering whether a… Continue Reading

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