The Biden administration’s fall 2021 update to the regulatory agenda contains several items of interest to retirement plan sponsors, including proposed regulations relating to environmental, social and governance (ESG) investing, a surprise final regulation on nondiscrimination testing relief for closed defined benefit (DB) plans, and a number of items related to the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 (Div. O of Pub. L. No. 116–94). This article highlights some of the retirement plan items on the updated agendas for the Department of Labor (DOL)’s Employee Benefits Security Administration (EBSA), the Internal Revenue Service (IRS) and the Pension Benefit Guaranty Corp. (PBGC), but omits some routine items. While the agendas often specify anticipated completion dates within the next year, those dates are generally aspirational.
The EBSA agenda includes several retirement plan proposals that have been the focus of the agency’s recent activity:
EBSA’s agenda also includes two new prerule items for retirement plans:
Notably, the EBSA agenda doesn’t include a prerule item currently under review by the Office of Management and Budget described as possible agency actions to protect life savings and pensions from threats of climate-related financial risk.
EBSA’s agenda includes a final rule on lifetime income disclosures as required by the SECURE Act. Although DOL had intended to publish the final rule before the interim final rule took effect on Sept. 18, 2021, EBSA now anticipates publication by February 2022. The agenda also includes two interim final rules that have been on the agenda for several years:
EBSA currently has no items listed as long-term regulatory projects.
IRS officials recently indicated the agency intends to focus its efforts on much-needed regulatory guidance for various provisions of the SECURE Act. These items will likely be the agency’s priority in 2022.
The agenda notes March 2022 as the target date for publication of these proposed regulations.
The IRS agenda includes a new item relating to mortality tables for determining DB plans’ minimum required contributions under IRC Section 430. These tables are used to determine minimum lump sums under IRC Section 417(e). Although the proposal provides no specific information as to what changes are under consideration, IRS might be contemplating incorporating the new Pri-2012 mortality tables released by the Society of Actuaries in 2019.
A number of noteworthy items IRS moved to its long-term actions list in spring 2021 are now back on the latest agenda:
The agenda also includes some familiar items that have been on IRS’s to-do list for a while:
The agenda indicates that IRS is working on final regulations reflecting the SECURE Act’s nondiscrimination testing relief for closed DB plans and replacement nonelective contributions, and also the IRC’s minimum participation requirement. This may come as a surprise to employers, since the agency never issued proposed regulations reflecting the SECURE Act’s relief. The IRS proposed regulations offering testing relief in 2016, and while there are some similarities between the two sets of rules, there are also significant differences. For example, the SECURE Act allows aggregating plans with different plan years and testing a DB plan on an aggregated basis with matching DC contributions or an ESOP, but the 2016 proposal includes neither of these options. These changes are novel and complicated, and arguably should be the subject of a proposed rulemaking with a notice and comment period.
The IRS agenda also includes final rules for the following items, though they have been on the agenda in some form for years and may not be top agency priorities:
IRS’s list of long-term actions continues to include items on notifying participants of the consequences of failing to defer receipt of distributions, affiliated service groups under Section 414(m) and Indian tribal government plans.
PBGC’s agenda includes a new proposed rule that would provide actuarial assumptions to determine withdrawal liability for participating employers in a multiemployer plan. The PBGC’s agenda lists several other proposals, all of which have previously appeared, including:
PBGC’s agenda includes a final rule on the special financial assistance for multiemployer plans provided under the American Rescue Plan Act of 2021. PBGC issued an interim final rule on July 12, 2021, and the agenda anticipates a final rule in January 2022.
PBGC currently has no items listed as long-term regulatory projects.