PLANSPONSOR - August/September 2020 - 12

UPFRONT
COVID Calls For Beneficiary Reviews
COVID-19 has led to layoffs and changed
rules for required minimum distributions
(RMDs), not to mention caused employee
health issues, all of which make it increasingly
important for sponsors to have good
procedures for updating beneficiary designations
and finding missing participants.
According to The Rosenbaum Law
Firm, emails bouncing back, mail being
returned, little to no recent activity on the
internet or phone, or a major distribution
check remaining uncashed are all signs of
SURVEY SAYS
Zoom-Fatigued?
We asked our
readers: Are you
suffering from
virtual meeting
burnout yet?
60.7% said yes
a missing participant. Along with sending
notices via mail, checking records and
sending inquiries to the beneficiaries of
a missing participant, the Department
of Labor (DOL) says, sponsors may use
locator services, credit reporting agencies
and internet search tools to track missing
participants and beneficiaries.
Participant failure to begin taking
RMDs concerns both the DOL and the
IRS, and both agencies actively monitor for
this issue during investigations and audits.
Under the Setting Every Community Up
for Retirement Enhancement (SECURE)
Act, workers must begin RMDs by April 1
the year after they reach age 72. However,
the Coronavirus Aid, Relief and Economic
Security (CARES) Act has since allowed
for 2020 RMDs to be waived for defined
contribution (DC) plans and individual
retirement accounts (IRAs).
These complex changes underline
the value of good communications.
" Knowledge is of the upmost importance,
and so is communication, " says Andrew
Oringer, co-chair of the ERISA [Employee
Retirement Income Security Act] and
executive compensation group at Dechert
LLP. " It's important that everyone has an
understanding of missing participant
procedures, and that all parties share that
understanding and it's memorialized. "
Plan fiduciaries are also responsible
... And: Will you
continue virtual
meetings in some
capacity if/when
things get back
to normal?
57.2% will use virtual
meetings only for work
35.7% will use them for
work and for family/
friends
7.1% will not use virtual
meetings
Pros
* No one can see you from
the waist down
* You can see the casual side
of business contacts
Cons
* Feeling of personal space
being intruded upon
* Technical issues
You can participate by subscribing to NewsDash at plansponsor.com/subscribe.
for keeping beneficiary designations up
to date and conducting proper beneficiary
reviews, says Anne Tyler Hall, founding
ERISA attorney at Hall Benefits Law LLC.
Plan sponsors should make sure their
participants are updating beneficiary
forms and designations on an annual basis
and should keep these forms on file, she
adds. If sponsors bring in a third party to
perform beneficiary reviews, the sponsor
has a fiduciary responsibility for selecting
and monitoring that third party.
" There needs to be a paradigm for
evaluating the [third party] and its process, "
Hall says. " You can delegate fiduciary
responsibility, but at the end of the day,
the sponsor is responsible from a fiduciary
perspective for choosing the provider. "
For sponsors that are hesitant to
designate a provider, Hall suggests
seeking ERISA counsel. This expert can
help them build a process for recruiting
third parties and monitoring plan documents,
to ensure those are consistent with
changes in a participant's legal status or
designations. -Amanda Umpierrez
12 PLANSPONSOR.COM August - September 2020
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PLANSPONSOR - August/September 2020

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