PLANSPONSOR - October/November 2018 - 10

Compliance Update
Summaries of the latest news from Washington and the courts-what's coming,
what's contemplated and what's critical for plan sponsors to know
DOL Seeks to Expand
'Association Retirement
Plans'
Under the direction of President Donald
Trump, the Department of Labor (DOL) is
seeking to make it easier for small businesses
to form association retirement
plans-aka multiple employer plans
(MEPs)-which permit them to join
together to offer defined contribution
(DC) plans within a single administrative
framework. To this end, the DOL has
published a set of proposed regulations
under Title 29 of the Code of Federal
Regulations; these would expand access
to retirement saving options by clarifying
the circumstances under which an
employer group, association or professional
employer organization (PEO) might
sponsor a workplace retirement plan. In
particular, the proposed regulation clarifies
that employer groups or associations
and PEOs can, when satisfying certain
criteria, constitute " employers " within the
meaning of Section 3(5) of the Employee
Retirement Income Security Act (ERISA)
in order to establish or maintain an individual
account " employee pension benefit
plan " within the meaning of ERISA
Section 3(2).
Family Savings Act
Passes House
The U.S. House of Representatives
advanced two of three core components
of the Republicans' Tax Reform 2.0
agenda. Directly relevant to the retirement
industry is the passage of H.R.
6757, or the Family Savings Act. As
adopted, the bill includes many, but not
all, of the provisions written into the
popular Retirement Enhancement and
Savings Act (RESA). At a high level, the
Family Savings Act embraces RESA's
proposed endorsement of the open
Reform 2.0, i.e., the more broadly focused
and politically divisive Protecting Family
and Small Business Tax Cuts Act of 2018.
Title I
of the bill
would allow
for wider
adoption of
MEPs, referred to
here as " pooled
employer plans. "
multiple employer plan (MEP) concept;
still, it fails to address some of RESA's
solutions for making lifetime income
more readily available to qualified retirement
plan participants. Notably, though,
before the House passed the bill, leadership
added the Senate's annuity selection
safe harbor provision from RESA.
Title I of the Family Savings Act
would allow for wider adoption of MEPs,
referred to here as " pooled employer
plans. " After the successful passage of the
bill, along with H.R. 6756, the American
Innovation Act of 2018, the House will
likely next turn to-and successfully
pass-the third core component of Tax
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DB Plan Disclosure
Requirements
The Financial Accounting Standards
Board (FASB) is making changes to the
disclosure requirements for defined
benefit (DB) plans. Some disclosure
requirements have been removed from
Subtopic 715-20, Compensation-
Retirement Benefits-Defined Benefit
Plans-General, and some requirements
have been added. In Accounting
Standards Update 2018-14, the FASB
says the objective and primary focus of
the changes is " to improve the effectiveness
of disclosures in the notes to financial
statements[. This would be done] by
facilitating clear communication of the
information that is required by generally
accepted accounting principles (GAAP)
that is most important to users of each
entity's financial statements, " according
to the update. The amendments are effective
for fiscal years ending after December
15, 2020, for public business entities; and
for fiscal years ending after December
15, 2021, for all other entities. Early adoption
is permitted for all. An entity should
apply the amendments on a retrospective
basis to all periods presented.
DOL Not Giving Up
On Fiduciary Rule
The Department of Labor (DOL) Employee
Benefit Security Administration (EBSA)
has on its regulatory agenda a continuation
of the final rule stage for " Fiduciary Rule
and Prohibited Transaction Exemptions. "
The item notes that, on April 8, 2016, the
DOL replaced the 1975 " definition of fiduciary "
regulation with a new regulatory
definition. However, its new definition
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PLANSPONSOR - October/November 2018

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