ERISA Roundup - Q2 2022

August 2022

ERISA Roundup Quarter 2 2022

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A NOTE FROM BDO’S NATIONAL ERISA PRACTICE LEADER
Mid-year is a great time to reflect on key accomplishments for the first half of the year and finalize your plans for the second half. To assist in this process, we have assembled a set of our most recent insights and resources.

In this edition of our ERISA Roundup, you’ll find information on the scope and potential implications on the Department of Labor (DOL) proposed rule on Environment, Social and Governance (ESG) investing. We also explore how recent changes can provide plans sponsors an opportunity to reexamine their current de-risking strategy, what factors to consider during an mergers and acquisition (M&A) activity, and how to determine where you are on your human resources journey.

Staying current on ERISA topics like these is simplified with BDO as we invite you to follow along with our regular insights at www.bdo.com/erisa and our podcast series BDO Talks ERISA.

Wishing you all the best,
BETH GARNER
National Practice Leader, EBP and ERISA Services
 

2022 Deadlines and Important Dates

Sponsors of defined benefit and defined contribution plans should keep the following deadlines and other important dates in mind as they work toward ensuring compliance for their plans in 2022. Dates assume a calendar year plan.

July
  • 14 / Action: 401(k) plans with publicly traded employer stock that use an ERISA format that requested a 15 calendar day extension (Form 12b-25) for the Form 11-K must file the Form 11-k with the Securities and Exchange Commission by July 14.
  • 25 / Action: File PBGC Form 200 by July 25, if plan sponsor of a single-employer defined benefit plan does not make a July 15 required contribution, causing the plan to have more than $1 million in unpaid contributions.
  • 15 / July 15, possible second quarter 2022 contribution due for defined benefit pension plans.
  • 31 / Action: Preapproved defined contribution plans must sign and date restated plan documents by July 31.

August
  • 1 / Action: Large plan audit must be completed by August 1 to avoid requesting Form 5500 extension.
  • 1 / Action: Form 5500 and Form 8955-SSA must be filed by August 1.
  • 1 / Action: To request a Form 5500 extension, Form 5558 must be filed on paper by August 1.
  • 15 / File PBGC Form 10, by Aug 15, if a defined benefit plan with >100 participants 1) missed its July 15 required contribution, 2) the contribution is still unpaid as of Aug 15, 3) the contribution could not have been met with a Prefunding or Carryover Balance election and 4) a PBGC Form 200 was not already filed for the same event.
Best Practice: Plans that failed compliance testing may take this mid-year opportunity to run compliance tests.

September
  • 15 / Fund: If an extension was filed, Sept. 15 is the deadline to fund employer contributions for Partnerships and S-Corporations.
  • 15 / Fund: Minimum funding deadline for single and multi- employer defined benefit plans.
  • 15 / Sept 15, last date to make 2021 contributions for defined benefit pension plans.
  • 26 / Action: File PBGC Form 200 by Sept. 26, if plan sponsor of a single-employer defined benefit plan does not make the Sept. 15 required contribution, causing the plan to have more than $1 million in unpaid contributions.
  • 30 / Distribution: Sept. 30, Summary Annual Report sent to participants with Dec. 31 plan year end.


 
 

Stay Up to Date with Our Podcast, BDO Talks ERISA

Our ERISA Center of Excellence releases a monthly podcast - BDO Talks ERISA! This series covers best practices around all things ERISA and any other HR-related topics, including:
  • How to avoid common compliance issues
  • How to navigate the ins-and-outs of ERISA’s fiduciary provisions
  • Our own experiences working for BDO’s ERISA Services group
  • A deeper dive into the insights we share through our BDO ERISA Center of Excellence
Listen to new episodes at BDO.com/BDOTalksERISA or subscribe on Apple Podcast or Spotify. If you have suggestions for future topics or have a question for us to answer, send an email to [email protected].
 

RECENT EPISODES

Episode 18: Employee Culture: The Differentiator in Today’s Workplace
Beth Garner talks with David Friedman, founder and CEO of High Performing Culture, LLC and author of Fundamentally Different and Culture by Design: How to Build a High-Performing Culture, Even in the New Remote Work Environment. David shares why culture is the biggest opportunity for companies to have a competitive and sustainable edge against their competitors and explains how leaders can create and implement their culture plan.



Episode 19: Retirement Readiness for Women
In this episode, Beth Garner and Joanne Szupka sit down with Michele Burkholder, CFP®, a financial adviser with the Burkholder Team, and Morgan Stewart, a finance professional working with Michele, to discuss women and their financial planning. Both Michele and Morgan have a mission to educate and guide individuals, families, and business owners regarding financial decisions and give sound, personal financial advice for every life stage.



Episode 20: Two Key Takeaways from the 2022 AICPA EBP Conference
Beth Garner and Joanne Szupka discuss two hot topics from the 2022 AICPA Employee Benefits Plans Conference, which was held in Nashville, TN. First, they explore the meaning of Environmental, Social and Governance (ESG), along with the implication of the Department of Labor’s (DOL’s) 2021 ruling on ESG investing. Next, they looked at cybersecurity, including the scope of the recent DOL issued guidance and the alarming stats that underscores the importance of being diligent


 
 

Plan Sponsor Alert: M&A Could be Your Next Challenge. Are You Ready?

Last year, despite pandemic fears, companies took advantage of low interest rates to create an unprecedented increase in mergers and acquisition (M&A) activity. On a global level, more than 63,000 transactions worth $5.9 trillion closed in 2021, with the U.S. leading the way in deals worth $2.6 trillion, according to Refinitiv, a British financial market data firm. Rising interest rates, ongoing geopolitical concerns and other factors may slow the pace of deals in 2022, but many analysts expect M&A activity to remain high for the foreseeable future.


 
 

Plan Sponsor Alert: Revisiting De-Risking Options

Thanks to better returns and an uptick in discount rates used to value plan liabilities, defined benefit plans’ funding statuses have improved to some of their highest levels since the Great Recession. Many plan sponsors are eager to preserve these gains and want to take risk off their balance sheet by implementing de-risking strategies. Because of the recent changes in funding levels and the various de-risking methods at their disposal, plan sponsors should use this opportunity to reexamine their current approach to best fit their goals for their plans and participants.
 


 


 

DOL Alert: Proposed Regulation on ESG Investing and Shareholder Rights

The Department of Labor (DOL) is preparing to finalize a proposed rule that changes the way environmental, social and governance (ESG) factors are viewed in a plan sponsor’s investment process and proxy voting methods. The proposal, which was issued in October 2021, aims to help plan sponsors understand their responsibilities when investing in ESG strategies and makes significant changes to two previously issued ESG rules.


 
 

The HR Readiness Checklist

Has your emerging business been prioritizing the human resources (HR) function to maintain an edge when it comes to attracting and retaining talent, as well as scaling up? Are you prepared to tackle the shifting expectations of today’s workforce and enhance your HR readiness to remain competitive?

BDO’s Human Resources Readiness Checklist can help you determine how prepared your organization is to meet emerging requirements and develop best practices for establishing an HR function.

Answer each question in the three sections and we’ll tally your score at the end so that you can see where you stand. Then download our HR Readiness Report Card to find out where to go from there.

Here’s what you’ll get after going through the checklist:
 
EMPLOYMENT COMPLIANCE SCORE EMPLOYMENT COMPLIANCE SCORE
Tells you how informed you are related to employment regulations basics.
PAYROLL SCORE PAYROLL SCORE
Tells you your preparedness level when it comes to compensation structures and hiring.
BENEFITS SCORE BENEFITS SCORE
Tells you your readiness level when it comes to benefits strategy and competitiveness.