ERISA Roundup - Q3 2021

October 2021

BY

Beth GarnerNational Practice Leader - EBP and ERISA Services

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A NOTE FROM BDO’S NATIONAL ERISA PRACTICE LEADER


The leaves are changing, and sweater weather is upon us, which can only mean one thing: October 15th is near. Now is the perfect time to check in and evaluate your employee benefits plan audit process. Did you run into any roadblocks or areas for improvement? Your BDO representative can help.

We know how busy this time of year can be, which is why we developed our Quarterly ERISA Roundup to provide you with one place to go for all our current updates. Keeping in mind that October is Cybersecurity Awareness Month, in this issue you will find our Spotlight on Human Resources and Cybersecurity which includes a collection of all our latest insights, podcast episodes, and regulatory updates on one of the hottest topics around. You will also find more details into reportable findings under SAS 136, the legislative and regulatory actions that are driving trends in retirement benefits today, and so much more.

Follow along with our regular insights at www.bdo.com/erisa and listen to our podcast series BDO Talks ERISA for an even closer look at these topics and more. We’d love to hear your feedback at BDOTalksERISA@bdo.com.

Sincerely,


 

IN THIS ISSUE...

 

Featured: Spotlight on Human Resources and Cybersecurity

Human Resources business leaders have likely spent a few restless nights wondering when it will happen and how their team will respond. Data breaches at some of the world's most recognizable names in business are making headlines almost daily. Remote work is here to stay for many, making it that much harder to keep sensitive information from exposure.


 

New Podcast Episode: BDO Talks ERISA

In February, our ERISA Center of Excellence launched a monthly podcast - BDO Talks ERISA! This series covers best practices around all things ERISA and any other HR-related topics.


 

Audit Communications to Plan Sponsors More Robust Under SAS 136

The AICPA’s Statement on Accounting Standards No. 136 (SAS 136) will meaningfully change the audit process for defined contribution plan sponsors – whether adopting this year or next.


 

How to Boost Tax Deductions by Retroactively Adopting A Workplace Retirement Plan

Employers who could use a federal income tax deduction for 2020 can consider retroactively adopting a broad-based, tax-qualified retirement plan, such as a discretionary profit-sharing plan, cash balance plan or traditional pension plan and making employer contributions before the extended due date of their 2020 income tax return.


 

Plan Sponsor Alert: 401(k) Plan Restatements Required by July 2022

Every six years, the Internal Revenue Service (IRS) requires employers with qualified, pre-approved plans to restate their plan documents – reflecting changes that have occurred since the plan documents were created or last restated.


 

2020 Form 5500 Not Needed for Retroactively Adopted Retirement Plans

On August 6, 2021, the IRS announced that employers who in 2021 retroactively adopt a tax-qualified retirement plan for 2020 are not required to file a 2020 Form 5500 Annual Return/Report for that plan.


 

Top 5 Workplace Compensation and Benefits Trends

Many employers are giving employees greater flexibility to work alternative schedules, including hybrid arrangements (i.e., some in-person and some remote work) or continuing to work entirely remotely.


 

Strengthening Workers’ Financial Wellness After the Pandemic

Even before the COVID-19 pandemic, employers were becoming increasingly focused on helping their workforces prepare for retirement and address other areas of financial wellness.


 

Secure Act Guidance for Safe Harbor Plans

Employers now have more flexibility in adding or amending safe harbor 401(k) or 403(b) plans, thanks to the 2019 Setting Every Community Up for Retirement Enhancement (SECURE) Act and subsequent guidance from the Internal Revenue Service (IRS).


 

House Ways and Means Committee Releases Initial Tax Proposals

On September 13, 2021, the House Ways and Means Committee released draft legislation that proposes a series of tax increases and tax cuts, which will undergo a round of markups by the committee over the next few days.


 

Tracking the Trends: Retirement Plan Benefits

Within the past couple of years, there has been a flurry of laws and regulations enacted to address the challenges workers face in saving sufficiently for retirement and provided short-term COVID-19 pandemic relief (financial and otherwise).


 

Potential Form 5500 Extensions for Disaster Situations

The Internal Revenue Service (IRS) provides tax relief provisions for taxpayers, who reside or have a business in an area, affected by a disaster situation.


 

Best Practices for Monitoring Retirement Plan Sponsors

As a plan sponsor it is good practice to formalize a process around monitoring service providers. Establishing, documenting, and executing this process can help to ensure that each vendor is achieving the objectives set out at the beginning of the relationship.


 

2021 DEADLINES AND IMPORTANT DATES FOR PLAN SPONSORS

October 2021

October 25: Action: File PBGC Form 200 by Oct. 25, if plan sponsor of a single-employer defined benefit plan does not make the Oct. 15 required contribution, causing the plan to have more than $1 million in unpaid contributions.
 

November 2021

November 2: File PBGC Form 10, by Nov 15
 

December 2021

December 15: Action: Dec. 15 is the extended deadline to distribute Summary Annual Report (SAR) for calendar year plans.
December 31: Action: Amendments to change traditional

View All Deadlines and Important Dates
 
 

CONTRIBUTION PLAN LIMITS AND OTHER ROLLING NOTICES FOR 2021

In addition to those important deadlines and dates, plan sponsors should be aware of the contribution plan limits and other rolling notices for 2021:
  • Employee salary deferral limits for 401(k), 403(b) and 457 plans will be $19,500. Age 50 catch-up contribution limit increases to $6,500.
  • Health Savings Account contribution limit is $3,600 (single) and $7,200 (family). Age 55 catch-up contribution stays at $1,000.
  • Traditional and Roth Individual Retirement Account contribution limit will be $6,000. catch-up contributions for participants age 50 and over is $1,000.
  • Limitation for the annual benefit under a defined benefit plan under Section 415(b)(1)(A) will be $230,000.
  • The dollar amount used to define “highly compensated employee” under Section 414(q)(1)(B) will be $130,000.
  • Newly eligible employees must receive a Summary Plan Description (SPD) within 90 days after becoming covered by the Plan.
  • Provide quarterly statements and fee information to participants.
  • Featured: Spotlight on Human Resources and Cybersecurity

Human Resources business leaders have likely spent a few restless nights wondering when it will happen and how their team will respond. Data breaches at some of the world's most recognizable names in business are making headlines almost daily. Remote work is here to stay for many, making it that much harder to keep sensitive information from exposure.

Asking employees to change passwords regularly and requiring annual cybersecurity training only goes so far. Phishing scams are looking for creative ways to trick even the most discerning member of the workforce. So, how can we prepare?

This Cybersecurity Awareness Month we’ve complied a collection of resources to help you stay up to date with emerging regulations and keep data protected.
 
 

New Podcast Episodes! BDO Talks ERISA

In February, our ERISA Center of Excellence launched 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 BDOTalksERISA@bdo.com.

 

Recent Episodes:

Episode 9: SAS 136 Back with Attitude: Understanding Reportable Findings

Erin Briet joins our hosts to take a closer look at reportable findings under SAS 136. Erin shares some real-world examples of what reportable findings look like, how to properly communicate these to the client, and more. Be sure to listen to our earlier episode Don’t You ‘SAS’ Me! Gut Check on SAS 136 for a complete overview of this new auditing standard.
 

Episode 10: The Core of the Cookie Cutter: Understanding Litigation Under ERISA

We welcome David Levine, Principal and Co-Chair of the Plan Sponsor Practice with Groom Law Group. On this episode David shares what is at the core of ERISA lawsuits, what pitfalls fiduciaries should avoid, and the trends he sees impacting ERISA litigation today.
 

Episode 11: Unpacking the Department of Labor’s Cybersecurity Guidance

David Levine returns to discuss the DOL’s guidance on cybersecurity and how plan sponsors should prepare for the possible impacts the guidelines could have on enforcement audits in the future.