DOL Releases RFI Related to Climate-Related Financial Risk

On February 14, 2022, the Employee Benefits Security Administration released a Request for Information (RFI) following the Executive Order on Climate-Related Financial Risk. The order instructs the ESBA to seek input on what actions it can take under ERISA and FERSA to safeguard the savings and pensions of U.S. workers from the threats of climate-related financial risk; including both physical risk and transition risk. Issues inquired about include data collection and publication, best sources of information about risks, and the benefits of including guaranteed lifetime income products into ERISA-covered plans. Written submissions regarding the RFI are due by May 16, 2022. See related DOL news release: U.S. Department of Labor Seeking Public Comment on Protecting Workers’ Life Savings, Pensions from Climate-Related Financial Risk. According to the news release: “The RFI follows a proposed rule published by the department, Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights. The RFI deals with a broader set of questions than the proposed rule and is a different initiative.”

DOL Releases Proposed Rule to Encourage ESG

On October 14, 2021, the Department of Labor (the “DOL”) published a proposed regulation, Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights to amend the DOL’s investment duties regulation under the Employment Income Security Act of 1974. Comments to the Proposed Rule will be accepted up until Monday, December 13, 2021.

For more information, see DOL Proposes Rule Encouraging ESG & Proxy Voting, Reducing Documentation Requirements prepared by the Groom Law Group.  See also DOL’s news release.

DOL Releases Proposed and Final Rules on Pooled Plan Provider Registration Requirements

On November 12, 2020, the U.S. Department of Labor’s Employee Benefits Security Administration issued a final rule establishing registration requirements for pooled plan providers. For more information, see The Race to Register: DOL Issues Final Rule on PPP Registration prepared by the Groom Law Group.

The DOL had issued a notice of proposed rulemaking on pooled plan provider registration requirements on August 20, 2020. The proposal was published on September 1, 2020 and seeks to implement the registration requirements for “pooled plan providers” pursuant to the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019. Public comments were accepted until October 1, 2020.

DOL Releases Proposed Rule and Final Rules on “Investment Duties” (aka the ESG Rule)

On June 23, 2020, the U.S. Department of Labor’s Employee Benefits Security Administration issued a proposed rule that proposes amendments to the Employee Retirement Income Security Act requiring plan fiduciaries to select investments and investment courses of action based solely on financial considerations relevant to the risk-adjusted economic value of a particular investment or investment course of action. Public comments on the proposed rule were accepted until July 30, 2020. See the U.S. Department of Labor’s news release.

On October 30, 2020, the U.S. Department of Labor (DOL) issued the final rule on “Financial Factors in Selecting Plan Investments.” The final rule amends the existing “investment duties” rule that outlines how fiduciaries can meet their obligations under ERISA. The notable change from the June 2020 proposed rule is the removal of references to environmental, social and governance (“ESG”) factors. View an overview of the rulemaking prepared by the Groom Law Group.

DOL Releases Interim Final Rule on Lifetime Income Disclosures

On September 18, 2020, the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA)  issued an interim final rule (IFR) that will help workers determine their ability to retire by allowing them to estimate how their current savings in a 401(k)-type plan might translate into lifetime monthly payments. The rule implements section 203 of the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019.  This IFR is effective September 20, 2021.

On July 26, 2021, DOL issued some Temporary Frequently Asked Questions (FAQs) related to the IFR.

DOL Releases Request for Information

On June 18, 2020, Employee Benefits Security Administration released a Request for Information (RFI) in response to the SECURE Act’s amendment of ERISA allowing for pooled employer plans. It requests information on the possible parties, business models, and conflicts of interest that respondents anticipate will be involved in the formation and ongoing operation of PEPs, in addition to information regarding similar issues involving multiple employer plans sponsored by employer groups or associations or professional employer organizations. The Department of Labor (the Department) is considering whether to propose a class exemption on its own motion to cover prohibited transactions involving PEPs and MEPs. Comments on the RFI were received until July 20, 2020.

DOL Information Letter

On June 3, 2020, the U.S. Department of Labor (DOL) issued an information letter intended to provide clarity about how ERISA fiduciary duties apply to including alternative investments as they do to more-typical investments in defined contribution (DC) plans. The guidance is an effort to make it clear that ERISA does not prohibit alternative investment in DC plans, and therefore a fiduciary could, if it follows a prudent process, decide to allocate a portion of a target date fund (TDF) portfolio to alternative investments. See DOL’s related press release.

MEP Proposed Rulemaking

Department of Labor

On July 31, 2019, the Employee Benefits Security Administration, Department of Labor (DOL), issued a Request for Information regarding the definition of “employer” in section 3(5) of the Employee Retirement Income Security Act of 1974, as amended. According to the DOL, the RFI is in response to public comments submitted for the proposed rule in October 2018 (see next bullet for details) and could serve as the basis for future rulemaking. The RFI was open for comments for 90 days and closed on October 29, 2019.  All public comments submitted to the RFI can be viewed here.

In addition, on July 31, 2019, the Employee Benefits Security Administration, Department of Labor, published final rules of Definition of ‘Employer’ Under Section 3(5) of ERISA-Association Retirement Plans and Other Multiple-Employer Plans. The regulation addresses when a group or association of employers or PEO falls within the definition of “employer” under ERISA section 3(5) for purposes of sponsoring a MEP under title I of ERISA to cover the employees of member employers.

  • See the Department of Labor’s news release on the final rule.
  • The proposed rules were issued on October 23, 2018 and were open for public comments until December 24, 2018. On December 21, 2018, CRI submitted comments to the U.S. Department of Labor regarding this proposed rule. Click here to view the letter. All public comments can be viewed here. 

Additional Resources:

The District Court of Washington, D.C. ruled that portions of the U.S. Department of Labor’s rule relating to the definition of employer related to Associated Health Plan undercut the Affordable Care Act. Because the definition of employer for MEPs under ERISA is similar to that of employer for Associated Health Plans, there is concern that a court may similarly block U.S. Department of Labor’s s new MEP rule.

The U.S. Department of Labor proposed rules that clarify which organizations can sponsor MEPs as defined by ERISA section 3(5). The impact on state-run MEPs is unclear, as the proposed rules do not explicitly mention them.

Treasury Department

On July 3, 2019, the Internal Revenue Service, Department of the Treasury, issued a notice of proposed rulemaking related to the tax qualifications of multiple employer plans. Proposed regulations would provide an exception to the “unified plan rule” if one employer fails to satisfy a qualification requirement or fail to provide information used to determine compliance with such requirements. The comment period closed on October 1, 2019.

Additional Resources:

ERISA Basics

View Recent DOL ERISA Advisory Council Reports:

CRI ERISA Related Policy Reports