The Washington Report
April 21, 2021
Note to subscribers: Due to the current environment, information is changing at a rapid rate. While we do our best to provide timely updates, it is possible that the information shared in the newsletter may change or be revised after our publication deadline. Stay healthy and safe! ~The Washington Report team
DOL Releases New Cybersecurity Guidance for Plan Sponsors, Plan Fiduciaries, Record-keepers, and Plan Participants
On April 14, 2021, the Department of Labor (DOL) released new guidance for plan sponsors, plan fiduciaries, record-keepers, and plan participants on best practices for maintaining cybersecurity, including tips on how to protect retirement benefits. This is the first time the DOL’s Employee Benefits Security Administration has issued cybersecurity guidance. This guidance is directed at plan sponsors and fiduciaries regulated by ERISA, as well as plan participants and beneficiaries.
The guidance comes in three forms:
- Tips for Hiring a Service Provider: Helps plan sponsors and fiduciaries select a service provider with strong cybersecurity practices and monitor their activities.
- Cybersecurity Program Best Practices: Assists plan fiduciaries and record-keepers in their responsibilities to manage cybersecurity risks.
- Online Security Tips: Offers plan participants and beneficiaries who check their retirement accounts online basic rules to reduce the risk of fraud and loss.
The news release is available here.
The “Tips for Hiring a Service Provider” guidance is available here.
The “Cybersecurity Program Best Practices” guidance is available here.
The “Online Security Tips” guidance is available here.
DOL Issues Guidance on Investment Advice Exemption
On April 13, 2021, the DOL issued guidance on fiduciary investment advice for retirement investors, employee benefit plans, and investment advice providers. The guidance relates to the DOL’s “Improving Investment Advice for Workers & Retirees” exemption and follows its February 12, 2021, announcement that that exemption would go into effect as scheduled on February 16, 2021.
The DOL issued the following two guidance documents:
- “Choosing the Right Person to Give You Investment Advice: Information for Investors in Retirement Plans and Individual Retirement Accounts” includes questions a retirement investor can ask when interviewing potential advice providers, background information to help them understand the purpose of each question, and investor-focused frequently asked questions (FAQs) about the exemption.
- A set of compliance-focused FAQs (“FAQs About PTE 2020-02: Improving Investment Advice for Workers and Retirees”) that provide guidance for investment advice providers who are relying, or planning to rely, on the exemption.
Both guidance documents are limited to the application of federal retirement laws to advice concerning investments in plans covered by ERISA, such as 401(k) plans and the Internal Revenue Code, such as individual retirement accounts.
The news release is available here.
The text of the DOL Fact Sheet “Choosing the Right Person to Give You Investment Advice: Information for Investors in Retirement Plans and Individual Retirement Accounts,” is available here.
The text of the DOL’s “FAQs About PTE 2020-02: Improving Investment Advice for Workers and Retirees,” is available here.
The February 12, 2021, DOL announcement is available here.
Treasury, IRS Request Comments for the 2021–2022 Priority Guidance Plan
On April 14, 2021, the Treasury Department and Internal Revenue Service (IRS) released Notice 2021-28, which provides the recommendation solicitation notice for the 2021–2022 Priority Guidance Plan. The Notice invites the public to submit recommendations for items to be included in the upcoming guidance document. The Treasury and IRS use the Priority Guidance Plan each year to identify and prioritize the tax issues that should be addressed through regulations, Revenue Rulings, Revenue Procedures, Notices, and other published administrative guidance. The 2021–2022 Priority Guidance Plan will identify guidance projects that the Treasury Department and the IRS intend to actively work on as priorities during the period from July 1, 2021, through June 30, 2022.
IRS Notice 2021-28 is available here.
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