The US Court of Appeals for the Ninth Circuit (appellate court) affirmed a lower court's ruling in Howard Jarvis Taxpayers Ass’n v. Cal. Secure Choice Ret. Sav. Program, 2021 WL 1805758 (9th Cir. 2021) that the CalSavers Retirement Savings Program is not preempted by ERISA. Specifically, the appellate court does not consider the program to be an ERISA plan, nor does it place additional requirements on an employer. Under the program, only employers who have chosen not to adopt an ERISA plan would be required to participate.

On April 27, 2021, the IRS updated a set of questions and answers concerning coronavirus-related retirement plan relief by adding five questions clarifying the partial plan termination relief provided through the Consolidated Appropriations Act of 2021 (CAA).

On April 14, 2021, the DOL’s Employee Benefits Security Administration provided guidance to plan sponsors, fiduciaries, record keepers and plan participants on cybersecurity best practices. This was done in an effort to protect American workers’ retirement benefits. This novel guidance was provided through three documents: 1) Tips for Hiring a Service Provider; 2) Cybersecurity Program Best Practices; and 3) Online Security Tips.

On April 13, 2021, the DOL issued guidance on fiduciary investment advice for retirement investors, employee benefit plans and investment advice providers. As a reminder, the DOL adopted prohibited transaction exemption (PTE) 2020-02, Improving Investment Advice for Workers & Retirees, in December of 2020. The DOL announced on February 12, 2021, that the prohibited transaction exemption for investment advice fiduciaries would go into effect as scheduled on February 16, 2021.

The IRS published a revised Publication 4484, Choose a Retirement Plan for Employees of Tax-Exempt and Government Entities. In this edition of the publication, the IRS reviews eight types of retirement plans available to employees of tax-exempt entities such as churches or charities. The publication provides the latest tax laws specific to each retirement plan and has been revised to reflect 2021 annual limitations.

On April 22, 2021, the IRS released the final instructions for Form 5310, Application for Determination for Terminating Plan. The instructions are updated periodically to reflect any regulatory or reporting changes.

The IRS has issued a summary of the top mistakes made by plan administrators utilizing the Voluntary Correction Program (VCP). As a reminder, the VCP is a way for retirement plans to receive IRS approval on corrections to plan documents or operational failures that would otherwise jeopardize the plan's tax-favored or qualified status. Thus, it is important the submission is free of errors to avoid denial of the submission or a delayed approval.

On March 22, 2021, the IRS released the draft instructions for Form 5310, Application for Determination for Terminating Plan. The IRS updates the form instructions annually for clarification purposes and to incorporate any regulatory or reporting changes.

On March 10, 2021, the DOL’s EBSA issued a statement explaining that it will not enforce final rules concerning ESG investments and proxy voting. The rules, entitled Financial Factors in Selecting Plan Investments and Fiduciary Duties Regarding Proxy Voting and Shareholder Rights, restricted fiduciaries’ use of nonfinancial factors (environmental, social and governance [ESG] criteria) when making certain retirement plan investment decisions and imposed certain requirements on fiduciaries concerning proxy voting and other shareholder rights, respectively.

On February 12, 2021, the Employee Benefits Security Administration (EBSA) announced that an exemption for investment advice fiduciaries, “Improving Investment Advice for Worker & Retirees,” would go into effect, as scheduled, on February 16, 2021. This rule was finalized under the Trump administration in December 2020. However, the Biden administration announced that they would review certain finalized and pending rules. They have seemingly completed their review of this rule and have allowed it to go into effect.