PLANADVISER - July/August 2020 - 4

Legislative and Judicial Actions
compliance news //
 IRS Updates Its OC List
To help practitioners and plan sponsors
achieve operational compliance, the IRS
has updated its operational compliance
(OC) list, identifying changes in retirement
plan qualification requirements
effective during the calendar year.
Such updates, as required by the OC
list, identify matters that may involve
either mandatory or discretionary plan
amendments, depending on the type
of plan, and may reference other
significant guidance that affects
daily plan operations.
The IRS notes that, to be
qualified, a plan must comply
operationally with each
relevant
requirement,
even
if that does not appear on
the OC list. A plan must also
comply with any change in the
requirements,
starting
proposed, the exemption would authorize
a wide range of investment advice
compensation models and client relationship
structures that could otherwise
be prohibited under the new rule.
To qualify, advisers must live up to a
collect only reasonable compensation
and to make no materially misleading
statements.
from
the effective date of the change.
The updated OC list includes
items effective this year. These
include several made by the Setting
Every Community Up for Retirement
Enhancement (SECURE) Act; amended
rules regarding hardship withdrawals
made by the Bipartisan Budget Act of
2018 and the Tax Cuts and Jobs Act;
and regulations that have extended
temporary nondiscrimination relief
for closed defined benefit (DB) plans.
 New Proposed Fiduciary Rule
A proposed Department
of
Labor
(DOL) conflict of interest regulation
has taken a first step toward public
release, having been turned over to
the Office of Management and Budget
(OMB), in June. The structure of the
proposed rule is based on the DOL's
existing temporary policy adopted
after the 5th Circuit Court of Appeals
vacated the agency's previous, 2016
fiduciary rule package. The longawaited
proposed rule was published
in tandem with a new prohibited
transaction exemption for investment
advice fiduciaries as defined and
policed under
the Employee Retirement
Income Security Act (ERISA). As
 Cunningham ERISA Settlement
Valued at Nearly $22mm
The achievement of a settlement agreement
in the Employee Retirement
Income Security Act (ERISA) lawsuit
known as Cunningham v. Wawa Inc.
was first announced in January,
but, at that time, no details of the
settlement were made public.
The basic contention of the
lawsuit was that the company
acted in a manner contrary
to ERISA's fiduciary requirements
when it forced terminated
employees to liquidate
company stock holdings at
an unfair price. Other claims
suggested participants were
misled about their rights under
the employee stock ownership
plan (ESOP).
Case documents have now
emerged showing Wawa agreed to pay
" Racial justice,
corporate diversity
and other ESG
factors are
increasingly
a consideration
in investment
decisions ... "
set of " impartial conduct standards, "
such as those included in the Regulation
Best Interest (Reg BI) framework
recently implemented by the Securities
and Exchange Commission (SEC).
This is to say, they are still required to
$21.6 million to resolve the litigation-
with no admission of wrongdoing by
itself as a corporate entity or by the
individual fiduciaries of the ESOP at
the heart of the case. The agreement
stipulates that the settlement fund
will be distributed among " all participants
in the Wawa Inc. Employee Stock
Ownership Plan with account balances
greater than $5,000 as of the date
they terminated employment, whose
accounts were liquidated on or after
September 12, 2015, and the beneficiaries
of such participants. " None of the
individual fiduciary defendants named
in the lawsuit are eligible to receive
payments from the settlement fund.
 Senators Challenge
Proposed ESG Restrictions
More than a dozen Democratic
members of the U.S. Senate have filed
and openly published a comment
letter
addressed to Department
of
Labor (DOL) Secretary Eugene Scalia,
calling on the regulator to dial back
4 | planadviser.com July-August 2020
http://www.planadviser.com
PLANADVISER - July/August 2020

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