On June 2, ForUsAll Inc.  filed suit against the United States Department of Labor (DOL) in federal district court in D. C., over its latest soft guidance issued in March on the use of cryptocurrency investments (Crypto) in plans.  Compliance Assistance Release No. 2022-01)   Last June, ForUsAll Inc. became one of the first providers to begin offering Crypto funds via brokerage windows in retirement plans.  See, “Why Would Anyone Invest In Crypto Through A Retirement Plan?”.  The lawsuit maintains that the DOL’s guidance was arbitrary and capricious and exceeded its regulatory authority by: inventing a new standard of care, “extreme care” for fiduciaries considering adding Crypto as a plan option; announced a new fiduciary obligation to monitor Crypto in brokerage windows; and threatened to open investigations of plan fiduciaries that offer Crypto.  It also alleged that the DOL  failed to follow the proper steps for issuing guidance under the Administrative Procedures Act, requiring a chance for public comment.  The suit asks the court to vacate and set aside the guidance and enjoin the DOL from attempting to enforce it.

Other Criticism.

Since the DOL issued its guidance, industry groups including the American Bankers Association, the American Benefits Council and others have criticized it and requested it be withdrawn.  However, many employee benefits practitioners don’t believe Crypto in plans is a good idea.  Meanwhile EBSA still doesn’t have a confirmed head as the Senate narrowly failed to confirm Lisa Gomez on June 8.  However her nomination is still alive because Majority Leader Chuck Schumer, D-New York, voted against the nomination, allowing him to bring it to the floor again in the future.

Crypto Still Risky.

While the lawsuit could rescind the DOL guidance, it’s this author’s opinion that Crypto is still a very risky investment for retirement assets for the reasons expressed in the guidance and my prior blog article.  Brokerage windows may be a less risky way for fiduciaries to offer Crypto to participants who demand it, but that doesn’t make it a good idea.  Under the current climate, fiduciaries should carefully consider whether to offer Crypto and carefully document their decision in case they are questioned by the DOL.  Stay tuned as we will continue to monitor the progress of the suit and guidance in this developing area.

A California employer with 5 or more employees that does not provide a retirement plan must register with CalSavers, the state’s mandated payroll deduction IRA program by June 30, 2022.  Additionally, a bill has passed the California Senate, SB 1126, and is being considered by the Assembly that would lower the threshold number of employees to 1 non-owner employee.  I have written extensively on CalSavers.  See for example:   “CalSavers Is Here To Stay As Supreme Court Refuses To Hear ERISA Challenge”;  “Inflation Adjusted Plan Limits Reiterate Advantages of Employer Plan Over CalSAVERS; Supremes May Accept Preemption Challenge”;  “Ninth Circuit Holds CalSavers Is Not Preempted By ERISA. . . 6/30 Deadline Approaching”; etc.  This blog article will discuss a couple of nightmare scenarios of the effect of the mandated CalSavers on employers.

Take Care Of Your Qualified Plan.   An employer that maintains a qualified retirement plan such as a pension, profit sharing or 401(k) plan for its employees is exempt from registering for CalSavers.  Likewise, maintaining a SEP-IRA or SIMPLE plan also exempts the employer.  So an employer maintaining one of these plans doesn’t have to worry about CalSavers, or does it?  Employers maintaining such plans are exempt from registering for CalSavers.  On the other hand, employers that don’t maintain another plan and don’t register for CalSavers are subject to penalties.  The penalties are $250 per employee and will be levied in partnership with the California Franchise Tax Board.  Once receiving the first notice of penalties, if the employer doesn’t comply within 90 days the penalty increases another $500 (for at total of $750) per employee.  CalSavers has indicated that it is serious about levying such penalties.  See CalSavers Begins Assessing Penalties-Threshold Number Of Employees Drops To 5 on June 30.

The CalSavers law says nothing about the terms of the retirement plan maintained by the employer that exempts it from registering.  For example, a profit sharing plan can have contributions in the complete discretion of the employer.  Presumably, the employer can contribute in the first plan year and then not contribute for subsequent years but it would still be exempt from registering for CalSavers.  However, failing to contribute for 3 or more  years could cause the IRS to maintain that the plan is not a qualified plan because it was not intended to be permanent as evidenced by the lack of contributions.

I often help clients in correcting failures in the required plan provisions or operation of their qualified plans, such as 401(k) plans.  Failures can be anything from failing to timely amend the plan for required changes in the law for a number of years to failing to include otherwise eligible employees.  I have helped employers restore the qualified status of their plan through the Employee Plans Correction Resolution System (EPCRS) or, when the failure is not eligible for EPCRS through a Voluntary Closing Agreement.  However, sometimes the failure is so egregious that the IRS will not enter into a closing agreement or the amount involved in correcting the plan is prohibitive for the employer to do it.

Imagine this worst case scenario.  In 2012, an individual with a significant account balance in the 401(k) plan of his former employer wishes to purchase his own business but doesn’t have enough wealth outside his retirement plan.  Searching the Internet he finds “ROBS R US.com”, a provider that helps people use the technique the IRS has named “Rollover for Business Startup” or ROBS.  Under this technique he incorporates a C corporation, has it establish a 401(k) plan, rolls over his account balance from his former employer’s plan and directs the investment of his account into employer stock of the new corporation.  The corporation now has capital, and purchases an existing business with more than 5 employees.   However, the owner never tells any of the employees about the plan, never makes any employer contributions to the plan, never values the stock in the plan, doesn’t file Forms 5500, and never amends the plan.  Essentially, once the corporation is capitalized, the owner forgets about the plan.   In 2023, the IRS audits the plan and determines that the corporation’s total disregard for the law means it will disqualify the plan and it is not eligible for the Audit Closing Agreement Program under EPCRS.  Therefore, the employer loses tax deductions for the past three years, and the owner will be taxed on the value of the stock.

That is certainly, bad enough.  However, since the employer didn’t maintain a qualified plan, it was required to register for CalSavers and failed to do so, now it is subject to penalties.

Misclassified Workers.

Another nightmare scenario involves misclassified workers.  Even though it is very difficult to be an independent contractor in California as a result of AB 5, it still happens. See California Rideshare Companies At The Intersection Of AB5 and Proposition 22.  So imagine an employer has 3 full time employees and a 25 person sales force classified as independent contractors.    The employer does not provide its workers a retirement plan and does not register with CalSavers.  The employer operates this way from 2021 to 2025 when it is audited by both the IRS and California that determine the sales force should be classified as employees.  Now the employer has 28 employees and has been subject to CalSavers since 2021.  It would be subject to penalties.

It’s important to note that had the employer adopted a 401(k) plan for the 3 full time employees, it wouldn’t have such penalties  and also would likely not have to cover the misclassified sales force retroactively.  The plan document probably contains “Microsoft” language that says if an independent contractor is reclassified as an employee by a government agency, they will not be retroactively eligible to participate in the plan.   This language was approved by the United States Court of Appeals for the Ninth Circuit in the case of Vizcaino v. Microsoft, 120 F.3d 1006 (9th Cir. 1997).  Therefore, the 401(k) plan would not lose its qualified status provided it covered the salesforce prospectively.

Conclusion.

These situations demonstrate how noncompliance with one law can trigger a prior obligation to comply with CalSavers.  It is unclear how CalSavers will handle penalties in these situations.  However, the CalSavers penalties could be an add-on cost to an already bad situation for the employer.

I’ll admit I don’t completely understand Cryptocurrencies or “Crypto” for short.  And without wanting to sound immodest, I’m not unintelligent or inexperienced in the world of investments or employee benefits, business, or the law.  Therefore, I will not try to explain it or how it works in this brief blog articles, there are plenty of other articles you can find on the Internet that do that.  I do know that there are over 17,000 Cryptos.  I also know that Crypto is not actual currency, at least not in the United States (Bitcoin, the first and largest Crypto is now the official currency of El Salvador).  That means it is not legal tender for all debts in the U.S. like cash.  I also know that it is quite volatile subject to large changes in its value.

Recently, there has been a big push in the media to encourage Americans to invest in Crypto.  In fact, a commercial starring Matt Damon premiered during the Super Bowl promoting Crypto.com.  Also, providers and plan sponsors are beginning to offer Crypto as an investment on the menu in participant directed 401(k) plans.  Last month, the nation’s largest record keeper, Fidelity Investments, announced it will have a product ready in coming months allowing 401(k) participants to direct up to 20% of their account to be invested in Crypto should the sponsoring employer add it to the available menu.  Fidelity will begin with Bitcoin but plans to add other Cryptos in the future.  Last June, a smaller provider ForUsAll Inc. began offering over 50 different Cryptos via brokerage windows in plans.  An April Investopedia survey showed that 28% of millenials expect to invest in Crypto to support themselves in retirement.  It is reported that 52 million Americans already invest in Crypto.

Prudence Generally Means Conservative.  I’ve had many occasion to advise clients on the legal aspects of riskier plan designs and investments.  For example, often when clients want to establish a ROBS plan, I have advised of the risks and many have changed their mind.  ROBS stands for Roll Over for Business Start-Up which is a term coined by the IRS to describe a technique to establish a C corporation that adopts a 401(k) plan permitting participant investment in employer  stock.  The principal owner then rolls over substantial assets from a prior employer plan or IRA, and purchases the C corporation stock to capitalize the business.  The term was coined in an internal IRS Memorandum describing all the ways these technically legal designs can be challenged on audit.  Beyond the risks identified in the Memorandum, I advise clients on the fact that they are gambling their hard earned retirement assets on a new business venture.  If the business fails they lose their retirement fund.  There is a reason retirement investing tends to favor conservative less risky strategies with steady growth over time.

The same can be said for such speculative and unregulated investments such as Crypto.  Do you really want to put your retirement money at that much risk?

The DOL’s Position.  In March the U.S. Department of Labor issued Compliance Assistance Release No. 2022-01 titled 401(k) Plan Investments in “Cryptocurrencies”.  In it the DOL cautions plan fiduciaries to exercise extreme care before they consider adding a cryptocurrency option to a 401(k) plan’s investment menu for plan participants.  The guidance states that at this early stage in the history of cryptocurrencies, the DOL has “serious concerns about the prudence of a fiduciary’s decision to expose a 401(k) plan’s participants to direct investments in cryptocurrencies” or other products whose value is tied to cryptocurrencies. These investments “present significant risks and challenges to participants’ retirement accounts, including significant risks of fraud, theft, and loss. . .” and cites several reasons including: Crypto’s speculative nature, difficulty for participants to make informed decisions, valuation concerns, lack of but evolving regulatory environment and the fact that losing a password could mean losing the entire investment.  The guidance concludes that EBSA is launching an investigative program aimed at plans that offer Crypto investments as part of its menu or through brokerage accounts and that fiduciaries of such plans can expect to be questioned on how offering such investments meet their fiduciary duties of prudence and loyalty in light of the risks.

Proof in the Pudding.  On May 12, 2022, the market saw $200 billion in wealth in Crypto lost overnight.  Bitcoin has lost 50% of its value since the Superbowl ad ran.  Again, I don’t completely understand Crypto but I’ve read that the free-fall in Crypto has been largely tied to the failure of a particular Crypto ironically called a “stablecoin” known as TerraUSD or UST, which is supposed to be pegged one-to-one with the U.S. dollar.  However, it somehow lost its peg and is now worth about 14 cents on the dollar.  Worse yet another Crypto called Luna is a token closely related to UST and is now worth zero.  Again, I don’t completely understand it, but I understand that it is quite volatile and Cryptos have experienced significant losses as a result.  So it begs the question:

Why would anyone want to invest in Crypto through a retirement plan?  More importantly, why would a fiduciary allow it as an option?  Given the current environment, I couldn’t call it a legally prudent investment.

In what appears to be the first Appellate Court decisions on what plaintiffs need to allege to defeat a motion to dismiss for failing to state a cause of action in an excessive fees case since the Supreme Court decided Hughes v. Nothwestern, (See Justices Make Short Work of Northwestern University’s  Fiduciary Defense) the Ninth Circuit has reversed two lower court decisions granting defendant’s motion to dismiss.

In the first unpublished opinion, Davis v.  Salesforce.com, issued April 8, 2022, while not actually citing Hughes, the court reversed the lower court decision citing the same Supreme Court cases that Hughes relied on such as Tibble v. Edison in finding the plaintiffs adequately alleged a breach of  the fiduciary duty of prudence.   That case held that fiduciaries have a duty to monitor investments in a plan and remove imprudent ones.  The Ninth Circuit found the plaintiff’s did state plausible claims that, if true, the defendants imprudently failed to select lower-cost share classes or collective investment trusts with substantially identical underlying assets.

The second case, Kong v. Trader Joe’s Company, another unpublished opinion decided April 15, 2022, also relied on Tibble.  However, the court  cited Hughes in acknowledging that the appropriate inquiry will necessarily be fact specific.  In that case plaintiff’s also alleged that Trader Joe’s failed to provide cost-effective investments with reasonable fees.

Both cases were sent back to the lower courts for trial.  These cases send the message to Federal District Courts in the Ninth Circuit (Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, Washington, Guam and the Northern Mariana Islands) that many excessive fee cases will have to be heard on the merits and not dismissed at the pleading stage.  This means the flood of cases will continue.

On Monday, February 28, 2022, the United States Supreme Court refused to accept the appeal of the Ninth Circuit’s dismissal of the Howard Jarvis Taxpayer’s Association’s challenge to California’s mandated payroll deduction IRA program, known as CalSavers.  The Association maintained the state law was preempted by ERISA.  This effectively puts an end to the challenge to CalSavers.  The United States Court of Appeals for the Ninth Circuit previously held the statute was not preempted by ERISA and dismissed the case.  See Ninth Circuit Holds CalSavers Is Not Preempted By ERISA. . . 6/30 Deadline Approaching.

CalSavers requires employers of a certain size that don’t otherwise offer a retirement plan to employees to provide its roster of employees to CalSavers and to automatically deduct 5% of pay for employees  and pay it to CalSavers to be invested in Roth IRAs.  Employees can opt out or change the amount of the deduction and even change the investment vehicle to a traditional IRA.  Many other states have similar programs that would have been in jeopardy if the law was held preempted by ERISA.

It’s important to note that the current threshold for employers having to register with CalSavers is employers with 5 or more employees.  If such employers do not provide a retirement plan and have not registered by June 30, 2022, they will face penalties.  See CalSavers Begins Assessing Penalties-Threshold Number Of Employees Drops To 5 on June 30.  Any employer that was taking a “wait and see” approach to see if the law would be preempted should be taking steps now to adopt a retirement plan or be prepared to register with CalSavers.

This decision makes it easier for suits alleging breach of fiduciary duties due to imprudent investments or excessive fees to avoid a defendant’s motion to dismiss.

On January 24, the U.S. Supreme Court reversed the dismissal of a suit brought by retirement plan participants against Northwestern University for breach of the ERISA fiduciary duty of prudence.  The participants sued alleging the institution allowed its retirement plans to pay excessive investment and recordkeeping fees on some investments included in the menu for participant-directed accounts such as retail share class mutual funds.  They also alleged that by having too large of a menu (over 400 choices), participants were confused as to which to choose.

The high Court rejected the reasoning of the lower courts that the availability of other lower cost investments in the menu meant the participants had no cause of action.  In a relatively short opinion, that wasn’t expected until later in the year (see, “Happy New Year! Supreme Court Expected To Be Busy With ERISA Again In 2022“), the Court relied on its 2015 decision in Tibble holding the fiduciary duty of prudence includes the duty to continually monitor investments and participants may allege a fiduciary has breached its duty by failing to remove investments that have become imprudent.   The Court reasoned that the allegations in the Northwestern case are similar to that in Tibble as the participants allege that by continuing to include imprudent investments with excessive fees, they have failed to monitor and remove imprudent investments.

The Justices found that the lower courts erred in not applying Tibble.   Instead they focused on a different aspect of the duty of prudence, to provide an adequate array of choices.  The lower courts found that because lower-cost prudent investments were available for participants to choose from, they could not complain they were forced to choose the imprudent investments.  The Justices held, the lower courts should have applied Tibble and not dismissed the case.   Therefore, it overturned the dismissal and sent the case back to the United States Court of Appeals for the Seventh Circuit with instructions to apply Tibble to determine whether the participants have stated a claim and that such inquiry should be context specific based on the circumstances.

This decision means that it will be easier for suits alleging breach of fiduciary duties due to imprudent investments or excessive fees to avoid a defendant’s motion to dismiss.   It also means, the wave of excessive fee litigation will continue.  Many cases were suspended, awaiting the high Court’s decision.  Plan fiduciaries charged with establishing the investments for the plan should be reviewing their investment menus with respect to fees to be prudent, now and routinely in the future.

The United States Supreme Court is considering whether to hear an appeal from United States Court of Appeals for the Ninth Circuit, dismissing a case brought by the Howard Jarvis Taxpayers Association claiming that CalSavers, California’s mandated payroll deduction IRA program, is preempted by ERISA (See Happy New Year! Supreme Court Expected To Be Busy With ERISA Again In 2022).  In the meantime, the CalSavers program continues as state law.  On Janurary 12,  the CalSavers Retirement Savings Board issued a press release stating that it will begin levying penalties, this month, on those employers failing to register with CalSavers by their deadline of September 30, 2020.  Employers with more than 100 employees not offering a retirement program to their employees were required to register by that date.  The original deadline was June 30, 2020 but it was extended due to the Coronavirus.  The penalty is $250 per employee (meaning the minimum would be $25,250 for 101 employees) and will be levied in partnership with the California Franchise Tax Board.  Once receiving the first notice of penalties, if the employer doesn’t comply within 90 days the penalty increases another $500 (for at total of $750, or $75,750 minimum) per employee.  The release says that the program has sent dozens of notifications by letter and email since it launched three years ago.  It urges employers to comply now before receiving the notice of penalties and states service representatives are standing by to assist employers.

Threshold Drops.  Importantly, the threshold number of employees, requiring employers to register with CalSavers if not offering a retirement plan, dropped from over 100 to over 50 with a deadline to register of June 30, 2021.  Additionally, employers with 5 or more employees and no plan must register by June 30, 2022 to avoid penalties.

Registering involves employers providing CalSavers with contact information for their employees so that CalSavers can contact them about enrolling.  Unless the employee opts out or changes the contribution amount, employers must withhold 5% of pay from all enrolled employees and pay it over to CalSavers.  The CalSavers program then invests the contributions in Roth IRAs for each employee.  The employee can opt out of a Roth IRA for a traditional IRA.

Consider Options.  Because CalSavers is IRA based, the amount that can be saved by employees is much lower than in a private qualified plan such as a 401(k) plan (See Inflation Adjusted Plan Limits Reiterate Advantages of Employer Plan Over CalSAVERS.  Employers with more than 5 employees that don’t currently provide a retirement plan should consult with an employee benefits attorney or other  professional to compare adopting a private plan over registering for CalSavers.  Please contact us with questions and look for our upcoming seminar/webinar on the subject.

Calendar year 2020 saw four U.S. Supreme Court decisions dealing with ERISA and employee benefits, three from the term beginning October 2019 and one from the 2020 term.  Another case from the 2020 term, California v. Texas was decided in 2021 (See, Supremes Uphold ACA Again! Find Challengers Lacked Standing).  2022 promises to provide a number of ERISA decisions as well, as the high Court continues to show interest in hearing ERISA issues.  Set forth below are some cases that may be decided during the current term.

1.  Hughes v. Northwestern University.   Oral arguments were heard by the Court in this case on December 6, 2021.  At issue is the standard a plaintiff, suing for breach of the ERISA fiduciary duty of prudence, must plead to adequately state a cause of action.  In a class action, the participants claimed the university’s 403(b) plan fiduciaries breached their duty by paying excessive record keeping and investment fees when lower fees were available.  The District Court dismissed the case and the United States Court of Appeals for the Seventh Circuit upheld the decision.  This caused a split with the Third Circuit’s 2019 decision in Sweda v. University of Pennsylvania.  A decision is expected in the Summer.

2.  John Doe 1 v. Express Scripts.  The issue in this case is whether Anthem, Inc., a health plan provider, (Anthem) and Express Scripts, Inc., a pharmacy benefits manager, (Express) breached fiduciary duties under ERISA when they negotiated that Anthem participants would pay higher prices for prescriptions under the pharmacy benefits manager agreement between the two companies, in exchange for a lower purchase price for Express to buy three Pharmacy Benefit Management companies from Anthem. The Second Circuit held neither company was an ERISA fiduciary when negotiating their business deal.  The employer health plans using Anthem petitioned the Supreme Court to hear the case.  The high Court has not yet decided whether to hear the case but on December 13, the justices invited the U. S. Solicitor General to file a brief giving the federal government’s view on the issue.  This is a sign of high interest in the case.

3.  Jarvis v. CalSavers.  As previously reported, the Howard Jarvis Taxpayers Association is continuing its challenge to CalSavers, by asking the Supreme Court to overturn the decision of the United States Court of Appeals for the Ninth Circuit, dismissing its preemption challenge, and the justices have requested CalSavers to respond. (See Inflation Adjusted Plan Limits Reiterate Advantages of Employer Plan Over CalSAVERS; Supremes May Accept Preemption Challenge).  Again the request by the justices that the state agency respond indicates their interest in the case.  Originally, the response was due on December 2, 2021, but it has now been extended to January 21, 2022.  In requesting the extension, the California  Attorney General’s Office stated it has learned that a petition for the Court to hear another case involving preemption is likely to be filed on January 14.  That case is ERISA Industry Committee v. Seattle, in which the Ninth Circuit upheld a Seattle ordinance against ERISA preemption.  The Seattle law requires large hotels and related businesses to provide workers with either health insurance coverage or additional compensation.  The California Attorney General asked for further time to respond in the CalSavers case to address any overlapping issues in both cases.

Stay tuned throughout 2022 to see if the Court has another term with multiple ERISA decisions.

The IRS announced the inflation adjusted qualified plan and IRA contribution limits for 2022 in Notice 2021-61 on November 4, 2021.  The new numbers include significant increases. However, importantly the limit on contributions to IRAs remain the same at $6,000, with an additional $1,000 if 50 or older.  On the other hand, the limit for elective deferrals for 401(k) plans have increased from $19,500 to $20,500, though the catch-up limit remains $6,500.  Additionally, the amount of compensation that can be considered under a defined contribution plan has increased by $15,000 from $290,000 to $305,000.  Likewise, the 415 limit on the total annual amount that can be contributed to a defined contribution plan has increased from $58,000 to $61,000.

CalSavers is California’s mandated payroll deduction IRA program that I have written about many times (See CalSavers Saved From ERISA Preemption By District Court,  CalSavers Not Preempted By ERISA! ).  California law requires employers of a certain size that do not offer a retirement plan to withhold 5% of compensation of employees and pay it over to CalSavers who invests it into Roth-IRAs for the employee, unless the employee opts out.  Next year, CalSavers applies to all employers with 5 or more employees.  Because the CalSavers program (as well as similar programs in other states) utilizes IRAs, employees simply can’t save as much as they could through an employer sponsored program.  For example, in 2022 an employee over age 50 can contribute $27,000 in salary reduction elective deferrals into a 401(k) plan.  Meanwhile, the same employee could only contribute $7,000 into a Roth-IRA under CalSavers.   That is a significant difference of $20,000.  These numbers reiterate how from a retirement savings standpoint, an employer sponsored plan is more advantageous than CalSavers.

The Howard Jarvis Taxpayers Association (HJTA) has challenged CalSavers from its enactment, maintaining that it was preempted by ERISA.  In May, the Ninth Circuit Court of Appeals upheld the lower court’s dismissal of the complaint.  See Ninth Circuit Holds CalSavers Is Not Preempted By ERISA. . . 6/30 Deadline Approaching.  HJTA filed a petition of certiorari with the U.S. Supreme Court requesting that they hear its appeal on October 12, 2021.  CalSavers filed a waiver of its right to respond on October 18.  However, on November 2, the Court requested that state Treasurer Fiona Ma file a response on behalf of CalSavers.  While the high Court has not yet decided whether it will hear HJTA’s appeal, this action certainly indicates it is leaning that way.  Should the Court hold that CalSavers is preempted by ERISA, the fact that employer sponsored plans allow for greater retirement savings won’t matter as CalSavers won’t be an option any longer.  However, this could have a chilling effect on employer’s adopting new plans as they would no longer have the incentive to avoid CalSavers.

 

The provision mandating that employers not otherwise offering a retirement plan to employees must offer an elective deferral only 401(k) plan or payroll deduction IRA for employees to save for retirement (See “Could CalSavers Go National? Federal Mandated Payroll Deduction Plan Proposal Included In 3.5 Trillion Budget Proposal“) has been dropped from President Biden’s latest $1.75 billion pared-down version of the bill.   The proposal had passed the House Ways & Means Committee on September 9 as part of the $3.5 trillion Budget Reconciliation proposal.  Also dropped was the proposal to restrict  so-called Mega IRAs (See “Ways & Means Committee Says You Must Save For Retirement, But Not Too Much“) as well as the paid family and medical leave provisions.  The original bill was reduced to appease Democratic opposition and President Biden believes that the compromise will have the support of all 50 Democratic Senators as well as pass the House of Representatives.  However, we’ll have to see.