News Items

10 pages. "ESG investment measures have become increasingly politicized through institutional investors and pension funds' growing reliance on proxy advisory firms. These advisory firms have introduced political agendas for corporate governance decision-making, leaving corporations and pension funds to operate at the whims of advisory firms with serious conflicts of interest that disregard investor value.... ESG investments should be made when they add value to a fund. When such investments will not improve the financial performance of the fund, or the decision to invest in them is based on political motives, they should be forgone."

"A new actuarial standard of practice on the assessment and disclosure of risk (ASOP 51) requires actuaries to identify and assess significant risks to pension plans and to disclose plan maturity measures that are important to understanding those risks.... Understanding plan maturity and how it affects the ability of pension plans to tolerate risk is essential to understanding how they are affected differently by investment return volatility, other economic conditions, improvements in longevity and other demographic changes."

"[R]oughly one in five emergency department visits involved care from an out-of-network physician, as well as a not-insignificant share of elective inpatient admissions at in-network facilities. And these surprise bills can be quite large.... Federal action, therefore, may prove necessary to protect people enrolled in self-insured employer health plans, as well as all privately-insured individuals in the majority of states that have not enacted comprehensive surprise billing legislation."

"52 percent of all U.S. workers (ages 20‑79) say it is difficult to know how retirement savings will translate into monthly income. The study suggests offering workers retirement savings income estimates can help bridge this gap.... About 4 in 10 retirees wished they had seen more frequent estimates of how much monthly income their savings would generate in retirement before becoming retired. Women lead this group compared to men 52 percent to 33 percent."

52 pages. "After unsuccessfully challenging the agreement to terminate the Plan in the Bankruptcy Court, Plaintiffs filed this action alleging that PBGC's termination of the Plan by agreement was improper. Over seven years of discovery have failed to reveal any factual or legal basis to support Plaintiffs' claims. Contrary to Plaintiffs' allegations, the termination of the Salaried Plan through agreement with the plan administrator is fully consistent with the express language of ERISA and well-established precedent." [Black v. PBGC, No. 09-13616 (E.D. Mich; motion filed Sept. 21, 2018)] [More information about this protracted litigation is on the PBGC website -- Editor]

"It took less than a month for the [DOL] to respond to President Donald Trump's order directing the agency to expand small businesses' access to retirement plans. The DOL's proposed rule to expand access to multiple employer retirement plans [has been] sent to [OMB] for review before the proposal becomes public."

"While it's clear 401k MEPs reduce fiduciary liability -- sometimes quite significantly -- companies need to be mindful this liability cannot be fully eliminated. They need to know what liability they will retain.... [T]he cost savings benefit may not be as good as it seems.... [It] would not be unusual for a single business association to offer multiple 401k MEP plans, each designed to cater to specific company needs."

63 pages, rev. Oct. 2018, for Processing Year 2019. "[This publication] outlines the communication procedures, transmission formats, business rules and validation procedures for information returns transmitted electronically through the AIR System.... The procedures in this publication should be used when the following information returns are transmitted electronically for TY 2015, TY2016, TY 2017 and TY2018 in PY2019: Form 1094-B ... Form 1095-B... Form 1094-C ... Form 1095-C ... This publication does not contain information or procedures for filing Form 1095-A."

133 pages, rev. Oct. 2018. "The purpose of this document is to provide guidance to all types of external transmitters about composing and successfully transmitting compliant submissions to IRS.... This document covers details on composing and submitting Form s 1094/1095-B and Forms 1094/1095-C by transmitters to IRS. The scope of the document addresses the A2A-application based via SOAP messages exchanged between client and exposed Web Service endpoints and the Web UI-browser-based requiring human initiation."

16 pages. "The relative health of a company's pension funding ratio is an important starting point for any [pension risk transfer (PRT)] evaluation ... Sponsors must [also] weigh ... the quality of their assets, the makeup of their employee and retiree populations, the quality of their participant data, and longer-term goals before pursuing a PRT.... Management of pension risks is inherently a long-term proposition ... With an eye towards managing mortality risks that often stretch a half century or more, life insurers are best positioned to manage long-term obligations such as pension payments."

"For 2018 only, employers can retroactively amend their leave policies to match the technical requirements of Code section 45S. Bad news: For 2019, the policy changes must be in place before the leave is taken. That means employers must amend their leave policies by December 31, 2018, in order to properly claim the tax credit for both 2018 and 2019."

"[The DOL found that by not counting FMLA leave as active service, the employee neither lost a benefit that accrued prior to the taking of leave nor accrued any additional benefit to which he or she would not otherwise have been entitled. The DOL repeated its longstanding position that such practices do not violate the FMLA 'as long as employees on equivalent types of leave receive the same treatment.' "

9 pages. "This practice note ... reviews a number of issues that may arise when implementing a granular approach to calculating pension cost, particularly the application of individual spot rates ... [M]any of the valuation-related issues discussed in this practice note may also have applicability under the traditional aggregated pension costing approach."

"Last year, 59% of plans responding to the NAGDCA survey offered collective investment trusts vs. 57% in 2016 and 54% in 2015.... The survey also found a slightly lower offering of mutual funds among government DC plans, falling to 82% last year vs. 84% in 2016 vs. 88% in 2015.... The survey also found that passive investments are playing an increasing role in plan assets, growing to 33% last year vs. 28% in 2016 and 22% in 2015."

"The Act requires employers to notify employees of their leave rights by April 1, 2019... For employees hired after April 1, 2019, employers may require a waiting period of 90 days before the employee can take paid sick leave, but current employees can presumably begin using sick leave immediately as of April 1, 2019, and may continue to do so as the leave accrues.... [E]mployers will be required to post a notice in the workplace outlining an employee's right to paid sick leave and identifying such leave as protected leave."

"[T]he 2019 Paid Family Leave premium rate will be 0.153%, allowing maximum annual employee contributions of $107.97. The maximum PFL benefit for 2019 will be 55% of the statewide average weekly wage for up to 10 weeks of qualifying leave."

"On the surface, the robust financial performance would suggest strong incentive plan payouts.... Most incentive plan goals account for more than year-over-year performance, i.e., they flex up and down along with rising and declining expectations. That's one reason we typically find incentive plan payouts following a bell-shape distribution curve."

"Do I have a grant of restricted stock or a grant of restricted stock units? What are the key differences? ... Is vesting based on duration of employment or on performance goals? What would happen to the vesting of my grant if I were to leave or lose my job, die, become disabled, or retire? ... With RSUs, can I defer the delivery of the shares at vesting? If my company pays dividends to shareholders, will I get dividends on my restricted stock? If so, when? ... What would happen to my restricted stock in a corporate acquisition or merger?"

"If an AHP is fully-insured, then state laws may require continuation coverage. These state laws can apply when federal COBRA does not. They can also require coverage beyond what federal COBRA requires.... AHPs have to be member-controlled. This means that employers may end up participating in certain decisions related to AHP administration. This would make them ERISA fiduciaries[.]"

House GOP's 'Tax Reform 2.0' legislation looks to retirement reforms[:] ... The retirement provisions have support from both parties in the House and Senate and alone are likely one of the few discretionary packages that could get passed this year.... Proposals aim to control unexpected medical bills[:] ... Current law requires plans to apply in-network cost-sharing [for emergency care] ... but allows the provider to balance bill the patient. The new proposal sets a more rigid standard for plan payments to providers, which might impact employer costs."

"If you and your spouse share a single family HSA and you both are 55+, only one of you can make the $1,000 catch-up contribution to the HSA. The workaround is easy, though. One of you opens a second HSA to which you contribute your $1,000 catch-up contribution.... If you have an adult child still covered by your medical plan (under age 26, per the [ACA]), the opportunity to stash some tax-free cash is even greater."

"A program centered on employee wellbeing can impact more than just healthcare costs ... There is greater opportunity when the program is aligned directly with an organization's goals."

27 pages. "This notice provides guidance on the employer credit for paid family and medical leave under section 45S of the Internal Revenue Code. This notice also announces that the Department of the Treasury and the [IRS] intend to publish proposed regulations under section 45S.... This notice includes sections on the following topics: A. Eligible Employer; B. Family and Medical Leave; C. Minimum Paid Leave Requirements; D. Calculating and Claiming the Credit; E. Effective Date."

"If you use the IRS model notices for eligible rollover distributions, you should update yours to the new standards. If you use an alternative notice (which is also permitted), you should modify it to address the issues in the new models.... For the practitioner community, Notice 2018‑74 serves as a helpful checklist of recent rollover changes."

"Plaintiff alleged that Unum wrongfully terminated her long term disability benefits under the Boy Scouts of America Long Term Disability Plan. Plaintiff filed a motion to compel responses to discovery requests aimed at ascertaining Unum's business practice of forecasting and targeting disability claims for potential 'recoveries' or terminations.... The court found Unum's boilerplate objections to be improper especially when Unum failed to submit any evidentiary declarations supporting the objections." [Gray v. Unum Life Ins. Co. of America, No. 17-1778 (C.D. Cal. Sept. 21, 2018; unpub.)]