Senior Counsel - Benefits Counsel 4 (0201)
University of California Office of the President
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TWG Benefits, Inc.
in ANY STATE, FL, IL, OH

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Aspire Financial Services LLC
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Retirement Realities–LIVE STREAM from the NIRS Seventh Annual Policy Conference
March 1, 2016 WEBCAST
(International Foundation of Employee Benefit Plans [IFEBP])

M&A Transactions on the Rise -- Bringing With Them Benefits and Compensation Issues
March 16, 2016 in NY
(Worldwide Employee Benefits Network [WEB] - New York Chapter)

Voluntary Fiduciary Correction Program & Abandoned Plan Workshop
April 20, 2016 in MI
(Employee Benefits Security Administration [EBSA], U.S. Department of Labor)

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Today's Discussions on the BenefitsLink Message Boards

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[Guidance Overview]

IRS Proposes Nondiscrimination Testing Relief for Closed Pension Plans
"The Proposed Regulations provide that for a plan that has been closed for five years or more, a benefit, right or feature is considered nondiscriminatory if: it is available only to the participants that continued to accrue benefits under the plan after the closure; and no plan amendment that affects the availability of the benefit, right or feature has been made effective since the closure date (except for certain permitted amendments).... The Proposed Regulations add a new exception from the Gateway requirement for an aggregated plan that included a DB plan that has been closed for at least five years." (McGuireWoods LLP)  

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Permissible Normal Retirement Ages: Proposed Regs for Governmental Pension Plans (PDF)
"For plans that do not allow in-service distributions prior to age 62, it appears that they would not need to comply with the reasonably representative requirement and therefore would not need to be concerned with meeting any of the safe harbors. Even though it may be unnecessary to consider any changes to the Normal Retirement Age from a legal perspective ... this would be a time to review the Normal Retirement Age to ensure that it appropriately balances the needs of the plan sponsor, employees, and taxpayers." (Ekon Benefits)  

Text of D.C. District Court Opinion: PBGC Must Reconsider Denial of Participant's Lump Sum Benefit (PDF)
"The PBGC argues that the statute is silent as to whether a participant who requests a lump-sum payment before a plan administrator submits a notice of distress termination is entitled to such a payment after the administrator submits the notice, and that its policy (denying payment under such circumstances) rests on a reasonable interpretation of the statute that is consistent with congressional intent.... The problem for the PBGC is that ... while the policy states that requests submitted before the plan administrator submits a notice of distress termination may be denied after the notice is submitted, in this case the request was not only submitted but also denied before the plan administrator submitted its termination notice to the PBGC." [Fisher v. PBGC, No. 14-1275 (D.D.C. Feb. 25, 2016)] (U.S. District Court for the District of Columbia)  

Failure to Furnish Copy of 401(k) Plan's Custodial Agreement Violated ERISA
"ERISA obligates plan administrators to furnish copies of trust agreements upon request -- but custodial agreements are not mentioned in the statute, requiring reference to the catch-all provision.... Plan administrators may [however] ... be interested in the court's conclusion that the administrator was not liable for penalties regarding ERISA Section 404(c) disclosures, since those disclosures are required by regulation and penalties can be assessed only for statutory violations." [Askew v. R.L. Reppert, Inc., No. 11-cv-04003 (E.D. Penn. Feb. 5, 2016)] (Thomson Reuters / EBIA)  

Retirement in the Land of Lincoln: The Illinois Secure Choice Savings Program Act (PDF)
20 pages. "While the Illinois law will pass legal muster under both ERISA and the Code, it is less clear that its arrangement is sound as a matter of policy.... This Article acknowledges the widespread concern that workers are not saving enough for retirement and notes that the Illinois law provides an important first contribution to attempts at remedying the retirement savings problem through a state-mandated program. This Article further encourages widespread experimentation among the states to determine which policies -- if any -- effectively encourage retirement savings." (Prof. Edward Zelinsky, in Illinois Law Review)  

Pension Plans: To Terminate or Not to Terminate
"Reducing risk by eliminating or decreasing the size of the plan is the primary goal of any pension risk transfer or termination, regardless of the motivation. A successful plan termination or risk transfer protects participants at every phase of the process while balancing the plan sponsor's economic considerations with the organization's goals and objectives. In a practical sense, a successful PRT transaction requires monitoring all the steps in plan termination and managing the regulatory agencies and their respective requirements, filings, and approvals while keeping an eye on any changes within the PRT market." (CAPTRUST Financial Advisors)  

Present Law, Data, and Selected Proposals Relating to Multiemployer DB Plans
84 pages. "This document ... provides a discussion of present law and data relating to retirement plans generally and to multiemployer defined benefit plans in particular, as well as descriptions of selected proposals relating to multiemployer plans." (Joint Committee on Taxation [JCT], U.S. Congress)  

Reduced Interest Rate Assumptions by Multiemployer Pension Plans Dramatically Increase Employer Withdrawal Liability
"Some [multiemployer] pension plans ... are setting up two sets of numbers and interest rate assumptions: [1] an extremely low rate using the PBGC long-term rate of about 3.30 percent, and [2] a higher assumed rate of return of 7 to 8 percent based on historical investment returns and future projections.... [This] allows these plans to report a higher funding ratio of assets to plan liabilities, but also to maximize the withdrawal liability for the employers.... The plans are not required to notify the employers prior to or even after interest rate changes are made." (Ford & Harrison LLP)  

Why the Coming Cuts to Teamster Pensions Deserve More National News Coverage
"Every Monday, Kenneth Feinberg, the appointed special master for the program, holds listening sessions by phone with retirees and others across the country.... [In] a recent session, retirees were angry and frustrated. One 66-year-old who spent his career hauling cars across the country said he was going to lose $2,000 a month. 'I am willing to take a cut, but not 68 percent,' he said. Others said they had disabilities arising from the job. A 74-year-old in bad health told listeners he was facing a cut of $1,700 a month. 'The media is going to have to get involved,' said one caller. 'Eventually it is going to have to get out and tell about our dilemma.' " (Columbia Journalism Review)  

Is a 10x Pay Retirement Savings Target Too High?
"In the past, [Fidelity] had recommended accumulating 8X gross pay [by age 67 in addition to your Social Security benefit in order to be able to retire and maintain your pre-retirement standard of living]. In their most recent study, they increased this target to 10X salary.... [One] actuary argues that both Fidelity's 10X salary savings target and the 70%-80% income replacement target rule of thumb are 'unrealistically high and clearly wrong for a majority of savers.' So, let's take a look at some numbers and you can decide for yourself." (Ken Steiner, FSA Retired)  

Health and Retirement Study Shows Declining Wealth and Work Among Male Veterans
"Among those 51 to 56 in 1992, veterans were better educated, healthier, wealthier, and more likely to be working than nonveterans. By 2010, 51- to 56-year-old veterans had lost their educational advantage, were less healthy, less wealthy, and less likely to be working than nonveterans." (University of Michigan Retirement Research Center [MRRC])  

Supreme Court Rejects Union Challenge to New Jersey Pension Reforms
"The court declined to hear the unions' appeal, leaving in place a July 2015 ruling by the New Jersey Supreme Court that allowed Republican Governor Chris Christie's administration to make only partial contributions into public pension funds.... Under bipartisan 2011 reforms, the state promised to step up contributions over seven years until reaching the full amount that actuaries say is necessary to keep it healthy. In exchange, New Jersey teachers, state troopers and other government workers agreed to pay more. But in 2014, Christie slashed the state's contribution for two years, citing a severe revenue shortfall and ultimately paying less than 30 percent of what was required under the reforms, according to the unions' petition asking the U.S. Supreme Court to hear the case." (Reuters)  

California Judges Win Lawsuit as Pension Conflicts Continue
"A superior court judge has awarded [California] judges back pay and a pension increase, ruling that a five-year freeze on their salary did not keep pace with average increases in state worker pay, a requirement under state law. But the state has not agreed to the amount owed judges in the class-action suit filed by a former court of appeals presiding justice, Robert Mallano, shortly before he retired two years ago." (Calpensions)  

ERIC Files Amicus Brief in Case Challenging Communication of Cash Balance Plan Wear-Away Provision
"The amicus brief argues that by law a fiduciary-breach claim based on an alleged misrepresentation requires proof of detrimental reliance, but the District Court found Foot Locker liable without evidence that any class member relied on an alleged misstatement to his or her detriment. Instead the District Court held that reliance could be 'presumed' on a class-wide basis.... The District Court also effectively nullified ERISA's statute of limitations, ruling that claims are continuously timely as long as the plaintiff acknowledges ignorance of their claims." [Osberg v. Foot Locker, Inc., No. 07-cv-1358 (S.D.N.Y. Sept. 29, 2015; on appeal to 2d Cir.)] (The ERISA Industry Committee [ERIC])  

ERISA Attorney Robert E. "Rob" Hoskins Dies
Prominent attorney Robert E. "Rob" Hoskins, 50, died on February 27. A partner in the Greenville, South Carolina office of Foster Law Firm, LLC, Rob handled ERISA and insurance claims involving long term disability, health insurance, life insurance, accidental death and dismemberment insurance, and pension/retirement matters before various courts including the U.S. Supreme Court. He wrote and lectured extensively on ERISA. His peers rated him as an "AV" lawyer in Martindale-Hubble. Rob was a co-administrator of ERISABoard.com, a popular forum for ERISA attorneys, where he contributed over 4,300 posts. His complete biography is online. Services in Greenville are on March 3. He will be greatly missed. (Legacy)  

409A's Documentation Decree: Put It in Writing
"[C]hances are, if the employer does not know an arrangement is subject to 409A, the arrangement most likely is not supported by a '409A-compliant document.' So just what constitutes a 409A-compliant document?" (Milliman Retirement Town Hall)  

SALGBA Challenge Winners Announced
State and Local Government Benefits Association [SALGBA]

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