Retirement Plans Newsletter

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Retirement and ESOP Account Administrator
Alerus Financial
in MI, MN, NH

Team Lead / 401(k) Pension Administrator
Nicholas Pension Consultants
in CA

Plan Document & Compliance Specialist
Northeast Professional Planning Group, Inc.
in NJ

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Webcasts, Conferences

Pensions at Risk: Guarding the Underfunded Cookie Jar
February 14, 2018 WEBCAST
Conference of Consulting Actuaries

ASOP 51: Assessing and Disclosing Pension Risk
February 28, 2018 WEBCAST
Conference of Consulting Actuaries

Different Measures of Pension Liabilities
March 14, 2018 WEBCAST
Conference of Consulting Actuaries

Understanding Employee Plans Compliance Resolution System (EPCRS): The Basics
March 22, 2018 WEBCAST
ASPPA [American Society of Pension Professionals & Actuaries]

►See 91 Upcoming Webcasts and Conferences

►See 1357 Recorded Webcasts


New Topics on the BenefitsLink Message Boards

New Comments and Topics

All Topics, Grouped by Forum

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[Official Guidance]

Text of EBSA Technical Correction to Extension of Transition Period and Delay of Applicability Dates for BICE and other Prohibited Transaction Exemptions
"Footnote 66 is situated in the regulatory impact analysis section of the preamble. The textual discussion surrounding footnote 66 focuses on regulatory alternatives considered, but rejected by the [DOL]. Footnote 66 identifies certain public commenters who support a contingent or tiered delay, two regulatory alternatives the Department declined to adopt. Due to a clerical error, the footnote also inadvertently includes the names of public commenters who do not support a contingent or tiered delay. This document corrects that error."
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]


2018 SALGBA National Conference in Jacksonville, FL

Sponsored by SALGBA [State and Local Government Benefits Association]

The 2018 SALGBA National Conference is April 29 - May 2 in Jacksonville, FL at the Hyatt Regency Riverside. More information please visit

PBGC Suits Challenging Standard Terminations: Statute of Limitations and Third-Party Liability
"IHI argued that PBGC's lawsuit was barred by the statute of limitations on the theory that PBGC's cause of action arose on ... the date IHI paid plan participants.... The court rejected IHI's arguments and ruled that PBGC's cause of action did not arise until its final determination ... or -- at the earliest -- on ... the date of PBGC's initial determination following its audit.... IHI tried to shift -- or share -- the liability by requesting leave to file a third-party complaint against ... a service provider retained by IHI to assist in establishing the retirement plan for IHI employees.... Citing ERISA Sections 4003 and 4041, the court held that 'the Plan Administrator alone, not a third party advisor, is responsible for proper termination of the Pension Plan.' " [PBGC v. Idaho Hyperbarics, Inc., No. 16-325 (D. Idaho May 15, 2017)]

CenturyLink Plan Participants Allege 401(k) Funds Underperformed Due to Multiple Asset Managers
"The proposed class action ... challenges a customized fund in CenturyLink's 401(k) plan that invests in the stock of large U.S. companies. The fund's design was seriously flawed because it used five different active fund managers with the same mandate, the lawsuit says. This caused the fund -- which allegedly was the only large-cap stock investment in the plan -- to consistently underperform its benchmark by 2 percentage points or more each year since 2012, according to the lawsuit."
Bloomberg BNA

Union Fund Hit with Excessive Fee Suit
"Similar to many excessive fee lawsuits filed against single-employer plans, the complaint accuses a multiemployer plan of failing to leverage its bargaining power to obtain lower investment and recordkeeping fees."

Defined Contribution Plans: 10 New Definitions for 2018
"10 terms rendered outdated by change. [For each, the authors] provide a more robust, accurate and current definition.... [1] Plan design ... [2] Full funding ... [3] Plan risk factors ... [4] Participant inertia ... [5] Participant communications ... [6] Participant outreach ... [7] Qualified default investment alternative (QDIA) and target-date fund (TDF) selection ... [8] Participant investment decisions ... [9] Investment decisions for plan fiduciaries ... [10] Diversification and investment solutions[.]"
Willis Towers Watson


NTSA Summit Connect with the best!

Sponsored by NTSA

The NTSA Summit is where leaders and innovators come together to make a difference for their clients, the industry, and themselves. It is the only national gathering of professionals in the 403(b) and 457 marketplaces.

House Democrat Introduces Workplace Retirement Savings Bills
"The proposed Automatic Retirement Plan Act of 2017 [introduced by Ways and Means Committee ranking member Richard Neal, D-Mass.] would require many employers to offer a 401(k) or 403(b) plan ... Employer contributions would not be required, but failure to offer a plan would incur an excise tax.... The second bill, the Retirement Plan Simplification and Enhancement Act of 2017, would modify the current automatic enrollment safe harbor cap of 10% of pay, and establish a new safe harbor to get employers to defer more than the automatic deferral floor of 3% of salary in the first year."
Pensions & Investments

Pension Finance Update, November 2017
"Stock markets brought more good news to pension sponsors in November, with a continuation of the remarkably steady bull market of 2017.... [T]raditional Plan A improved 1% and is now up almost 5% for the year, while the more conservative Plan B improved a fraction of 1% in November ahead almost 2% through the first eleven months of 2017."
October Three Consulting

FAS87 ASC715 Discount Rates and Moody's Rates, Updated November 2017
Includes an unofficial monthly report as of Nov. 30, 2017 of Moody's Daily Long-term Corporate Bond Yield Averages and Moody's Daily Treasury Yield Averages, which are used as benchmarks by some corporate pension plans.
David Rigby, via BenefitsLink Message Boards

The Role of IRAs in U.S. Households' Saving for Retirement, 2017 (PDF)
"More than one-third of U.S. households owned individual retirement accounts (IRAs) in 2017.... More than one-quarter of U.S. households owned traditional IRAs in 2017.... More than half of traditional IRA-owning households indicated their IRAs contained rollovers from employer-sponsored retirement plans.... Traditional IRA-owning households with rollovers cite multiple reasons for rolling over their retirement plan assets into traditional IRAs.... Only 12 percent of US households contributed to traditional or Roth IRAs in tax year 2016, and very few eligible households made catch-up contributions to traditional IRAs or Roth IRAs."
Investment Company Institute [ICI]


First State-Run Auto-IRA Plan Is Working, But Why Do Some Business Groups Want These Programs to Fail? (PDF)
"Oregon's first two pilot programs have enabled 1,000 employees in mostly micro and small businesses to set aside $200,000 in retirement savings in just a couple of months. The employee opt-out rate is around 30 percent; low enough to show the program is being well-received but high enough to show that those not wishing to save have had no trouble disengaging.... Among the other legal objections ... is that automatic enrollment in any payroll withholding IRA, even with advance notice and an easy opt-out, is merely voluntary but not 'completely voluntary' for the employee, as required by the 1975 DOL safe harbor."
David E. Morse, via Benefits Law Journal

Benefits in General

Senate Passage of Tax Bill Signals Benefit Changes -- But Which Ones?
"Each measure handles the health care individual mandate, education benefits and other deductions differently.... [A] comparison chart of the workplace provisions in both the House and Senate bills [is provided], and some of the key differences are noted [in this article]."
Society for Human Resource Management [SHRM]

Senate Approves Tax Reform Legislation
"Included in the manager's amendment is a provision to reduce the age for in-service retirement plan distributions from a DB plan or governmental 457(b) plan to 59-1/2.... It also includes a change to the partnership provisions to increase the deduction for pass-through business income to 23%, up from the 17.4% level that was included in the original Finance Committee proposal[.]"
National Association of Plan Advisors [NAPA]

Cambridge Retirement System Sues Willis Towers Watson Over Merger
"Cambridge (Mass.) Retirement System filed a class-action lawsuit against Willis Towers Watson and other defendants for allegedly violating provisions of the Exchange Act in connection to the merger between Towers Watson & Co. and Willis Group Holdings. The suit alleges that defendants issued false and misleading statements in proxy materials filed with the U.S. [SEC] prior to the merger, which closed on Jan. 4, 2016."
Pensions & Investments

Meet the Law Firms Fighting 401(k), Health Plan Class Actions
"For the second year in a row, [Morgan Lewis & Bockius LLP is] the law firm getting the most ERISA class action business.... Dorsey & Whitney LLP follows closely in number of ERISA class actions.... Skadden Arps Slate Meagher & Flom has been hired to defend eight ERISA class actions in the past year.... Proskauer Rose LLP, Alston Bird, Groom Law Group Chartered, and Reed Smith LLP are defending seven class actions, respectively.... Steptoe & Johnson LLP was hired to defend six ERISA class actions.... O'Melveny & Myers LLP and Sidley Austin LLP are defending four class actions each."
Bloomberg BNA

Executive Compensation
and Nonqualified Plans

Executive Comp Ramifications of House and Senate Versions of Tax Reform
"The current House and Senate bills remove the previously proposed Section 409B and therefore nonqualified deferred compensation and equity compensation will generally remain subject to taxation under currently applicable rules under Section 409A and Section 83. Otherwise, the current House and Senate bills are similar to the initial House bill, including with respect to its meaningful changes to the Section 162(m) $1 million executive compensation deduction rules and tax-exempt executive compensation rules."
Latham & Watkins

on the BenefitsLink Message Boards

Discounted Rate for Provision of Fiduciary Services by Existing Service-Provider: Prohibited Transaction?
X provided health and insurance services to its client. X offered that client a discounted rate for providing fiduciary services to that client for its retirement plan. The retirement plan received a discount of 15% on the stated fee for the retirement plan because of the bundled services. A prohibited transaction?
BenefitsLink Message Boards

Rule of Parity: Any Limit to How Long the Former Employee Can Be Away?
Plan uses Rule of Parity. Exclude eligibility service before a period of 5 consecutive one year breaks in service if an employee does not have any nonforfeitable right to the account balance derived from Employer contributions. Does not have a one year holdout provision. An employee is eligible to enter the plan on his rehire date if vested when terminated. Employee is terminated in February 2005 and was 60% vested. He is rehired in 2014, so he was gone for 9 years. Is there a limit as to the number of years an employee is gone from the company so that the prior service will not count for eligibility? Can an employee be rehired after 20 years and will that prior service count?
BenefitsLink Message Boards

Trouble Purchasing Annuities at Termination of Relatively Small Plan
Plan sponsor will be finalizing the termination process during the 1st quarter of 2018. They have 40 annuitants. Expected liability for these annuitants is approximately $350,000. We are having a hard time finding firms to bid on the annuities due to the relatively small size. Have you found one?
BenefitsLink Message Boards

Press Releases

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David Rhett Baker, J.D., Editor and Publisher
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BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2017, Inc. All materials contained in this newsletter are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of, Inc., or in the case of third party materials, the owner of those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.

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