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Associate DC Consultant
Pavilion Advisory Group, Inc.
in IL, MN

Client Service
Aldrich Wealth
in OR

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Feds Defend Pension Law's Religious Exemption
"[T]he government argued that [ERISA's] 'church plan' provision is constitutional because it has a secular legislative purpose and neither advances nor hinders religion. This is the first time the government has publicly commented on the constitutionality of the exemption in the four years since it's become a controversial issue driving dozens of ERISA class actions." [Sanzone v. Mercy Health, No. 16-923 (E.D. Mo., gov't memo filed Dec. 11, 2017)
Bloomberg BNA


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Aon Hewitt Can't Escape Safeway's 401(k) Fee Lawsuit
"[The federal district judge] rejected Aon's argument that it didn't breach its fiduciary duty of prudence because it had in place a 'master consulting agreement' with Safeway that established Aon's 'robust process' in providing 'ongoing consulting and performance evaluation.' The terms of the agreement, standing alone, can't establish that Aon acted prudently, and the fact that an agreement exists doesn't prove it was followed, [the judge] said." [Terraza v. Safeway Inc., No. 16-3994 (N.D. Cal. Dec. 11, 2017)]
Bloomberg BNA

Interesting Angles on the DOL's Fiduciary Rule, Part 73
"In the past, recordkeepers often provided sample line-ups to start-up plans and to existing plans that were transferring to their recordkeeping platform. However, under the new fiduciary definition, a selective list of investments is considered to be fiduciary investment advice, which means that the recordkeeper would need to make prudent recommendations and would be subject to ERISA's prohibited transaction rules (e.g., for any proprietary investments and revenue sharing). Fortunately, there is an exception in the fiduciary regulation; unfortunately, though, the scope of the exception is limited."

2017 Stable Value Study: A Survey of Plan Sponsors, Stable Value Fund Providers and Advisors (PDF)
30 pages. "[M]any plan sponsors recognize that stable value's performance track record is better than that of money market funds. However, ... there remains a need for the stable value industry to encourage a greater understanding for -- and appreciation of -- stable value's risk and return profile vis-à-vis other capital preservation options."

Wishful Thinking or Within Reach? Three Generations Prepare for Retirement (PDF)
118 pages. "57% of Generation X and 55 percent of Baby Boomers cite outliving their savings and investments as one of their greatest retirement fears. 47% of Millennials fear that they will be unable to meet the basic financial needs of their family when they retire. 66% of all workers are concerned that Social Security will not be there for them when they are ready to retire."
Transamerica Center for Retirement Studies


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Qualified Plan Beneficiary Rules, Part 3
"[A] surviving spouse has the option of rolling the funds into his or her own IRA or to a qualified plan, if the qualified plan accepts rollovers. However, many factors determine how and when the rollover should occur."

Recent Data on the Funded Status of Multiemployer Pension Plans (PDF)
"A majority of plans are in the green zone ... Most plans have a funded percentage above 70% and many are fully funded ... In the construction industry, a greater percentage of plans with fewer than 1,000 participants are in the red zone than larger plans ... Yet the industry as a whole remains overwhelmingly healthy with very few [critical and declining] plans -- only six in 2017."
Segal Consulting

2018 California PEPRA Compensation Limits
"The 2018 [California Public Employees' Pension Reform Act of 2013 (PEPRA)] compensation limits are $121,388 for Social Security members and $145,666 for non-Social Security members. These limits are the maximum pay that a California public agency can recognize in a defined benefit plan for PEPRA members, i.e. those first hired by a public employer in 2013 or later."
Van Iwaarden Associates

NASRA Issue Brief: State Hybrid Retirement Plans (PDF)
"[A] growing number of states have established [hybrid plans] on either an optional or mandatory basis.... [M]ost contain the core features known to promote retirement security: mandatory participation, shared financing between employers and employees, pooled assets invested by professionals, targeted income replacement with survivor and disability protection, and a benefit that cannot be outlived." [Updated Dec. 2017]
National Association of State Retirement Administrators [NASRA]

Representatives Introduce Electronic Disclosure Bill for Retirement Plan Information
"The proposed Receiving Electronic Statements to Improve Retiree Earnings (RETIRE) Act would automatically enroll plan participants in electronic delivery. It would require employers to make retirement information easily accessible online, and have protections for employees who prefer to receive paper documents and can opt out."
Pensions & Investments


Why Multiple Employer 401(k) Plans Are Obsolete Today
"MEP providers and their investment fund partners routinely tout plan benefits that either don't exist or are just as accessible with a single employer 401(k) plan. The reason is simple -- to protect asset-based fees that can quickly grow out of control.... [T]hanks to today's 401(k) investments and technology, single employer 401(k) plans can offer lower fees and the same level of outsourced fiduciary services (if desired). These developments have made MEPs obsolete."
Employee Fiduciary


Roth Option Won't Remedy 'Pass-Through' Problem in Tax Bill
"[A] Roth election, at best, can only apply to the elective contributions made to a 401(k) plan. There is no Roth option for matching contributions or discretionary profit sharing contributions. For a small business owner with the wherewithal to save, that amounts to $36,000 this year. More to the point, ... there is no 'Roth' election whatsoever with regard to contributions made to a cash balance plan (or any other type of defined benefit plan). Cash balance plans are extremely popular with small business owners who, after plowing money into their business for many years, can finally start funding their retirement."
National Association of Plan Advisors [NAPA]

Benefits in General

[Guidance Overview]

2018 Reporting and Disclosure Calendar for Multiemployer Health and Retirement Plans (PDF)
"[This 33-page calendar summarizes] the annual compliance requirements and disclosure obligations that health and retirement plan sponsors need to know. The content in these calendars raise issues that may cause plan sponsors to check, change or consider their current approaches."
Segal Consulting

[Guidance Overview]

2018 Reporting and Disclosure Calendar for Single Employer Health and Retirement Plans (PDF)
"[This 33-page calendar summarizes] the annual compliance requirements and disclosure obligations that health and retirement plan sponsors need to know. The content in these calendars raise issues that may cause plan sponsors to check, change or consider their current approaches."
Segal Consulting

The Benefits of Mediation in ERISA Claims
"Mediation can help reduce the chances of the plaintiff being awarded a higher payout, and avoid payment of the defendant's legal fees. A carefully mediated negotiation can allow both parties to walk away content with the outcome, without the unknown outcome that can result from a trial."
Butterfield Schechter LLP

Selected Discussions
on the BenefitsLink Message Boards

Need to Correct Missed Roth Contributions?
Employer was not updating participants' deferral changes they had made on the recordkeeper's web site. The plan is a 3% safe harbor, so no matching to worry about. If a plan missed updating a deferral for all of 2016 and 2017, does it need to make some kind of correction? The participant believed he was deferring 8% Roth but payroll was deferring only 7% -- basically a $15 per pay period difference. Does this link apply (or perhaps it does not because these are Roth contributions?) --
BenefitsLink Message Boards

Short Plan Year in 2018; Use 2017 Version of Form 5500?
A client's retirement plan will be closed during its 2018 calendar plan year, and its distribution should be done by March 2018. The plan will need to file a Form 5500 for the short plan year ending March 30, 2018. Which version of Form 5500 should be used? It would seem to be the 2018 version, but the 2018 version won't be available until early 2019. Could the plan use the 2017 form?
BenefitsLink Message Boards

Owner's Deferral Mistakenly Put Into IRA Rather Than 401(k)
During 2016, a $4,000 deferral by the owner of a company was incorrectly put into an old IRA rather than into his 401k account. This error was discovered in early 2017 during year-end reconciliation and preparation of the Form 5500. The error was made by the asset platform/broker's office. To transfer the funds, they want us (as the TPA) to write a letter saying something like "the plan accepts this rollover." But I believe there should not be a rollover, because it never should have been put into the IRA. How to resolve? Further, the asset platform/broker's office wants to prepare a 2017 1099-R. But they made the initial mistake of putting it into the IRA, so are we supposed to jump through hoops to cover them?
BenefitsLink Message Boards

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