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DC Plan Administrator
San Diego Pension Consultants
in CA

Retirement Plan Consultant and Administrator
Moran Knobel-Means & Associates
in CA, WA, Telecommute

Retirement Plan Regional Director
Retirement Plan Consultants
in AZ, CA, NM, Telecommute

Client Service Associate - Ret. Plan Mgmt.
Genovese Burford & Brothers
in CA

Associate Partner - Defined Contribution Consulting
in CT, FL, GA, MO, NC, NJ, NY, PA

Benefits Analyst (Experienced)
Sandia National Laboratories
in NM

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[Official Guidance]

Text of PBGC Final Regs: Allocation of Assets in Single-Employer Plans: Valuation of Benefits and Assets; Expected Retirement Age
"This rule amends the [PBGC's] regulation on Allocation of Assets in Single-Employer Plans by substituting a new table for determining expected retirement ages for participants in pension plans undergoing distress or involuntary termination with valuation dates falling in 2018. This table is needed to compute the value of early retirement benefits and, thus, the total value of benefits under a plan.... This rule is effective January 1, 2018."
Pension Benefit Guaranty Corporation [PBGC]

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Pension Plan Termination: A Plan Sponsor's Readiness Guide, Part 1 (PDF)
"The formal plan termination process has many legally mandated and interrelated steps that require accurate historical data, significant communications with plan participants, and reporting and disclosure to agencies such as the [IRS] and the [PBGC]. As sponsors move closer to full funding on a plan termination basis, their strategy should include a focus on these criteria, including those governing investments, data, and the plan advisers that will play a role in the termination process."
Findley Davies | BPS&M

Risk Transfers Increasingly Used for Modest Pension Payouts
"[C]ash-strapped companies are focusing their efforts where they have the most impact: purchasing annuities in order to transfer to an insurer the companies' obligations to retirees who will receive modest benefits.... Through the first three quarters of this year, pension plans purchased $12 billion of annuities, but [one consultant] expects the total for the year to come in around $20 billion."
Treasury & Risk

MetLife Discloses It Failed to Pay Benefits to Some Retirees from Annuity Buyouts
"[MetLife said in a Dec. 15 SEC] filing that of the approximately 600,000 members of their 'group annuitant population,' less than 5% of those participants have not received their benefits because they 'have moved jobs, relocated, or otherwise can no longer be reached via the information provided for them' ... . The exact number of participants, which 'tend to be' those who received $150 or less in monthly benefits, has not been provided."
Pensions & Investments

MetLife's Failure to Pay Retirees' Pensions Is Under Scrutiny
"Massachusetts securities regulators have begun an investigation into MetLife's failure to pay thousands of workers' pensions.... The disclosure by MetLife does not state the exact number of retirees who are impacted, what efforts MetLife has made to find correct addresses, how long the problem has been going on, or when and how MetLife learned of the problem."
Treasury & Risk


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Interesting Angles on the DOL's Fiduciary Rule, Part 74
"The recordkeeper must apply the criteria to all of the investments that are available on its platform and then report the results.... [T]hat could, depending on the criteria selected by the plan sponsor, be a list of just a few funds or a list of hundreds of funds. Unfortunately, if the recordkeeper further winnows the list of investments produced by the application of the generally accepted criteria or the IPS criteria, the recordkeeper could become an investment fiduciary."

Federal Judge Grants Delta Air Lines' Motion to Dismiss ERISA Fee Lawsuit
"The lawsuit alleged that defendants' conduct cost plaintiffs and the proposed class millions of dollars needlessly expended on excessive fees and costs; however, in a short but informative opinion, a judge has ruled the proposed class of plaintiffs lacks standing." [Johnson v. Delta, No. 17-2608 (N.D. Ga. Dec. 12, 2017)]

Your 403(b) Fiduciary Responsibilities and 403(b) Plan Litigation (PDF)
26 presentation slides. Topics: [1] Overview of Relevant ERISA Provisions; [2] Co-Investments with Endowment; [3] Environmental, Social and Governance (ESG) Investing; [4] Monitoring 3rd Parties; and [5] 403(b) Plan Litigation.
McDermott Will & Emery

Stable Value Funds: A Financial Investment with Risky Litigation Consequences
"Stable value funds have desirable features.... But those features do not eliminate the risk of losses, they just delay them. Indeed, a stable value fund with a longer duration is riskier than a fund with a shorter duration.... Considering the litigation risks for fiduciaries who do not set the stable value fund just right, ... a fiduciary may conclude the best option is not to offer a stable value fund at all. Yet fiduciaries have also been sued for not offering a stable value fund."
Mayer Brown

Comparing SEPs to 401(k) Safe-Harbor Plans (PDF)
"The purpose of this outline is to compare a SEP with a safe harbor 401(k) plan -- especially for employers who must cover participants other than just the owners. Note that a SEP is funded entirely by Employer contributions -- there are no employee deferrals allowed in a SEP."
Retirement Management Services, LLC

Retirement Readiness: How Do We Compare with Other Countries?
"Australia provides the greatest replacement, which is not surprising since this includes the majority of their employer-provided benefits. The UK is at the lowest level at all three income levels, while the US is very close to the UK at the lower income level but moves closer to Australia as income increases."
Findley Davies | BPS&M


MetLife's Missing Pension Payments?
"Companies offload pension risk, and it's up to the insurers to manage those pensions, including the administration of pension payments.... [As] more and more companies offload pension risk to insurers, these type of operational blunders are simply not acceptable. It's not just embarrassing, it could cost MetLife future business."
Pension Pulse


401(k) Process Must Be Demystified
"[A]ll Americans are capable in their ability to achieve financial well-being, whether that's saving through a 401k plan or other method. Sometimes we overwhelm people in explaining the 401k process -- we have to demystify this. Another thing that [works] is positive reinforcement from peers and colleagues.... [P]eople should get in the habit of performing a regular review to see the success they are having. This also is an opportunity to assess if you are saving all you can."
Fiduciary News

Benefits in General

Cybersecurity Risks to Employee Benefit Plans
"If (or more likely, when) a cybersecurity breach occurs, plan sponsors should have ... procedures for how the sponsor, likely working with its service providers, will communicate with plan participants who may be anxious about the breach and protecting their data. Sponsors should also have a process for determining how a breach will be corrected and what remedies will be used."
Foley & Lardner LLP

IRS and DOL Extend Timelines for Plans Affected by Hurricane Maria
"The extensions issued on Nov. 12 generally apply to directly affected group health plans, disability and other welfare plans, pension plans and participants in those plans. The relief designates a period that will not count toward timelines for establishing eligibility for HIPAA special enrollment or COBRA coverage, and complying with ERISA claims procedures and external reviews. The disregarded periods are September 17, 2017, through March 16, 2018 (Puerto Rico), and September 16, 2017, through March 15, 2018 (U.S. Virgin Islands)."
Willis Towers Watson

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

Actions to Take Before Year End in Response to Section 162(m) Changes
"Make sure the company takes all actions indicated by IRS guidance as necessary to support a 2017 accrual. Make sure the company does not certify that any particular amount will be paid to Section 162(m) covered employees.... For outstanding performance-based awards that cannot be accrued in 2017, determine whether the awards qualify for the Act's transition rule[.]"
Morgan Lewis

To Accelerate or Not? Potential Tax Planning in Light of Proposed Reforms to Code Section 162(m)
"[C]orporations with publicly traded debt subject to Section 15(d) of the Exchange Act, will become subject to Section 162(m) ... [and] may want to consider whether to accelerate into 2017 the vesting and payment of compensatory payments that otherwise would have been made in 2018 or future years. This acceleration of payment may ... preserve the deductibility of amounts that would otherwise be non-deductible under Code Section 162(m)."
Tax Talks: The Proskauer Tax Blog

Excise Tax Coming on Compensation of Tax-Exempt Organization Executives
"The Tax Cuts and Jobs Act ... includes a provision that imposes an excise tax equal to the corporate tax rate... on certain compensation paid to employees of tax-exempt entities, including not only 501(c)(3) organizations, but also 501(c)(4) and 501(c)(6) organizations, as well as governmental employers and political organizations.... [T]he tax applies to compensation payable to a Covered Employee, which is contingent on a termination of employment, if the value of the compensation exceeds three times the employee's average annual compensation in the five preceding years."
Blank Rome LLP

Selected Discussions
on the BenefitsLink Message Boards

Restructuring under Grouping Method; Allocate to Group A but Not Group B?
Have a plan that uses the Grouping method, with two classes A and B. Each class passes coverage individually. The allocation method in each class is based on compensation (pro-rata). Plan is not top heavy. They are wanting to do a 5% allocation to Group B but not do any allocation to Group A. As each passes coverage individually and a safe harbor base allocation (pro-rata) is used for Group B, I don't see a problem. Agree?
BenefitsLink Message Boards

Puerto Rican Participants in U.S. 401(k) Plan
One of the plan sponsors we work with recently mentioned that their U.S.-qualified plan has a couple of Puerto Rican employees participating in it. At least one of them has been contributing up to the 402(g) limit. No Form 480.70 or 6042 has ever been filed, although it's not clear to me whether this is a requirement or not. This brings up a few questions: [1] Should Puerto Rican employees participate in a 401(k) plan that does not have dual qualification? [2] If there is anything wrong with this situation, what needs to be done to fix it?
BenefitsLink Message Boards

Software for 401(h) Accounts in a Money Purchase Plan
Anyone know of plan document software that provides for 401(h) accounts in a money purchase plan? I'm striking out everyplace I've checked.
BenefitsLink Message Boards

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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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