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Retirement Policy Manager
University of California Office of the President
in CA

ESOP Administrator
Swerdlin & Company
in GA

Senior 401(k) Plan Administrator
FM International
in NY

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[Official Guidance]

Text of PBGC Notice of Modified Systems of Records; Rescinded System of Records; System of Records.
94 pages. "[The PBGC] proposes the following changes to its system of records notices to: amend a general routine use, rescind a duplicative system of records, establish a new system of records for collection of data from the agency website, add or amend routine uses in ten systems of records, make clarifying changes to all nineteen systems of records notices, and republish all existing systems of records notices. The PBGC determined that the proposed changes were necessary after conducting the biennial review of its systems of records notices."
Pension Benefit Guaranty Corporation [PBGC]


ERISA Audits: What We All Knew but Forgot

Sponsored by Lorman and BenefitsLink

Feb. 26 webinar. When the DOL or IRS comes knocking and looking to examine the benefits being offered to employees, it is important for an employer to be knowledgeable and ready. BenefitsLink discount.

Budget Act Includes Qualified Retirement Plan Provisions
"The Budget Act allows participants in qualified retirement plans who were affected by the California wildfires to take benefit distributions ... and prescribes changes to the rules on taking hardship distributions ... The Budget Act also provides relief for some participants whose qualified plan accounts were distributed in connection with a wrongful IRS levy, and calls for Congress to form a bipartisan, bicameral committee to hold hearings and propose legislative changes to address solvency concerns with multiemployer pension plans and the [PBGC]."
Kilpatrick Townsend

Brief of Alerus Financial Opposing Grant of Certiorari on Question of Burden of Establishing Loss Causation (PDF)
23 pages. "The real issue -- and the one to which the parties, the district court, the panel majority, and the dissent devoted the vast majority of their analysis -- was whether the Plan had come forward with any non-speculative evidence that it had suffered any loss at all.... [T]his case provides a poor vehicle to resolve the question that Petitioners have presented[.]" [The Pioneer Centres Holding Co. Employee Stock Ownership Plan and Trust and Its Trustees, No. 15-1227 (10th Cir. June 5, 2017; cert. pet. filed Aug. 4, 2017)]
Supreme Court of the United States

Seventh Circuit: ERISA Does Not Preempt State 'Slayer Statute'
"The wife argued that she was the designated beneficiary under the pension plan and that ERISA preempted the Illinois slayer statute. The estate argued that ERISA did not preempt the Illinois slayer statute, that the statute precluded distribution to the slayer-spouse and that the couple's minor child should receive the pension benefits of the deceased participant. The district court awarded benefits to the estate. The Seventh Circuit affirmed[.]" [Laborers' Pension Fund v. Miscevic, No. 17-2022 (7th Cir. Jan. 29, 2018)]
Benefits Bryan Cave

Best Practices: 401(k) Loan Policy
"Educate employees about the implications of a loan ... Implement service fees ... Don't appear to advocate borrowing ... Discourage savings interruptions ... Make repayment easy ... Don't rule out loans altogether ... Consider limiting loans to specific purposes."


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Hardship Withdrawals: An Attractive Nuisance Becomes More Attractive
"[The Budget Act] includes provisions that make hardship withdrawals more attractive -- removing barriers, increasing available monies, and removing the suspension of contributions.... [A]dding 21st Century loan processes, features like 'commitment agreements' and electronic bill paying, will reduce leakage. The leakage from defaulted loans will generally be less, much less than the leakage from hardship withdrawals."
Plan Sponsor Council of America [PSCA]

2018 Key Administrative Dates and Deadlines for Calendar-Year Defined Contribution Plans (PDF)
This four-page chart includes a descriptive list of the 'key' administrative dates and deadlines for calendar-year defined contribution plans regulated by ERISA and the Internal Revenue Code.

Two-Year Budget Deal Will Impact Employer Plans
"In addition to a next step for multiemployer plan funding problems and relief for plan distributions aimed at supporting individuals affected by the late 2017 California wildfires, the Budget Act includes some provisions from the House tax bill last year that had been omitted from the final agreement."

House-Senate Committee Tasked with Solving Multiemployer Pension Crisis by Year-End
"The committee will be comprised of six senators and six House members, equally divided between Republicans and Democrats, who will be appointed by House and Senate leaders. It will have instructions to report a bill by the last week of November, and will be required to hold at least five public meetings. If at least four members from each party agree on a compromise, the solution the committee produces will be guaranteed an expedited vote on both the House and Senate floors with no amendments[.]"
Chief Investment Officer [CIO]

When Do CalPERS Rates Become 'Unsustainable'?
"The ability to absorb rising pension costs varies from city to city ... but one thing unsustainable for all is the erosion of basic services.... [U]ncertainty causes reluctance to fully staff police, fire departments, and public works maintenance. As discretionary services such as libraries, parks and recreation are threatened, long-term commitments are less likely. Though the economy is growing and unemployment is low, cities are forced to make tough budget decisions."

Lessons from Across the Pond: DC Plans in the U.S. and the U.K. (PDF)
36 pages. "[M]andatory auto-enrollment and re-enrollment in the UK has been a huge success in boosting participation rates in workplace pension plans to around 90% for many employers ... [A]uto-escalation has proved to be a successful tool to get US plan participants to save more in workplace retirement plans ... [L]itigation on the issue of excessive investment fees has forced US plan fiduciaries to focus on negotiating lower fees, and government regulation has demanded greater disclosure of fees[.]"
Eversheds Sutherland

Delaying Retirement by Up to Six Months Is Equivalent to Saving an Additional 1 Percent Over 30 Years
"[R]esearchers calculated what retirement would look like for people who started saving at different stages of their lives, as well as their financial situations (single versus married, for example) and how much they contributed to their retirement savings. They also assumed workers would receive Social Security benefits immediately upon retiring."

Earnings Test, Non-Actuarial Adjustments and Flexible Retirement
"Earnings tests force workers to exit the labor market when claiming a pension. After abolishing the earnings test, workers can claim their benefits and can keep on working, potentially increasing labor supply. Our key result is that the difference between exit and claiming age strongly depends on the actuarial neutrality of the pension system and can become very large. Abolishing an earnings test as part of a 'flexibility reform' may therefore create more labor supply but at the same time, reduce the average claiming age when adjustments remain less than actuarial, thereby worsening rather than improving the sustainability of public pension systems."
National Bureau of Economic Research [NBER]

Benefits in General

[Guidance Overview]

No Further Delays for Enhanced Disability Claims Procedures
"For plans where the administrator will retain the discretion to make disability determinations, the plan sponsor should, prior to April 1, [1] ensure that plan administrators and benefits staff are aware of, and will follow, the new rules in practice; [2] update plan documents and SPDs to reflect the new procedures; and [3] update ABD letters, disability claims forms, communications, notices, company intranet, and employee handbooks[.]"
McCarter & English

Plan Limitations Period That Was Not Disclosed in Benefit Denial Letter Is Unenforceable
"The court observed that although the Fourth Circuit has not decided this question, the First, Third, and Sixth Circuits have concluded that a benefit denial must state a plan-imposed time limit for filing suit in order for the limit to be enforced against a participant[.]" [Starnes v. Universal Fidelity Administrators Co., No. 17-3073 (D.S.C. Feb. 5, 2018)]
Thomson Reuters Practical Law

The Educated Fiduciary: How to Up Your Game
"Read at least one newsletter regularly.... Schedule an on-site fiduciary training session.... Subscribe to blogs.... Sign up for webinars.... Attend a formal education program.... Familiarize yourself with materials on the DOL's website.... Develop written policies with your advisers.... Prepare a checklist of things to do each year.... Read up on your own."
Cohen & Buckmann, P.C.

Budget Brings Pension and Health Care Relief (PDF)
"The bill includes some helpful relief for plan sponsors and participants of qualified plans: [1] Expanded hardship relief.... [2] California wildfire relief.... [3] Relief for improper federal tax levy.... [4] Joint Select Committee on multiemployer plans.... [The bill] makes no changes to the [ACA] tax provisions nor does it include provisions related to market stabilization. It does, however, make keys changes to Medicare and provide funding for a number of popular domestic health programs."
Groom Law Group

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

Clarifying the Use of Nonqualified Plans to Mitigate Lost Deduction Under the New 162(m) Regime
"After a covered employee's retirement or other termination of employment, the company still will be able to pay and deduct up to $1 million in benefits each year, even under the 'once a covered employee always a covered employee' rule.... If an employee defers compensation ... the company will be replacing current, non-deductible cash payments with a promise to pay cash in the future. If the future payouts amount to less than $1 million per year, the payouts will then be fully deductible[.]"
Winston & Strawn LLP

Press Releases

DOL Investigations Help Retirement Plans Recover Nearly $16 Million After Losses from Fraudulent Loans
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

DOL Investigation Results in Sentencing Of Former Connecticut Resident for Theft of Benefit Checks
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

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David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2018, 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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