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Liability-Hedging: A Guide to Best Practices for U.S. Pension Plans (PDF)
28 pages. "For many pension plans, investment strategy is often structured with a liability-hedging portfolio and a growth portfolio ... [T]he construction and calibration of the liability-hedging portfolio is integral to effective pension asset management. This report focuses exclusively on the liability-hedging portfolio, delineating key considerations and best practices for single-employer defined benefit plans[.]"
Cambridge Associates
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[Advert.]
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PBGC Encourages New Approaches to Multiemployer Withdrawal Liability
"PBGC officials want plan trustees, consultants and actuaries to discuss their proposals before applying, to shorten the review time needed. Interest in alternative payment rule proposals has grown in recent years, and often involve highly troubled plans. The proposals involve analyzing future cash flows and underfunding under various scenarios."
Pensions & Investments
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Interesting Angles on the DOL's Fiduciary Rule, Part 85
"[It] is possible that the [DOL] will propose a new regulation, which expands on the old definition and which focuses on the elements of trust and confidence, as well as other criteria.... Under both ERISA and the Code, financial conflicts of interest are prohibited.... Both the SEC and FINRA generally rely on disclosures to mitigate conflicts. In other words, if adequately disclosed, it is permissible to have financial conflicts of interest for SEC and FINRA regulated advisors."
FredReish.com
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Paying 401(k) Fees from Plan Assets
"Settlor expenses ... are considered to benefit the 401(k) plan sponsor in more than an incidental way....[and] must be paid by the plan sponsor.... When 401(k) plan participants are considered to derive some benefit from a settlor expense, the sponsor can charge that portion to the plan. Further, plan expenses necessary to implement a settlor decision can be paid from plan assets as an administrative expense."
Employee Fiduciary
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[Advert.]
For over 20 years, we've helped employers find the best-informed candidates to fill their benefits job openings -- learn more!
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Asset Growth Trend Continues in Fourth Quarter 2017 (PDF)
"For the 100 largest public-employee pension systems in the country, assets (cash and investments) totaled $3,785.9 billion in the fourth quarter of 2017, increasing by 2.7 percent from the 2017 third quarter level of $3,684.7 billion. Compared to the same quarter in 2016, assets for these major public-pension systems increased 11.6 percent from $3,392.1 billion[.]"
U.S. Census Bureau
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[Opinion]
ARA Letter to IRS Recommending Expansion of Self Correction Program under EPCRS (PDF)
"ARA recommends the Service adopt the following modifications to EPCRS: ... [1] Extending the period for self-correction of significant errors and permitting self-correction of missed deferral opportunities, regardless of when the error occurred; [2] Adding new earnings adjustment calculation methods to the existing safe harbor methods in EPCRS; [3] Clarifying the definition of an insignificant operational failure; [4] Providing safe harbor corrections related to overpayments and earnings adjustment calculations in defined benefit plans; [5] Expand[ing] the types of errors that may be corrected through SCP[.]"
American Retirement Association [ARA]
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[Opinion]
Court Strikes Down Popular 'Blended' Method for Determining Multiemployer Plan Withdrawal Liability
"Whereas for funding actuaries get to use their 'best estimate' on the interest rate (and they generally choose a high rate that low-balls contributions), when it comes to calculating a withdrawal liability the goal is to use a very low interest rate to maximize the payments that these departing employers will owe the plan. The largest actuarial firm doing multiemployer work even came up with their own methodology that a court just found to be in violation of ERISA[.]"
Burypensions
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Executive Compensation
and Nonqualified Plans
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Employee Stock Purchase Plans: The Biggest Tax-Return Mistakes to Avoid
"[1] Not filing Form 8949 after an immediate sale of ESPP shares at purchase.... [2] Paying tax on the discount too early.... [3] Directly using what appears as the cost basis on your Form 1099-B.... [4] Paying the wrong tax on the discount.... [5] Using the wrong price when there is no lookback."
myStockOptions.com
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Managing an NQDC Plan Investment Menu
"Unlike a qualified defined contribution plan, in which plan assets are segregated from the employer's general assets in a trust or custodial account, the compensation deferred into an NQDC plan remains commingled with the employer's general assets and the returns are notional. This arrangement is significant because the plan sponsor bears the responsibility for funding the notional returns generated by the investment menu."
Callan
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Selected Discussions
on the BenefitsLink Message Boards
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Counting Hours Performing Services for Which Employees Are Paid Directly by Government (IHSS)
My client provides supported services to people in need in California. Part of the employees' hours are billed to the company and part are billed to the government program (IHSS). The government pays the employee directly. Does the client have to include the government billed hours in the 1,000 hour eligibility calculation? I don't know if this makes a difference, but it's a for-profit company.
BenefitsLink Message Boards
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Does Anyone Check Whether a New Customer's Executive Has Been Barred from Serving as a Fiduciary?
Many court decisions about a theft from an employee-benefit plan include an order that a wrongdoer is barred from serving as a fiduciary of an employee-benefit plan. But how (if at all) is such an order practically enforced? Am I right in guessing a TPA might not spot a problem? Leaving aside a 3(16) TPA, an ordinary service provider might not be a fiduciary, and might have no duty or obligation to guard against an ineligible person's service. And if a TPA runs a check on its new customer, would the TPA's check spot this problem? If a Form 5500 annual report includes an ineligible person's name as a signer or authorizer, does anything in EBSA's error-checking or post-filing review catch a problem?
BenefitsLink Message Boards
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BenefitsLink.com, Inc.
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Winter Park, Florida 32789
(407) 644-4146
Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager
BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2018 BenefitsLink.com, 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 BenefitsLink.com, 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.
Links to web sites other than BenefitsLink.com and EmployeeBenefitsJobs.com are offered as a service to our readers; we were not involved in their production and are not responsible for their content.
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