Retirement Plans Newsletter

April 5, 2018

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Jobs

Regional Sales Director
Fringe Benefit Group
Telecommute

IRA Expert
Ed Slott and Company, LLC
Telecommute

Retirement Plan Consultant
Intac Actuarial Services
in NJ, NY

Compliance Analyst
Pentegra Retirement Services
in NC

►See 132 Jobs

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Webcasts, Conferences

Employee Benefits Breakfast Briefing
May 1, 2018 in CA
Nixon Peabody LLP

Helping Small Business Owners Save for Retirement
May 3, 2018 WEBCAST
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

RITA IRA Institute
May 9, 2018 in CO
Retirement Industry Trust Association [RITA]

Getting It Right - Know Your Fiduciary Responsibilities Seminar
June 28, 2018 in RI
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

►See 164 Upcoming Webcasts and Conferences

►See 1361 Recorded Webcasts


Discussions

New Topics on the BenefitsLink Message Boards

New Comments and Topics

All Topics, Grouped by Forum


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[Official Guidance]

Text of IRS Notice 2018-24: Request for Comments on Scope of Determination Letter Program for Individually Designed Plans During Calendar Year 2019 (PDF)
"This notice requests comments on the potential expansion of the scope of the determination letter program for individually designed plans during the 2019 calendar year, beyond provision of determination letters for initial qualification and qualification upon plan termination. In reviewing comments submitted in response to this notice, the [Treasury Department] and the [IRS] will consider the factors regarding the scope of the determination letter program set forth in section 4.03(3) of Revenue Procedure 2016-37.... The Treasury Department and the IRS will issue guidance if they identify any additional types of plans for which plan sponsors may request determination letters during the 2019 calendar year."
Internal Revenue Service [IRS]

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Sponsored by Burrmont Compliance Labs LLC

Noted author and speaker S. Derrin Watson, J.D. is now answering questions in our Ask the Author service. Get your answers from Derrin in four business hours or less. Contact us at sales@ERISApedia.com or 612-605-2266.


Tax Act Compels Fresh Review of 'Uncomfortable' Fiduciary Obligations of Participant Loans
"These changes should cause plan sponsors and recordkeepers to consider new choices about their handling of loan defaults, something they haven't had to do in nearly 18 years. This matters because changing a plan's loan rules is not a minor technical act. Loans are investments subject to the same ERISA prudence rules as any other plan investment, and changes to loan procedures impacts the investment."
Business of Benefits

Rethinking the Digital Experience to Drive Plan Participation
"[A] full-featured, responsive website for your plan likely will engage and excite your employees, and thus promote participation rates. Move forward from archaic paper forms and encourage the use of technology for efficiency and safety to drive plan participation.... A well-designed user experience empowers plan participants to better understand their options, actively direct their funds and, ultimately, save more. Here are some insights ... on how to improve the user experience in retirement account web portals."
PlanPILOT

PBGC Releases First 2016 Data Tables
PBGC has released this first installment of tables for the 2016 Data Book, updating information in the Claims and Summary Tables.
Pension Benefit Guaranty Corporation [PBGC]

Restated Preapproved DB Plans Learn from DC IRS Amendment Cycle
"Taking a page from the books of their DC plan sponsor compatriots that have been through this process, all employers can: [1] Understand the role of the employer in the process. [2] Schedule changes in plan design. [3] Manage the payment of document provider costs.... [4] [C]onsider basing the [cash balance plan] interest-crediting rate on the actual plan asset rate of return. [5] For an employer considering terminating a DB plan, coordinate the restatement process with the termination process. [6] For an employer with an individually designed plan document, consider the pros and cons of moving to a preapproved plan document."
HR Daily Advisor

[Advert.]

Navigating the Compliance Challenges of Missing Participants

Sponsored by Pension Benefit Information, Inc.

The DOL is coming ... Pension plan audits are on the rise with a specific focus on the Term-Vested population and RMD. Contact the pros at PBI to learn more about our new Term-Vested Audit & Remediation Service.


Revenue Sharing Simplified
"Revenue sharing is a lot like ... rebates. Now, not all investments provide a rebate. And, sometimes, the cash back does not go directly into a participant's retirement plan account. It may first be used to offset plan expenses, such as recordkeeping and administrative expenses. In some plans, the remainder is then returned to an individual's retirement plan account."
Cammack Retirement Group

A Closer Look at the Fifth Circuit Decision Vacating the Fiduciary Rule
"It appears the Fifth Circuit's ruling will apply nationwide ... While the Tenth Circuit upheld the rule ... [it] did not address the initial threshold issue of whether the action to redefine the term 'investment advice fiduciary' was a proper exercise of the [DOL's] power. The plaintiffs in the Fifth Circuit ... did directly challenge the Department's statutory authority, and the Fifth Circuit determined that the action to redefine the term 'investment advice fiduciary' exceeded the [DOL's] power under ERISA."
Katten Muchin Rosenman LLP

Key Topics to Include in Any ERISA Fiduciary Training Program
"[1] Who is an ERISA fiduciary? ... [2] Settlor functions versus fiduciary functions ... [3] Identifying the ERISA plans of the employer ... [4] Description of ERISA fiduciary duties ... [5] Self-dealing and conflicts of interest ... [6] Prohibited transactions and exemptions ... [7] Limited liability for participant-directed investments ... [8] Favorable standard of review ... [9] Governance ... [10] Fiduciary insurance."
Thompson Coburn

Taft-Hartley Defined Contribution Plans: The Pros and Cons of Trustee- vs. Participant-Directed Investment
"Participant direction could potentially reduce trustees' liability ... Participant direction demands more education and communication ... Trustee direction may have potential efficiencies ... Consider member needs and perspectives." [Includes a chart of pros and cons for each approach.]
J.P. Morgan Asset Management

PBGC Issues Guidance on Reviews of Multiemployer Plans' Proposed Alternative Terms and Conditions to Satisfy Withdrawal Liability
"The Pension Benefit Guaranty Corporation (PBGC) has issued guidance for multiemployer plans that request review of proposed alternative terms and conditions for satisfying employer withdrawal liability under [ERISA]. The guidance sheds light on information the PBGC finds helpful and the factors it considers in its reviews."
Thomson Reuters Practical Law

An Analysis of Retirement Models to Improve Portability and Coverage (PDF)
97 pages. "This report examines the employer-based voluntary retirement system and explores a variety of potential changes.... [1] [T]he 401(k) system and ... the extent and nature of portability, the flow of money to IRAs, and leakage from both systems.... [2] [T]he coverage gap among traditional wage and salary employees and ... potential options for shrinking the gap.... [3] [T]he separate challenge of covering workers in non-standard employment, who would tend to be left out of fixes for traditional workers."
Center for Retirement Research at Boston College

New York to Establish IRA-Based Private Sector Retirement Program
"Employees will be offered an opportunity to contribute or to decline participation. If no election is made, employees would be automatically enrolled and contributions withheld from their compensation at a rate of three percent. Employees can opt out of participation at any time or may change their rate of contribution."
Ascensus

Benefits in General

What Happens After Breach of Fiduciary Duty Claims Stemming from Denials of Benefits Survive a Motion to Dismiss? (PDF)
"Following the U.S. Supreme Court's decision in CIGNA Corp. v. Amara, plaintiffs have argued, with some success, that ERISA breach of fiduciary duty claims under ERISA Sections 502(a)(2) and (a)(3) may proceed alongside claims for benefits under ERISA Section 502(a)(1)(B) that seek the same relief.... One recent decision ... provides useful insight on how courts approach residual breach of fiduciary duty claims ... after dismissing a claim for benefits ... It demonstrates that, even where a court permits a breach of fiduciary duty claim to outlive a claim for benefits, plaintiffs still may have difficulty establishing an actionable fiduciary breach in the typical claim for benefits context." [O'Rourke v. Northern California Electrical Workers Pension Plan, No. 16-2007, (N.D. Cal. Nov. 2, 2017)]
Jenner & Block, via Employee Relations Law Journal

Selected Discussions
on the BenefitsLink Message Boards

Interest Credits After NRD
Are cash balance participants required to receive an interest credit after their NRA? If they do not, do we have to give the participant a suspension of benefits notice? This is not a question of what the plan says. It is question of what the plan must say.
BenefitsLink Message Boards

Owner Has E-1 Visa; OK to Be Trustee?
The owner of the company in a non-resident and has a E-1 visa. Can he serve as trustee? Doing research it looks like he can but that he'd need to have a second trustee who is a US citizen.
BenefitsLink Message Boards

ESOP Required No Spousal Consent for Single-Sum Lifetime Distributions, So Surviving Spouse Got No Portion of $2.7 Million Distributed Two Days Before Participant's Death
Because the terms of an ESOP did not require the spouse's consent for a distribution before the participant's death (other than one chosen in the form of a life annuity), the spouse (as the surviving spouse, even though the participant had filed for a divorce) got no portion of the $2.7 million in the participant's account because there were zero dollars left in the account at the date of his death ... the participant's single-sum withdrawal of his account balance was processed on a Friday, and then he died on Sunday. Yikes!
BenefitsLink Message Boards

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Lois Baker, J.D., President  loisbaker@benefitslink.com
David Rhett Baker, J.D., Editor and Publisher  davebaker@benefitslink.com
Holly Horton, Business Manager  hollyhorton@benefitslink.com

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.

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