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April 13, 2018 logo logo
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Benefits Associate
Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
in TX

Retirement Plans Specialist
Benefit Plans Plus, LLC [BPP]
in MO, Telecommute

COBRA Eligibility Account Administrator
Alerus Financial
in MN

Financial Consultant
Nolan Financial
in MD, Telecommute

Retirement Distribution Processor
Alerus Financial
in MN

Plan Administrator
Stones River Consulting
in TN, Telecommute

Payroll Manager
S. L. Nusbaum Realty Co.
in VA

Senior Manager - Benefits Compliance
Reynolds American
in NC

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[Official Guidance]

Treasury Notice of Multiemployer Pension Plan Application to Reduce Benefits: Pressroom Unions' Pension Trust Fund
"The Board of Trustees of the Pressroom Unions' Pension Trust Fund ... has submitted an application to reduce benefits under the plan in accordance with [MPRA]. The purpose of this notice is to announce that the application ... has been published on the website of the Department of the Treasury, and to request public comments on the application from interested parties, including participants and beneficiaries, employee organizations, and contributing employers of the Pressroom Unions' Pension Trust Fund."
U.S. Department of the Treasury


Evaluating Your Third-Party Administrator: Are You Getting What You're Paying For?

Sponsored by Lorman and BenefitsLink

May 2 webinar will enable entities responsible for identifying, selecting, and monitoring their TPA to track performance and assess results, as well as identify opportunities to create additional value. Discount for BenefitsLink readers.

Plasterers Local 82 Pension Fund Application for Approval of Suspension of Benefits under MPRA (PDF)
458 pages. "The Trustees of the Plan propose to make the suspension effective February 1, 2019 ... The proposed benefit suspension for Active Participants will be a 22% reduction in the accrued monthly benefit as of December 31, 2016 ... The proposed benefit suspension for Non-Active Participants will be a 31% reduction in the accrued monthly benefit as of December 31, 2016[.]"
U.S. Department of the Treasury

Home Depot 401(k) Plan Latest Targeted with ERISA Fiduciary Breach Lawsuit
"Plaintiffs include in their complaint a substantial amount of backward-looking fund performance data to underpin their failure to monitor claims, comparing the Home Depot offerings to others that could have been purchased."

District Court Refuses to Dismiss Former Committee Members from Church Plan Funding Lawsuit
"Former committee members for the pension plan of St. Elizabeth Medical Center moved to have themselves dismissed from a lawsuit challenging the church plan status of the pension plan, but a federal judge declined to dismiss them from a count regarding funding of the plan." [Boden v. St. Elizabeth Medical Center, No. 16-49 (E.D. Ky. Apr. 4, 2018)]

DOL Voids ESOP Fiduciary Indemnification Agreements to Reach Settlements
"In recent litigation involving ESOP-owned companies, the DOL has taken the position that indemnification clauses are void against public policy under Section 410 of [ERISA]. Though lacking clear precedent, this policy has also been adopted by private plaintiff classes in recent years. As evident from [a recent settlement], a policy of voiding indemnity provisions can limit defense budgets, make settlements more likely and potentially create dangerous precedent for ESOPs."
McDermott Will & Emery


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Some Pension Plan Sponsors Missing Out on Tax Saving Opportunity
"Many pension-plan sponsors are making large voluntary contributions to their plans this year. Pension-funding rules allow such contributions to be retroactively recorded for 2017 if they're made by Sept. 15. The payments are tax deductible, of course, and because of the reduced corporate income tax rate that took effect Jan. 1, deductions claimed for 2017 are worth a lot more than those claimed for 2018."

How Can the U.S. Retirement System Provide Income to Last a Lifetime? (PDF)
"Many approaches may be needed to help future retirees secure lifetime incomes ... The range of approaches will require participation from all stakeholders: policymakers, actuaries, employers, financial planning advisers, and financial product and service providers. Possible approaches consist of reevaluating federal retirement policies, emphasizing financial literacy and education, and refocusing retirement plan designs."
American Academy of Actuaries

Buying Power for Higher Education Institutions: When You Have It and When You Don't
"According to each of the recent higher education lawsuits, the plaintiffs assert that the institutions have a responsibility to use their 'size and bargaining power to demand low cost investments' and to create 'economies of scale' in the services being provided. So how exactly does an institution do this? What if there are multiple historical record keepers and a large portion of the assets might remain in 'individual contracts' under participant authority?"
Fiduciary Plan Governance, LLC

The State Pension Funding Gap, 2016
"In 2016, the state pension funds in this study cumulatively reported a $1.4 trillion deficit -- representing a $295 billion jump from 2015 and the 15th annual increase in pension debt since 2000. Overall, state plans disclosed assets of just $2.6 trillion to cover total pension liabilities of $4 trillion.... The median public pension plan's investments returned about 1 percent in 2016, well below the median assumption of 7.5 percent -- a disparity that added about $146 billion to the debt."
The Pew Charitable Trusts

Benefits in General

Voluntary Severance Plans: Case on Point
"A [recent] decision from Delaware's federal district court ... involves a typical [voluntary severance plan (VSP)] structure, and a litigation risk for employers to avoid.... [E]mployers need to be sure the VSP is communicated to eligible employees through FAQs or other means that generally address how the VSP differs from the RIF. Imprecision or ambiguity can open the door for claims that employees were misled or under-informed about their choices." [Girardot v. The Chemours Co., No. 16-263 (D. Del. Mar. 29, 2018)]
Paul Hastings LLP

Executive Compensation
and Nonqualified Plans

IRS Filing Deadlines and Stock Compensation Planning for 2018
"In any tax season, the recognition of income from stock compensation or an employee stock purchase plan can complicate your return. Examples include income from an NQSO exercise, an ISO or ESPP disqualifying disposition, or the vesting of restricted stock.... [T]his tax season has the potential to be more confusing than most if you sold any stock last year. Issues are especially likely to arise with the cost basis as reported on Form 1099-B and with the tax-return reporting on Form 8949 and Schedule D."

Selected Discussions
on the BenefitsLink Message Boards

Annuity Contracts Considered Distributed for Form 5500 Purposes?
Plan Sponsor has old TIAA individual contracts in 403(b) plan. More than 90 of these contracts belong to terminated participants. We (the TPA) would like TIAA to take some action to show that these contracts are distributed for 5500 purposes. Has anyone had experience they could share with this issue?
BenefitsLink Message Boards

Missed Deferral Opportunity -- 25% QNEC vs. 3-Month Rolling
A plan sponsor has participants who missed 5 months of deferral opportunity due to a technical payroll glitch. The Sponsor wants to know if the Rolling Three-Month exception can apply to the last 3 months of the missed 5 months, where they would only have to fund a 25% QNEC for the first 2 months and not for the full 5 months?
BenefitsLink Message Boards

Tiered Matching Contributions Based on Service?
Can a 401(k) plan have a tiered match contribution based on service? No HCEs would be eligible to participate.
BenefitsLink Message Boards

Sub S Shareholder 'Wages'
Employer maintains a profit sharing plan, no employees. Box 1 of his W-2 includes health insurance premiums; boxes 3 & 5 do not. Employer wants max deduction (and who doesn't?). Would his 25% be based on Box 1 or Box 3? Accountant seems to think Box 3.
BenefitsLink Message Boards

Church Plan and Definition of Spouse
Can a non-ERISA steeple church 403b plan use a definition of spouse that does not reflect the Windsor amendment to DOMA? So can a church plan define Spouse to mean a person of the opposite sex to whom the participant is married, but then state that for RMD purposes, Spouse reflects the changes to DOMA as of June 26, 2013? The document to be used is a pre-approved plan that does not define Spouse in this manner, and we would need to write this definition into the plan, which could take it out of pre-approved status (which I guess is the second issue). First issue is the legality of using this definition in a church plan.
BenefitsLink Message Boards

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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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