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[Official Guidance]

Text of Treasury Department Letter Authorizing Benefit Reductions for Alaska Ironworkers Pension Plan (PDF)

"Because a majority of voters identified as eligible by the Plan did not vote to reject the benefit reduction, the benefit reduction is permitted to go into effect. Treasury, in consultation with DOL and PBGC, has issued a final authorization to reduce benefits under the Plan as described in the Application, effective July 1, 2018, subject to the conditions described [in this letter]."
U.S. Department of the Treasury

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[Guidance Overview]

Interesting Angles on the DOL's Fiduciary Rule, Part 94

"Since a broker-dealer and its representative would not ... receive any compensation if a participant does not roll over, there is ... a material conflict of interest involving financial incentives.... Reg BI says that a broker-dealer must disclose and mitigate or, alternatively, eliminate the financial incentive conflict of interest.... [T]he best 'mitigation' appears to be a process that ensures that the recommendation is in the best interest of, and loyal to, the participant. That means that broker-dealers are in essentially the same position as they were under BICE."

[Guidance Overview]

IRS Resolves Yet Another Failure to Designate a Beneficiary for a Retirement Account

"[IRS PLR 201821008] is yet another case of a failure to properly designate a beneficiary of a retirement account. In this case, the IRS remedied the issue by approving the surviving spouse's rollover of a Governmental 457(b) account to her own traditional IRA, even though the decedent's estate was the beneficiary of the 457(b) account. The IRS considered the spouse's rights and control over the estate[.]"
Appleby Retirement Dictionary

Fourth Circuit Affirms Denial of Equitable Relief in Conversion from Individual Accounts to Commingled Fund

"Plaintiffs argued to the lower court and on appeal that because their money was improperly commingled with other money, they should receive a proportionate share of the whole of the profits Bank of America made on the combined assets ... Both courts rejected the plaintiffs' argument that the district court was required to reward proportionate-share-of-the-whole relief. ERISA requires equitable relief to be 'appropriate' and thus does not mandate a remedy. " [Pender v. Bank of America Corp., No. 17-1485 (4th Cir. June 5, 2018)]

Defined Contribution Plan Sponsors' Evolving Views of Retirement Related Risks and Objectives

"69% of DC plan sponsors indicate that retention of participant assets is preferable to retirees transitioning account balances out of the plan... [29%] report that keeping retired participants in plan has become more of a priority.... 42% [identify] longevity risk as the topic of most concern -- three times the number that prioritized more immediate and limited concerns of addressing downside risk (14%) or volatility risk (12%).... [N]early two-thirds (65%) of plan sponsors agreed that achieving the highest retirement income opportunity is a more influential priority in their QDIA evaluation process."
T. Rowe Price


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Millennials Are Mad for ETFs

"Exchange Traded Funds (ETFs) are the investment vehicle of choice for 91% of Millennial investors ... Millennials say 42% of their portfolios are currently in ETFs, and more than half (56%) of investors in that generation say they have already replaced all individual securities in their portfolios with ETFs.... [N]early three quarters (74%) of Millennials surveyed expect to increase their ETF investments in the next year and 54% say they would consider placing their entire portfolio in ETFs in the same time frame."
Charles Schwab

EBRI Retirement Security Projection Model: Analyzing Policy and Design Proposals (PDF)

17 pages. "[This Issue Brief examines] the impact of various retirement-reform proposals on all US households between the ages of 35 and 64 by first assessing the current, aggregate national-retirement deficit, and then examining the impact of the following potential initiatives: [1] Auto Individual Retirement Account (IRA) programs ... [2] Programs expanding access to defined contribution plans ... [3] A universal defined-contribution scenario. [4] Auto-portability proposals. [5] Proposed reductions in the 402(g) and/or 415(c) limits."
Employee Benefit Research Institute [EBRI]

Securing Future Retirements: Innovations in Planning Strategies, Financial Products and Employee Benefit Plan Structure (PDF)

80 pages; 18 essays. "The primary motivation of this year's call for essays was to identify potential solutions and new innovations being developed to assist workers and retirees better prepare for retirement.... The full essay collection is found in this publication and sets forth ideas that can be further developed or that will spur thinking for new products, planning tools and employee benefit plan strategies."
Society of Actuaries

DB Plan Assets Increase in Q1 While DC Plan Assets Decline

"Corporate defined benefit plan assets rose by $9 billion in the quarter ended March 31, to $3.212 trillion, a 0.28% increase ... Corporate defined contribution plans decreased by $40 billion in the first quarter, or 0.64%, to $6.249 trillion."
Pensions & Investments

How Does Divorce Affect Retirement Security? (PDF)

11 pages. "[T]his brief investigates how divorce impacts the National Retirement Risk Index (NRRI).... [D]ivorce substantially increases the likelihood of being at risk in retirement. The unexpected result is that the effects vary by type of household: large effects for divorced single men and couples with a previously divorced spouse, but no effect for divorced single women."
Center for Retirement Research at Boston College

Planning for Retirement: The Impact of Divorce (PDF)

"[W]hile half of all American households are at risk of not being able to maintain their pre-retirement standard of living after they stop working, that risk is 7 percentage points higher for households where at least one person has been through a divorce."

Depending on Your Age, This Will Protect You from a Social Security Fail

"Social Security remains on the cusp. Out of balance as of this year, it's doomed to go insolvent in 2034. What can people do to help protect themselves against the failure of Social Security? Here are some practical examples of how people, based on their current age, can best protect themselves (and their children) from this imminent failure."
Fiduciary News

Selected Discussions
on the BenefitsLink Message Boards

ECPRS Correction for Systematic Missed Deferrals from Last Paychecks?

Plan sponsor realized that elective deferrals are not being withheld from terminated employees' last paychecks during 2017. This is inconsistent with the terms of the plan document. I'm looking for input on the appropriate correction method under ECPRS.
BenefitsLink Message Boards

Inclusion of TPA Fees in Participant Disclosures

My understanding is that TPA fees can be paid from participant accounts. In some cases, this is done on an ongoing basis in the form of a monthly, quarterly or annual deductions. We include a specific dollar amount or basis points on a 404a-5 fee disclosure notice. Must the fee disclosure notice reference a specific dollar amount or is OK to simply state that TPA fees may be deducted? If we must specify, it is OK to be in the form of basis points rather than a dollar amount?
BenefitsLink Message Boards

H2A Temporary Agricultural Employees: An Excludable Class?

A company in the farming industry has has 3 equal owners who are employees. All of the other employees are H2A employees. Over the course of a typical plan year, some of the H2A employees work more than 1,000 hours. Many return "home" and come back the following year to work again. Are H2A employees an excludable class of employees for coverage purposes, similar to non-resident aliens?
BenefitsLink Message Boards

Notifications on Payouts Under $200

When a plan has automatic cashout provisions, and checks are being issued for under $200, it is my understanding that there is no withholding, and participants do not have to fill out forms. The plan's trust issues the checks and mails them to the last known address. Does the participant have to receive anything besides a check? A notice, letter of explanation, etc.?
BenefitsLink Message Boards

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Press Releases

DOL Reaches Agreement to Restore More Than $1 Million to Chicago-based Health Insurance Trust Fund
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

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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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