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[Official Guidance]

Text of Solicitation of Nominations to the Advisory Committee of the PBGC

"[PBGC] is soliciting nominations for appointment to the Advisory Committee of the PBGC....The Advisory Committee members are ... [1] Two representatives of employee organizations; [2] Two representatives of employers who maintain pension plans; and [3] Three representatives of the general public.... Appointments are for three-year terms ... By February 19, 2019, the terms of all of the Advisory Committee members will have expired. Therefore, PBGC is seeking nominations for all of the seats."
Pension Benefit Guaranty Corporation [PBGC]


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[Guidance Overview]

Interesting Angles on the DOL's Fiduciary Rule, Part 100

"[In] order for the SEC's best interest standard to be satisfied, an advisor (of a broker-dealer or an RIA) must engage in a process where the advisor gathers, and carefully and professionally considers, the relevant information. That process would need to satisfy the best interest and loyalty standards. But, what are the relevant factors?"

What Do We Do With Mutual Fund Settlement Proceeds?

"[It] is up to plan fiduciaries to determine a course of action that is prudent and in the best interest of plan participants.... [1] Allocate to affected participants ... [2] Allocate to all participants in the plan at the time ... [3] Allocate to all current participants ... [4] Place in holding account and pay fees."

Rules Every Professional Fiduciary Must Follow

"[1] Align compensation to client's best interests ... [2] Avoid conflicts-of-interest ... [3] Know your client ... [5] Communicate ... [6] Document ... [7] Execute well, consistently."
Fiduciary News

Women Expect to Run Out of Money Five Years Too Soon in Retirement (PDF)

33 pages. "Over two in five women (43%) are unsure of how long their savings will last compared to one-third of men (33%).... On average, women anticipate a 5-year gap between their savings projections and years spent in retirement.... Overall, women express less comfort than men with taking investment risk (71% vs. 81%) ... Compared to two-thirds of men (66%), fewer than half of women (48%) check their investment performance weekly."


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Editor's Pick 2018 Retirement Preparedness Survey: A Generational Challenge (PDF)

16 pages. "Over half of pre-retirees expect to generate retirement income by continuing to work either full-time or part-time after they have 'retired,' compared with only 6% of current retirees.... More than a third of Millennials say they don't see the point of planning for retirement because anything can happen between now and then ... Compared with Millennials, Gen Xers have a greater number of concerns about retirement, and their estimates of how much money they will need to retire are significantly higher."

Little Change in Public Pension Funded Ratio in Q2 (PDF)

"Another quarter of below benchmark asset performance has caused a $23 billion setback in the estimated funded status of the 100 largest US public pension plans ... At the end of June 2018, the deficit stands at $1.448 trillion ... compared to $1.425 trillion at the end of March 2018. As of June 30, the funded ratio stood at 71.2%, down slightly from 71.4% at the end of March."


A Proper Interpretation of the Investment Advisers Act's Fiduciary Standard

"[T]he SEC seeks to ignore its own precedent, and to ignore centuries of state common law, in order to eviscerate the fiduciary standard of conduct. This development should be cause for concern for every person acting as a fiduciary -- attorneys, physicians, accountants, investment advisers, Certified Financial Planners(tm), and others."
Ron A. Rhoades, JD, CFP

Benefits in General

Court Provides Tips on Effective Use of Video Surveillance in Disability Claim Decisions

"For the video surveillance to be meaningful, inconsistencies between the plaintiff's assessment and the actual level of activity 'must be more than minor.' ... The video in this case was helpful because it 'showed Plaintiff partaking in activities for hours at a time.' ... An independent reviewing physician's opinion may be given greater weight when relying on a medical record review and video surveillance." [Eaton v. Reliance Standard Life Ins. Co., No. 16-2764 (W.D. Tenn. July 31, 2018)]
Lane Powell PC

Ninth Circuit: ERISA Section 502(a)(2) Claims Beyond Scope of Employees' Arbitration Agreements

"[T]he district court denied USC's motion to compel arbitration, holding that the arbitration agreements were unenforceable as to the plaintiffs' ERISA claims because the USC Plans were the real parties in interest to Section 502(a)(2) claims, and the USC Plans had not consented to arbitration.... The Ninth Circuit [held] that the plaintiffs' ERISA Section 502(a)(2) claims asserted on behalf of the USC Plans did not fall within the scope of the plaintiffs' individual arbitration agreements." [Munro v. Univ. of Southern Calif., No. 17-55550 (9th Cir. July 24, 2018)]
Morgan Lewis

Ninth Circuit Affirms Denial of Motion to Compel Arbitration of ERISA Action

"[E]mployers should revisit their employment contracts and consider broadening the arbitration clauses and class action waivers in them to apply specifically to instances where an employee is asserting claims on behalf of an ERISA plan and its participants, and to apply specifically to breach of fiduciary claims asserted by an employee in any capacity against the employer as a plan administrator." [Munro v. Univ. of Southern Calif., No. 17-55550 (9th Cir. July 24, 2018)]

Selected Discussions
on the BenefitsLink Message Boards

Who Are the Participants 'Affected' by a Partial Termination?

Rev. Rul. 2007-43 seems to me to provide some reasonable clarity for determining when a partial termination has occurred. You divide the number of "employer initiated" active participant terminations during the period in question (e.g., plan year) by the number of active participants you had at the beginning of the plan year, and, depending on how much the resulting percentage is over or under 20%, you determine whether you had a partial termination. 20% or over, you probably did. Under 20%, you may not have; other facts and circumstances can be brought into the analysis if you're close. But Rev. Rul. 2007-43 also seems to say, without any basis in regulations or case law, and possibly, in my opinion, contrary to the plain meaning of the statute (IRC sec. 411(d)(3)), that if you determine you had a partial termination, then everyone who terminated without full vesting during the period in question, including voluntary terminations, is deemed to have been "affected" by the partial termination and therefore is required to be fully vested. Does anyone besides me think that this may be baseless and lacking in common sense?
BenefitsLink Message Boards

Prior Year Employment Termination; Gateway Contribution Needed?

I have a cross tested 3% safe harbor plan. The plan uses W-2 compensation and excludes post severance and post year-end compensation. There were a few employees who terminated 12/31/2016 but received their final W-2 in January 2017. I know that they should receive the 3% safe harbor non-elective for 2017. However, if the profit sharing allocation is conditional on being employed on the last day of the plan year or working at least 1 hour of service during the plan year, would they be entitled to the gateway contribution? Technically they did not work any hours in the current plan year even though they have wages and hours reported on the census.
BenefitsLink Message Boards

OK to Condition Hardship Distribution upon Participation in Financial Wellness Program?

A client has recently asked if they can require participants to enroll in their financial wellness program as a condition of receiving a hardship distribution from their retirement plan. It seems like a great idea to me.
BenefitsLink Message Boards

How Does One Know Whether a Partner Was Employed on the Last Day of a Year?

A profit-sharing retirement plan has a last-day condition on who shares in an allocation of a discretionary contribution. The employer is a partnership, and many of the employer's workers are partners rather than employees. For the last-day condition, the plan's governing document refers only to whether the participant is 'employed' on the last day. The partnership keeps no records of a partner's time worked. How does one determine whether a partner was employed on the last day? Was a partner 'employed' on the last day of a year if she had not been de-admitted from the partnership (and had for the year earned income more than zero)? What rules should I worry about?
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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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