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District Court Opinion: Denial of Dignity Health's Motion to Dismiss Based on Church Plan Exemption (PDF)

19 pages. "Plaintiffs plausibly allege that the Plan is not properly maintained as a church plan. First, they allege that the Plan is 'maintained' by Dignity for its own and its affiliates' employees, and that Dignity is neither a church, a convention or association of churches, nor an organization whose principal purpose or function is the administration or funding of the Plan as required by section 1002(33)(C)(i).... If Congress had not intended to attach any significance to the word 'maintained,' it could have simply required that a plan be 'administered or funded' by a principal-purpose organization, and not also 'maintained' by one. It did not make that choice." [Rollins v. Dignity Health, No. 13-1450 (N.D. Cal. Sept. 6, 2018)]
U.S. District Court for the Northern District of California


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401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2016 (PDF)

"More 401(k) plan participants held equities at year-end 2016 than before the financial market crisis (year-end 2007), and most had the majority of their accounts invested in equities.... About two-thirds of 401(k) plans, covering about three-quarters of 401(k) plan participants, included target date funds in their investment lineup at year-end 2016.... A majority of new or recent hires invested their 401(k) assets in balanced funds, including target date funds."
Investment Company Institute [ICI]

Expanding Retirement Security Through Public and Private Innovation: Second Annual Aspen Leadership Forum on Retirement Savings (PDF)

23 pages. "The 2018 Forum picked up on the discussions that began at last year's inaugural meeting, advancing earlier progress in identifying the key barriers to retirement security and potential solutions ... Many of the same themes emerged, including the challenges posed by increases in longevity and Americans' overall financial fragility. But the second chapter of this conversation went further in finding common ground and building momentum around the paths forward. Many participants voiced support for programs such as 'rainy-day savings accounts' and displayed a new openness toward policies that would make saving universal."
Aspen Institute

President Trump Asks Agencies to Review, Revise Retirement Plan Rules

"The changes President Trump is seeking are not sweeping, but very targeted. The most noteworthy -- addressing the MEP rules and plan disclosures -- are clearly meant to diminish employer-perceived obstacles to establishing and maintaining plans. The ball is now in the agencies' court. Yet to be determined is the extent to which such changes will be made in agency drafting rooms, versus the halls of Congress."

Minimal FASB Changes to Defined Benefit Plan Disclosure Requirements

"The following disclosure requirements are added: [1] For cash balance and other plans with a promised interest crediting rate, the weighted average of the interest crediting rates. [2] Explanation of the reasons for significant gains and losses concerning the benefit obligation."

Emerging-Market Tremors Rattle Tennessee's Public Pensions

"The troubles hammering developing economies ... has exposed the difficulties facing U.S. public pensions, many of which have embraced riskier assets in recent years hoping to boost returns. The Tennessee Consolidated Retirement System, which manages $50 billion in pension assets for the state's public employees, has almost $2 billion invested in ETFs devoted to some of the hardest-hit markets such as South Africa, Indonesia and Turkey. Those investments have lost $243 million since the start of the year[.]"
The Wall Street Journal; subscription may be required

Deciding If a Lump Sum Pension Payout Is Right for You

"[1] Compare using a 4% withdrawal ratio ... [2] Compare using an income annuity ... [3] Check the funding status of your pension ... [4] Evaluate your health."
Joe Allaria, CFP, via Nasdaq

Benefits in General

[Official Guidance]

Revised IRS Form 5558 and Instructions: Application for Extension of Time to File Certain Employee Plan Returns (PDF)

Fillable PDF, rev. Sept. 2018. "An extension of time to file Form 5500 Series ... and/or Form 8955-SSA ... and an extension of time to file Form 5330 ... must be submitted on separate Forms 5558. A signature is not required for an extension of time to file Form 5500 series and Form 8955-SSA. However, a signature is required for an extension of time to file Form 5330."
Internal Revenue Service [IRS]

Sure That Plaintiff You Settled With Won't Sue Again?

"You settle an employment dispute, pay a hefty amount to plaintiff, and get a broad release of claims. You won't have to deal with that plaintiff again, right? Maybe not. If you don't get the right release, that same plaintiff now can bring an ERISA lawsuit on behalf of her employee benefit plan."
Bob Blum Mediation via the Daily Journal


Stop Making 401(k) Contributions -- Fill Up Your HSA First

"HSAs are triple tax-free ... HSA payroll contributions are truly tax-free ... No use it or lose it ... Paying retiree health care expenses ... No age 70‑1/2 minimum distribution requirements ... Contribution limits ... HSAs and retirement planning ... Investing HSA contributions important."
Robert C. Lawton, via Forbes

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

IRS Breaks Its Silence on 162(m) Grandfathering Rule but You Might Not Like What It Has to Say

"Many performance-based plans provide companies with the ability to reduce amounts payable under those plans based on subjective factors. For example, if a company has the discretion to reduce a $1 million bonus to $200,000 based on subjective factors, only $200,000 is payable pursuant to a written binding contract and the remaining amount is not eligible for grandfathered status."
Drinker Biddle

Editor's Pick Executive Comp and Benefits Issues for Start-ups and Emerging Companies (PDF)

32 pages. "In contrast with the typically passive nature of public company shareholders, principal shareholders of start-ups ... are often directly involved in establishing the company's executive compensation packages. The result is typically a close alignment of the executives' compensation with the interests of the shareholders (and later the investors).... Executive compensation in the emerging enterprise tends not to be lavish or mysterious, although the compensation can be substantial if the company is successful."
Skadden via Bloomberg Law

Editor's Pick Stock Compensation: 2018 Assumption and Disclosure Study (PDF)

"When valuing stock options, companies continue to rely heavily on the Black-Scholes option pricing model, with 77% of Large companies relying solely on the use of that model in valuing their stock option awards. However, 23% of Large companies disclose use of other models ... Overall, median Black-Scholes option pricing model assumptions for High Tech companies moved similarly to those of the Large company group, from 2016 to 2017."

Selected Discussions
on the BenefitsLink Message Boards

TPA's 3% Annual Loan Fee in 403(b): Reasonable?

I have a 403(b) Plan with a TPA which charges 3% of the loan balance annually as their loan fee. I've never heard of a loan fee based upon loan amount. On its face, this appears unreasonable. I generally see a fixed fee for loan initiation (around $100-$150) and an annual maintenance fee of around $25.
BenefitsLink Message Boards

Rules for Handling Seasonal Employees

The business currently has a plan that is open to employees, but only three employees participate, and of those three at least one is highly compensated. The business has many seasonal employees. The concern is that the plan in not in compliance. They are considering a safe harbor plan. From what I read, there are no specific rules about seasonal workers.
BenefitsLink Message Boards

Deadline for Adopting Corrective Amendment to Permit Early Entry in 2017

For a 2017 calendar Plan Year, what is the latest possible date to adopt a corrective amendment to permit early entry for an employee who did not meet eligibility (non-highly compensated)?
BenefitsLink Message Boards

Can Plan's Effective Date Precede Issuance of Employer ID Number?

New client has come to us. He is a self-employed author. He would like to start a solo-k plan. He received his business EIN on 8/28/2018. We are setting up the plan for him. Can we use a 1/1/18 start date or does it have to be 8/28/2018?
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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