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Fiduciary Best Practices for Church-sponsored Retirement Plans
CAPTRUST Financial Advisors

Current Retirement Industry Topics
November 8, 2018 in TX
ASPPA Benefits Council [ABC] of Dallas/Fort Worth

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[Official Guidance]

Text of PBGC Notice of Request for Approval of Special Withdrawal Liability Rules: United Food and Commercial Workers International Union

"The Plan's proposed amendment would be effective for withdrawals occurring under ERISA section 4205(a)(1) during the 3‑year testing period ending June 30, 2014, or any subsequent plan year and for any withdrawals occurring under sections 4203 and 4205(a)(2) of ERISA on or after July 1, 2013. Thus, the proposed amendment is intended to apply to cessations of the obligation to contribute that have already occurred.... There are two employers that may be eligible for relief from withdrawal liability under the proposed amendment if it is approved."
Pension Benefit Guaranty Corporation [PBGC]


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[Guidance Overview]

IRS PLR Generates Interest in Employer Student Loan Benefit Plans, But Issues Remain

"[T]he PLR held only that this benefit did not violate the contingent benefit rule. The PLR did not address other practical questions that employers will need to resolve before implementing their own similar program.... [1] Non-discrimination issues ... [2] Substantiation ... [3] Refinancing ... [4] Administration ... [5] Safe harbor questions ... [6] Replacement vs. additional benefit."
Porter Wright Morris & Arthur LLP

[Guidance Overview]

Common IRS and DOL Audit Issues; Description of Recent and Pending Employee Benefits Legislation (PPT)

78 PowerPoint slides. Many topics, including: [1] types of IRS audits; [2] triggers for IRS audits; [3] triggers for DOL audits; [4] internal controls; [5] committee or trustee meetings; [6] plan documents; and [7] tax and benefit reform initiatives.
The Wagner Law Group

Using Retirement Plans to Benefit from the 20% Deduction on Pass-Through Income

"[T]he goal will be to reduce taxable income below the threshold for phase-out of the 20% QBI deduction.... Tax qualified retirement plans ... represent a potential source of substantial tax deductions for taxpayers.... [A]ll affected business owners should [consider] whether they can increase their contributions to retirement plans in a sufficiently cost effective manner to help them to take advantage of the QBI deduction."

PBGC Issues Final Regs on Guaranteed Benefits for Owner-Participants in Terminating DB Plans

"Before PPA, there were benefit limitations that applied to substantial owners, these being defined as a person owning the entire interest in an unincorporated trade or business, or more than 10 percent of a partnership or corporation. PPA changed the applicable definition from substantial owner to 'majority owner,' now defined as a person owning the entire interest in an unincorporated trade or business, or more than 50 percent of a partnership or corporation."

Participant Sues Frontier Over Investment in Legacy Stock

"The case is interesting in several respects: [1] Legacy stock is emerging as a significant litigation target ... [2] The plaintiff ... focuses on the ERISA fiduciary duty to diversify plan investments. And [3] the claim is based not on a drop in value but rather the alleged underperformance of Verizon stock 'relative to prudently diversified alternatives such as an S&P 500 tracking ETF.' " [Reidt v. Frontier Comm. Corp., No. 18-1538 (D. Conn. complaint filed Sept. 11, 2018)]
October Three Consulting

Reliance Trust Settles DOL Lawsuit Over ESOP Valuation

"The consent judgment requires Reliance Trust to pay $4,545,454 back to the plan within 30 days. Once the payment is made, the Department will assess a civil penalty of $454,545 against Reliance Trust Co. Inc.... [EBSA] found that, in May 2011, the owners of Tobacco Rag Processors Inc. sold 100% of the company stock to the plan for $82.5 million, ... [which EBSA determined] exceeded fair market value[.]"

The Value of Working with an Independent Pension Risk Advisory Firm (PDF)

"A truly independent annuity broker will have: [1] Inside knowledge of all major carriers providing 'safest available' pension annuities. [2] Understanding of evolving capacities and appetites for taking on new annuity business. [3] Lack of bias to avoid directing business to preferred carriers of the pension risk advisor. [4] Unwavering commitment to drive every carrier to their best offer with each transaction and each round of bidding while not tipping off select carriers to other carrier's pricing."

Public Pension Reform: A 'Top-Down' Roadmap to Success (PDF)

"[Because] there are numerous stakeholders with various objectives, ... clearly defining the 'goal' is complicated. In the public sector, there is rarely one decision maker.... A 'top-down' approach ... determines an overall structure and magnitude of change, including the development of a contribution strategy, and then details the specific design modifications to achieve those objectives has proven to be very effective."


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Estimates of the Financial Effects on Social Security of H.R. 6933, the 'Equal Treatment of Public Servants Act of 2018' (PDF)

"This Bill would generally replace the windfall elimination provision (WEP) with a new formula ... for individuals becoming eligible for OASDI benefits in 2025 or later. The proposal would also provide for a rebate payment starting in 2020 for individuals affected by the current WEP.... Over the period 2019 through 2028, ... the net program cost for the OASDI program would be increased by about $25.0 billion. Over the long-range 75-year period, ... enactment of the Bill would increase (improve) the OASDI actuarial balance by 0.04 percent of taxable payroll."
U.S. Social Security Administration [SSA]

'Retire Rich!' -- Don't Believe the Sales Pitch

"Many of these exploitative videos are targeted to 20-somethings new to the financial world, who may be more vulnerable and persuadable. But perhaps they are also able to attract hundreds or even thousands of viewers because they offer easy solutions to what may be our most anxiety-producing financial challenge: Will I ever be able to afford to retire?"
Squared Away Blog, by the Center for Retirement Research at Boston College

SSA Actuarial Note 2018-4: Illustrative Benefits for Retired Workers, Disabled Workers, and Survivors Scheduled Under Current Law (PDF)

"[F]our tables show estimated future benefits consistent with earnings in 2017 and age in 2018.... Table 1A: Retired Workers Who Become Entitled at Normal Retirement Age (NRA).... Table 1B: Retired Workers Who Become Entitled at Age 65.... Table 2: Disabled Worker Annual Benefit Amounts.... Table 3: Survivor Annual Benefit Amounts."
Office of the Chief Actuary, U.S. Social Security Administration [SSA]


Pension Rights Center Comments to the Joint Select Committee on Solvency of Multiemployer Pension Plans

"The letter includes ... [1] An explanation of how this emerging crisis developed and a critique of [the Multiemployer Pension Reform Act of 2014 (MPRA)], which reversed the key promise of ERISA: that a plan cannot take away benefits that employees and retirees have already earned. [2] A description of the principles that should guide this Committee in developing its proposed legislation, including the repeal of [MPRA] and restoration of benefits already cut under that misguided statute. [3] The reasons that the so-called 'composite' legislation cannot be a part of a solution."
Pension Rights Center


ARA Letter to IRS Requesting Expansion of Hurricane Florence Relief for Participants and Service Providers (PDF)

"ARA believes that the following relief is justified and should be granted at the earliest possible moment.... [1] Relief for taxpayers who would like to use their retirement assets in qualified retirement plans to alleviate hardships caused by Hurricane Florence.... [2] The storm came through at a particularly busy time for plan sponsors and their service providers.... It is particularly important that relief extend to taxpayers whose books, records or Form 5500 return preparer are located in areas affected by Hurricane Florence."
American Retirement Association [ARA]

Benefits in General

The Fiduciary Duty of Loyalty (PDF)

"While there is consensus chat the duty of loyalty is derived from the common law of trusts, and the restatement of trusts states that the duty of loyalty is an objective standard, case law has generally taken a different approach based upon the language of ERISA Section 404(a)(l) (which is framed in terms of acting for an exclusive purpose). Note, however, there was a recent difference of opinion on this issue between District Courts."
The Wagner Law Group

Selected Discussions
on the BenefitsLink Message Boards

True-Up OK for Matching Contributions, If Adoption Agreement Specifies Per-Pay-Period?

ftwilliams volume submitter document. The adoption agreement says the Safe Harbor match is per payroll period. The employer wants us to calculate a true up. Is that legal?
BenefitsLink Message Boards

2010 Proposed Regs on Target Date Funds: Ever Finalized?

Back in November 2010, DOL issued proposed regs on target date funds. Were they ever finalized?
BenefitsLink Message Boards

Protection of Benefits, Rights and Features After Merger of Plans

Plan A is merging into Plan B. Plan A allows for in-service distributions at age 59‑1/2 from an deferral account. Plan B does not. What should be done to protect that benefit? An amendment to Plan B's document, or do I need to just include language in the merger resolution?
BenefitsLink Message Boards

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Press Releases

DOL Seeks to Amend Complaint to Protect Participants And Beneficiaries of Failing Multiple Employer Welfare Plan
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

Most Popular Items in the Previous Issue

Text of IRS Fiscal Year 2019 Program Letter (PDF)
Internal Revenue Service [IRS]

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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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