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Retirement Plans Newsletter December 26, 2018 |
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Jobs
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Webcasts, Conferences Proposed IRS Regulations Affecting 401(k) and 403(b) Plans
Executive Compensation Series - Proxy Season: Compensatory Thoughts from ISS
Risk Mitigation Strategies for Benefit Plans
Structuring Equity Compensation for Partnerships and LLCs: Considerations After Tax Reform
National Conference & Expo
The Other Reasons for Filing Form 5330
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Discussions |
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This Newsletter:
BenefitsLink Health & Welfare Plans Newsletter:
Message Boards Digest:
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Senior Retirement Plan Administrator/ Recordkeeper|
Trust in Financial Institutions Can Affect Retirement Plan Participation "The results suggest an association between distrust in financial institutions and the likelihood that workers will choose to stay in a retirement savings plan if enrolled automatically. That includes whether they would take part in a state-sponsored individual retirement account with automatic enrollment [auto IRA], or one sponsored by their employer."
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[Advert.]
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Are you an experienced attorney who can handle issues involving private or government retirement plans? Join our no-fee National Pension Lawyers Network! There is no obligation to take any case we refer to you. Join our network! |
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401(k) Suits Point to Need for Litigation Risk Prevention "These settlements cover financial institutions that have filled their 401(k) plans with proprietary investments ... Although defendants admitted no wrongdoing and agreed to pay money, many settlements include non-monetary remedies for plan management practices that could have reduced litigation risk in the first place."
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Some Unions Turning to Variable Benefit Pension Plan Model "[T]he $95 million New Orleans Carpenters Pension Plan, a plan close to 100% funded ... added a variable plan design for all benefits that have accrued since May. The basic premise ... is that benefits are adjusted up or down based on investment returns. The assumed rate of return ... determines whether benefits for all participants, including retirees, rise or fall on a plan year basis."
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"The Corporation argues that it is entitled under Section 1344(c) to any post-termination increase in the value of pension plan assets. In other words, the Corporation reasons, Congress has already decided who benefits or suffers the loss from a change in the value of plan assets once that plan has been terminated. Therefore, the Corporation concludes that the pilots cannot recover that money as equitable relief for an alleged breach of fiduciary duty. We agree.... The pilots' request for post-termination investment gains is fundamentally flawed." [Lewis v. PBGC, No. 17-5068 (D.C. Cir. Dec. 21, 2018)]
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[Opinion]
Groundhog Day Meets Mortality Assumptions "[T]he updated tables reduce the typical pension plan liability by about 0.4%. MP-2018 is a repeat of the prior three year's downward trend that has cumulatively reduced pension liabilities by approximately 3%, with the zenith of longevity optimism occurring with the release of MP-2014."
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[Opinion]
10 pages. "[ICI urges] the Department to interpret the definition of employer more broadly, specifically by expanding the category of persons able to act indirectly in the interest of employers ... Any concerns the Department may have with respect to permitting MEP sponsorship by financial services firms can be mitigated by using established methods for ensuring both the legitimacy and qualifications of the MEP sponsor and protection from conflicts of interest. Failure to expand the interpretation as recommended likely will result in market distortions and inefficiencies, to the detriment of retirement savers."
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Benefits in General |
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[Official Guidance]
Text of IRS Publication 15-A: Employer's Supplemental Tax Guide, for Use in 2019 (PDF) 73 pages. Topics include: [1] Who are employees? [2] Employee or independent contractor? [3] Employees of exempt organizations. [4] Religious exemptions and special rules for ministers. [5] Wages and other compensation. [6] Sick pay reporting. [7] Pensions and annuities.
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Evolving the Benefit Mindset: Responding to the Pace of Change "The challenge for employers is three-fold: [1] Assess the existing portfolio with a fresh perspective to determine whether longstanding legacy program designs still meet employee needs; [2] Evaluate how investments are applied via the subsidy strategy; [3] Evaluate how benefits are delivered and the employee experience it creates.... 96% of employers are making the employee experience with benefits a top priority over the next three years."
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Under ERISA, Ignorance Is Bliss in the Ninth Circuit "[T]he Ninth Circuit concluded that the statute of limitations was not triggered when the documents were made available to the plaintiff.... [T]he plaintiff was required to have actual knowledge that Intel increased the retirement funds' alternative investments and that those investments were imprudent." [Sulyma v. Intel Corp. Investment Policy Comm., No. 17-15864 (9th Cir. Nov. 28, 2018)]
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How Will the Partial Government Shutdown Affect Employers? "Unlike other recent government shutdowns, the instant closure affects only nine federal agencies [including] the Department of the Treasury ... In addition, certain smaller independent agencies, such as the Equal Employment Opportunity Commission (EEOC), will also be impacted. It will be business as usual for other agencies, including the [DOL] ... and [HHS], which have already been funded through September 2019."
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Executive Compensation |
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[Guidance Overview]
Year-End Guidance on New Income Inclusion Deferral for Private Company Options and RSUs "On December 7th, the IRS issued Notice 2018-97 to provide initial guidance on the new private company income inclusion deferral regime enacted under Code Section 83(i) as part of the 2017 Tax Cuts and Jobs Act.... [T]he Notice serves as validation of the widely-held sense that the risks and complexities of the deferral regime outweigh any potential benefits -- particularly for employers."
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[Guidance Overview]
SEC Adopts Final Hedging Disclosure Rule "The final rule requires a description of any practices or policies a public company has adopted regarding the ability of its employees (including officers) and directors to engage in certain hedging transactions.... [M]ost companies must include this disclosure in their proxy and information statements relating to the election of directors during fiscal years beginning on or after July 1, 2019."
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Institutional Investors and Advisors Pursue Expanded CEO Pay Ratio Disclosure "A group of institutional investors and advisors, cumulatively representing $3.3 trillion in assets under management and advisement, recently sent a letter to every public company included in the S&P 500 index seeking expanded CEO pay ratio disclosures in proxy statements.... The group believes that supplemental disclosure will help investors put the pay ratio information in the context of the company's overall approach to human capital management."
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Selected Discussions |
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Can a QDRO Dictate Which Assets Must Be Used? A plan has 401(k) with safe harbor on a mutual fund recordkeeping platform, and the profit sharing in a pooled account. Participant P has a current balance of $200K in his individual accounts and $50K as of the latest valuation in the pooled account, and the segregation amount is slated to be $130K. For the sake of ease, obviously, it would be awesome to pay out the QDRO from the platform. The attorneys are writing that into the QDRO. Do they have that right? Isn't that the Plan Administrator's authority to decide where to pay the QDRO from? As long as the dollar amount is satisfied, that should be all they care about, I'd think.
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Most Popular Items in the Previous Issue |
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2019 Reporting and Disclosure Requirements for Ongoing Calendar-Year Qualified Plans
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ERISA Attacks Move From Church Plans to Government Plans
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Connect
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BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2018 BenefitsLink.com, 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 BenefitsLink.com, 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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