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Developing a High-Performance Retirement Plan Committee

"[1] Choose the right number of members ... [2] Appoint a Chairman and a Secretary ... [3] Utilize a Committee Charter and Committee Roster ... [4] Provide formal fiduciary training ... [5] Meet 2 to 4 times per year (but no less than annually) ... [6] Keep meeting minutes ... [7] Maintain a 'fiduciary file' ... [8] Purchase fiduciary liability insurance."
Greenspring Advisors


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The Georgetown University 403(b) Decision and the Future of 403(b) Fiduciary Litigation

"Based on the nature of the arguments within the Court's analysis of the Stock fund, the Court based its opinion purely on the fund's returns, both the fund's nominal, or stated, and risk-adjusted returns. For the courts to start basing decisions even in part on Morningstar' 'star' system is not a good sign." [Wilcox v. Georgetown Univ., No. 18-422 (D.D.C. Jan. 8, 2019)]
The Prudent Investment Fiduciary Rules

Vanguard Announces the Passing of Founder John C. Bogle

"John Clifton Bogle, founder of The Vanguard Group ... died [January 16] in Bryn Mawr, Pennsylvania. He was 89.... He introduced the first index mutual fund for investors and, in the face of skeptics, stood behind the concept until it gained widespread acceptance; and he drove down costs across the mutual fund industry by ceaselessly campaigning in the interests of investors."

Best Interest and Best Practices, Part 13

"In most of the settled cases, the plaintiffs' class action attorneys require that certain conditions -- or 'best practices' -- be adopted by the plan fiduciaries. And, in settlement after settlement, those conditions are, by and large, the same. That raises the obvious question, why haven't plan committees reviewed these cases and instituted the practices required by the settlement agreements?"

Delayed Employee Retirement Presents Challenges to Business Planning

"When your employees are unable to retire on time, the impact can expand beyond just the employees and their families.... Employees who stay on the job past the traditional retirement age can create higher costs for the business through increased payroll and benefit costs.... [An] aging workforce may negatively influence the buyer's perception about business' sale price[.]"

How Retirement Readiness Varies by Gender and Family Status: A Retirement Savings Shortfall Assessment of Gen Xers

"When households for which no shortfall is projected are excluded from the analysis, the average size of the shortfall is $76,896 for widows vs. $82,937 for widowers.... [F]uture eligibility in DC plans can dramatically reduce serious potential financial complications in retirement.... For those with 21-30 years of future DC eligibility, auto portability reduces average RSS by 21 percent for single females to as much as 38 percent for widowers."
Employee Benefit Research Institute [EBRI]

Expand Your Spending Categories in 2019 for Better Personal Retirement Budgeting and Planning

"[W]hen determining whether you are spending too much or too little, ... you should be looking at the proposed total spending budget for the current year divided by the present value of your total assets ... and not the proposed amount to be withdrawn from your accumulated savings divided by your accumulated savings."
Ken Steiner, FSA Retired

Benefits in General

[Guidance Overview]

Implications for Employee Benefit Plans of California Consumer Privacy Act of 2018

"Even if the [California Consumer Privacy Act of 2018 (CCPA)] is ultimately determined to be preempted in the context of ERISA plans, it will still apply to data collection by an employer in its capacity as an employer, as well as data related to benefits and policies not covered by ERISA. This includes information collected by an employer in connection with administering vacation, sick leave, paid time off or leaves of absence. Other benefits that are generally not subject to ERISA include health savings accounts, dependent care flexible spending accounts, many short-term disability plans and certain voluntary benefits."
Hunton Andrews Kurth, via Lexology

Rising Penalties for Non-Compliant Employee Benefit Plans

"2019 penalties for the following violations reflect the increase from 2018: [1] Failure to file an annual report (Form 5500).... [2] Failure to provide blackout notices.... [3] MEWA's failure to file required report (M-1).... [4] Employer's failure to tell employees about Medicaid/CHIP coverage.... [5] Failure to furnish reports (e.g., pension benefit statements) to certain former participants and beneficiaries or to maintain records.... [6] Failing to comply with the Genetic Information Nondisclosure Act (GINA)."
Hall Benefits Law

Form 5500 Schedule C Questionnaire Process

"Create a standard template questionnaire that will apply to most vendors.... Create a template for indirect compensation only that will be sent to plan trustees and plan employees.... Coordinate the service provider list with the Form 5500 preparer to verify its accuracy.... Review returned questionnaires to make sure they are fully completed by responders and if any questions need to be resolved."
Lindquist LLP

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

IRS Releases Interim Guidance on New Excise Tax on Executive Comp Paid by Tax-Exempt Organizations

"What is an 'applicable tax-exempt organization'? ... Who is the 'employer'? ... What is a 'related organization'? ... Who is a 'covered employee'? ... What is the applicable 'taxable year'? ... What is 'remuneration'? ... Who is a licensed medical or veterinary professional and how do you determine what amounts are paid for 'medical and veterinary services'? ... What are 'excess parachute payments'?"

Selected Discussions
on the BenefitsLink Message Boards

403(b) Distribution to US Citizen Living Abroad: Is W-9 necessary?

A participant in a 403(b)(9) retirement plan has requested a distribution. The participant is a US citizen. The participant lives in Peru. The funds would be wired to a bank account in the US. The retirement plan has his SSN on file sourced from both his enrollment app from years ago and his recent withdrawal request form. Questions: [1] Because his SSN is on file and he indicated on the withdrawal form he is a US Citizen, is there any need for the plan to require receipt of a W-9? [2] If the participant was requesting the funds be delivered outside the US, would there be a need for the W-9?
BenefitsLink Message Boards

Error in 'Good Faith 403(b) Document' Signed in 2009

Eligible charitable organization signed (without reading or counsel) a "good faith" 403b plan document in 2009 as mandated by IRS. 2009 document erroneously provided immediate eligibility for the ER match despite the plan having been operated since 1992 using a permissible 1 year eligibility requirement. Because the 2009 document was only to be an interim "best efforts" stopgap measure, can the employer simply correct the error retroactively in the new preapproved document or does it have an operational error that must go through VCP?
BenefitsLink Message Boards

415 Limit with Catch Up

If an employee does not fully utilize the 401(k) catch up provisions, and defers a total of $22,500, then the 415 limit would be $55,000 plus $4,000 for a total of $59,000? I just want to be sure that I should not be using the limit of $61,000. I feel no since if a participant over age 50 does not defer at all is limited to $55,000, but feel the need to check.
BenefitsLink Message Boards

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Press Releases

Most Popular Items in the Previous Issue

Text of DOL Annual Adjustments to Civil Penalties for 2019 (PDF)
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

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BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2019, 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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