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January 25, 2019 logo logo
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Implementation Specialist
Nova 401(k) Associates
in AZ, TX, Telecommute

Account Manager
Summit Financial Corporation
in MA

Recordkeeping Team Manager - OmniPlus
in FL, GA, IL, TX

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[Official Guidance]

PBGC Pilot Mediation Program Made Permanent and Expanded

"PBGC launched a pilot project in October 2017 that offered mediation with certain termination liability collection and Early Warning Program cases. In January 2019, the pilot project became a permanent program and has expanded to include fiduciary breach cases."
Pension Benefit Guaranty Corporation [PBGC]


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Slicing and Dicing Retirement Plan Fees: Allocation Considerations for Plan Sponsors (PDF)

"[The authors] review the legal background related to fee allocation and examine the impact of the [DOL's] fee disclosure rules ... discuss considerations for plan sponsors as they evaluate the interrelation of investment management and recordkeeping fees ... consider common recordkeeping fee allocation approaches, along with the potential benefits and drawbacks of each method ... [and] address the importance of procedural prudence that includes proper documentation of the fee allocation process."

2017 Tax Cuts and Jobs Act Breathes New Life Into Old Trick for Dealing with Participant Loans in Corporate Transactions

"If the corporate transaction occurred in the first half of the year, [a participant] would have more than 12 months to either [1] come up with the money to 'fund' the second rollover, or [2] take a loan from Buyer's plan to fund the second rollover.... There are, of course, some conditions that must be met in order for this 'replacement loan' option to work.... [T]his 'replacement loan' approach is superior to making a direct rollover of the participant loan, for several reasons."
Spencer Fane

Deferred Income Annuities Enhance Retirement Readiness (PDF)

"The study finds an overall improvement in retirement readiness when DIA purchases equal to 5, 10, and 15 percent of the 401(k) balance, and a pre-commencement death benefit, are added to the DIA. When the results are broken out by age at simulated death, there is an overall decrease in retirement readiness for those dying before benefits begin, as well as for those dying soon after benefits begin."
Employee Benefit Research Institute [EBRI]

Tips for Annually Rebalancing Your Retirement Accounts

"Reestablish target allocations.... Consolidate accounts to simplify rebalancing ... Reevaluate fund selections.... Ignore market returns.... Rebalancing 401(k)s versus IRAs.... Adjust contributions.... Tolerance rebalancing."
U.S. News & World Report


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2019 Pension Risk Transfer Poll: A Survey of Defined Benefit Plan Sponsors (PDF)

"76% of DB plan sponsors with de-risking goals plan to completely divest all of their company's DB plan liabilities at some point in the future.... [A]ctions by the [PBGC] ... are the primary catalyst for plan sponsors to initiate a pension risk transfer to an insurance company (55%). This includes PBGC premium increases (52%) and a change in the PBGC premium methodology to the risk-based formula (18%)."

Analysts Say Nevada Fiduciary Duty Proposal Has Strength, Needs Defining

"With some are calling the latest state regs tougher than the [SEC's] best-interest proposal, it isn't all bad news for those who sell annuities in Nevada. For one thing, commissions remain acceptable under the draft proposal[.]"


Can States Decide Who Is A Fiduciary? Nevada Ignores ERISA Preemption

"It will set a dangerous precedent if these rules are finalized as proposed. New Jersey and Maryland are considering either new legislation or regulations that would also provide for state regulation of fiduciaries. The problem could rapidly spread.... The retirement industry can and should submit comments to the Nevada regulators stressing that they do not have authority to regulate who is a fiduciary to an employee benefit plan."
Cohen & Buckmann, P.C.

Benefits in General

Editor's Pick Ethical Considerations for Employee Benefits Counselors (PDF)

69 pages. Topics: [1] The glory and peril of written advice; [2] Minutes: how much detail to include? [3] Attorney's retention of consultant: privilege for client's communications with consultant; [4] Preserving client confidentiality on listservs and online chat rooms; [5] Attorney-client privilege; [6] Work product doctrine.
Utz & Lattan, LLC

Is the Partial Government Shutdown Affecting Your Benefit Plans?

"While on leave, employees are not in pay status and, therefore, elective contributions to 401(k) plans and cafeteria plans cannot be made.... A temporary or permanent layoff or a cutback in hours affecting a number of employees can have an impact on nondiscrimination testing.... Employees who are laid off or experience a reduction in hours resulting in loss of health plan coverage must be offered COBRA continuation coverage.... IRS is not publishing the monthly 'applicable interest rate' used in calculating lump sum payments from certain pension plans."
The Wagner Law Group

Selected Discussions
on the BenefitsLink Message Boards

DB RMDs for First Vested Year

Say a 5% owner is well past 70.5 and starts a plan effective 1-1-19. Vesting is excluded prior to 1-1-19 and NRA is 65+5. 3-year cliff vesting is used, so the owner will first have vested benefits in 2021. Is the initial RMD date 4-1-2022 or 12-31-2021?
BenefitsLink Message Boards

Can a Multiemployer Fund Change Withdrawal Liability Calculation Rules? Under What Circumstances?

My client is contemplating leaving a multiemployer Fund. we have two withdrawal liability estimates, one from a few years ago and one very recent. The recent one is almost triple the one from a few years ago. We have been told that the fund changed their withdrawal liability calculation rules, removing a cap on how they calculate unfunded vested benefits. Is the fund allowed to make such a change? Does my client have any defenses?
BenefitsLink Message Boards

Do Your Clients' Small DC Plans Allow Benefits in the Form of Periodic Payments?

Some small individual-account (defined-contribution) retirement plans allow a participant a choice of taking a retirement benefit in periodic payments. Others provide a benefit is paid only as a single sum. So, an informal survey: Do your clients' smaller plans allow periodic payments?
BenefitsLink Message Boards

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David Rhett Baker, J.D., Editor and Publisher
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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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