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January 30, 2019 logo logo
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Communicating FInancials and Valuation to Your Participants
March 5, 2019 WEBCAST
National Center for Employee Ownership [NCEO]

IRA Contributions
March 12, 2019 WEBCAST

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[Official Guidance]

Text of IRS Notice 2019-13: Weighted Average Interest Rates, Yield Curves, and Segment Rates Applicable for January 2019 (PDF)

"This notice provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates used under Section 417(e)(3), and the 24-month average segment rates under Section 430(h)(2) ... In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under Section 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate under Section 431(c)(6)(E)(ii)(I)."
Internal Revenue Service [IRS]


PBI reinvents Death Audit category with launch of CertiDeath

Sponsored by Pension Benefit Information, Inc.

CertiDeath™ eliminates the work, complexity, and uncertainty now associated with identifying deaths, saving companies loads of time spent reviewing obituaries and money lost due to missed or misclassified deaths.

[Official Guidance]

PBGC Updates Staff Responses to Practitioner Questions

PBGC has updated its Staff Responses to Practitioner Questions webpage to include additional information about guaranteed benefits, reportable events and standard terminations. PBGC will update this webpage periodically as additional questions arise.
Pension Benefit Guaranty Corporation [PBGC]

[Official Guidance]

VCP Submission Kit: Failure to Have Adopted a New Pre-Approved Defined Contribution Plan by the April 30, 2016 Deadline

"Plan sponsors may use this Voluntary Correction Program (VCP) Submission Kit if they: didn't adopt an updated pre-approved defined contribution (DC) plan for the Pension Protection Act (PPA) by April 30, 2016, and want to correct this failure by adopting an updated pre-approved DC retirement plan to bring their plans back into compliance.... As a plan sponsor, you'll need to take additional steps to correct any other failures."
Internal Revenue Service [IRS]

House Democrats Unveil Social Security Expansion Bill

"[T]he Social Security 2100 Act ... would expand Social Security benefits across the board and prolong the program's solvency for the next 75 years and beyond. The legislation finances a more generous benefit and cost-of-living adjustment formula, a reduction in income taxes on benefits and the closure of Social Security's long-term funding gap by lifting the cap on income subject to payroll taxes and raising those tax rates."
The Huffington Post

Estimates of the Financial Effects on Social Security of the Social Security 2100 Act (PDF)

25 pages. "Assuming enactment of the [Social Security 2100 Act], we estimate that the combined Social Security Trust Fund would be fully solvent throughout the 75-year projection period ... [T]he OASDI program would meet the further conditions for sustainable solvency, because projected combined trust fund reserves would be growing as a percentage of the annual cost of the program at the end of the long-range period. The proposal includes eight provisions with direct effects on the OASDI program[.]"
Office of the Chief Actuary, U.S. Social Security Administration [SSA]


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Georgetown University Defeats Retirement Plan Fee Litigation

"The court noted that ERISA's fiduciary standard of prudence requires only that a plan fiduciary use appropriate methods to investigate the merits of the challenged investments and to structure the investments related to the challenged transactions.... [The court] noted that the plaintiffs' allegations targeted the 'fundamental structures' of Georgetown's retirement plans, not the fiduciary prudence of the plan trustees." [Wilcox v. Georgetown Univ., No. 18-422 (D.D.C. Jan. 8, 2019)]
McDermott Will & Emery

Johnson & Johnson Sued for Alleged Violation of ERISA Duties in Three 401(k) Plans

"Two lawsuits claim that fiduciaries should have taken action to reduce the impact on the J&J stock based on allegations that the health-products company failed to disclose information about talc being used in the company's baby powder.... [The lawsuits] said fiduciaries' inaction caused 401(k) plan participants to lose money on their investments in company stock, the price of which, they allege, was inflated." [Perrone v. Johnson & Johnson, No. 19-923 (D.N.J. complaint filed Jan. 22, 2019); Tarantino v. Johnson & Johnson Pension & Benefits Comm., No. 19-1115 (D.N.J. complaint filed Jan. 25, 2019)]
Pensions & Investments

Stadion, United of Omaha Slapped with Excessive Fee Suit

"Ultimately, the plaintiffs claim that Stadion directed participants' accounts into United of Omaha- and Stadion-affiliated investment options, 'despite the availability of lower-cost, higher-performing investment options within the plan that would have better met the needs of participants' ... The plaintiffs claim that 'Stadion avoided these options because they did not generate as much revenue for its business partner, United of Omaha." [Davis v. Stadion Money Mgmt., LLC, No. 19-119 (M.D.N.C. complaint filed Jan. 25, 2019)]
National Association of Plan Advisors [NAPA]

Weyerhaeuser Transfers $1.5 Billion in U.S. Pension Plan Liabilities

"The transaction, which is expected to close later in the first quarter, will transfer the benefit payments of about 28,500 U.S. retirees and beneficiaries who receive benefits of less than $1,085 a month[.]"
Pensions & Investments

Lockheed Martin Transfers $2.6 Billion in Pension Risk

"The Prudential contract is a $1.8 billion buyout that affects about 32,000 U.S. retirees and beneficiaries in the defense and aerospace company's defined benefit plans ... The Athene contract is an $800 million buy-in affecting about 9,000 U.S. retirees and beneficiaries, in which the plan will continue to pay benefits to be reimbursed by Athene."
Pensions & Investments

Editor's Pick State Hybrid Retirement Plans (PDF)

12 pages. "Despite variability among these plans, most contain the core features known to promote retirement security: mandatory participation, shared financing between employers and employees, pooled assets invested by professionals, targeted income replacement with survivor and disability protection, and a benefit that cannot be outlived."
National Association of State Retirement Administrators [NASRA]

Editor's Pick Internal Real Rates of Return Under the OASDI Program for Hypothetical Workers (PDF)

"This note presents analysis of theoretical internal real rates of return for hypothetical workers with various earnings patterns and levels under the Old-Age, Survivors, and Disability Insurance (OASDI) program.... [I]nternal rates of return attempt to answer the question: If an individual or group of workers with selected characteristics were to invest contributions to fund future benefits (including dependents), what real annual yield would be required to finance those future benefits?"
U.S. Social Security Administration [SSA]

Editor's Pick Money's Worth Ratios Under the OASDI Program for Hypothetical Workers (PDF)

"This note presents analysis of theoretical money's worth ratios for hypothetical workers with various earnings patterns and levels under the Old-Age, Survivors, and Disability Insurance (OASDI) program. The money's worth ratio is the ratio of the present value of expected benefits to the present value of expected payroll taxes (contributions) for an individual or a cohort of workers. A value of greater than one for this ratio indicates that, on a present value basis, more money is expected to be received in benefits than is expected to be paid in payroll taxes over the lifetime of that individual or cohort."
U.S. Social Security Administration [SSA]

Benefits in General

The Naked CEO: Personal Liability for Board Members and C-Suite Under ERISA

"The United States spends approximately $3 trillion a year on health care, making the oversight of company health plans an attractive target for plaintiffs.... The plaintiffs' bar is now arguing that ... employee premiums and other costs, such as co-pays, types of coverage, pharmacy rebates, should be considered protected ERISA plan assets, and that every decision a plan sponsor makes with respect to use of those plan assets is a fiduciary decision."
Crowell & Moring

Executive Compensation
and Nonqualified Plans

So You Have Stock Compensation and Your Form W-2 Just Arrived: Now What?

"Vesting of restricted stock, share delivery from restricted stock units (RSUs), and vesting of performance shares all trigger W-2 reporting of the income received. The treatment on the W-2 is essentially the same for all three grant types, assuming you did not elect to defer share delivery at vesting (only permitted in RSU plans at small number of companies)."

Selected Discussions
on the BenefitsLink Message Boards

Discretionary Match After Plan Year-End

A plan provides for a discretionary match which the plan sponsor may make after the plan year has ended (1,000 hours and last day required). The plan sponsor wants to wait until later in the year to decide whether or not to make the match, let's say after March 15. The plan fails the ADP test, and if match is allocated pro-rata over deferrals, it will most likely fail the ACP test as well. If the match is discretionary, is it possible to allocate the match by reducing the match to the HCEs sufficient to avoid an ACP failure and possible excise tax? I'm not finding anything in the document that indicates one way or the other.
BenefitsLink Message Boards

Recognizing Past Service for Purposes of 401(k) Testing

Plan acquired entities with 400 new participants during the course of 2018 -- all hired 2/1/18. Plan is recognizing service from date of hire for the 400 new participants. In 401k testing, I am excluding all those who do not meet statutory eligibility. Do I count the participants I'm recognizing past service for in the non-excludable test? It seems like I would not, because their hire dates with the employer don't meet statutory eligibility regardless of the past service that is being recognized.
BenefitsLink Message Boards

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Press Releases

Gail S. Ennis Sworn In as Inspector General for the Social Security Administration
Office of the Inspector General [OIG], U.S. Social Security Administration [SSA]

NTSA 2019 Elite Advisors Honored
National Tax-Deferred Savings Association [NTSA]

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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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