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[Guidance Overview]

IRS Announces Retiree Lump-Sum Windows Are Back on the Table

"Wednesday's announcement signals a complete 180 from the IRS and Treasury Department from its position nearly four years ago. Notice 2019-18 indicates that the Treasury Department and the IRS will keep a close eye on retiree lump-sum windows, and it hinted that further guidance may be issued sometime in the future. In the meantime, it appears that plan sponsors can again consider whether a retiree lump-sum window is an appropriate feature, without fear of retribution from the IRS-at least for the time being."
Poyner Spruill LLP


DC Investment Lineup, SF 3/28, CHI 4/2, DAL 4/4, NY 4/9

Sponsored by Pensions & Investments

Learn how your peers are helping their participants reach better retirement outcomes. Through a series of panel sessions and tabletop discussions, you'll walk away with new tools and techniques to build a diversified investment lineup.

[Guidance Overview]

PBGC Proposed Regs Would Simplify Multiemployer Plan Withdrawal Liability Calculations

"[U]nder the proposal an employer's withdrawal liability is determined in two steps. First, the plan sponsor determines withdrawal liability payments based on the reduced plan benefits after taking into account the benefit reductions and benefit suspensions. Next, the plan sponsor adds to this the employer's proportional share of the value of the benefit reductions and benefit suspensions."

PBGC Proposed Rule Provides Methods for Computing Withdrawal Liability (PDF)

"[T]he proposed withdrawal liability rules: [1] Reflect previous guidance on disregarding adjustable benefit reductions. [2] Provide simplified methods for complying with the [MPRA] requirements to disregard benefit suspensions. [3] Provide new guidance on which contribution increases should be reflected when determining an employer's withdrawal liability assessment and annual payment amount."

IRS Announcement May Allow Lump Sum Window for Retirees

"Plan sponsors do not have to offer lump sums to their entire retiree population.... The retiree group can be carefully selected to maximize the results of the window."

Departing Employees Who Stay in a Defined Contribution Plan for at Least a Year Are Not Likely to Leave

"The percentage of participants taking a distribution -- either a cashout or a rollover -- within the first year of leaving their employer ranged from 55% to 60%.... [F]or each year [from 2008 through 2016], the percentage of people taking a distribution from their plans between one year and two years after leaving employment ranged from 14% to 16%[.]"
Pensions & Investments


DC Investment Lineup, SF 3/28, CHI 4/2, DAL 4/4, NY 4/9

Sponsored by Pensions & Investments

Learn how your peers are helping their participants reach better retirement outcomes. Through a series of panel sessions and tabletop discussions, you'll walk away with new tools and techniques to build a diversified investment lineup.

403(b) Plan Remedial Period Closing Less Than Year from Now

"While the March 31, 2020 deadline may seem far off, the correction process requires significant time. Since amendments to the plan document must be retroactive to January 1, 2010 (or the plan's effective date, if later), a review must be done to evaluate both [1] all amendments made to the plan since that date, and [2] whether the plan has in fact been administered consistently with the plan document since that date."
Sheppard Mullin

Arizona Annuity Law Passes Senate

"The Arizona bill bans indices that have not been in existence for at least 10 years for use in fixed indexed annuity illustrations.... In addition, the bill requires that the insurer and agent 'retain copies of the disclosure document, illustrations and the buyer's guide and all other forms of advertising for the duration of the fixed indexed annuity or 10 years, whichever is shorter.' "

New Pension-Cut Court Decisions in California Begin with Little Change

"The ruling was a rare pension court loss for unions, led by Cal Fire Local 2881. While awaiting the next case, lawyers are analyzing the 45-page ruling ... for any hint of clarifying or reshaping the California Rule. Among the main points in the ruling is that public employment is ordinarily statutory, rather than contractual, and can be modified by the governing body." [Cal Fire Local 2881 v. CalPERS, No. S239958 (Cal. Mar. 4, 2019)]


American Benefits Council Comment Letter on Nevada Draft Fiduciary Regs

"State fiduciary rules, like the one enacted in Nevada and like the proposed regulation, are clearly preempted by ERISA.... [It] is difficult to argue that ERISA's savings clause would protect a state fiduciary rule like Nevada's from federal preemption. This is because Nevada's rule is primarily focused on the provision of investment advice, rather than the regulation of insurance, banking, or securities."
American Benefits Council

Executive Compensation
and Nonqualified Plans

Examples of 2019 Pay Ratio Disclosures

"[This article provides] examples of pay ratio disclosures from recently filed proxies where registrants chose to rely on the median employee identified in the prior year. [1] Sabre Corporation ... [2] Seaboard Corporation ... [3] Superior Industries International, Inc.... [4] The Goodyear Tire & Rubber Company."

Selected Discussions
on the BenefitsLink Message Boards

Union Employee Becomes Non-Union Manager -- Effect on Entry Date?

A DB Plan excludes union employees (covered by collective bargaining agreement). An employee was hired by the company on 3/11/15 as a Union employee and was covered under the pension plan until he moved to a Non-union managerial position on 8/31/17. If the plan's eligibility requirements is 12 months, would he not enter the plan until 12 months following 8/31/17 (1/1/19 due to entry date) or would he be eligible immediately on 8/31/17 due to the service for the company since 3/11/15 (ie using the service while a union employee)?
BenefitsLink Message Boards

Safe Harbor Plan Eligibility: Can Exclude Employees in Controlled Group?

Can a safe harbor plan exclude the employees of one member of a controlled group? Can the plan be separated into SH and non-SH?
BenefitsLink Message Boards

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Press Releases

PSCA Honors Zvi Bodie With Lifetime Achievement Award
PSCA [Plan Sponsor Council of America]

Most Popular Items in the Previous Issue

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David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

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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