Retirement Plans Newsletter

April 12, 2019

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Quality Assurance Manager
Nova 401(k) Associates
in Houston TX / Dallas TX / Austin TX / Scottsdale AZ / Telecommute

Relationship Manager II
The Standard
in Plano TX

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[Official Guidance]

Text of PBGC Interest Rate Update for Benefits Payable in Terminated Single-Employer Plans, May 2019

"The May 2019 lump sum interest assumptions will be 1.00 percent for the period during which a benefit is (or is assumed to be) in pay status and 4.00 percent during any years preceding the benefit's placement in pay status. In comparison with the interest assumptions in effect for April 2019, these assumptions represent a decrease of 0.25 percent in the immediate rate and are otherwise unchanged."
Pension Benefit Guaranty Corporation [PBGC]

[Advert.]

2019 SPARK National Conference -- June 4-5, Falls Church, VA

Sponsored by SPARK

The retirement services industry's leading event for top marketing, sales, administration and record keeping professionals. Comprehensive agenda is designed to meet the needs of 401(k) Plan Providers, Financial Advisors and Record Keepers.


[Guidance Overview]

Editor's Pick 2019 Enrolled Actuaries Meeting 'Blue Book': Questions to the PBGC and Summary of Responses (PDF)

18 pages; Mar. 20, 2019. Topics include: [1] Premiums; [2] Standard Terminations;[3] Reportable Events; [4] ERISA Section 4010 Reporting; [5] ERISA Section 4044 Calculations; [6] Deadline for Reporting Section 4062(e) Event; and [7] Determining Whether Section 430(k) Lien is Discontinued at End of Plan Year.
Enrolled Actuaries Meeting and Pension Benefit Guaranty Corporation [PBGC]

White House Energy Infrastructure Order Calls for ERISA, Proxy Voting Review

"President Donald Trump ordered the [DOL] to see whether retirement plans engaging with energy companies on ESG issues comply with ERISA ... [An Executive Order issued on April 10] calls on the Labor secretary to review guidance on proxy voting 'to determine whether any such guidance should be rescinded, replaced or modified to ensure consistency with current law and policies that promote long-term growth and maximize return on ERISA plan assets.' "
Pensions & Investments

Court Concludes That CalSavers Is Not Preempted by ERISA

"The automatic IRA enrollment approach taken by CalSavers (and by several other states) is only one of several designs that states are using to help workers save for retirement. Some of those state programs facilitate the adoption of ERISA plans, and a DOL interpretive bulletin regarding three ERISA-based approaches ... remains in effect. The success of the auto-IRA approach, however, depends on avoiding ERISA preemption." [Howard Jarvis Taxpayers Assoc. v. The California Secure Choice Ret. Savings Prog. (CalSavers), No. 18-1584 (E.D. Cal. Mar. 28, 2019)]
Thomson Reuters / EBIA

Failure of ESOP Fiduciaries to Stop Company Officers from Making Affirmative Misrepresentations Impacting Stock Price Did Not Breach ERISA Duties

"The corrective course of action suggested by the plan participants, the court determined, was not so clearly beneficial that a prudent fiduciary could not conclude that it would be more likely to harm the fund than to help it. The court affirmed the strict pleading standard followed in the Fifth Circuit, while distinguishing a contrary ruling from the Second Circuit." [Fentress v. Exxon Mobil Corp., No. 16-3484 (S.D. Tex. Feb. 4, 2019)]
Wolters Kluwer; free registration required

[Advert.]

Sponsored by BenefitsLink.com

Reach the right candidate for your company's job opening! Put your job ad in front of our 24,000+ newsletter readers and on our web site -- the employee benefits community's job board over 20 years. Place your job ad now.


ERISA Risk Management and the Forensic ERISA Attorney

"Since ERISA liability is based on past events over the last three or six years, there is nothing that can be done to avoid or minimize liability for past acts.... [R]egardless of the [Supreme] Court's eventual decision [in Putnam Investment, LLC v. Brotherston], the prudent choice would be for plans and plan service providers to act proactively to ensure that their plan's investment options are prudent and cost-efficient going forward, and to regularly monitor the plan's investments, replacing those that are no longer cost-efficient. The ability to show that the plan had a fundamentally sound due diligence program in place and actually followed such system would be valuable in responding to any audits and/or ERISA claims that might arise."
The Prudent Investment Fiduciary Rules

Benefits in General

[Official Guidance]

Editor's Pick Text of IRS FAQs: Tax Cuts and Jobs Act, Section 199A - Qualified Business Income Deduction

33 Q&As, Apr. 11, 2019. "[Included] are answers to some basic questions about the new qualified business income (QBI) deduction, also known as the section 199A deduction, that may be available to individuals, including many owners of sole proprietorships, partnerships and S corporations. Some trusts and estates may also be able to take the deduction. This deduction, created by the 2017 Tax Cuts and Jobs Act, allows non-corporate taxpayers to deduct up to 20 percent of their QBI, plus 20% of qualified real estate investment trust (REIT) dividends and qualified publicly traded partnership (PTP) income."
Internal Revenue Service [IRS]

Executive Compensation
and Nonqualified Plans

Does a Requirement to Pay 'Target Variable Compensation' Include Equity Awards?

"The Court noted the defendants' interpretation of [the severance agreement] was reasonable, but that it was not the only reasonable interpretation. Just as conceivable, according to the Court, was that the term 'Incentive Compensation' could mean certain items that may be paid in cash or equity ('compensation, variable compensation, bonus, benefit') as well as one item that is only paid or payable in cash ('award'). According to the Court, under this interpretation, regardless of whether the equity awards are 'paid or payable in cash,' they would be included in Batty's accrued Incentive Compensation." [Batty v. UCAR International Inc., No. 2018-0376 (Del. Ch. Apr. 3, 2019)]
Dodd-Frank.com

Selected Discussions
on the BenefitsLink Message Boards

Partnership Sponsoring a 401(k) Already Filed Its Form 1065

Partnership consists of 5 doctors. For 2018, all five doctors made elective deferrals to a 401(k) plan. The doctor having the largest share in the partnership wants to make an additional $36,500 employer discretionary contribution on his behalf. The accountant already has filed the Form 1065 (without extension); no employer contributions have been made as of today. If the 2018 Form 1065 is amended to reflect the employer contribution that is necessary, does that give the company the additional time to make the contribution and have it deductible for 2018?
BenefitsLink Message Boards

After-Tax Employee Contributions to a Safe Harbor Matching Plan

If an employer wants to allow for after-tax employee contributions, then those contributions are tested in the ACP test. If the plan operates as a safe harbor match, does that mean that the ACP test passes automatically with respect to the after-tax employee contributions?
BenefitsLink Message Boards

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Lois Baker, J.D., President  loisbaker@benefitslink.com
David Rhett Baker, J.D., Editor and Publisher  davebaker@benefitslink.com
Holly Horton, Business Manager  hollyhorton@benefitslink.com

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