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April 17, 2019 logo logo
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Saver Success Specialist
Ubiquity Retirement and Savings
in San Francisco CA / AZ / CO / FL / IL / MA / NC / NJ / NV / NY / OR / TX / Telecommute

Defined Benefits Client Relationship Manager
Goldleaf Partners
in MN / Telecommute

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Webcasts, Conferences

Employee Benefit Plans Conference
May 6, 2019 in LA

Form 5500 Update
June 19, 2019 WEBCAST
ASPPA [American Society of Pension Professionals & Actuaries]

IRA University
July 10, 2019 WEBCAST

Litigation Involving DB Plans
July 10, 2019 WEBCAST
ASPPA College of Pension Actuaries [ACOPA]

HSA University
July 11, 2019 WEBCAST

Fall ESOP Forum
September 17, 2019 in UT
National Center for Employee Ownership [NCEO]

►See 171 Upcoming Webcasts and Conferences

►See 1517 Recorded Webcasts


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New Comments and Topics

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[Official Guidance]

Text of IRS Notice 2019-29: Weighted Average Interest Rates, Yield Curves, and Segment Rates for April 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]


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.

Lifetime Income Solutions as a QDIA: Focus on Decumulation and Rollovers (PDF)

44 pages. "The 2018 Council concluded that amending [Qualified Default Investment Alternative (QDIA)] regulations to specifically address [lifetime income (LTI)] could incent plan sponsors to adopt innovative QDIAs, including QDIAs with LTI options.... [T]he 2018 Council made recommendations to the Department in the areas of: [1] Amendments to the QDIA regulations; [2] Delegation of fiduciary responsibilities for annuity selection; [3] Plan distribution options."
Advisory Council on Employee Welfare and Pension Benefit Plans, Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

Evaluating the DOL Regs and Guidance on ERISA Bonding Requirements and Exploring Reform Considerations (PDF)

15 pages. "[T]he Council developed recommendations for updating regulatory and sub-regulatory guidance for plan officials, plan sponsors and plan service providers to improve compliance with the requirements of section 412. Specifically, the Council recommends the Department issue a new Interpretive Bulletin and a summary of the requirements under section 412 of ERISA for securing a fidelity bond."
Advisory Council on Employee Welfare and Pension Benefit Plans, Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

ESOPs: What Not to Do -- And If You Did, How to Correct It (PDF)

25 presentation slides. "Traps for the unwary: [1] Pre-transaction: party relationships, appropriateness of providers, due diligence; [2] Implementation: plan design, communication, new employees; [3] On-going administration: repurchase liability/loan amortization, distributions, diversification; [4] Termination: timeline, distributions, missing participants."
McDermott Will & Emery

Executive Order Instructs DOL to Reexamine Fiduciary Proxy Guidance

"The Trump Administration, in this new [executive order], is in effect instructing DOL to review current plan investment practice ... to determine whether it has any effect on capital market support for 'the Nation's energy infrastructure.' And to review current DOL guidance on the fiduciary responsibilities with respect to proxy voting ... This DOL review -- due within 180 days -- may generate a revision in current policy and may affect current plan proxy voting and shareholder engagement practice."
October Three Consulting

Annuity Purchase Update: April 2019 Interest Rates

"The first quarter of 2019 shows a noticeable drop in annuity purchase interest rates. However,... insurers are pricing annuity purchases aggressively. Annuity purchase prices have not risen as much as expected based on the drop in interest rates, yet we do not know how long this favorable aggressive pricing from insurers will last."
October Three Consulting

Contribution Analysis: U.S. Single Employer Pension Plans

"In 2016, 27% of plan liabilities were in plans that had an unfunded liability when computed with the smoothed discount rates allowed under federal law. This percentage is up from 11% in 2015. Of the 27% of plan liabilities associated with plans that had an unfunded liability in 2016, 16% is attributable to plans that contributed enough to reduce their unfunded liabilities, while 11% fell short.... 78% of liabilities in 2016 were associated with plans with an unfunded liability."
Society of Actuaries

Editor's Pick Social Security Replacement Rates and Other Benefit Measures: An In-Depth Analysis

"Replacement rates that compare benefits with earnings just before retirement show that, across cohorts, benefits replace about two-fifths of substantial late-career earnings, falling short of providing income continuity as workers transition out of the labor force.... Because the Social Security benefit formula is progressive, meaning that benefits replace a larger share of earnings for lower-income workers, replacement rates for workers in the lowest earnings quintile are about two to three times higher, on average and across cohorts, than replacement rates for workers in the highest quintile."
Congressional Budget Office [CBO]

2019 Corporate Pension Funding Study (PDF)

"[D]espite investment losses of 2.8% [for 2018] -- the worst asset performance since 2008 -- ... [t]he funded ratio for the Milliman 100 companies settled at 87.1%, an improvement from the year-end 2017 funded ratio of 85.8%. The funding deficit improved by $41 billion, ending the year at $215 billion.... Corporate plan sponsors continued last year's trend of higher contributions, totaling $57.5 billion."

Challenges Faced by Physical Workers in Preparing for Retirement

"[O]nly 35 percent of physical workers say they are always saving for retirement (habitual savers) and 19 percent say they have a written plan (retirement strategists). Physical workers expect to retire at age 65 (median).... Fifty-five percent of physical workers say they have access to a retirement plan with/without employer contribution. Forty-eight percent have access to good training provision and 26 percent are offered work more suitable to older workers."


It's Too Easy to Conceal 401(k) Fees -- We Need 408(b)-2 Reform

"[T]he current 408b-2 fee disclosure rules make it too easy for 401(k) providers to do what Fidelity is accused of doing -- obfuscate indirect compensation. That's a big problem for business owners who rely on 408b-2 information to confirm their 401(k) fees are both reasonable and necessary -- an important fiduciary responsibility. [In this article] are 408b-2 fee disclosures that ... make it too difficult for business owners to evaluate indirect compensation.... [T]hey demonstrate the need for 408b-2 reform."
Employee Fiduciary

Benefits in General

DOL 2018 Enforcement Stats Send Wake-up Call for Complacent Fiduciaries

"The [DOL] recovered $1.6 billion in 2018. There were 1329 civil investigations, 64% of which resulted in a monetary recovery or corrective action. 111 of these went into litigation. There were also 268 criminal investigations.... What are some of the issues that might be uncovered by the [DOL]?"
Cohen & Buckmann, P.C.

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

For-Profit and Public Employers Could Become Subject to New 21% Excise Tax on Tax-Exempt Organizations

"Under [Notice 2019-09], all wages paid to the covered employees of the [applicable tax-exempt organization (ATEO)] over $1,000,00 by any related organization, including taxable entities, is subject to the 21% excise tax.... Many companies and other for-profit organizations have established foundations for the benefit of their communities. These companies now could be at risk if they lend employees or otherwise provide employee services to the ATEO. If your company has a foundation, now might be a good time to determine whether any highly paid employees provide services to it."
Winston & Strawn LLP

[Guidance Overview]

IRS Issues Guidance on Excise Tax on Executive Compensation Paid by Tax-Exempt Entities

"A public university or community college could fit into one of three categories. One is that the entity, despite being an instrumentality of a state, received a determination letter from the IRS in which the IRS certified that the entity qualified as a tax-exempt organization under Code Section 501 ... Those entities would be subject to the Code Section 4960. Second, an entity separately organized from a state or political subdivision of a state would have its income exempt under Code Section 115(1). That entity also would be subject to Code Section 4960. Some entities, however, rely on the doctrine of 'implied statutory immunity' to avoid federal income taxation, rather than seeking tax-exemption under Code Section 501(a) or excluding income under Code Section 115(1). The Notice explains that such entities are not subject to the Section 4960 excise tax."
Porter Wright Morris & Arthur LLP

Selected Discussions
on the BenefitsLink Message Boards

412(e) Conversion to Non-Fully-Insured Plan

[1] How does one convert a 412(e) plan to a non fully insured plan? Can it be accomplished simply by not making premium payments? [2] If a fully insured plan is frozen for a year can it be resumed or does it lose the level premium requirement by doing so? [3] What are the options for getting the life insurance out of the plan?
BenefitsLink Message Boards

Adding Safe Harbor Non-Elective Contribution Provisions to Existing 401(k) Plan

We have an existing 401(k) plan that wants to add a SHNEC. Can this be done mid-year? Or instead can it be done only as of the first day of a plan year?
BenefitsLink Message Boards

Notice Required When Adding a New Fund to a 401(k) Lineup without Mapping Any Assets to It?

Is there a 30-day notice requirement for simply adding a new fund to a 401(k) lineup, not mapping any assets to it?
BenefitsLink Message Boards

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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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