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Retirement Plan Administrator
in VA / Telecommute

Director of Outreach and Engagement
International Foundation of Employee Benefit Plans
in Brookfield WI

Defined Contribution Consultant
in CT / FL / MN / NC / NY / PA

AVP, New Business, US Pension Risk Transfer
in New York NY / NJ

Defined Contribution Consultant
The Vargo Company
in Erie PA

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[Official Guidance]

Text of PBGC Final Regs: Terminated and Insolvent Multiemployer Plans and Duties of Plan Sponsors

"The Pension Benefit Guaranty Corporation is amending its multiemployer reporting, disclosure, and valuation regulations to reduce the number of actuarial valuations required for smaller plans terminated by mass withdrawal, add a valuation filing requirement and a withdrawal liability reporting requirement for certain terminated plans and insolvent plans, remove certain insolvency notice and update requirements, and reflect the repeal of the multiemployer plan reorganization rules.... This rule is effective July 1, 2019."
Pension Benefit Guaranty Corporation [PBGC]

[Advert.] Announces: 457 Plan eSource

Sponsored by Burrmont Compliance Labs LLC

New! 457 Plan eSource. A must-have reference for all things 457. A perfect companion to the 403(b) Plan eSource. Authored by S. Derrin Watson, JD, APM. Easy to read and understand given his unique writing style. Call or email

Senate Confirms New PBGC Director

"Gordon Hartogensis was approved by the Senate [on April 30] to serve as director of the Pension Benefit Guaranty Corp. Mr. Hartogensis, who was confirmed by a vote of 72-27, replaces W. Thomas Reeder Jr., who was nominated by Barack Obama and confirmed by the Senate in October 2015."
Pensions & Investments

401(k) Loan Usage Reaches Nine-Year Low

"The use of 401(k) loans reached a nine-year low of 22.5% in 2018, and continued a steady six-year decline of nearly 10% ... [T]he percentage of participants who took a hardship withdrawal fell for the ninth consecutive year, declining from 1.9% in 2010 to 1.3% in 2018. Meanwhile, both loan balances and the average amount of hardship withdrawals increased.... The participation rate dropped by nearly 2% from 2017 to 2018.... Participation was over 40 percentage points higher in plans with auto-enrollment compared with plans without it.... The average pretax deferral rate increased slightly to 8.6% ... Plan adoption of target date products reached an all-time high at 95%."
T. Rowe Price

How and Why to Simplify DC Plan Investment Menus

"Brandon M. Diersch, group portfolio manager at Microsoft, attributes the simplification of his firm's DC plan investment menu as one reason it has such a high participation rate, 97%, without auto enrollment.... [W]hen simplifying a fund menu, the sophistication of participants and the investment committee is a key driver. It will inform whether the plan should offer sophisticated asset classes or managers that will make the asset class decisions."
PLANSPONSOR; free registration may be required

401(k) Mutual Funds: Pay Attention to Share Class!

"[E]mployers have a fiduciary responsibility to choose the lowest-priced share class available to their 401(k) plan -- so participant investment returns aren't reduced unnecessarily by avoidable fees. To meet this fiduciary responsibility, employers must be capable of evaluating share class fee differences. This capability can often be obtained with some basic education. Further, these differences are usually obvious in a mutual fund's prospectus."
Employee Fiduciary


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Fee War Saved Investors Billions Last Year

"Asset-weighted expense ratios for U.S. funds dropped to a record low of 0.48 percent in 2018, from 0.51 percent the year before, Morningstar said ... Investors are paying half of what they were charged 2000, when the firm began tracking asset-weighted fees."
Institutional Investor

2019 Investment Company Fact Book (PDF)

335 pages. "The growth of [IRAs] and defined contribution (DC) plans, particularly 401(k) plans, explains some of the increased household reliance on investment companies in the past three decades. IRAs made up 10 percent of household financial assets at year-end 2018, up from 3 percent in 1988, while DC plans have risen from 5 percent of household financial assets to 9 percent over the same period (with 401(k) plans accounting for 6 percent of household financial assets at year-end 2018)."
Investment Company Institute [ICI]

FAS87 ASC715 Discount Rates and Moody's Rates, Updated May 1, 2019

An unofficial monthly report as of March 29, 2019, of the Moody's Daily Long-term Corporate Bond Yield Averages and Moody's Daily Treasury Yield Averages (used as benchmarks by some corporate pension plans).
David Rigby, via BenefitsLink Message Boards

'Saint Constance' Fixes the Unfixable as Patron of Lost Pensions (PDF)

"In her five years as the congressionally-mandated participant and plan sponsor advocate at the [PBGC, Constance Donovan has] been a lifeline for flustered pension holders and employers at a federal agency she's characterized as often effective but prone to being opaque, defensive, and adversarial.... Two recommendations that have carried over since she started at PBGC include retroactively paying interest on excess premium contributions, something Congress approved as part of the Pension Protection Act of 2006, and establishing a national pension plan registry that participants could use to search for long-lost benefits."
Bloomberg Law


ESOPs Address Wealth Inequality, New Study Finds

"A [recent study] by the Rutgers Institute for the Study of Employee Ownership and Profit Sharing shows that ESOPs help families significantly increase their assets, thereby shrinking gender and racial wealth gaps.... Greater support of and participation in ESOPs -- across all demographics and especially in disadvantaged communities -- should help further narrow the wealth divide."
The ESOP Association

Benefits in General

DOL Provides Roadmap to Avoid Misclassification of Gig Workers

"In determining joint employment liability under wage and hour laws, companies must still look at state laws, which may be much more restrictive. The road map provided by the DOL [in Opinion Letter FLSA2019-6] only outlines the economic reality test utilized by the FLSA and not the plethora of other tests utilized under federal, state or even municipal laws."

Executive Compensation
and Nonqualified Plans

Executive Compensation Excise Taxes Due Soon

"Both publicly-traded and privately-held companies that have executives who serve as officers or employees of a private foundation controlled by the company are at particular risk, even if the executives receive no pay from the private foundation. Excise tax returns reporting liability under section 4960, and payments of any tax, are due by May 15 for calendar year taxpayers[.]"
Eversheds Sutherland

Selected Discussions
on the BenefitsLink Message Boards

Excessive Voluntary Contributions by Owners

We have a safe harbor 401(k) with employee, SHNE and EE voluntary contributions. Of course the owners are the only participants who did the voluntary contribution. ACP tests have been met, but each owner seems to have overshot the maximum $61K 415 limit. I suppose that if the excess was contributed in 2019, all is OK; but what if not?
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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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