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May 14, 2019 logo logo
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Pension Plan Administrator
American Pension Advisors, Ltd.
in Indianapolis IN

Employee Benefits Associate
Shipman & Goodwin LLP
in Hartford CT

Relationship Manager
Newport Group
in Los Angeles CA

Relationship Manager
Newport Group
in Lake Mary FL

Program Implementation Analyst
in Arlington VA

Pension Administrator
Strategic Pension Services, LLC
in Albany NY / Telecommute

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Webcasts, Conferences

Being Smart About M&A-Related Benefit Plan and Employment Issues
June 11, 2019 WEBCAST
Wagner Law Group P.C.

WEB Atlanta Summer Social Atlanta Braves vs. Pittsburgh Pirates
June 12, 2019 in GA
Worldwide Employee Benefits Network [WEB] - Atlanta Chapter

Effectively Communicating Your Benefits Program to a Multi-Generational Workforce
June 12, 2019 in TX
Worldwide Employee Benefits Network [WEB] - Houston Chapter

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[Official Guidance]

Text of PBGC Submission to OMB, Request for Comments: Reporting of Contributions Made Under Section 4062(e)(4)(A) Following Substantial Cessation of Operations

"PBGC is proposing a new form series ... An employer or a plan administrator would file Form 4062(e)-01 to notify PBGC of the occurrence of a substantial cessation of operations and request a determination of the employer's liability. An employer would file Form 4062(e)-02 to notify PBGC that it made the elections to pay annual additional contributions to a plan. An employer would file Form 4062(e)-03 to notify PBGC that it paid an annual additional contribution, received a funding waiver from the [IRS], or is no longer obligated to pay additional annual contributions.... [An] employer would file Form 4062(e)-04 to notify PBGC that it failed to pay an additional annual contribution to the plan."
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

[Official Guidance]

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

"The June 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 May 2019, these assumptions represent no change in the immediate rate and are otherwise unchanged."
Pension Benefit Guaranty Corporation [PBGC]

PBGC Coverage Determinations Could Become Easier

"A new [PBGC] coverage determination form with instructions could streamline and standardize the task of requesting whether a defined benefit plan is covered by the agency's plan termination insurance program. Under a one-year pilot program, employers could also use the form to request opinion letters about certain plans not yet established. Comments on the draft form and instructions ... are due by June 7."

Proposed IRS Regulations Liberalize Rules for Hardship Withdrawals

"[T]he lowest income quartile of participants who take a hardship distribution and wait two years before resuming deferrals take a 25% hit on their ultimate retirement savings accumulations when they stop working.... Sponsors who worry about the long-term impact of such distributions can take other steps to minimize leakage, including limiting the size of distributions and allowable reasons."

IRS Expands Self-Correction Program for Retirement Plans (PDF)

"[A chart] summarizes the steps and conditions for correcting certain plan loan failures."

IRS Provides Welcome Relief from High VCP Fees

"In January 2018, the IRS announced a new VCP fee structure based on plan assets, rather than on the number of plan participants. This fee structure eliminated several exceptions -- including amendment or loan failures -- that used to carry a fixed or reduced general fee. As a result, many employers face significantly higher fees to correct operational failures under the VCP. But the IRS also allows more employers to fix plan failures through self-correction, perhaps as a result of the vigorous criticism about higher fees."

Market Volatility Shows Importance of Pension Plan Termination Planning

"The plan termination process itself requires many steps, but there are also steps that a plan sponsor can take prior to beginning a plan termination to be better prepared. Whether plan termination is 1, 5, or 10 years away, planning is critical."

The Meat and Potatoes Topics of 401(k) Plan Sponsor Training

"[For investment selection and monitoring, the] process is key ... It relies on trust law traditions dating back to the eighteenth century. These traditions have the plan sponsors back -- but only if they're diligently followed.... Since it's not reasonable to assume that all plan participants fully understand the nature and relevance of their investment choice, the plan sponsor must determine how best to educate them on these matters.... Thanks to 'process,' plan sponsors rarely get into trouble for offering investments that lose money. On the other hand, they'll find themselves in litigation if they make the wrong fee choice."
Fiduciary News

Baltimore Court Ruling on Police, Firefighter Pensions Likely Faces Appeals from Unions and City Government

"Judge Julie R. Rubin ruled last year that the city breached the unions' contracts when it changed pension benefits for people who were already retired.... In Monday's ruling, she said those retirees are entitled to seek damages for the lost benefits. But she also ruled that the city could make modifications to the pension contract that extended the years of service from 20 to 25 years for employees to receive pension benefits."
The Baltimore Sun

Social Security: The Windfall Elimination Provision (WEP) (PDF)

15 pages. "The windfall elimination provision (WEP) is a modified benefit formula that reduces the Social Security benefits of certain retired or disabled workers who are also entitled to pension benefits based on earnings from jobs that were not covered by Social Security and thus not subject to the Social Security payroll tax.... In December 2018, nearly 1.9 million people (or about 3% of all Social Security beneficiaries) were affected by the WEP." [Report 98-35, updated May 14, 2019]
Congressional Research Service [CRS]

Many Filed for Social Security Retirement Benefits Out of Necessity -- But Wish They Had Waited Until Later

"More than half (53%) filed out financial necessity, such as not saving enough, and another one-third (30%) filed as the result of unforeseen issues, such as health issues or employment changes.... In the simplest and most conservative cumulative calculation, a married couple with longevity into their early 90's could be leaving more than a half million dollars on the table -- or as much as $2,000-4,000 per month for life -- by filing for Social Security retirement benefits at age 62 versus filing at age 70. Furthermore, a surviving spouse could receive $1,000-2,000 per month less for life as a result of filing at age 62."

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

Editor's Pick Highly Compensated Excise Tax Deadline Imminent

"Set forth [in this article] are the key issues relevant to establishing a reasonable, good faith position under Notice 2019-09 that the Section 4960 excise tax should not apply to volunteer officers of a [private foundation (PF)] who receive all of their compensation from taxable organizations related to such PF. What is important to understand is that the Section 4960 excise tax only applies if volunteer officers are treated as employees of the related PF. Whether an employee relationship exists is a facts and circumstances test, and having someone serve as an officer to meet state law nonprofit corporation requirements does not result, by itself, in employee status."
McDermott Will & Emery

Vesting Incentive Equity: Time vs. Milestone Vesting Schedules

"Achieving business milestones surely seems a better measure of 'value add' than the simple passage of time, and after all, the whole idea of vesting is to reward folks for adding value, not for passing time. And yet, time-based vesting is still the norm in the startup world. Why is that?"
Michael Best

Selected Discussions
on the BenefitsLink Message Boards

Removing True-Up Mid-Year from Safe Harbor Plan

Currently the plan makes all matching contributions each payroll period. But the match as defined in the document is based on annual comp/deferrals -- a.k.a. a true-up. The employer wants to change the match to a payroll period only. No true-up. Can this change be implemented mid-year?
BenefitsLink Message Boards

Editor's Pick Keep Your Tools Sharp: View Accumulated Wisdom of Fellow Employee Benefit Practitioners on Timely, Practical Topics

Using our free message boards, you can view all messages posted by a particular member. For example, if you find Texas attorney Luke Bailey's contributions to be particularly valuable to you, you can generate a list such as this one (click). Generating a list for any particular member is easy -- learn more. Eavesdrop on the country's best, most involved practitioners. Or jump in -- the water's fine!
BenefitsLink Message Boards

► Subscribe to the BenefitsLink Message Boards Digest— a free daily email of all new discussions (not just the selected few shown above). View a sample issue.

Press Releases

Most Popular Items in the Previous Issue

2019 ERISA Advisory Council Issue Statement: Permissive Transfers of Uncashed Checks from ERISA Plans to State Unclaimed Property Fund (PDF)
Advisory Council on Employee Welfare and Pension Benefit Plans, Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

Present Law and Background Relating to Challenges in the Retirement System
Joint Committee on Taxation [JCT], U.S. Congress

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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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