Retirement Plans Newsletter

June 3, 2019

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Jobs

Senior Pension Administrator - Combo DB / DC Plans
Primark Benefits
in Burlingame CA / Telecommute

Retirement Plan Administrator
Nicholas Pension Consultants
in Rancho Cordova CA / Corona CA

Health Insurance Specialist
Centers for Medicare & Medicaid Services, U.S. Department of Health and Human Services
in Bethesda MD / Telecommute

Recent Graduate - Auditor
Employee Benefits Security Administration, U.S. Department of Labor
in Kansas City MO / Telecommute

Specialist, Retirement Education & Enrollment
Nationwide Financial
in CA / CO / MA / NJ / PA / WA

Senior Pension Administrator
Scholz & Friends Enlightened Retirement Group, Inc.
in San Antonio TX

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SECURE Act: Key Changes for Plan Sponsors and Employers

"[1] Expansion of part-time employee eligibility ... [2] Changes to section 401(k) safe harbor plans ... [3] Addition of 'qualified birth or adoption distributions' ... [4] Prohibition on using credit card arrangements for plan loans ... [5] New lifetime income disclosure requirement ... [6] New portability for lifetime income investment options ... [7] Nondiscrimination testing relief for closed defined benefit plans ... [8] Changes to minimum required distributions ... [9] New statutory safe harbor for annuity provider selection."
Proskauer Rose LLP

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Reimbursement of Direct Expenses: Ninth Circuit Upholds Decision in City National

"CNB had calculated the amount that it charged to the plan for its services simply as a portion of mutual fund revenue sharing payments.... CNB was also recordkeeper for over 200 other plans. It did not, however, 'maintain a system for tracking how much time its employees specifically spent servicing the [City National] Plan.' ... [DOL alleged] that this fee arrangement violated ERISA's prohibition on self-dealing.... [T]he Ninth Circuit [held] that ERISA's prohibited transaction exemption for 'reasonable compensation' for the provision of services is not available for fiduciary self-dealing. " [Acosta v. City National, No. 17-55421 (9th Cir. Apr. 23, 2019)]
October Three Consulting

Supreme Court Will Hear IBM Stock Drop Case

"Issue: Whether Fifth Third Bancorp v. Dudenhoeffer's 'more harm than good' pleading standard can be satisfied by generalized allegations that the harm of an inevitable disclosure of an alleged fraud generally increases over time." [IBM v. Jander, No. 18-1165 (2d Cir. Dec. 10, 2018; cert. pet. granted June 3, 2019)]
SCOTUSblog

What the New DOL Fiduciary Rule Will Probably Look Like

"[Two] scenarios would see the DOL's rule take the form of a prohibited transaction exemption. In one, advisers and brokers that comply with terms set in the SEC's Regulation Best Interest would also meet conduct standards under ERISA. In the second scenario, the exemption could be a hybrid approach, meshing elements from the SEC rule and additional requirements (such as additional disclosures) laid out by the DOL."
InvestmentNews; subscription may be required

Best Practices for ESOP Trustee and ERISA Compliance

"ESOP deals may see increased scrutiny by the [DOL] (DOL) when valuation includes control premiums and controlling sellers that can sell back warrants in the future. The more the ESOP transaction strays from standard ESOP deals, the more the DOL and employee participants may look at the valuation of the company stock." [Brundle v. Wilmington Trust, N.A., Nos. 17-1873, 17-2224, 17-2323, 17-2324, 18-1029 (4th Cir. Mar. 22, 2019)]
Butterfield Schechter LLP

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New State-Run IRA for Private Sector Opens July 1

"A new state workplace retirement savings program, CalSavers, will open to an estimated 250,00 to 300,000 employers on July 1 -- offering an automatic IRA payroll deduction for the 7.5 million California workers with no retirement plan on the job.... For businesses with five or more employees, the program is mandatory. They must offer employees CalSavers, or a qualified retirement plan chosen by the employer, to avoid a penalty for repeated non-compliance of $750 per employee."
Calpensions

A Mistake With Lingering Regret: Cashing Out Your 401(k)

"Each year, 5.9 million American women enrolled in 401(k) plans will change jobs. 2.4 million, or 41%, will cash out completely.... [W]omen ages 25-34 will change jobs every 2.7 years, and for women with 401(k) balances less than $5,000, cash out rates soar to 71%.... [A] typical 25-year old woman could change jobs three times prior to age 34 and cash out two of her first three 401(k) balances. At 34, she would preserve only $5,100 in retirement savings, which will yield just $13,900 in savings by age 67.... [H]ad she avoided cashing out, she would have $83,700 at retirement."
Women's Institute for a Secure Retirement [WISER]

55% of Americans Are Making This Retirement Planning Mistake

"Not only do many retirees end up unable to keep working well into retirement, despite their plans to do so, but it's also very common for older Americans to be forced to retire earlier than expected. In fact, while 54% of workers expect to work past the age of 65, the average retirement age reported by current retirees was just 61."
Motley Fool

FAS87 ASC715 Discount Rates and Moody's Rates, Updated June 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

[Opinion]

Letter from Employer Organizations to EBSA Re Electronic Delivery of Retirement Plan Information (PDF)

"Electronic delivery empowers retirement plan participants by providing them constant and real-time access to information about their retirement benefits and other online tools that can assist with retirement planning. Retirement savers could more easily retain copies of benefit statements, search for relevant information, and link to relevant information and options, such as increasing their retirement contributions."
American Bankers Association, American Council of Life Insurers [ACLI], American Retirement Association [ARA], ERISA Industry Committee [ERIC], Investment Company Institute [ICI], Securities Industry and Financial Markets Association [SIFMA], SPARK Instit

Press Releases

Most Popular Items in the Previous Issue

Inspector General of the DOL: Semiannual Report to the Congress (PDF)
Office of Inspector General, U.S. Department of Labor [DOL]

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David Rhett Baker, J.D., Editor and Publisher  davebaker@benefitslink.com
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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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