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[Guidance Overview]

SEC Issues Final Regulation BI

"The types of securities transactions covered under Regulation BI include recommendations to roll over or transfer assets from one type of account to another, (e.g., a recommendation to rollover or transfer assets in an ERISA account to an IRA), recommendations to open up a particular type of account (broker or advisory), and recommendations to take a retirement plan distribution for purposes of opening a securities account. A broker-dealer is not able to waive compliance, nor can a retail customer agree to waive protection under the Regulation BI."
The Wagner Law Group

[Guidance Overview]

SEC Adopts Regulation Best Interest

"[B]roker-dealers will be required to act in the best interests of retail customers when making investment recommendations and may not put their financial interests 'ahead of the interests of a retail customer when making recommendations.' Reg BI includes.... [1] Disclosure Obligation ... [2] Care Obligation ... [3] Conflict of Interest Obligation ... [4] Compliance Obligation: ... The Commission also issued two interpretations."

Supreme Court Will Hear ERISA Statute of Limitations Case

"Issue presented: Whether the three-year limitations period in Section 413(2) of [ERISA], which runs from 'the earliest date on which the plaintiff had actual knowledge of the breach or violation,' bars suit when all the relevant information was disclosed to the plaintiff by the defendants more than three years before the plaintiff filed the complaint, but the plaintiff chose not to read or could not recall having read the information." [Sulyma v. Intel Corp. Investment Policy Comm., No. 17-15864 (9th Cir. Nov. 28, 2018; cert. pet. granted June 10, 2019)]

Why Employers Should Think Twice About Adding Annuity Payments to Their 401(k) Plans (PDF)

"[A]lthough Section 401(k) plan fiduciaries, by following the DOL and SECURE Act safe harbors, receive significant protection in the event an insurance company becomes financially unable to make annuity payments, there is nevertheless a substantial amount of other due diligence, outside of the scope of the safe harbors, that fiduciaries will need in undertake to satisfy their duties of oversight under ERISA."
Blank Rome LLP, via Bloomberg Tax Management Compensation Planning Journal

House Education and Labor Committee Sets Vote on Multiemployer Reform Bill

"The bill, H.R. 397, also known as the Butch Lewis Act, would establish the Pension Rehabilitation Administration and a related trust fund within the Treasury Department to make loans to multiemployer plans in critical and declining status that are approved by Treasury to reduce benefits, or to plans that are already insolvent but not terminated. Treasury would issue bonds to finance the loan program."
Pensions & Investments

SSM Health Care Reaches $60 Million Settlement in Church Plan Case

"Participants in several SSM Health pension plans in Illinois, Missouri, Oklahoma and Wisconsin claimed in a lawsuit originally filed in 2016 ... that SSM Health did not meet statutory requirements to qualify as a church plan exempt from [ERISA].... The settlement requires SSM Health to fully fund the plan for 10 years, contribute $15 million per year to the plan from 2019 to 2022 and make additional payments to workers who received their retirement savings in a lump sum."
Pensions & Investments

San Diego Must Decide Whether to Continue Legal Fight Over 2012 Replacement of DB Plan with 401(k) Plan

"San Diego City Council members are expected to decide [on June 10] whether to continue fighting for 2012's controversial Proposition B pension cut measure, or give up and join labor unions seeking to invalidate the voter-approved initiative. State courts have ruled San Diego skipped key legal steps when placing the measure on the ballot, and that the city must financially compensate 4,000 employees who don't have pensions because of Proposition B."
The San Diego Union-Tribune

Group Annuity Market Pulse, First Quarter 2019

"Sales of [$900 Million] of group annuities were placed during the first quarter of 2019. The first quarter of 2019 was active with 20 transactions completed, following a very active fourth quarter in 2018. Significant activity is expected throughout the year, with some large transactions expected in the second half of the year."
Willis Towers Watson


Will Actuaries Miss the Boat Again on Social Security?

"Every year, the Social Security trustees release a new report discussing the financial status of the Social Security system and every year, the American Academy of Actuaries (AAA) releases their 'Actuarial Perspective' issue brief explaining the new report and the Academy's recommendations for possible system changes ... [T]he Academy should also recommend that Congress consider adopting automatic tax increases/benefit reductions on a going forward basis so that sustainable solvency can be maintained in the future without specific Congressional action."
Ken Steiner, FSA Retired

Executive Compensation
and Nonqualified Plans

Inspector General Assessment of IRS Implementation Planning Efforts for the Excise Tax on Excess Compensation Paid by Tax-Exempt Organizations (PDF)

23 pages. "TE/GE Division management has not completed a strategy to address noncompliance with the new tax. Although TE/GE Division management acknowledged the need for a compliance strategy and took preliminary steps in that process, as of December 31, 2018, they had not established a timeline for further development and implementation of compliance activities. Affected organizations will begin reporting the excise tax on returns filed as early as May 2019. A fully developed compliance strategy is needed to monitor and track potential noncompliance with the new excise tax."
Treasury Inspector General for Tax Administration [TIGTA]

Selected Discussions
on the BenefitsLink Message Boards

Distribution to a 'Top 25' Employee When Below 1% of Funding Target

Plan is funded between 60% and 80% thus limiting their 100% lump sum option to 50%. A top 25 employee's 50% lump sum is below 1% of the funding target (100% would be above 1% of funding target). The plan's ERISA attorney is saying this 50% lump sum can be distributed because the 50% lump sum is below 1% of FT. This doesn't seem right to me because, in this case, a plan funded at 78% would allow a 50% lump sum in this situation, while a plan funded at 82% would allow no lump sum. Thoughts?
BenefitsLink Message Boards

Locating Missing Participants -- Best Internet Web Sites?

I did a VCP filing for a client in the first quarter of 2019. Because there are a lot of former employees who may be entitled to corrective contributions, I knew that the client would have trouble locating former employees who are entitled to a corrective allocation. I suggested that the search start with free internet searches to locate the missing participants and to verify current addresses of those who fail to respond. Which are the best sites?
BenefitsLink Message Boards

Freeze 403(b) Plan, Start a New One -- What Are the Successor Plan Issues?

403(b) plan wants to change recordkeepers. The assets are in some sort of investment that cannot be transferred without the signed consent of all account holders (Individual Custodial Trust Account" was the term used, I believe). So the employer is thinking of "freezing" the plan and starting a new one with the new recordkeeper. Does this pose a no-deferrals-for-a-year successor plan problem? If not, would they have such a problem if the the first plan is terminated at a later date?
BenefitsLink Message Boards

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Press Releases

IRI Retirement Fact Book 2019 Now Available
Insured Retirement Institute [IRI]

Finzo NZ Limited is Certified for Investment Support Services
Centre for Fiduciary Excellence [CEFEX]

Most Popular Items in the Previous Issue

SEC Adopts Regulation Best Interest
Cadwalader, Wickersham & Taft LLP

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