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June 11, 2019 logo logo
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Pension Plan Administrator
American Pension Advisors, Ltd.
in Indianapolis IN

Part-Time ERISA Attorney
in Atlanta GA / Telecommute

Client Relationship Manager - Group Benefits Advisory
Plante Moran
in Auburn Hills MI

Regional Sales Associate - Midwest
July Business Services
in Waco TX / Telecommute

Regional Sales Associate - Northeast
July Business Services
in Waco TX / Telecommute

Retirement Plans Business Development Officer
1st Source Bank
in South Bend IN

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[Guidance Overview]

SEC Broker-Dealer Rule Package, Part 1: Regulation Best Interest

"As in the proposed rule, determining whether a broker-dealer makes a 'recommendation' will be based on how that term is currently interpreted under broker-dealer regulations.... [The SEC] identified various types of communication that it does not consider to constitute a recommendation, provided, that the communication -- on its own or in combination with other communications -- does not include a recommendation of a particular security or investment strategy."
Spencer Fane


Bring Employee Benefits Education to You

Sponsored by International Foundation of Employee Benefit Plans [IFEBP]

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Supreme Court to Hear Intel Appeal of Ninth Circuit's 'Actual Knowledge' Standard for ERISA Statute of Limitations

"Intel is fighting claims ... that the company made overly risky investments, with too much money in hedge funds and private equity. Intel says the lawsuit was filed after a three-year statute of limitations had expired. [Plaintiff Christopher Sulyma], who worked at Intel from 2010 to 2012, had access to electronic documents describing the investments more than three years before he sued. But he says he doesn't recall reading those documents and didn't learn about Intel's hedge-fund and private-equity investments until they became the subject of news reports in 2015, the year he sued in federal court in California." [Sulyma v. Intel Corp. Investment Policy Comm., No. 17-15864 (9th Cir. Nov. 28, 2018; cert. pet. granted June 10, 2019)]
Bloomberg; subscription may be required

Intel 401(k) Fiduciary Breach Appeal Moving to Supreme Court

"Intel said the participant's lawsuit was filed beyond the three-year limitations period allowed by ERISA from the time a plaintiff had 'actual knowledge of a breach or violation.' Intel told the court that 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)]
Pensions & Investments

Best Practices for Plan Sponsors, Part 9

"As with the Anthem case, the Vanderbilt settlement teaches fiduciaries that they need to pay attention to the share classes of the mutual funds they include in their plans, including private sector 403(b) plans. A committee should devote at least part of one meeting a year to a report by its investment advisor on the share classes of their plan's investments and the share classes that are available to the plan. This is a high risk area and should be treated accordingly, that is, with close attention and care."

Fiduciaries Must Confront Fears and Fads of Market Cycles

"During late bull markets, investors begin using a different calculus in search of greater returns. It's quite the opposite from the way they think during market lows. A fiduciary must navigate through the fears and fads of these treacherous extremes. Why, for example, would investors flee falling markets just as valuations become attractive?"
Fiduciary News


Financial Planning After Retirement: Coordinating the Retirement Plan with the Estate Plan

Sponsored by Lorman and BenefitsLink

June 25 webinar. Coordinating your financial plan with your estate plan is important to a successful and comfortable retirement.BenefitsLink discount.

District Court Finds No Abuse of Discretion in Plan's Refusal to Change Retiree's Lump-Sum Election

"A pension plan administrator did not abuse its discretion when it denied a retiree's request to change her mind for the second time as to whether she would prefer to continue to receive a monthly, single-life annuity payment or make a one-time election to receive a lump-sum payment ... The window for revoking the retiree's decision regarding the lump-sum election, set forth in the terms of the plan and communicated in writing to the retiree, had closed." [Mitchell v. Lucent Technologies Pension Plan, No. 17-8097 (N.D. Ill. March 7, 2019).
Wolters Kluwer; free registration required

How America Saves 2019: Vanguard Defined Contribution Plan Data (PDF)

121 pages. "Over the past decade, plan sponsors have increasingly turned to plan design to influence employee retirement savings behavior. As a result, plan participation rates have improved and participant portfolio construction has also improved.... [This study provides] a 15-year look back highlighting automatic enrollment and the evolution of balanced investment strategies."

401(k) Participants' Investing Behavior May Leave Them Short

"[A]lthough 401(k) participants believe they need $1.7 million, on average, to retire, many are not investing enough to reach that goal. The nationwide survey of 1,000 401(k) plan participants also reveals the outsized role of the 401(k) in Americans' financial lives, with most (58%) saying it is their only or largest source of retirement savings. Moreover, two-thirds (65%) of those surveyed say participating in a 401(k) plan was their first experience with investing -- yet when it comes to using a 401(k), 64 percent view themselves as savers rather than investors."
Charles Schwab

How a Raising the Age for Required Withdrawals Could Impact Your Retirement

"The Secure Act, which passed the House of Representatives in May and awaits action in the Senate, would increase the age for required minimum distributions to 72 from 70-1/2. A theoretical $500,000 portfolio, earning 5% annually, would have $33,500 more at age 89 if the RMDs started at age 72."


State Pension Funds Shouldn't Be Captive to Politics

"In a misguided effort to fight climate change, State Sen. Liz Krueger introduced Senate bill 2126, the Fossil Fuel Divestment Act, earlier this year.... Pension funds have begun to realize that the costs of divestment are not worth the political statement.... It only hurts retirees and local economies. Fellow pensioners, retirees and taxpayers must demand separation between political opinions and public pension management. Politicians should not jeopardize our hard-earned retirement and a healthy economy because of a political agenda." [The author is the former vice chairman of the New York City Fire Department Pension Fund.]
Richard Brower, via Institute for Pension Fund Integrity


Four Lessons from the Latest Social Security Trustees' Report

"[1] Social Security faces a huge financing shortfall.... [2] The shortfall is certain.... [3] We are running out of time to save Social Security, if we haven't already.... [4] We need public trustees."
Charles Blahous, Manhattan Institute for Policy Research

Benefits in General

Getting the Most Bang for Your Buck Out of a Severance Release

"In a recent Iowa case, an employee who signed a release in connection with a severance agreement later attempted to bring an ERISA claim for breach of fiduciary duty against the employer's ESOP plan.... Because the employee's acceptance of the release was knowing and voluntary, and because it was broad enough to cover the trustee as a fiduciary of the ESOP and to cover ERISA claims for breach of fiduciary duty, the court granted summary judgment in favor of the trustee." [Innis v. Bankers Trust Co. of South Dakota, No. 16-650, (S.D. Ia. Apr. 30, 2019)]
Hawley Troxell

Underreporting of Self-Employed Income Affects Social Security and Medicare

"[M]ore than 3 million self-employed people -- construction contractors, small business owners, and other independent contractors -- did not disclose some or all of their earnings to the IRS in 2014. This under-reporting translated to unpaid self-employment taxes of $3.9 billion to Social Security and another $900 million to Medicare. An additional 2.3 million Americans sell goods and services on platforms like Airbnb, Lyft, and Etsy every month.... Their under-reporting resulted in an estimated non-payment of $2 billion to Social Security and $500 million to Medicare in 2014."
Squared Away Blog, by the Center for Retirement Research at Boston College

Press Releases

Most Popular Items in the Previous Issue

Why Employers Should Think Twice About Adding Annuity Payments to Their 401(k) Plans (PDF)
Blank Rome LLP, via Bloomberg Tax Management Compensation Planning Journal

SEC Issues Final Regulation BI
The Wagner Law Group

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David Rhett Baker, J.D., Editor and Publisher
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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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