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June 26, 2019 logo logo
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Manager, Retirement Plan Compliance
Guideline, Inc.
in San Mateo CA

Counsel, Qualified Retirement Plans
Guideline, Inc.
in San Mateo CA

Retirement Plan Consultant
in Roseville CA

Retirement 401(k) Plan Administrator Analyst
in Greensboro NC

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Webcasts, Conferences

Under the Dome - A Closer Look at Legislative Proposals Impacting Retirement
July 17, 2019 WEBCAST
EBRI [Employee Benefit Research Institute]

Protecting Employee Privacy and Identity in the Digital Age
July 25, 2019 WEBCAST
Worldwide Employee Benefits Network [WEB] - Atlanta Chapter

Generating Retirement Income and Special Considerations of Generation X
August 21, 2019 WEBCAST
EBRI [Employee Benefit Research Institute]

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[Official Guidance]

Text of PBGC Proposed Regs: Miscellaneous Corrections, Clarifications, and Improvements

60 pages. "[PBGC] is making miscellaneous technical corrections, clarifications, and improvements to [certain] regulations ... These changes are a result of PBGC's ongoing retrospective review of the effectiveness and clarity of its rules as well as input from stakeholders." [Amendments include: [1] Reportable Events -- eliminate possible duplicative reporting of active participant reductions, clarify when a liquidation occurs, and provide additional examples for certain events; [2] Financial and Actuarial Information Reporting -- eliminate a requirement to submit individual financial information for each controlled group member and add a new reporting waiver; [3] Standard Terminations -- provide more time to file a post-distribution certification; and [4] Premium Rates -- emphasize that a plan does not qualify for the variable rate premium exemption for the year in which it completes a standard termination if it engages in a non-de minimis spinoff in the same year.]
Pension Benefit Guaranty Corporation [PBGC]


Gemini Web Portal: Change the Way you do Business!

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[Official Guidance]

Treasury Department Approval of Western Pennsylvania Teamsters and Employers Pension Fund Application for Reduction of Benefits (PDF)

"Because a majority of voters identified as eligible by the Fund did not vote to reject the benefit reduction, the benefit reduction is permitted to go into effect. Treasury, in consultation with DOL and PBGC, has issued a final authorization to reduce benefits under the Fund as described in the Application, effective August 1, 2019, subject to the conditions described [in this letter]."
U.S. Department of the Treasury

[Guidance Overview]

Editor's Pick SEC Publishes Roadmap to Navigating Investment Advisers' Fiduciary Duty

"[T]he application of the various elements of an IA's fiduciary duty may differ depending on the nature of the client relationship. The SEC discussed and provided examples of many of these differences in the Interpretation. [C]ertain of the most notable [are discussed in this article]."
K&L Gates

[Guidance Overview]

SEC Adopts New Broker-Dealer and Investment Adviser Conduct Standards and Disclosure Requirements

"The [SEC] adopted a rulemaking package, including Regulation Best Interest, new Form CRS Relationship Summary and two interpretations of the Investment Advisers Act of 1940, designed to enhance the quality and transparency of retail investors' relationships with investment advisers and broker-dealers.... Broker-dealers and investment advisers must begin complying with the new rules by June 30, 2020."
Thomson Reuters Practical Law

Editor's Pick Advisor's Guide to the SEC's Reg BI and Form CRS

"Ultimately, while Regulation Best Interest did not impose a full fiduciary duty on broker-dealers, it does materially lift the standard of conduct that applies to them, requiring greater disclosures from broker-dealers of their business practices, a requirement for broker-dealers to take active steps to mitigate the conflicts of interest their incentives create for brokers, and an outright ban on certain sales contests, quotas, and similar (and especially problematic) incentives."
Nerd's Eye View


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Supreme Court Will Take Another Look at ERISA Stock-Drop Pleading Standard

"[T]he issue boils down to the level of detail required in a federal complaint to open the discovery door. Entering that door is of utmost significance to plaintiffs because discovery is so expensive to defendants ... Many large cases that find themselves stuck in discovery settle without any adjudication on the merits. The forthcoming Jander decision will advise ERISA litigants whether the trend towards closing the discovery door will continue." [Jander v. Retirement Plans Committee of IBM, No. 17-3518 (2d Cir. Dec. 10, 2018; cert. pet. granted Jun. 3, 2019)]
Seyfarth Shaw LLP

Compensation Traps: The Trouble with True-Ups or Lack of True-Ups

"The concept and the mechanics of a true-up contribution are best explained by demonstrating an extreme situation: the maximum deferral under Internal Revenue Code Section 402(g) is withheld from the first paycheck of the year."
Belfint Lyons Shuman

When SIMPLE Is Not Simple, and Is Expensive (PDF)

"Employers too often adopt IRA-type savings plans expecting to avoid the detailed administrative and IRS compliance requirements of tax qualified Profit Sharing and Defined Benefit Pension Plans.... IRA-type plans require the same employer's administrative attention, and impose the same fiduciary exposure as tax-qualified Profit Sharing and Defined Benefit Pension Plans.... The employer may temporarily avoid the cost of independent advisors, but the cost for corrections can be much greater."
H. C. Foster and Company

Defined Benefit Plan Sponsors Reassessing Long-Term Goals Due to Volatile Markets and Uncertain Costs

"More companies are actively de-risking and exploring new investment governance structures. Nearly two thirds of those surveyed plan to outsource some or all of their pension plan investment duties. 63% of respondents are planning to terminate their plans in the next five years, up significantly from 38% in 2015."

Manage Your 401(k) Toward a Comfortable Retirement

"[1] Contribute at least 15% ... [2] Don't stop contributing ... [3] Always make sure you collect the entire company match ... [4] Make Roth 401k contributions ... [5] Get help with your investment allocations ... [6] Allocate your balance to target date funds if you desire simplicity ... [7] Rebalance annually if you aren't in a target date fund ... [8] Please do NOT sell when markets fall ... [9] Don't take participant loans ... [10] Don't roll over your account to an IRA."
Lawton Retirement Plan Consultants

Investigating the Difference in Mortality Estimates between the Social Security Trustees' Report and the Human Mortality Database (PDF)

"The Social Security Administration (SSA) and Human Mortality Database (HMD) life table series for the United States are two of the most widely used sets of mortality indicators at the national level. Life table values differ between the two sources, and the gap has been growing progressively since the early 1980s: the difference in life expectancy at age 65 has increased to 0.4 years in 2014."
Michigan Retirement and Disability Research Center, Univ. of Michigan

Supreme Court Requests Advice on Puerto Rico Pension Case

"The Supreme Court is asking for the opinion of the U.S. solicitor general on whether it should consider a petition from the Roman Catholic Archdiocese of San Juan, Puerto Rico, to decide if courts can override a religious organization's legal structure and force affiliates to face joint and several pension liability as a single entity. The archdiocese filed for bankruptcy protection in August after receiving a $4.7 million judgment in a case brought by pension plan participants against the Superintendence of Catholic Schools of the Archdioceses of San Juan."
Pensions & Investments

Benefits in General

How Are Generational Trends Reshaping the Employee Benefits Landscape?

"Employers are finding themselves in an 'arms race' to design a benefits package that optimally improves employee satisfaction and wellness -- physical, emotional and financial -- within a given budget. Understanding the needs of your unique employee populations may enable you to get more value out of your benefits offering today and in the future."

District Court Opinion: ERISA Does Not Apply to Benefit Claims by Foreign Nationals Working Outside U.S. (PDF)

"The foreign plan exemption is only one of five provisions that state when a plan will be exempted under ERISA ... It is mere speculation to conclude that this exemption means that foreign nationals working in a foreign country are within the scope of ERISA.... Without an affirmative intention of Congress that clearly expresses that ERISA applies extraterritorially, the Court must therefore presume that ERISA 'is primarily concerned with domestic conditions,' and Plaintiffs' motion to remand will be granted due to a lack of subject matter jurisdiction." [In re Reliance Standard Life Ins. Co., Nos. 19‑331, 19‑332, 19‑333, 19‑334, 19‑335, 19‑336, 19‑338, 19‑339, 19‑340, 19‑341, 19‑342, 19‑343 (E.D. Penn. Jun. 24, 2019)]
U.S. District Court for the Eastern District of Pennsylvania

Seventh Circuit Holds That 'Substantial Compliance' Does Not Apply to Missed Deadlines

"[S]ome circuits allow plan administrators to claim 'substantial compliance' when not meeting their deadlines to decide claims or appeals and invoke little or no penalty for these transgressions. The Seventh Circuit has made it clear to plan administrators: substantial compliance does not apply to ERISA's regulatory deadlines. Make a decision on time or be subject to de novo review." [Fessenden v. Reliance Standard Life Ins. Co., No. 18-1346 (7th Cir. Jun. 25, 2019)]
Kantor & Kantor


Testimony of AICPA to the ERISA Advisory Council: Improving the Financial Statement Audit Process (PDF)

10 pages. "While the primary objective of the auditor is to express an opinion on whether the plan's financial statements are fairly presented, the audit process can also help the plan administrator keep apprised of matters that may need to be addressed to fulfill their responsibilities."
American Institute of Certified Public Accountants [AICPA]

Selected Discussions
on the BenefitsLink Message Boards

Plan Sponsor Contributes to Previously Sponsored Plan by Mistake

Attorney X had a one-participant profit sharing plan at Fidelity for his one-person law firm until he established a partnership with attorney Z on January 1, 2018. The partnership adopted a plan (as successor employer) that had been sponsored by the attorney Z (who is our client). Attorney X, unaware as to how all this worked, made a $15,000 contribution in May of 2019 to his OLD plan, even though he had no income from his sole proprietorship in 2018 or 2019. Attorney X wants to fix his mistake before he rolls over the old plan assets into the new plan. I'm not sure what kind of mistake or error this should be classified as, in order to determine the proper correction method.
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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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