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External Wholesaler
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External Wholesaler
in CT / MA / ME / NH / RI / VT / Telecommute

Retirement Plan Administrator
Douglas M. Farr & Company, Inc.
in La Crescenta CA

Account Executive
Aspire Financial Services LLC
in Tampa FL

Relationship Manager
Aspire Financial Services LLC

Manager - Experienced Plan Consultant
Randall + Hurley, Inc.
in MT / WA

Benefits Advisor
Employee Benefits Security Administration, U.S. Department of Labor
in Washington DC / Telecommute

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[Guidance Overview]

IRS Issue Snapshot: Hardship Distributions from 401(k) Plans

"This Snapshot examines the criteria for hardship distributions. Different restrictions apply to hardship distributions made from elective deferrals that were contributed prior to 1989. A discussion of those rules is beyond the scope of this Snapshot. The Bipartisan Budget Act of 2018 made several changes to the requirements for hardship distributions from 401(k) plans. Those changes are summarized[.]"
Internal Revenue Service [IRS]


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Supreme Court Rules in Case That Could Have Demolished the Retirement Plan Regulatory System

"[T]he outcome of this seemingly unrelated case could have been monumental for the retirement planning industry, as it ultimately tested the principle that courts should defer to agency interpretations of ambiguous regulations ... [T]he Supreme Court's multiple published opinions in the case are muddled, implying that it will likely have to return to the issue as soon as next year, because lower courts are going to come to divergent approaches." [Kisor v. Wilkie, No. 18-15 (S. Ct. Jun. 26, 2019)]

Using Behavioral Insights to Increase Annuitization Rates: The Role of Framing and Anchoring

"[A] behavioral approach is suggested ... in aid of increasing annuitization rates.... [C]ommunicating savings as a monthly or yearly income stream (as opposed to a lump sum framing) and using a uniform set of assumptions is suggested.... [A] recommended level of annuity prior to retirement is discussed, building on anchoring bias to help individuals making retirement decisions choose higher levels of annuities. This document points out questions, concerns, and future exploration needed."
The Brookings Institution

Operational Assessments Improve Employee Benefit Plans and Cut Fiduciary Risk

"An operational assessment is an evaluation of an employee benefit plan's conformance to fiduciary rules.... Authentic assessments are conducted by a certified governance, risk and compliance (GRC) expert that specializes in employee benefit plans. Assessments identify gaps between real world benefit plan operations and fiduciary rules."

Several Cases on Supreme Court's ERISA Docket May Affect Plan Sponsors

"At issue in Intel is ... for purposes of the three-year limit, what constitutes 'actual knowledge?'... A rule that ... a plaintiff can avoid application of ERISA's three-year statute of limitations by simply claiming that he never read or 'looked at' those disclosures would, to a great extent, nullify the effect of [that rule].... If the Supreme Court upholds the Second Circuit in Jander, then some sponsors will, in effect, be compelled to ... come to a judgment to disclose/not disclose inside information under an entirely separate statute/set of standards than those applicable under the securities laws, and may be judged to have violated ERISA's fiduciary rules if they get that judgment wrong."
October Three Consulting


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Supreme Court Agrees to Hear Intel Case with Potentially Significant Implications for 401(k) Plan Fiduciaries

"A decision by the Supreme Court that enables the case to proceed on the merits may have significant ramifications for retirement plan fiduciaries. If the lower courts determine that the Intel Committee's investment menu design was not consistent with its fiduciary duties under ERISA, then this could have a chilling effect on other companies who are considering adding alternative assets to their 401(k) plans. Conversely, if Intel prevails on the merits, then this type of investment menu design could become more common." [Sulyma v. Intel Corp. Investment Policy Comm., No. 17-15864 (9th Cir. Nov. 28, 2018; cert. pet. granted June 10, 2019)]
Ropes & Gray LLP

Active Multiemployer Plan Participants Face Higher Contributions and Lower Benefit Levels (PDF)

26 pages. "[C]urrent active participants are already bearing the burden of recent decreases in benefits and increases in contributions ... The real value of the benefits provided by all seven plans in the study has declined significantly over time.... Contributions have increased significantly -- and considerably faster than wage inflation -- over time.... Maintaining active participation is crucial to the survival of multiemployer plans."
Horizon Actuarial Services, LLC; United Association of Journeymen and Apprentices of the Plumbing, Pipefitting and Sprinkler Fitting Industry of the United States and Canada; and Mechanical Contractors Association of America, Inc.

SECURE Act Stalls Amid Senate 'Holds'

"Like some House Republicans, a number of GOP senators also object to a provision that provides targeted pension funding relief to certain community newspapers. Another senator objects to language barring defined contribution (DC) plans from making participant loans via credit cards or similar arrangements."


ERIC Testimony to ERISA Advisory Council on Permissive Transfers of Uncashed Checks from ERISA Plans to State Unclaimed Property Funds (PDF)

"E[T]here is a question about a beneficiary's rights against the plan if the benefits are escheated to the state ... [T]here are also significant practical concerns. For one, which state should the plan sponsor transfer the money to? ... [We] request that as part of its report, the Council advise that the Department provide guidance on this topic and refrain from asserting any findings of fiduciary breach related to such uncashed check issues until it provides clarifying guidance on this specific topic."
The ERISA Industry Committee [ERIC]


What Is Happening to 'Traditional' Retirement?

"Two-thirds of new retirees feel lost, anxious, or bored. 24% of Uber drivers are over age 50; earning money is NOT their number-one reason for driving! ... Money is the THIRD most important reason why older Americans remain employed.... Even in some industries where people may wish to traditionally retire, the labor shortage is actually resulting in employers incentivizing employees to keep working (e.g., truck drivers, where the current shortage is approximately 50,000 workers)."
Cammack Retirement Group

Benefits in General

Beneficiary May Sue Trustees of One ERISA Plan for Fiduciary Breaches Causing Loss of Benefits under Another ERISA Plan

"The trial court explained that Amara extended the surcharge remedy to a breach of trust committed by a fiduciary for any violation of fiduciary duty. Next, the trial court found that nothing in the Welfare Fund Trust Agreement prohibits the imposition of a surcharge on the Welfare Fund's trustees. The trial court noted that the Trust Agreement explicitly authorized the use of trust funds to indemnify its trustees." [DeRogatis v. Bd. of Trustees of the Welfare Fund of the Int'l Union of Operating Engineers Local 15, 15A, 15C & 15D, AFL-CIO, No. 14-8863 (S.D.N.Y. June 13, 2019)]
The Wagner Law Group

Supreme Court Decides Important Agency-Deference Question

"The refined test is as follows: First, a court should not afford deference to an agency's interpretation of its own regulation unless the regulation is 'genuinely ambiguous.' ... Second, even if the regulation is genuinely ambiguous, the agency's interpretation must still be 'reasonable.' ... Third, even if the agency's interpretation of the ambiguous regulation is reasonable, a court 'must make an independent inquiry into whether the character and context of the agency interpretation entitles it to controlling weight.' This, in turn, involves three elements." [Kisor v. Wilkie, No. 18-15 (S. Ct. Jun. 26, 2019)]
Reed Smith

DOL and Treasury Update Guidance Agendas for Employee Benefits

"Of the 44 projects, 17 have been pending for at least five years. One of the three new DOL initiatives -- electronic delivery of required participant notices -- reflects an August 2018 White House directive ... The DOL fiduciary rule remains on the agenda, but the projected date has been further delayed from September 2019 to December 2019[.]"
Eversheds Sutherland


It's Time for Employee Benefit Technology Partnerships

"Consolidated mobile technologies that pull together disparate carriers, payroll organizations, HRIS (learning, PTO, etc.), telemedicine, 401(k), wellness, cost transparency, FSA and other data, all in one-view with drill-down abilities per category, simplify the experience and increase utilization. Focused and planned push/pull notifications through the app to the employee level that matches an employer's strategic initiatives for the year, not just for HR, but for the whole organization, greatly increases the total ROI of the HR team."
Employee Benefit News

Selected Discussions
on the BenefitsLink Message Boards

Issues Surrounding Annual 403(b) Notice Required by Universal Availability Requirement

The 403(b) regulations require 403(b) plan sponsors to provide an effective opportunity to eligible employees to make 403(b) deferrals to the plan. According to 1.403(b)-5(b)(2), this requirement is satisfied by providing a notice to the employees at least once a year that tells the employees that the 403(b) plan is available, and also tells them how to make or change the amount of their 403(b) deferral election. Is there a published or sample form? When is the annual universal availability notice distributed? Do plan sponsors need to get employees' signatures or otherwise record the date that they sent the notices to eligible employees and the date the eligible employees received the notices in order to document that they have satisfied the universal availability requirement?
BenefitsLink Message Boards

Death of Sole Owner and Trustee of Underfunded 412(e)(3) Plan

A doctor, who recently died, adopted a 412(e)(3) Plan in 2014. Funded it the first year, but not the three years following. He finally allowed us to freeze the plan in 2018. We were going to terminate our services but he died on May 30, 2019. His brother is trying to keep the business open and ownership transferred to his name, but the brother refuses to fund the plan. Has anyone dealt with a plan that is not covered by PBGC, not fully funded and the sole owner/trustee has died? Can we force the business to fund the plan? Can we go to his estate to get the plan funded? Can we just pay out the NHCEs with the funded assets?
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Press Releases

NAPA Launches Campaign to Recognize Top DC Wholesalers
National Association of Plan Advisors [NAPA]

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Manage Your 401(k) Toward a Comfortable Retirement
Lawton Retirement Plan Consultants

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Lois Baker, J.D., President
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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