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Survivor Benefits Supervisor
Wespath Benefits and Investments
in Glenview IL

Senior Plan Document / Compliance Specialist
Professional Capital Services, LLC (PCS)
in Philadelphia PA

Senior Retirement Plan Administrator
Professional Capital Services, LLC
in Philadelphia PA

Employee Benefits Compliance Associate
Slevin & Hart, P.C.
in DC

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Webcasts, Conferences

An Afternoon with Will Hansen, American Retirement Association's Chief Government Affairs Officer
August 15, 2019 in IL
ASPPA Benefits Council [ABC] of Chicago

ERISA for Non-ERISA Lawyers
September 24, 2019 WEBCAST
American Bar Association Joint Committee on Employee Benefits [JCEB]

►See 134 Upcoming Webcasts and Conferences

►See 1529 Recorded Webcasts


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[Official Guidance]

Text of GASB Exposure Draft: Section 457 Deferred Compensation Plans That Meet the Definition of a Pension Plan

"This proposed Statement would require that all accounting and financial reporting requirements relevant to pension plans be applied to Section 457 plans that meet the definition of a pension plan. Similarly, this proposed Statement would specify that all accounting and financial reporting requirements relevant to pensions be applied to benefits provided through Section 457 plans that meet the definition of a pension plan.... This proposal would require investments of all Section 457 plans to be valued as of the end of the plan's reporting period in all circumstances."
Governmental Accounting Standards Board [GASB]

[Guidance Overview]

A Welcome Expansion: IRS Resuscitates Determination Letter Program

"The IRS has noted that partially statutory hybrid plans (e.g., plans that contain multiple benefit formulas, only one of which is a hybrid formula) are eligible for a determination letter--the plan need only have one hybrid formula to be eligible.... [Rev. Proc. 2019-20] also opens up the determination letter program to 'merged plans.' Although this term may seem to encompass many situations in which two plans are combined, plan sponsors should pay close attention to the requirements of the Revenue Procedure, including all applicable time limits[.]"
Ogletree Deakins

[Guidance Overview]

SEC Interpretation: Standard of Conduct for Investment Advisers

"The Release affirmed the SEC's long-standing view that the scope of an adviser's obligations must be based on overarching principles, as opposed to a laundry list of specific obligations. However, the Release does provide some useful examples of the application of an adviser's fiduciary duty obligations to its clients, and additional information as to the SEC's view of what constitutes full and fair disclosure by an adviser of its conflicts and informed consent to those conflicts by a client.... The Release does not take a position on the scope or substance of any fiduciary duty that applies to an adviser under applicable state law, nor does it address the extent to which the Advisers Act applies to impersonal investment advice."
Cadwalader, Wickersham & Taft LLP

PBGC Issues Proposed Regs on Reportable Events, Information Reporting, Plan Terminations, and PBGC Premium Rates

"[T]he proposed regulations ... [1] change how active participants are counted when determining whether an attrition event has occurred.... [2] would not place a time limit on the need to verify a person's eligibility for benefits ... [3] would clarify the regulatory definition of this event to provide that a reportable event occurs when one or more persons cease to be either a contributing sponsor of a plan or a member of the plan's controlled group ... [PBGC] is requesting comments on whether the [public company] waiver should be expanded to apply when a parent company timely files a Form 8-K but is not a contributing sponsor to the plan."
Thomson Reuters Practical Law

Supreme Court to Review Eighth Circuit Decision Regarding Standing in ERISA Defined Benefit Plan Cases

"The defendants' initial motion to dismiss for lack of Article III standing was denied. During the litigation U.S. Bank voluntarily contributed enough money to make the plan overfunded and again moved to dismiss. This time the district court dismissed the breach of fiduciary duty claims as moot because the plaintiffs lacked any concrete interest in relief.... By focusing on injury and harm to the plan, the Eighth Circuit addressed hallmark issues of constitutional standing in a decision that it said was based on statutory standing." [Thole v. U.S. Bank, N.A., No. 16-1928 (8th Cir. Oct. 12, 2017; cert. pet. granted Jun. 28, 2018)]

Editor's Pick Discharge and Bar Dates for Multiemployer Pension Plan Withdrawal Liability Claims: When Is a Claim a Claim? (PDF)

"The courts disagree over whether the Bankruptcy Code's definition of claim is broad enough to sweep in contingent withdrawal liability claims, which are dependent upon complex actuarial calculations, asset valuations and estimates of future benefit obligations to participants ... or instead whether the contingent nature of a withdrawal and the possibility of underfunding ... are too ephemeral to create a dischargeable claim until the withdrawal of an underfunded plan actually occurs."
Reinhart Boerner Van Deuren s.c., via Employee Benefit Plan Review

Retirement Savings and the Role of Innovation and Technology

"Individuals are increasingly managing their money by phone, both for informational tasks ... and for transactional tasks ... The trend of mobile and on-demand financial technology will continue, with far-reaching effects for savers, including greater financial inclusion in 'cashless' or underbanked societies and greater use of professional financial advice through robo-advisers."
Investment Company Institute [ICI]

The Real Cost of Nominal Annuities

"If future inflation is benign, as it was from 1950-1970, then both the nominal level-payment annuity and the nominal annuity with a 3% COLA ... would end up purchasing more at today's annuity prices than the CPI-adjusted annuity.... On the other hand, if future inflation is historically high, [as in] the 1970s and 1980s, then the CPI-adjusted annuity would end up purchasing more than either of the two nominal annuities.... The question this raises is whether that potentially large difference in a nominal annuity or bond's future purchasing power is a risk you want to take."
The Retirement Cafe

This Time CalPERS Plans for Stock Market Drop

"Despite a fund reaching $368 billion last week during a record bull market, CalPERS is far from recovering its 100 percent funding in the year before the 2008 crash. It still has only 70 percent of the projected assets needed to pay growing future pension costs.... Last month the CalPERS board ... received a staff report on planning for the next 'drawdown,' defined as a 20 percent drop in the market for at least three months."

FAS87 ASC715 Discount Rates and Moody's Rates, Updated July 1, 2019

An unofficial monthly report as of June 28, 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


The 'Hidden' Message in Reg BI

"Reg BI's acknowledgment of the importance of cost-efficiency in terms of investment recommendations is consistent with the Restatement (Third) of Trust's position regarding cost-efficient investing....Whether Reg BI survives judicial scrutiny or not, financial 'advisers' of all types need to recognize the importance of investment costs and the potential liability issues associated with same. Costs matter."
The Prudent Investment Fiduciary Rules

Benefits in General

Health Costs in Retirement: 2019 Estimates (PDF)

"A healthy 65-year-old couple retiring in 2019 is projected to spend $369,000 in today's dollars ... on healthcare over their lifetime, and expenses at age 85 are estimated to be 250% higher than at age 65.... A healthy 67-year-old retired couple is projected to spend 39% of their pre-tax Social Security benefit on healthcare in 2019.... A healthy 45-year-old couple who retires at age 65 is projected to pay $532,000 in 2019 dollars, and $1.4 million over their retirement years, for retiree healthcare.... The estimated 2019 annual premium plus out-of-pocket cost for a healthy 65-year-old is $5,000."

Help Employees Choose the Right Benefits to Manage Health Care Costs in Retirement

"[1] Encourage employees to look ahead, not just live in the moment ... [2] From saving to spending: The lifetime benefits of HSAs ... [3] Explain how voluntary benefits fill the 'coverage gap' at every life stage ... [4] The power is in the combination."

Selected Discussions
on the BenefitsLink Message Boards

Missing or Nonresponsive Participant in Money Purchase Pension Plan

The default benefit under a money purchase plan is a joint and survivor annuity. As a defined contribution plan, it cannot pay this benefit straight from the account; it must acquire an annuity from an insurance company. What insurance company will sell an annuity contract to a plan trustee without a participant's signature on the contract application? With investments all in mutual funds for active participants, there is no insurance company involved in the administration or normal investment. Does anyone know of an insurance company taking this business?
BenefitsLink Message Boards

More Than One Participating Employer in a Controlled Group -- Can X Contribute for Y's Employees?

Two dentists (husband and wife) have separate corporations. The corporations are participating in the same 401k plan, which has a safe harbor matching provision. The wife's corporation contributes the safe harbor matching contribution to the plan for her, as well as the safe harbor contribution for the husband. Is this OK? In general, in a plan with multiple participating employers, can one entity contribute for another entity's participants?
BenefitsLink Message Boards

Eliminate Partial Withdrawals for Terminated Participants?

We have a plan transitioning to us. Can we eliminate partial withdrawals for terminated participants? We prefer full distributions only for them. Is it a prohibited cutback?
BenefitsLink Message Boards

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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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