Retirement Plans Newsletter

August 2, 2019

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[Guidance Overview]

DOL Finalizes MEP Regulation

"[This article briefly reviews] the legal background ... the final regulation ... [and] DOL’s discussion, in the preamble to the final regulation, of the fiduciary obligations of an employer that adopts a multiple employer plan. [The article concludes] with a brief discussion of the separate Request for Information (RFI) on Open MEPs also released on July 22, 2019."

October Three Consulting

[Guidance Overview]

Multiple Employer Plans and Saving the Barrel from the One Bad Apple (PDF)

"If the procedure detailed in the proposed regulation is followed, the MEP can avoid disqualification caused by a participating employer that is not cooperating in fixing a qualification failure. The proposed regulation contains a number of steps and the entire process could take over a year from start to finish."

Boutwell Fay LLP

[Guidance Overview]

DOL Publishes Final Rule on Association Retirement Plans and Other Multiple Employer Plans

"[T]here are still a number of questions outstanding about MEPs and particularly Open MEPs, including those about disclosure and compliance. In addition, there are questions about fiduciary responsibility and each individual employer's fiduciary liability, plan governance issues, risks involved in the event that an employer desires to leave the MEP and costs for administering such an arrangement."

Holland & Knight

DOL Issues PTE 2019-02 on IRA Auto-Portability

"The PTE allows [Retirement Clearinghouse (RCH)] to receive certain fees in connection with the transfer of an individual's default IRA or eligible mandatory distribution account assets to the individual's new plan account, via the RCH auto-portability program.... PTE 2019-02 ... may prove instructive as a framework for auto-portability more broadly. Plan sponsors who choose to have a plan participate in auto-portability programs are subject to the general fiduciary standards in selecting and monitoring service providers for such programs."

Thomson Reuters Practical Law

DOL Issues Final Prohibited Transaction Exemption for Auto-Portability

"The [DOL] this week issued its final prohibited transaction exemption (PTE) for automatic portability. This action has removed the requirement that participants consent to have their small balance of $5,000 or less or safe harbor [IRA] automatically rolled into their new employer’s retirement plan.... To date, Retirement Clearinghouse has a pilot program with one U.S. employer that has 250,000 employees. "

planadviser

Central States Pension Fund Continues to Bleed as Congress Debates Aid

"The Central States fund had just $13.1 billion in assets as of June 30 and is on track to go broke in 2025, ... spending $2.1 billion more than it takes in every year. The fund ... is among the biggest in the country, covering about 400,000 retirees, active workers and people hoping to collect a pension from the fund someday."

The Columbus Dispatch

A 'How To' Guide to Retirement Savings for the Self-Employed

"[This article reviews] some of the most common strategies a self-employed person could utilize, and explores the pros and cons of each."

Bronfman Rothschild

Social Security: Beneficiaries Affected by Both the Windfall Elimination Provision and the Government Pension Offset (PDF)

15 pages. "The Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) are two separate provisions that reduce Social Security benefits for workers and/or and their eligible family members if the worker receives (or is entitled to) a pension based on employment not covered by Social Security.... As of December 2018, 263,775 Social Security beneficiaries were affected by both the WEP and the GPO. They accounted for 38% of spouses and survivors affected by the GPO and 14% of beneficiaries affected by the WEP." [CRS R45845; Jul. 30, 2019]

Congressional Research Service [CRS]

Benefits in General

[Official Guidance]

Text of EBSA Request for Nominations to ERISA Advisory Council

"The terms of five Council members expire at the end of this year. The groups or fields they represent are as follows: [1] employee organizations; [2] employers; [3] accounting; [4] insurance; and [5] the general public.... Nominations must be received on or before [September 19], 2019."

Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

District Court Rules Exhaustion of Administrative Remedies Is Mandatory Only if Required by Plan Document

"Claims procedure descriptions in plan related documents should use mandatory language ... In particular, special care should be taken with the model statement of ERISA rights, which some plan sponsors incorporate verbatim from the DOL's SPD regulations and which provides that a plan participant 'may file suit in Federal court' when a benefit claim is denied." [Greiff v. Life Ins. Co. of North America, No. 18-496 (D. Ariz. Jul. 5, 2019)]

Thomson Reuters / EBIA

Starting August 16, Electronic Filing Required for Top-Hat Statements and Apprenticeship and Training Plan Notices

"Beginning August 16, 2019, electronic filing for any apprenticeship and training plan notice or top-hat statement will be required. With respect to an apprenticeship and training plan, the changes do not alter the requirements that the employer must take steps that are reasonably designed to ensure that the information required to be contained in the notice is disclosed to eligible employees and to also make the notice available upon request."

Hodgson Russ LLP

Federal Judge Dismisses ERISA Fiduciary Breach Claim against University for Lack of Standing

"The Court found that Stanley released her claims under the agreement from the release’s plain language. The release included 'any and all claims' for violation of any federal statute, 'including but not limited to' statutes listed in the release. The Court rejected Stanley’s broader interpretation of 'claims for vested benefits,' stating that the language only referred to a contractual claim under the plans themselves and not a broader statutory claim under ERISA." [Stanley v. George Washington Univ., No. 18-878 (D.D.C. Mar. 29, 2019)]

Williams Mullen

Selected Discussions
on the BenefitsLink Message Boards

Investment Courses for the Trustee -- A Plan Expense or a Settlor (Employer) Expense?

Small DB plan trustee pays for investment courses from trust assets (about $1,500 from $750,000 of assets). Could this be considered a plan expense? I think probably not, but in the context of a DB plan for which the trustee is the main participant and ultimately must meet the minimum funding requirement, it may not make a difference. The ultimate question is whether this type of expense is proper to begin with, and instead is a settlor or personal to the Trustee expense. In the context of a DC plan it could make a difference.

BenefitsLink Message Boards

Board Resolution Being Used to Limit Deferral Percentage and Define Catch-Up Contributions

Can a board resolution be used to state the maximum deferral percentage that can be deferred by the HCE group and also state that any amount over the average by any HCE who has or will attain at least age 50 by the end of the 2018 calendar year will be considered a catch-up contribution?

BenefitsLink Message Boards

Sponsor Left a MEP -- Now Must Move Participants' Accounts Out of the MEP?

A sponsor adopting an open MEP decided to start its own plan. So they gave notice to the MEP and the balances for the active participants were rolled into the sponsors new plan. Balances for terminated people were left in the MEP though. Should the balances for the terminated people have moved as well? Have another recent situation when the plan sponsor was acquired by another company and the acquired sponsor is transferring into the acquiring entity's plan. Again, do the balances for participants terminated prior to the acquisition move into the acquiring entity's plan?

BenefitsLink Message Boards

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Press Releases

PCS Retirement Acquires Aspire Financial Services
Professional Capital Services, LLC

Most Popular Items in the Previous Issue

What You Need to Know About Association Retirement Plans
Pete Swisher, via 401(k) Specialist

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BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2019 BenefitsLink.com, 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 BenefitsLink.com, 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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