PBGC Drafts Updated Premium Package for Risk Transfers, Final Filings
"PBGC has proposed changes to its premium filing package for 2020 to collect additional information on risk-transfer activity involving retirees. The revisions come in response to IRS Notice 2019-18, which relaxed the prohibition against defined benefit plans offering retiree lump-sum windows. The proposal would also require plan sponsors to file a coverage-determination request when making a final premium filing after PBGC coverage ceases."
Mercer
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Important Questions to Ask Your Financial Advisor
"[1] Are you a fiduciary for the recommendations you make? .... [2] How are you paid? ... [3] What is your investment philosophy? ... [4] What professional credentials do you have? ... [5] What is your educational background? ... [6] How many years have you been an investment adviser? ... [7] What does your ideal client look like? ... [8] What happens to my business if you are gone? ... [9] Does the company you work for sell investment funds/products?"
Lawton Retirement Plan Consultants
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What's the Difference Between 3(38) and 3(21) 401(k) Advisers?
"Plan sponsors would be most interested in learning what the practical difference between the two options ... While these functional differences can be quite evident to the plan sponsor, less obvious but perhaps of greater significance is the difference in personal fiduciary liability exposure. In determining which arrangement works best for them, 401k plan sponsors need to determine what’s more important: increased control or reduced liability."
Fiduciary News
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Have an IRA or 401(k)? The New SECURE Act Will Change Your Estate Planning
"Under the previous rules, we could ‘stretch’ IRA distributions to non-spouse beneficiaries, which allowed for a potentially significant income tax savings to the children of IRA owners. ... Coupled with the fact that inherited IRAs are subject to the claims of the beneficiary’s creditors, many IRA owners created ‘IRA Conduit Trusts’ or other mechanisms to make sure beneficiaries could take only the Required Minimum Distributions and assets in the IRA would be protected. SECURE changes that paradigm."
Forbes
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Here's How Much Your State Spends on Pension Funds
"According to the U.S. Census Bureau's 2017 Annual Survey of Public Pensions, state and local governments contributed $144.6 billion to employee pension programs in 2017.... The states spending the most per public sector worker do not necessarily have greater than average public sector employment. In fact, Alaska and Hawaii are the only two states in the top 10 on this list to also rank among the 10 states where the most people work for the government."
USAToday
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What Is the Maximum Possible Social Security Benefit in 2019?
"The maximum possible Social Security benefit in 2019 depends on the age you begin to collect payments and is: $2,209 at age 62; $2,861 at age 66; $3,770 at age 70. However, qualifying for payments worth $3,000 or more requires some serious career planning throughout your life. Here's what you need to do to qualify for the maximum possible Social Security payment."
U.S. News & World Report
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Can a Pre-Tax 401(k) Account Be Converted to a Roth Account?
"There are Roth conversions and Roth transfers. Conversions are only permitted when a participant otherwise has a reason to take money out of the plan. That could be on termination of employment or attainment of age 59-1/2. Transfers, on the other hand, are not restricted to those types of events, so any participant can take advantage of them."
DWC
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Does Public Pension Board Composition Impact Returns?
"The effectiveness of pension boards depends on their structure, composition, size, and member tenure. Based on best practices for each factor, this analysis constructs a 'Board Effectiveness Index' for 145 pension funds. The results show that a higher Index score is associated with a higher 10-year investment return on fund assets."
Center for Retirement Research at Boston College
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Benefits in General
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Unbelievable: ERISA's Broken Promise
"This article explores the policy dimension of ERISA disclosure law and chronicles the doctrinal decay of the equilibrium Congress envisioned. From the perspective of workers it is a saga of disappointment, disillusionment, and defeat. The new balance may serve the interests of federal courts (reduced caseload) and some employers (increased flexibility), but it also likely contributes to increasing standardization of employee benefit plans, decreasing their utility as instruments of workforce management."
Peter J. Wiedenbeck, Washington University in St. Louis - School of Law, via SSRN
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Executive Compensation and Nonqualified Plans
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Section 409A Deferred Compensation Tax: Is There Any Recourse Against Employer?
"An executive’s ability to recover damages for Section 409A taxes under a state law cause of action or under a Henkel-themed ERISA lawsuit may be foreclosed by the increasingly common practice of including a provision in a deferred compensation plan or agreement, which states that claims may not be asserted against the employer for Section 409A liabilities. To date, there are no published court opinions discussing whether such limitations of Section 409A liability are enforceable."
Blank Rome LLP
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Managing Executive Incentive Programs for Chemical Companies
"[This article covers] key attributes of the [chemical] industry and their impact on setting goals and designing incentives to help manage the impact of volatility resulting from: [1] Commodity prices on feedstock supplies and product sales; [2] Macroeconomic trends on demand (domestic and global); [3] Variability in currency exchange rates."
Meridian Compensation Partners, LLC
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Selected Discussions on the BenefitsLink Message Boards
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Does This Exchange of Variable Annuity Contracts Constitute a Section 1035 Exchange?
Individual currently owns a non-qualified VA. He is the owner and annuitant. Contract had a ratchet and guaranteed minimum withdrawal benefit. The ratchet has expired so he is looking at exchanging into a new VA contract. The current contract has the owner as the annuitant and his spouse as designated beneficiary. He is looking at exchanging into a VA where he will be the owner and he and his spouse will be joint annuitants. Does this qualify for a 1035 exchange?
BenefitsLink Message Boards
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403(b)(9) Church Plan Operational Error -- Did Employee Waive It?
A non-electing 403(b)(9) church plan has an employer with several operational errors. The employer is currently working towards submitting a VCP application. It has been identified by one person in this organization that part-time employees working 20 hrs/week or more were never given the opportunity to participate via salary deferral. However, the employment offer to one or more part-time employees stated there would be "no benefits" with the part-time position(s). Is this a case of "facts and circumstances" in which the employer could justify not giving an opportunity to participate?
BenefitsLink Message Boards
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