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August 15, 2019 logo logo
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Half Day Defined Benefit Seminar
September 4, 2019 in OH
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September 26, 2019 in PA
ASPPA Benefits Council [ABC] of Greater Philadelphia

Managing Pension Risk & Liabilities
October 15, 2019 in GA
Pensions & Investments

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[Guidance Overview]

Administering Hardship Distributions Should Not Be a Hardship

"[1] Make sure your clients understand the procedures for hardships; [2] Always check your client’s plan document before you process a hardship distribution ... [3] Develop and provide your clients with a 'substantiation package' to conform to the notice and certification requirements ... [4] If you provide plan documentation to your clients, make sure you are set up to provide your clients with the amendment to remove the deferral suspension requirement before the due date ... and [5] Make sure that someone is properly preparing Forms 1099-R for hardship distributions and that the form provides that the distribution is not eligible for rollover."

Ferenczy Benefits Law Center


The PPA restatement deadline is fast approaching!

Sponsored by Wolters Kluwer

Now is the time to check out's Defined Benefit Documents cloud-based software! With three plan types and our Batch Restatement Tool you can quickly and easily restate your existing plans to PPA in a few clicks! Why wait? Learn more.

Custom Portfolio Fees, Allocations Questioned in ERISA Complaint

"As it awaits the results of a Supreme Court appeal on another case scrutinizing its investment decisions, Intel Corporation now faces an additional lawsuit questioning the fees and performance of custom target-date funds (TDFs) offered to its defined contribution (DC) retirement plan participants." [Anderson v. Intel Corp. Inv. Policy Comm., No. 19-4618 (N.D. Cal. complaint filed Aug. 9, 2019)]

PLANSPONSOR; free registration may be required

Editor's Pick Small Business and Retirement Savings: The Push for Multiple Employer Plans

"The DOL has more clearly defined which employer associations and PEOs are able under current law to sponsor Multiple Employer Plans ... The IRS proposes to revise the 'one bad apple' rule... Congress moves forward with 'Open MEP' legislation."

Steptoe & Johnson LLP

Editor's Pick The Emerging Best Interest and Fiduciary Duty Patchwork (PDF)

"[T]his year has seen a number of fiduciary and best interest investment advice regulations at both the federal and state levels. Firms subject to these regulations will face challenges in dealing with rules that will impose a host of new obligations, and that may overlap and conflict with one another. This chart is intended to help firms take stock of the evolving framework and aid firms in putting the pieces together."

Eversheds Sutherland

Will Trump Administration Prove Friendlier to Retirement Plan Innovators?

"[T]he fund LGIMA hopes to roll out will be a TDF that features a built-in insurance component that will allow investors to 'hit the easy button' to annuitize a given portion of their lump sum balance. The fund would be supported ... by what is essentially a heat map that can be displayed in the participant’s investment portal. This heat map would show whether or not the current market conditions present a favorable or unfavorable annuity purchase window."


Annuity Purchase Update: August 2019 Interest Rates

"The spread of annuity purchase prices above the GAAP projected benefit obligation (PBO) remained fairly stable during 2018.... When annuity purchase interest rates and yield curve interest rates changed rapidly from December 2018 to August 2019, the spread fluctuated slightly up and down ... A narrow spread may represent an opportunity to settle an annuity purchase at a relatively cheaper price compared to a broad spread."

October Three Consulting

The End of Favorable Tax Treatment for Inherited IRAs?

"To raise about $1.5 billion a year over the next 10 years, Congress is proposing to require people, other than spouses or disabled children, to withdraw their inherited IRA balance within 10 years.... The first clue that, in the grand scheme of things, this is not a huge deal should come from that revenue number -- $1.5 billion a year, or $15 billion over the next 10. IRAs and 401(k)s have around $16 trillion in assets. Changing the stretch provisions amounts to a tiny tax increase on the total base of assets."

Morningstar Advisor

IRS Addresses Tax and Reporting Consequences of Failure to Cash a Qualified Plan Distribution Check

"Allowing individuals to delay income by simply ignoring a distribution check would give them unfettered discretion to delay their taxable income, a consequence that the IRS has clearly denied elsewhere ... And allowing individuals’ handling of distribution checks -- beyond the control and typically beyond the knowledge of the plan administrator -- to alter the tax withholding and reporting obligations of the plan administrator would invite chaos. If there is anything curious about the ruling, it is why the IRS thought the ruling was needed now."

Thomson Reuters / EBIA


California K-12 Teachers Have Great 403(b) Choices -- They Just Don't Know It

"Most school districts offer 35 plus vendors with the overwhelming majority of the companies selling high-fee insurance products pushed by high-commission sales agents. But dig a little deeper, and you find that nearly all California teachers have at least a couple of really good vendor choices."



Investing 401(k) and IRA Funds

"Investing in the stock market will be subject to wide swings in the values including reactions to the economy, jobs, inflation, interest rates and/or political activities and utterances, however, the long term trend should be up as long as you have a well-diversified portfolio of shares in United States listed companies....  [C]onsider putting a large percentage of your retirement funds in plain vanilla index or exchange traded funds."

WithumSmith+Brown, PC

Benefits in General

Third Circuit Joins Majority in Rejecting 'De Facto Administrator' ERISA Theory

"The Third Circuit ... concluded that it 'must restrict application of the title "administrator" to those who fit the statutory definition and not stretch the term to authorize penalties against others whom a disappointed participant might like to reach.' Although most circuits align with the Third, the de facto administrator theory remains jurisdictionally sensitive, as the First and Eleventh Circuits have accepted the theory in some capacity." [Bergamatto v. Bd. of Trustees of the NYSA-ILA Pension Fund, No. 18-2811 (3d Cir. Aug. 6, 2019)]

Jackson Lewis

Fourth Circuit Vacates Dismissal of Spouse's Fiduciary Breach Claims Against Employer

"The Fourth Circuit [held] that a participant or beneficiary is generally not required to allege that the plan administrator and named fiduciary also satisfies a functional fiduciary test to state a plausible fiduciary breach claim. Nevertheless, the court also concluded that, even if named fiduciary status was not enough to subject the employer to fiduciary responsibilities, the employer’s alleged conduct satisfied the functional definition of a fiduciary." [Dawson-Murdock v. National Counseling Group, Inc., No. 18-1989 (4th Cir. Jul. 24, 2019)]

Thomson Reuters / EBIA

Executive Compensation
and Nonqualified Plans

Long-term Compensation Choices: Real Equity or Phantom Stock?

"Designed and administered properly, phantom stock should be non-taxable until the cash is paid, generating ordinary income for the employee and a deduction for the company. Plans that are limited to only key employees should be free from the burdens of ERISA rules governing participation, vesting, funding and fiduciary responsibilities....  [P]hantom stock avoids the risks inherent in having additional shareholders."


Selected Discussions
on the BenefitsLink Message Boards

Forced Distributions to Participants, into IRA Institution Owned by Sponsor

Plan sponsor has an ownership interest in an IRA provider. Can they force out (terminated <$5k) participants into IRAs with that provider, or would that be a PT? I remember reading about a PTE that would allow banks to force out participants in their plans into IRAs held by the bank, but my search skills are failing me at the moment and I can't find it again.

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Press Releases

CalPERS Offers New Program to Help Public Employers Offset Future Pension Costs
CalPERS [California Public Employees' Retirement System]

NIPA announces new EPCRS Certificate Course
NIPA [National Institute of Pension Administrators]

Most Popular Items in the Previous Issue, Inc.
1298 Minnesota Avenue, Suite H
Winter Park, Florida 32789
(407) 644-4146

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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