Retirement Plans Newsletter

August 21, 2019

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Jobs

Defined Benefit Analyst
OneAmerica
in Indianapolis IN

Defined Benefit Actuarial Analyst
TRA, Inc.
Telecommute

Compliance Analyst
TRA, Inc.
Telecommute

Distributions Analyst
Loren D. Stark Company
in Houston TX

Defined Contributions Consultant
Loren D. Stark Company
in Houston TX / Telecommute

Retirement Plan Sales Territory Manager
Loren D. Stark Company
in Irving TX

Retirement Account Analyst
Alerus Financial
in Bedford NH

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Webcasts, Conferences

2019 ERISA Disability Case Law Update
August 22, 2019 WEBCAST
ProLawCLE

Voluntary Fiduciary Correction Program
September 16, 2019 in CA
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

Voluntary Fiduciary Correction Program
September 17, 2019 WEBCAST
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

What to Expect from an EBSA Investigation and DOL's Voluntary Fiduciary Correction Program (VFCP)
September 18, 2019 in TX
ASPPA Benefits Council [ABC] of Dallas/Fort Worth

Elevating Financial Wellness in the Workplace
September 19, 2019 in IL
Worldwide Employee Benefits Network [WEB] - Chicagoland Chapter

Washington Update with Will Hansen
November 13, 2019 in MO
ASPPA Benefits Council [ABC] of Gateway St. Louis

►See 160 Upcoming Webcasts and Conferences

►See 1546 Recorded Webcasts


Discussions

New Topics on the BenefitsLink Message Boards

New Comments and Topics

All Topics, Grouped by Forum


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District Court Awards ESOP $6.5 Million, Finds That Trustee Breached Duty

"The court held that the ESOP trustee had breached its duty of prudence and duty of loyalty to the ESOP and had committed a prohibited transaction by overpaying for the company stock held by Vinoskey and a related trust. It also held that Vinoskey was a knowing participant in the prohibited transaction and, thus, jointly and severally liable with the ESOP trustee." [Pizzella v. Vinoskey, No. 16-062 (W.D. Va. Aug. 2, 2019)]

Holland & Knight

[Advert.]

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Sponsored by Burrmont Compliance Labs LLC

Find out why we are the fastest-growing ERISA Compliance Service in the industry. Outstanding authors, customer satisfaction & support. Contact us to see what we can do for you. sales@erisapedia.com or 612-605-2266


Charles Schwab Wins Pro-Arbitration ERISA Decision

"[T]he 9th Circuit has overturned and remanded the District Court’s decision on the grounds that it is no longer 'good law' to conclude that ERISA plaintiffs as a general matter cannot be forced into arbitration....  According to the District Court, the lead plaintiff’s claims were brought on behalf of the plan -- not on his own behalf -- and without the plan’s consent he [could not] waive rights that belong to the plan, such as the right to file this action in court." [Dorman v. Charles Schwab Corp., No. 18-15281 (9th Cir. Aug. 20, 2019)]

PLANSPONSOR; free registration may be required

Meet the MEPs: Professional Employer Organizations

"According to longstanding DOL guidance, the structures of many PEO retirement plans lacked the commonality and control among participating companies that the DOL said were required in order to maintain a MEP.... The new DOL regulations remove much of that ambiguity and pave the way for a more consistent approach."

DWC

Traditional Safe Harbor 401(k) Plan vs. QACA: How to Choose

"[A chart provides] a summary of traditional and QACA safe harbor 401(k) plan requirements....  When a safe harbor plan has no participation problem, it can be tough to justify an automatic enrollment feature. It adds administration that can be expensive to fix if mistakes are made. That said, if you’re interested in a QACA, there is a simple way to avoid automatic enrollment mistakes -- insist upon an affirmative deferral election from all plan participants."

Employee Fiduciary

Improving Your Retirement Plan Governance

"Proper identification and documentation of the plan's fiduciaries is the first step for proper governance.... [It] is important that training be provided.... [P]lan governance must address the process required to manage investment performance and assign monitoring tasks to ensure that performance matches expectations....  [and] must assign the task of monitoring the operation of the plan in accordance with applicable laws.... [A] communications plan should be incorporated in plan governance."

PlanPILOT

[Advert.]

SPARK Forum - November 3-5, 2019 -- The Breakers, Palm Beach, FL

Sponsored by SPARK

Join us at the retirement services industry's leading event for top marketing, sales, administration and record keeping professionals. Comprehensive agenda includes topics for Record Keepers, 401(k) Plan Providers, Financial Advisors and Cyber Security Professionals.


How Can Plan Sponsors Evaluate Prospective Auditors?

"[C]redentialed auditors are not interchangeable. In addition to digital badges that show this minimum level of commitment to the industry, plan sponsors should inquire as to: [1] The size of the EBP audit practice ... [2] The experience of the audit team ... [3] Has the DOL reviewed the firm’s workpapers? ... [4] IRS audits ... [5] Other references ... [6] Continuing professional education ... [7] Other industry involvement."

Belfint Lyons Shuman

Defined Contribution Plan Participant Activities, First Quarter 2019 (PDF)

"In 2019:Q1, 1.4 percent of DC plan participants took withdrawals, similar to the share in 2018:Q1. Levels of hardship withdrawal activity also remained low.... Only 0.9 percent of DC plan participants stopped contributing in 2019:Q1, about the same pace as in 2018:Q1... DC plan participants’ loan activity edged down in the first quarter of 2019, following a seasonal pattern observed over the past several years."

Investment Company Institute [ICI]

Record Number of 401(k) Participants Yields Boost in Savings Rate in Q2; Average Account Balance Rises (PDF)

"The average 401(k) balance rose to $106,000, a 2% increase from $103,700 in Q1 2019. The year-over-year average balance is also up roughly 2% from $104,000 in Q2 2018. The average IRA balance increased to $110,400, a 2% increase from last quarter and 3% higher than the $106,900 balance one year ago."

Fidelity

IRA Investors Are Concentrated in Lower-Cost Mutual Funds

"[T]rends in average expense ratios for IRA investors, which continued in 2018: [1] average expense ratios paid by IRA mutual fund investors continue to trend downward; [2] equity and bond mutual fund investors in IRAs pay average expense ratios similar to those paid by all mutual fund investors (i.e., industrywide); and [3] IRA investors, like those in 401(k) plans and industrywide, concentrate their assets in lower-cost mutual funds."

Investment Company Institute [ICI]

How Many 457(b) Plans Do You Need?

"[R]ather than terminating their stable value fund contract and suffering the investment consequences, many agencies simply leave their existing 457(b) in place -- and just add another entire plan to the benefits mix. Although it is possible to maintain several 457(b) plans at the same time, this requires additional work and coordination. In most cases, your 457(b) record keeper will not take on, or assist you with, these responsibilities for another provider’s plan."

Best Best & Krieger LLP

[Opinion]

A 401(k) May Be Worst Account to Have in Retirement

"Just about every financial expert ... advises savers to contribute to their company’s 401(k) plan --  at least enough to receive the employer’s matching contribution.... Not a bad deal, right?  ... Until you’re ready to retire, that is. That’s when a 401(k) (or 403(b) or traditional IRA) suddenly becomes the worst possible retirement plan, from a tax perspective, a saver could have. Here’s why[.]"

Kiplinger

Benefits in General

Fee Shifting in ERISA Cases: Considerations in Mediation

"There are important reasons for defendants to be wary that they may have to pay plaintiff's legal fees.  There also are ways that a defendant may -- and may not -- successfully challenge plaintiff's claims for legal fees.... [T]he principal amount at issue is not the only potential loss that is at stake ... It's not hard for plaintiffs to have 'success on the merits' in order to get their fees paid.... Defendants have most success challenging hours billed and certain costs."

Bob Blum Mediation

Executive Compensation
and Nonqualified Plans

Severance and Deferred Comp Considerations for Tax-Exempt Colleges and Universities

"Negotiating when severance is due ... Deciding what severance benefits to give ... Restrictive covenants ... Excise tax considerations ... Tenure ... Determining which documents provide for severance ... Reporting."

McDermott Will & Emery

Selected Discussions
on the BenefitsLink Message Boards

Loan Payroll Deduction Did Not Start -- How to Fix?

A participant took a loan from the plan and the payment was supposed to be withheld from their payroll. The payment was not. Besides getting the deduction going so that the loan is paid back, what is the remedy for the lost time... missing payments?

BenefitsLink Message Boards

Company A Buys 80% of Company B -- What Happens to Their 401(k) Plans?

Company A buys 80% of Company B, effective 10/1/2019; Company B's owner retains 20% ownership of B. Both companies sponsor calendar year 401(k) plans, but B's employer contribution is not as generous as A. After Company A buys 80% of B, they become a controlled group. Can A and B continue to maintain separate 401(k) plans with different ER contributions? Do they have to be tested together or can they be tested separately? If they have to be tested together, when must that begin?

BenefitsLink Message Boards

SARs Question (Not SARS -- No Need for Masks)

Anyone see this new addition of a Paperwork Reduction Act notice to the DOL's model Summary Annual Report? Not sure how half a page of unrelated text reduces paperwork. Also, is there a deadline where this becomes mandatory? It's enough of a slog to get an SAR to fit on one page after it's been generated by our software. I feel like deleting it until something more obvious and official dictates it has to , has to, be in there. What say ye?

BenefitsLink Message Boards

Turnaround Time for IRS Determination Letters on Plan Termination?

Anyone with recent experience on the turnaround time for plan termination Determination Letter requests? I know it will vary, but am hoping to get an idea of others' experience in last few years.

BenefitsLink Message Boards

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Press Releases

Key PBGC Leadership Appointments
PBGC [Pension Benefit Guaranty Corporation]

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David Rhett Baker, J.D., Editor and Publisher  davebaker@benefitslink.com
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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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