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Retirement Plan Administrator
PlanTech, LLP
in Birmingham AL / Telecommute

ERISA Attorney
Schwartz, Steinsapir, Dohrmann & Sommers LLP
in Los Angeles CA

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Webcasts, Conferences

New MEP Rules: Coming up! with Derrin Watson, J.D., APM
September 19, 2019 WEBCAST

Responsibilities of an Internal ESOP Fiduciary
October 22, 2019 WEBCAST
National Center for Employee Ownership [NCEO]

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[Guidance Overview]

IRS Issues Guidance on Tax Obligations for Qualified Plan Uncashed Checks

"The facts on which this ruling is based make it clear that the participant could have cashed the check but chose not to do so. However, it does not appear that the holdings in the ruling would also apply in the case of a participant who never actually received the distribution check (e.g., because of a bad address)."

Seyfarth Shaw LLP


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.

DOL Readies Proposal for More Digital 401(k) Disclosures

"The [DOL] is close to proposing a rule that would boost digital delivery of employees' 401(k) statements, a prospect that has drawn excitement from the retirement plan industry but concerns investor advocates worried that a shift away from paper may prove harmful."

InvestmentNews; subscription may be required

Projected 2020 IRA and Saver's Credit Limits

"These unofficial 2020 limits are determined using the Internal Revenue Code’s cost-of-living adjustment methods, chained Consumer Price Index for All Urban Consumers (chained CPI) values through July and Mercer’s projected chained CPI for August.... Maximum 2020 deductions for traditional IRA contributions are projected to remain at 2019 levels."


DOL Argues Securities Law, Not ERISA, Should Be the Basis for Whether to Disclose Adverse Information

"[In an] amicus curiae brief ... the [DOL] argued that the proper standard for determining if a fiduciary should disclose insider information affecting company stock in a retirement plan should be what securities law requires.... This alternative approach would arguably present as stiff a challenge for plaintiffs as the more harm than good standard." [Jander v. Retirement Plans Committee of IBM, No. 17-3518 (2d Cir. Dec. 10, 2018; cert. pet. granted Jun. 3, 2019)]

National Center for Employee Ownership [NCEO]

Ninth Circuit Sends Charles Schwab ERISA Case to Individual Arbitration

"A U.S. Court of Appeals determined that arbitration on an individual basis is the proper forum for a participant’s claim that Charles Schwab breached its fiduciary duties and engaged in prohibited transaction under [ERISA] by holding proprietary funds in its 401(k) plan." [Dorman v. Charles Schwab Corp., No. 18-15281 (9th Cir. Aug. 20, 2019)]



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SunTrust Defeats Successor Fiduciary Liability Claim

"The participants argued that constructive knowledge is sufficient, and the information about fund selection in prior meeting minutes and other documents should have made current members aware of a possible breach.... The judge disagreed, stating that a failure-to-remedy claim requires actual knowledge of a predecessor’s breach.... The judge also found the mere inclusion of proprietary funds was insufficient to alert the current committee members that the selection process may have been flawed." [Fuller v. SunTrust Banks, Inc., No. 11-784 (N.D. Ga. Jul. 16, 2019)]


Issues That Can Trigger a Lawsuit Over TDFs in Retirement Plans

"A litigation firm has listed what it is investigating for potential lawsuits over target-date funds (TDFs) in retirement plans."


The Emerging Best Interest and Fiduciary Duty Patchwork: CFP Board's New Standard of Conduct (PDF)

"While broker-dealer and investment adviser firms are not themselves CFPs, such firms frequently permit, and in some cases encourage and even financially support, their registered representatives and supervised persons to obtain the CFP designation. As a result, the CFP Board's new standards have caused many broker-dealers and investment advisers to consider how this CFP fiduciary standard fits within their existing supervisory framework, and whether any action by the firm is called for."

Eversheds Sutherland

Best Practices for Retirement Plan Sponsors, Part 10

"This article -- about the BB&T settlement agreement -- is another example of the importance of using appropriate share classes and a good process for selecting investments and monitoring service providers.... The case settled for $24 million. While that is a lot of money, the settlement agreement’s non-monetary conditions are the 'lessons' for plan fiduciaries."

Interest Rates 2019: Measuring UVBs for Variable-Rate Premiums

"[This article discusses] a key election a sponsor may make as to how plan underfunding is measured -- whether to use end-of-2018 spot rates or a 24-month average -- that may have a material effect on how much PBGC variable-rate premiums the sponsor must pay in 2019. This is an issue for DB plan sponsors (only) and is highly technical, but for many sponsors there will be significant money at stake."

October Three Consulting

The Roth Conundrum

"The argument for Roths at this point is centered on the historically low current tax rates: rather than defer pre-tax into a traditional 403(b)/401(k)/457(b) and pay higher taxes later, defer to a Roth and pay taxes now while they are low. But is that actually the case?"

Cammack Retirement Group


There is Still a Fishy Smell in the Teachers' Lounge

"With school starting across the country, teachers are as vulnerable as ever. And it's not just in the teachers' lounge that they need to be 403(b) aware. Insurance companies are providing 'education' about the 403(b) at mandatory new teacher and back-to-school workshops."



Are Public Pensions in a Crisis? Part 3 -- Is It Just an Accounting Problem?

"GASB rules ... reward injecting more risk into a public pension plan, even though it can make the situation more financially precarious.... GASB is ... providing information to ... the public officials who will have to manage, implement, and decide on various financial matters.... But who will ... give other stakeholders, such as taxpayers and public employees and retirees, information on how likely public pensions will start eating up all the budget? Or the likelihood that the funds are going to run out (and when)?"


Benefits in General

Fourth Circuit Finds Plan Administrator May Have Triggered Fiduciary Status

"The Fourth Circuit ... cited precedent that established that when a plan administrator is responsible for verifying employee eligibility for participation in an employee benefit plan, that administrator acts in a fiduciary capacity with regard to that obligation. Further, a plan administrator also acts in a fiduciary capacity when it conveys (or fails to convey) material information to a plan participant concerning the retention of eligibility for a benefit plan when that administrator is aware that the participant wishes to maintain his participation in that plan." [Dawson-Murdock v. National Counseling Group, Inc., No. 18-1989 (4th Cir. Jul. 24, 2019)]

Winston & Strawn LLP

Prominently Displayed, Fundamental Discrepancy In Benefit Calculation Triggered Contractual Limitations Period

"The Fifth Circuit concluded that a plan’s three-year contractual limitations period began to accrue when a beneficiary received a letter in 2008 that prominently displayed on the first page the monthly earnings used to calculate his long term disability benefits." [Faciane v. Sun Life Assurance Co. of Canada, No. 18-30918 (5th Cir. Jul. 25, 2019)]


The Time Between Disability Onset and Application for Benefits: How Variation Among Disabled Workers May Inform Early Intervention Policies

"Using Social Security administrative data, the authors find that the median period from onset to application is 7.6 months. Younger applicants tend to have waited longer, particularly those diagnosed with back impairments or arthritis. Among both younger and older applicants, individuals diagnosed with intellectual disability or other mental disorders are potential targets for early intervention programs because those groups wait the longest to apply and are the most likely to continue working in the interim."

Matt Messel and Alexander Strand, via SSRN

Selected Discussions
on the BenefitsLink Message Boards

Effect of a Short Plan Year on Years of Service for Benefit Accrual

A 9/30, fiscal year-end plan switched to a calender year-end after 9/30/14. To make this change, a short plan year was created from 10/1/14 until 12/31/14. The plan benefit formula is 2% for each year of service. For the three-month plan year, is each employee credited with 2% for this additional "year of service"?

BenefitsLink Message Boards

Descriptions of Eligibility Requirements Differ in Personnel Manual and 403(b)(9) Non-Electing Church Plan Document

An employer's personnel manual (dated 1998) states all employees are eligible to participate in the 403(b) plan. The same employer's plan document (2009) provides a default eligibility for employees working at least 20 hours per week. For employees working for the employer 2009 and beyond, which document governs participation eligibility?

BenefitsLink Message Boards

Mortgage as Profit Sharing Plan Investment

Business owner wants to use part of his profit sharing segregated account to make a mortgage loan to an unrelated individual. Proper documentation and an attachment or lien will be filed. Any problem with this type of loan?

BenefitsLink Message Boards

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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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