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August 28, 2019 logo logo
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Compliance Manager
BlueStar Retirement Services, Inc
in Ponte Vedra Beach FL

401k & Defined Contribution Plan Consultant
Planned Retirement Consultants & Administrators, LLC
in Ridgewood NJ / San Diego CA

Defined Benefit Plan Consultant
Planned Retirement Consultants & Administrators, Inc.
in Ridgewood NJ / San Diego CA

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[Guidance Overview]

DOL Issues Final Prohibited Transaction Exemption for the Consolidation of Small Retirement Accounts When Workers Change Jobs

"Before authorizing a plan's participation in the Program, a plan fiduciary who is independent of RCH must review the terms of the Program, and determine that the plan's participation in the Program is prudent. All fees that RCH receives in connection with the Program must be approved by the plan fiduciary of the prior employer plan. ... The DOL further concluded that neither the plan sponsor of the former employer nor the new employer would be acting as a fiduciary in connection with a decision to transfer the individual's default IRA into the new employer's plan."

King & Spalding

[Guidance Overview]

Best Interest Standard of Care for Advisors, Part 9

"The SEC's release for the proposed Reg BI described 'cost' as being a more important consideration than it is under the suitability standard. However, in the final Reg BI, the significance of 'cost' was elevated even further.... When Reg BI applies on June 30, 2020, every broker-dealer recommendation to retail customers must include consideration of the cost of the investments or investment strategies."

[Guidance Overview]

403(b) and 457(b) Plan Compliance Challenges: Avoiding Pitfalls in Plan Design and Administration

47-slide presentation by attorney Carol V. Calhoun. Topics include "Why would a public school have a 403(b) plan instead of a 401(k) or 457(b) Plan?", the universal availability requirement for 403(b) plans, and the section 4960 excise tax on annual remuneration in excess of $1 million for covered employees.

Venable LLP

Retirement Plan Obligations to Reemployed Service Members and Veterans

"Employers should review the DOL Fact Sheet with an eye towards: [1] updating employment practices and policies that affect veterans and other employees with military service, [2] reminding applicable managers of the rights afforded employees that are reemployed following military service and [3] updating plan actuaries and relevant third party administrators about eligibility service, benefit accruals and vesting determinations made for reemployed employees coming back from qualified military service."


Loans in 403(b) Plans

"One of the areas that suffers most from the lack of standardization is the general administration of 403(b) plan loans.... Because of the proprietorial issues unique to loan processing, it may be difficult to establish uniform acceptable 'best practices' for loans in the marketplace.... [L]oan provisions in the plan document should defer to the contractual language of the loan provisions in each participant's underlying annuity contract or custodial account to avoid conflict."

National Tax-Deferred Savings Association [NTSA]


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.

Ninth Circuit Decisions Overrule 35-Year Precedent in ERISA Arbitration Disputes

"[T]he Ninth Circuit's three-judge panel overruled its decision in Amaro v. Continental Can Co., which had held that ERISA claims could not be subject to arbitration. In an unpublished, nonprecedential opinion, the same panel of the Ninth Circuit concluded that an arbitration provision contained in a 401(k) plan document required arbitration of an individual's claim." [Dorman v. The Charles Schwab Corp., No. 18-15281 (9th Cir. Aug. 20, 2019; also unpub. memo. opinion)]

Holland & Knight

Recovery of Defaulted Withdrawal Liability Payments in the Seventh Circuit: ERISA Means What It Says and Nothing More

"The Court of Appeals for the Seventh Circuit recently held that once a multi-employer pension fund accelerates withdrawal liability periodic payments into a lump sum liability, there is no statutory mechanism to revoke that acceleration.... The Court noted that ERISA's withdrawal liability provisions explicitly allow accelerating debt under certain circumstances, but are silent on deceleration." [Bauwens v. Revcon Technology Group, No. 18-3306 (7th Cir. Aug. 13, 2019)]

Seyfarth Shaw LLP

Recent Decisions Cast Doubt on Stock Drop as a Basis to State a Claim Against ESOP Trustee

"Despite the differing conclusions of the Courts, the complaints in Lee and Choate are largely indistinguishable -- allegations of post transaction drops in value resulting from the debt taken on by the company sponsoring the ESOP to facilitate the transaction. However, because of the misplaced application of the shifting burden of proof, the results between the two matters vary widely."

Thompson Hine, via Lexology; free registration required

Can the SEC and DOL Sing in Harmony?

"In the coming months, both the SEC and DOL are expected to begin issuing a number of new rules and proposals as these 'harmonization' efforts come into daylight. Key areas of focus may include rollover recommendations, electronic disclosure, and permissible investments."

Groom Law Group

Text of Enrolled Actuaries Pension Examination EA-2, Segment L, Spring 2019 (PDF)

91 pages. Full text of May 7, 2019, exam with answers, published online by IRS.

American Society of Pension Professionals & Actuaries [ASPPA]; Joint Board for the Enrollment of Actuaries [JBEA]; Society of Actuaries

California Court of Appeals Further Clarifies STRS' Authority to Collect Overpayments Made to Retirees

"[T]he 'continuous accrual theory' allowed CalSTRS to collect from the Blaser Teachers only those monthly overpayments made to the retirees within the three years prior to commencement of the action; any overpayments made to the Blaser Teachers more than three years prior to commencement of the action were time barred by Section 22008's limitation's period. The action in this case was 'commenced' when the Blaser Teachers filed petitions for writs of mandate in superior court." [Blaser v. State Teachers’ Retirement System , No. H045071 (Cal.App. Jul. 10, 2019)]

Liebert Cassidy Whitmore


Statement of Pension Rights Center to ERISA Advisory Council on Permissive Transfers of Uncashed Checks from ERISA Plans to State Unclaimed Property Funds (PDF)

"[A]lthough State unclaimed property programs are very helpful to individuals who have lost track of non-retirement assets, they are not the best arrangement for people who have earned 401(k), pension, profit sharing and other retirement plan benefits. A far better approach would be if a federal agency were designated as the repository for uncashed checks. The PBGC is the logical choice since the agency already has extensive experience managing its successful programs for terminating plans and has a website that is very user friendly."

Pension Rights Center


PLR Permits Pre-Tax RIA Advisory Fees From Fee-Based Annuities

"[T]he recent PLRs from the IRS are at least a step in the right direction, bring important parity and tax law consistency between advisory fees for tax-qualified retirement accounts and advisory fees for non-qualified annuities, and provide another potential tool that advisors can use to better serve their clients ...  particularly in unique situations where a client specifically needs an annuity, or wants to replace an existing annuity."

Nerd's Eye View

Benefits in General

How the New ERISA Employee Benefit Plan Audit Standards Will Affect Your Plans

"If your organization opts for what is currently called an ERISA limited scope audit ... you will be required to provide certain written representations related to the reliability of the certified investment information.... Plan sponsors must be able to produce a completed (or substantially complete draft) Form 5500 in order for their auditor to identify material inconsistencies and material misstatements of fact, if any, with the audited ERISA plan financial statements prior to dating the auditor's report.... Areas of plan reporting that tend to have a high rate of compliance issues, such as prohibited transactions, will be getting a closer review from your plan auditor."


Executive Compensation
and Nonqualified Plans

NQDC Plan Sponsors Focusing on Retirement Savings for the Highly Paid

"Asked why they offer nonqualified deferred compensation (NQDC) plans, plan sponsors ... said to 'have a competitive benefits package' (32.7%) followed by 'to help employees accumulate assets' (22.7%).... [R]espondents who indicated their primary purpose was to offer a competitive or above-average benefits plan declined from 41.6% in 2016 to 35.4% in 2018.... [T]wo-thirds of plan sponsors did not make any changes to their plan in 2018, and two-thirds said they had no plans to make changes in 2019."

PLANSPONSOR; free registration may be required

Selected Discussions
on the BenefitsLink Message Boards

Recoupment of Overpaid Withholding

Has anyone had any experience with the IRS regarding recoveries of withholding overpayments made by a pension plan or is aware of any guidance? For example, assume that a pension plan continues to pay benefits to a deceased retiree's bank account and the joint holder of the account retains the funds or the funds are returned to the plan by the bank.

BenefitsLink Message Boards

Amend Mid-Year to Reduce Safe Harbor 401(k) Match Contributions?

Plan currently provides SH 401(k) match contribution (100% up to 6%) on a payroll basis. Can the plan be amended mid-year to reduce the match to 100% up to 4% prospectively for the rest of the year?

BenefitsLink Message Boards

Take Hardship Distribution from a Safe Harbor Source?

Can a hardship distribution be taken from a safe harbor source?

BenefitsLink Message Boards

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Press Releases

Most Popular Items in the Previous Issue

Top 10 Areas of Focus in DOL Investigations of Retirement Plans
Morgan Lewis, Via Employee Benefit Plan Review, 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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