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[Guidance Overview]
DOL Clarifies Employers' Retirement Plan Obligations Under USERRA
"The ruling provides the DOL’s views on several of the more granular questions involved in applying USERRA’s requirements for calculating retirement plan contributions upon an employee’s return from military leave.... [T]he fact sheet emphasizes that these requirements must be applied to employees on an individual basis and that there likely is no one across-the-board approach that will adequately address each returning service member’s individual circumstances."
Seyfarth Shaw LLP
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Another TDF Targeted With Fiduciary Suit
"While claims of available, identical funds with lower fees are the 'norm' in this litigation, this suit raises the issue of tracking error, claiming that 'compared to marketplace alternatives, Principal's index funds deviated further from the benchmark index, and consistently had the worst performance even on a pre-fee basis." [Kirk v. Ret. Comm. of CHS/Community Health Systems, Inc., No. 19-689 (M.D. Tenn. complaint filed Aug. 8, 2019)]
National Association of Plan Advisors [NAPA]
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Meet the MEPs: Corporate MEPs
"[T]he DOL noted that ... it 'lacks a meaningful basis on which to determine the precise level of ownership ... that conclusively distinguishes bona fide ownership groups from commercial enterprises' ... [H]aving that stated directly in the preamble to the regulations now creates an air of uncertainly and an opening for potential challenge on audit."
DWC
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Managing Funding and PBGC Variable-Rate Premiums in a Volatile Interest Rate Environment
"HATFA interest rate stabilization (25-year averaging), especially in the near term, considerably eases otherwise applicable ERISA minimum funding requirements. In contrast, PBGC variable-rate premiums are determined based off of a liability/asset calculation (UVBs) that does reflect market interest rates.... [M]any plan sponsors' funding policies - and the response to current declines in interest rates - are likely to be framed with a view to reducing so far as possible PBGC variable-rate premiums."
October Three Consulting
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Using Vignettes to Improve Understanding of Social Security and Annuities
"[T]he gap between advised claim age for a relatively healthy person versus a relatively sick person was larger by nearly a year in the vignette treatments versus the control group.... [T]he vignettes increased financial literacy related to these concepts by 10-15 percentage points.... [T]he mode of communication did not have a significant impact -- the video and written vignettes were equally effective."
National Bureau of Economic Research [NBER]
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Protecting Retirement Assets from Creditors (PDF)
"[D]uring a participant's life, ERISA provides the only guaranteed protection, subject to any applicable exceptions.... Most states ... do not expressly protect inherited IRAs, and some barely protect retirement plans.... [If] creditor protection is important for the beneficiaries of a retirement account ... the account owner should name an irrevocable trust as the beneficiary of the retirement plan, as the law is much more settled -- and debtor-friendly -- in the trust area.... NQDC plans face the biggest challenges."
Greensfelder, via Journal of the Missouri Bar
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Fast Facts and Figures About Social Security, 2019 (PDF)
43 pages. "67.9 million people received benefits from programs administered by the Social Security Administration (SSA) in 2018. 5.6 million people were newly awarded Social Security benefits in 2018. 55% of adult Social Security beneficiaries in 2018 were women. 54.7 was the average age of disabled-worker beneficiaries in 2018. 86% of Supplemental Security Income (SSI) recipients received payments because of disability or blindness in 2018."
U.S. Social Security Administration [SSA]
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[Opinion]
The Business Roundtable's Statement of 'Balancing Needs' Demonstrates the Valid Counter to DOL's ESG Approach
"[T]he Business Roundtable ... position ... properly frames the issues for the ERISA investment fiduciary: prudent assessment of an investment must take into account a broader view than the narrow financial analysis of the books and records of the company, or of current market pricing. Particularly for ERISA fiduciaries, the investment standard is long-term, to provide retirement income. Any valid, long-term analysis has to be able to take into account the social, political, market and scientific trends which will inevitably affect the investment’s value."
Business of Benefits
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Selected Discussions on the BenefitsLink Message Boards
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No More Suspension of Deferrals Upon a Hardship Withdrawal
We are planning on amending our plans in 2020 for the new hardship rules. That includes the no more suspension of deferrals. What happens is some takes a hardship now? Their suspension period would go until February. Does the suspension just go away January 1?
BenefitsLink Message Boards
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Twenty Plan Sponsors in a Controlled Group But No Combined Coverage Testing Since George W. Bush Was President
Company A owns 20 other companies at 100% ownership. All 21 (20 plus company A) entities have their own separate plans with different record keepers, TPA's and financial advisers. No one has performed combined coverage testing for the past 15 years. The plans vary from safe harbor to traditional 401k with profit sharing. All plans are small plans so on their own have not had an audit requirement. All plan year-ends are calendar year. Is this an obvious VCP submission requiring them to go back and run coverage testing for X years? Or can this be self-corrected?
BenefitsLink Message Boards
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Forfeiture of Excess Matching Contributions: Before Running ACP Test or After?
If the employer over matched on deferrals because they got the formula wrong, are the excess matching contributions forfeited before the ACP test is run or are they included in the ACP test? I read somewhere they're possibly excluded from the ACP test and included in the general test. Yeesh. Any clarification would be appreciated.
BenefitsLink Message Boards
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David Rhett Baker, J.D., Editor and Publisher
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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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