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September 19, 2019 logo logo
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Pension Practice Director

Retirement Plan Resources [RPR], A Division of Baldwin CPAs
Louisville KY / Telecommute

DC Plan Administrator

Hunter Benefits Consulting Group, Inc.
Denver CO

Plan Document Transition Analyst

Empower Retirement
Greenwood Village CO / KS / WI

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Webcasts, Conferences

Tales from the Crypt: PEOs and Other Outsourcing Options: Risks, Benefits and Other Considerations in Using a Contingent Workforce
September 19, 2019 in OH
Worldwide Employee Benefits Network [WEB] - Northeast Ohio Chapter

Top 10 Retirement Plan Red Flags that can get You Sued (or Audited)!
September 26, 2019 WEBCAST
Cohen & Buckmann P.C.

Big Shots and Brews: An Evening with Northeast Ohio's Employee Benefits Leaders
September 26, 2019 in OH
Worldwide Employee Benefits Network [WEB] - Northeast Ohio Chapter

ERISA Workshop
October 31, 2019 in MA
ASPPA Benefits Council [ABC] of New England

►See 124 Upcoming Webcasts and Conferences

►See 1545 Recorded Webcasts


New Topics on the BenefitsLink Message Boards

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[Official Guidance]

PBGC Releases New 4062(e) Forms

"PBGC has created a new form series intended to clarify and simplify the process for providing PBGC the required notifications following a substantial cessation of operations and election to make additional annual contributions to satisfy resulting liability....  [1] Form 4062(e)-01 (to notify PBGC of a substantial cessation of operations), [2] Form 4062(e)-02 (to notify PBGC of an election to make additional annual contributions), [3] Form 4062(e)-03 (to notify PBGC of a payment of an additional contribution, termination of obligation for future contributions, or receipt of funding waiver from the IRS, and [4] Form 4062(e)-04 (to notify PBGC of a failure to pay an additional contribution)."
Pension Benefit Guaranty Corporation [PBGC]


The PPA restatement deadline is fast approaching!

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Friday the 13th Unlucky for CalSavers as U.S. Maintains Law Is Preempted by ERISA

"In the Statement, the [DOL] maintains that CalSavers is preempted by ERISA because ERISA plans are necessary to its framework and it forces employers to either maintain an ERISA plan or to participate in CalSavers. Additionally, the Department maintains that the CalSavers program itself creates an administrative scheme that employers must follow if not maintaining an ERISA plan. Therefore, the CalSavers program as maintained by any one employer is an ERISA-covered plan." [Howard Jarvis Taxpayers Assoc. v. The California Secure Choice Ret. Savings Prog. (CalSavers), No. 18-1584 (E.D. Cal. Mar. 28, 2019)]
Murphy Austin

Second Circuit Challenge to Popular Withdrawal Liability Calculation Method Settles

"The withdrawal liability case of the year came to an anticlimactic end ... with a stipulation withdrawing the case with prejudice. The most-watched issue in the case was a challenge to the Segal Blend discount rate assumption used by many multiemployer pension plans to calculate employer withdrawal liability.... The court held that the discount rate assumption must represent the actuary's best estimate based on the likely returns of the plan, not the returns of a hypothetical portfolio as the Segal Blend does. The dismissal of the case means that the Southern District of New York's opinion still stands.' [The New York Times Co. v. Newspapers & Mail Deliverers'-Publishers' Pension Fund, No. 17-6178 (S.D.N.Y. Mar. 26, 2018)]
Drinker Biddle

DC Plan Hacks: Tips for an Efficient Design

"[1] [T]here is nothing to preclude automatically enrolling participants in a Roth. Some plan sponsors may find that a Roth could be more appropriate for their employee population (e.g., younger workers).... [2] [A]llow after-tax contributions in the DC plan to serve as a form of emergency savings. Employers ... could facilitate after-tax contributions up to a certain dollar amount ... [3] The sponsor can set the terms of the plan to permit participants to structure their distributions within certain frameworks[.]"

Annuity Purchase Update: September 2019 Interest Rates

"There was a noticeable drop in annuity purchase interest rates in the first and second quarter of 2019. This trend has continued and annuity purchase interest rates fell again in September ...  The US Treasury rates increased roughly 50 basis points in September, which may signal a rise in annuity purchase interest rates."
October Three Consulting

Estimates of the Financial Effects on Social Security of Enacting the Social Security 2100 Act (PDF)

"Assuming enactment of the proposal, we estimate that the combined Social Security Trust Fund would be fully solvent (able to pay all scheduled benefits in full on a timely basis) throughout the 75-year projection period, under the intermediate assumptions of the 2019 Trustees Report.... [U]nder this proposal the OASDI program would meet the further conditions for sustainable solvency[.]"
Office of the Chief Actuary, U.S. Social Security Administration [SSA]

St. Clare's Hospital Workers Sue Over Unpaid Pension Benefits

"A group of former hospital employees and advocate organizations have filed a lawsuit against the Roman Catholic Diocese of Albany, N.Y., and St. Clare's Corp., seeking damages against the corporation for its failure to pay pension benefits. The suit ... says the St. Clare's Corp. told 1,100 former St. Clare's Hospital employees in October that most of them would receive either drastically reduced pension benefits or no benefits at all."
Pensions & Investments

A Behavioral Approach to Retirement Guarantees

"The paper derives a mathematical model of a pension insurance contract which simultaneously provides an escalating guarantee for retirement income and allows for a life cycle asset allocation style of investing. Simulations show that life cycle strategies which incorporate guarantees to be welfare improving.... The superiority of the insurance strategy seems to be most dependent on the behavioral trait of subjective probability weighting."
Andreea Victoria Popescu, via SSRN

Retirement Savings Cliches: Keep Some, Retire Some

"Let's take a look at the more popular retirement savings clichés and see if they should hang around or be 'retired,' themselves. [1] Pay yourself first ... [2] Cut back on your lattes so you can save for retirement ... [3] Save as early as you can ... [4] Don't put all your eggs in one basket when investing."
Cammack Retirement Group

Benefits in General

Situs of Benefit Plan's Signing May Be Key in Determining Class Action Forum

"The Northern District of Washington ... ruled that the plaintiff's choice was less important because the case was a putative class action, meaning that it has not yet been certified by the court as a class. [The court gave] a fair amount of weight to the fact that the plan was negotiated and executed in Georgia, claiming these actions made for a 'considerable technical connection' to making the forum for the lawsuit Georgia. Further, choosing Georgia reduced litigation and travel costs on both sides." [Mayfield v. ACE American Ins. Co., No. 18-1695 (W.D. Wash. May 13, 2019)]
Hall Benefits Law

Denial of Benefits Can Be an Abuse of Discretion in Discrete Circumstances, 9th Circuit Says

"Recently, the Ninth Circuit Court of Appeals ... addressed a plan participant's claims of procedural irregularities and illustrated the difficulty that a plan participant may have in challenging an adverse denial of benefits decision. This decision is important in demonstrating how slight differences in the facts and circumstances of a participant's denial of benefits claim can result in potential liability and costly litigation for plan administrators.' [O'Rourke v. Northern California Electrical Workers Pension Plan, No. 17-17419 (9th Cir. Aug. 16, 2019)]
The Wagner Law Group

Selected Discussions
on the BenefitsLink Message Boards

'Taxable Living Expense Allowance' as an Excluded Fringe Benefit

I have a client whose plan defines compensation to not include taxable fringe benefits. I learned today that one of the employees is paid a "taxable living expense allowance," which I believe qualifies as a fringe benefit. He was permitted to defer from (and be matched on) the allowance throughout 2018, and I imagine most of 2019. I can deal with the excess match contributed but my question is whether there is a 'fix' for the failure as it pertains to the deferrals.
BenefitsLink Message Boards

Governmental 401(a) Plan Wants to Have Multiple Allocation and Vesting Schedules

An existing governmental 401(a) plan holds matches as well as allows employer nonelective contributions. Is there any problem with describing multiple different allocation formulas with different eligibility and vesting schedules for match, nonelective, or both?
BenefitsLink Message Boards

New Employee Entered 401(k) Plan Earlier Than Document Allows

I have a client that let a new employee enter the plan before meeting the eligibility date. I know EPCRS allows the plan to be retroactively be amended to waive the eligibility conditions as long as it meets the conditions of EPCRS. However, they don't want to do this because it would trigger a top heavy contribution for the employee. Can we claim that her 402(g) limit with respect to this plan was zero and process a taxable distribution as a corrective distribution for exceeding the 402(g) limit or do we have to return the money to the employer and have them make her whole
BenefitsLink Message Boards

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Press Releases

HERO Announces Winners of 2019 Health and Well-Being Awards
Health Enhancement Research Organization [HERO]

Most Popular Items in the Previous Issue

Deadline Approaching for 403(b) Plan Document Restatements
Venable, via Lexology; free registration required, 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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