Retirement Plans Newsletter

September 23, 2019

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Senior Pension Administrator

Primark Benefits
Telecommute

ERISA & Employee Benefit Specialist / Paralegal

AIG
New York NY

Installation Coordinator

Goldleaf Partners
Telecommute

Relationship Manager

Benefit Plans Plus, LLC [BPP]
Henderson KY

Retirement Plan Administrator

The Finway Group
West Des Moines IA / Telecommute

Senior Enforcement Advisor

Employee Benefits Security Administration [EBSA]
DC / Telecommute

Benefits Advisor - Recent Graduate

Employee Benefits Security Administration [EBSA]
Silver Spring MD / Telecommute

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PBGC Issues New ERISA Section 4062(e) Form Series

"The new 4062 Form Series includes forms that should be used to notify the PBGC that a Section 4062(e) event has occurred and to provide information concerning an employer's election and payment of additional plan contributions."
Thomson Reuters Practical Law

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Hardship Withdrawals From Your Retirement Plan Just Got Easier

"The threshold for taking a hardship withdrawal hasn't changed. You must be facing an 'immediate and heavy' financial need, and you can only withdraw an amount to meet that need. Here's what's changed. [1] Disaster-related expenses.... [2] The six-month rule.... [3] The loan-first rule.... [4] More sources to tap.... [5] New employee representation requirement."
Forbes

A Prudent Approach to Evaluating Target Date Funds

"Rather than judging these strategies based on a personal opinion of the proper amount of equity exposure at each point in the glidepath, it’s a good idea to compare performance to peers with similar philosophies and with the same target dates over as long of a period as possible."
Newport Group

Are 401(k) Advice Fees Headed to Zero?

"Offering low-cost -- even zero-cost -- services may make sense for many large financial services companies that want to attract investors and then work with them in other, potentially more lucrative ways[.]"
InvestmentNews; subscription may be required

Ninth Circuit OKs Arbitration for ERISA Fiduciary Breach Cases

"The potential advantages of resolving ERISA claims in arbitration -- e.g., smaller awards and likely faster resolution than litigation -- may appeal to many employers.... [But] individual arbitration, unlike litigation, sets no precedent for similar claims from other employees. So employers might have to arbitrate an issue multiple times with potentially different outcomes. For certain claims, employers may prefer obtaining a binding judicial opinion."
Mercer

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The Popularity of Pension Risk Transfers

"As the popularity of PRTs has accelerated, the use of annuities as a replacement for defined benefit (DB) pensions and as a vehicle to provide long-term financial security to retirees has flourished. However, some DB plan sponsors as well as participants are unfamiliar with the products, their suitability to provide a source of secure income in retirement, or the expertise, financial strength and capabilities of the providers of annuities: America’s life insurance companies."
MassMutual

Editor's Pick Pension Plan Maturity: Why Big Plans Mean Big Risk (PDF)

"Once mature, plans often have difficulty reducing their current level of investment risk.... [T]he crucial role for actuaries is to help plan sponsors anticipate and mitigate risks, with the goal of assuring full payment of the intended pensions. However ... [A] plan's level of maturity affects its ability to recover from a negative shock, so different levels of funding and investment risk may be appropriate."
American Academy of Actuaries

Americans, Gen X Especially, Race to Build Retirement Savings

"Sixty-two percent of Americans say they need to catch up and build up their nest eggs ... Thirty-eight percent say they started saving and investing early.... Generation Xers (ages 39-53) are in the direst shape: 73% say they must make up ground, compared with 66% of millennials (23-38) and 51% of boomers (55-73)."
USA TODAY

77 Percent of Private Industry Workers Offered Retirement Benefits Participated in Them in 2019

"Take-up rates were higher for workers in larger establishments (88 percent in those with 500 or more workers) than for workers in smaller establishments (71 percent in those with 1 to 99 workers). For workers who were members of a union, the take-up rate was 90 percent, compared with 75 percent for nonunion workers. Among full-time workers, the take-up rate was 80 percent, compared with 57 percent for part-time workers."
U.S. Bureau of Labor Statistics [BLS]

[Opinion]

Revisiting the DB Pension Plan Model Failure

"The DB pension model has failed not because the model itself is inherently defective ... but because of the way in which the assets funding those DB obligations have been invested. Why is it that earlier in this century, DB pension plans went through two episodes of once-in-a-lifetime 'perfect storms' within a decade, in which their funded status declined 30%-40% each time, whereas the insurance industry, with very similar long-term obligations in their annuity business, sailed through unscathed? Surely there is a lesson here for the pension industry."
Pension Pulse

[Opinion]

Why Most Annuities Aren't Inflation-Adjusted (and Why That's a Problem)

"[L]ess than 5% of immediate and deferred annuities quoted in 2018 included any type of cost of living adjustment. This is way too low. While it's definitely true that not everyone needs an annuity with a COLA, more retirees should at least be considering them during the purchase process. Why aren't COLAs included in more annuity quotes? [The] key reason is the impact COLAs have on initial payout rates."
The Wall Street Journal; subscription may be required

Selected Discussions
on the BenefitsLink Message Boards

Offer 5.001% Stock Option So NHCE Becomes HCE

Through attribution, if an NHCE is offered a 5.001% (more than 5%) stock option, the employee's status changes to an HCE. Is the company required to draft an official stock option or is it enough if the company simply writes an official letter on their stationary (notarized, witnessed etc.) addressed to the employee offering him the option to purchase 5.001% of the company?
BenefitsLink Message Boards

Model QDRO for Minnesota State Courts?

I've been drafting QDROs in Wisconsin for several years. I'm working on my first Minnesota QDRO (Hennepin County). I have the Judgment of Divorce, property settlement, etc. Does anyone know where I can get a model Minnesota QDRO, if there is such a thing? (Otherwise, I'll use my Wisconsin template and revise as necessary.)
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Press Releases

Most Popular Items in the Previous Issue

Hardship Regs are Finally Final
Cammack Retirement Group

IRS Issues Final Hardship Regs
American Society of Pension Professionals & Actuaries [ASPPA]

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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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