Retirement Plans Newsletter

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Webcasts, Conferences

Revised EPCRS and Determination Letter Programs: New Opportunities for Plan Sponsors
October 17, 2019 in NY
Worldwide Employee Benefits Network [WEB] - New York Chapter

DC Roundtable - Addressing Asset Allocation & Decumulation Challenges in DC Plans
October 24, 2019 in IL

Million Dollar Benefit Mistakes
October 29, 2019 in TX
Worldwide Employee Benefits Network [WEB] - Dallas Chapter

►See 99 Upcoming Webcasts and Conferences

►See 1561 Recorded Webcasts


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New Comments and Topics

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[Guidance Overview]

IRS Finalizes Changes in Hardship Distribution Rules

"Plan amendments will be needed to reflect the hardship changes under the final regulations ... Sponsors of pre-approved plan programs will also need to adopt interim amendments to address the hardship distribution changes ... For 403(b) plans, the current remedial amendment period is applicable, such that any amendments reflecting the changes in the final regulations are due by March 31, 2020."
Groom Law Group


Pension Meets Profit Sharing: Equity Compensation for Results, Retention, and Retirement

Sponsored by Lorman and BenefitsLink

Oct. 24 webinar. Equity compensation is not just for executives, employees at every level can benefit from an incentive plan that rewards individual performance, business unit performance, and company performance. BenefitsLink discountLearn more

[Guidance Overview]

IRS Changes 401(k) and 403(b) Hardship Withdrawal Rules

"The final regulations apply a more flexible standard for determining whether a participant has an immediate and heavy need. The regulations also expand the available sources of hardship withdrawals.... [T]he new regulations permit 401(k) and 403(b) plans to authorize hardship withdrawals from QNECs, QMACs, and their investment earnings on elective deferrals.... The new regulations apply to all hardship withdrawals made on or after January 1, 2020."
Ballard Spahr LLP

[Guidance Overview]

Time-Limited IRS Determination Letter Program Open for Individually-Designed Cash Balance and Other Statutory Hybrid Plans

"The IRS will accept submissions for updated determination letters until August 31, 2020. Determination letters obtained under this temporary program will for the first time take into account all plan provisions related to the final hybrid plan regulations issued in 2014 and 2015."
Troutman Sanders

401(k) Breach Complaint Against Invesco Dismissed

"Although the plan participant contended that managers continued to offer allegedly poor-performing investments, the judge questioned the scope of this argument. 'The fact that (the) plaintiff has alleged a single instance of a questionable decision by defendants in the last six years does not in and of itself create an inference of wrongdoing,' the judge wrote." [Cervantes v. Invesco Holding Co., No. 18-2551 (N.D. Ga. Sep. 25, 2019)]
Pensions & Investments

Third Circuit Addresses Partial Withdrawal Liability Situation

"The Third Circuit found that for a partial withdrawal to occur it was necessary for work to continue to be performed within the jurisdiction and that the work did not result in contributions to the Fund.... The Court found that a mere closing of one location and shifting the work to other locations with continuing contributions to the Fund would not result in a withdrawal liability." [Caesars Entertainment Corp. v. Int'l Union of Operating Eng. Local 68 Pension Fund, No. 18-2465 (3d Cir. Aug. 1, 2019)]
Hodgson Russ 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. Learn more

Three Questions to Answer Today for an Improved DC Plan Tomorrow

"Proactively and honestly answering these questions can help maximize participants’ chances for retirement success and enhance the effectiveness of plan sponsors’ decision-making processes for DC plan governance.... Who are you solving for? ... How do you define and prioritize risk to deliver better retirement outcomes? ... What role do you want your plan to have in your workforce's retirement journey?"
T. Rowe Price

Questions for Company Fiduciaries to Ask Before Joining a 401(k) MEP

"[K]ey issues to consider will include: [1] Quality of investment options being offered; [2] Robustness of recordkeeping in place; [3] Quality of any communication or guidance being provided; [4] Other services offered to a participant; [5] Any potential conflicts of interest for anyone involved with the MEP; [6] Cost and competitiveness of the service (particularly compared to alternatives)."
Fiduciary News

Union Pension Fund to Slash Benefits to Avoid Insolvency

"The pension fund for the Michigan Regional Council of Carpenters and Millwrights has filed a plan with the U.S. Treasury Department to reduce retirement payments for up to 19,600 Southeast Michigan union members and retirees ... The Detroit Carpenters' Pension Trust Fund reported a funding level of 34.8 percent on May 1, 2018, as actuaries for the employer-sponsored pension plan have projected it will run out of money by 2034 without a reduction in benefits."
Crain's Detroit Business

Summary of the Quarterly Survey of Public Pensions, 2019 Second Quarter (PDF)

"For the second quarter of 2019, total holdings were $3.96 trillion, an increase of 3.0 percent from the previous quarter.... For the second quarter of 2019, cash and short-term investments amounted to $88.4 billion, a decrease of 9.4 percent from the previous quarter."
U.S. Census Bureau

FAS87 ASC715 Discount Rates and Moody's Rates, Updated October 1, 2019

An unofficial monthly report as of September 30, 2019, of the Moody's Daily Long-term Corporate Bond Yield Averages and Moody's Daily Treasury Yield Averages (used as benchmarks by some corporate pension plans).
David Rigby, via BenefitsLink Message Boards


Teachers Want Higher Pay, But Pensions Swallow Up the Budget

"Teachers and their unions typically attribute low salaries to flat or falling state spending on education, with skinflint politicians to blame. But in most places education spending is rising. It isn't showing up in teachers' paychecks because so much of it gets diverted to pay for expensive retirement benefits for former teachers. Politicians' overly generous past promises, sometimes made at the behest of teachers unions, are now coming back to bite the education sector."
The Wall Street Journal; subscription may be required

Benefits in General

[Guidance Overview]

California Legislation Sets New Test for Determining Independent Contractor Status (PDF)

"The consequences of worker reclassification from a benefits perspective are significant and wide-sweeping, as independent contractors who are reclassified as employees may be entitled to retroactive benefits under all benefit plans that they would have been eligible for had they been properly classified as employees originally.... Employers [should] be cautious about simply adding independent contractors to benefit plans rather than determining whether they are, in fact, employees. While this may seem a simple solution to the situation, it could create more problems for the employer."
Boutwell Fay LLP

Selected Discussions
on the BenefitsLink Message Boards

Is a "Guaranteed" Bonus Really an Excluded "Bonus"?

Client's plan excludes bonuses from the definition of Compensation. Participant has a $30K/year guaranteed hours bonus each year. Owner uses the term "bonus," but the spirit of the guaranteed hours bonus is really to incentivize attorneys to meet a set goal of hours. Because the participant's "bonus" amount is guaranteed for this year (and next), is it fair to say that this should simply be classified as regular salary?
BenefitsLink Message Boards

New Plan to Spin Off of Calendar Year MEP on October 1 -- Results in Loss of Safe Harbor Status?

If there is a plan sponsor who wants to switch from a Closed MEP to their own plan after 10/1, and they currently have safe harbor status with the Closed MEP, can they maintain that safe harbor status with the new spinoff plan?
BenefitsLink Message Boards

Has Key Employee Become a Former Key in This Situation? What's the Determination Date?

Company owned 51% by Participant A and 49% by Participant B. December 28, 2018, Participant A sells shares to Participant B, who is now the 100% owner. Participant A compensation in 2017 was $108,000. For the 12/31/2018 Plan Year, both A and B are HCEs. Is Participant A considered a Key Employee or a Former Key Employee, because there was no ownership as of 12/31/2018?
BenefitsLink Message Boards

Extensions for Form 5500 Are Being Denied

Has anyone else had their Form 5500 extensions denied? Two clients contacted us this week regarding letters they just received from the IRS saying their extension was denied. One client has two plans; one extension request was approved and the other plan's request was denied. I have never seen this happen before.
BenefitsLink Message Boards

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Press Releases

Hansen Takes on New Role as PSCA Executive Director
PSCA [Plan Sponsor Council of America]

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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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