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[Official Guidance]

Text of 2019 Draft Instructions for Form 5500-EZ: Annual Return of a One-Participant (Owners/Partners and Their Spouses) Retirement Plan or a Foreign Plan (PDF)

Oct. 3, 2019. "Form 5500-EZ is used by one-participant plans and foreign plans that are not subject to the requirements of section 104(a) of [ERISA] and that do not file Form 5500-SF electronically to satisfy certain annual reporting and filing obligations imposed by the Code." [Also available: Draft of 2019 IRS Form 5500-EZ]
Internal Revenue Service [IRS]

CareerBuilder Sued by Former 401(k) Participant Alleging ERISA Violations

"The complaint said the plan contained 'excessively expensive' mutual funds, causing participants to pay 'excessive fees' to the plan's record keeper and investment adviser.... [The plaintiff] criticized the fees charged by the plan's record keeper, ADP, and its investment adviser, Morgan Stanley, as 'excessive and unreasonable.' Neither was named as a defendant." [Martin v. CareerBuilder, No. 19-6463 (N.D. Ill. complaint filed Sep. 30, 2019)]
Pensions & Investments

401(k) Lawsuits Get More Complex

"[P]articipants in its $3.2 billion 401(k) plan ... [alleged] that [Community Health Systems Inc.] acted imprudently in retaining an index mutual fund given its tracking error, a reference to how closely the fund tracks a market index like the S&P 500.... Other recent cases ... made the argument that plan sponsors shouldn't allow record keepers to inappropriately use data such as contact information, account size and age to cross-sell proprietary non-retirement-plan-related products like insurance."
InvestmentNews; subscription may be required

How Do Retirees' Spending Patterns Change Over Time?

"Housing is the largest spending category for every age group ... On average, households spent less on food as they grew older ... [O]lder households allocated a larger share of their budgets to gifts and contributions. The share of health care costs in households' budgets increased with age."
Employee Benefit Research Institute [EBRI]

Open or Closed: Which 401(k) MEP Choice Should Your Employer Make?

"Employers need to both understand the difference between these choices as well as how those differences might impact their specific situation. In some ways, open MEPs may be problematic for employers seeking the maximum benefits presented by these pooling vehicles. Closed MEPs do not have these problems."

San Diego Labor Unions File Suit to Invalidate Prop B Pension Cut

"City labor unions in San Diego have filed a lawsuit seeking to invalidate 2012's controversial Proposition B pension cut measure, which made San Diego the only city in California to eliminate pensions for most newly hired workers. The lawsuit is an expected and necessary step to wipe out the measure, which was ruled illegal last year by the state Supreme Court because San Diego skipped key legal steps when placing it on the ballot."
The San Diego Union-Tribune


Why K-12 403(b) Plans Stink

"ERISA doesn't apply to public K-12 schools and public universities, but it does to private universities and private K-12 school plans. This leads to generally excellent plans at ERISA institutions and long K-12 403(b) vendor lists stocked with mostly-high fee products pushed by non fiduciary sales agents."

Benefits in General

When ERISA Preempts State Laws for Employee Benefits

"A recent appellate ruling ... addressed whether two Hawaii anti-subrogation statutes are pre-empted by ERISA.... Although the insurer's lien would have been preserved had a portion of the settlement been denominated as reimbursement for medical 'special damages,' that did not occur and the health insurer was left without a means of enforcing its claimed lien to recoup the money it had paid." [Rudel v. Hawai'i Management Alliance Association, No. 17-17395 (9th Cir. Sept. 11, 2019)]
DeBofsky, Sherman & Casciari, P.C.

Selected Discussions
on the BenefitsLink Message Boards

ESOP Termination Post-Acquisition -- Distributions in Cash Only?

Is there a specific exception to the rule that an ESOP participant must have the right to receive a stock distribution that applies to an ESOP termination related to a merger/acquisition? I think I've seen this before, but now can't find anything on it. Here's the situation -- ESOP plan sponsor was acquired in a stock purchase transaction and merged into the buyer. ESOP was terminated prior to the close of the transaction. Stock of plan sponsor was exchanged for stock of buyer. Can the shares owned by ESOP be liquidated following the plan termination and all plan participants paid distributions in cash?
BenefitsLink Message Boards

Two Employers, Two Plans, Same Owner -- Must Aggregate for Purposes of the $250,000 Form 5500 Rule?

My question concerns 5500s. My client owns two companies (one has a DB plan, the other has a 401(k) plan) -- obviously a controlled group. He is the only employee in each company. Because they are two employers, do we need aggregate the assets for purposes of the $250K threshold for filing?
BenefitsLink Message Boards

401(k) Plan Carrying Bad Loans; How to Correct and Terminate?

Solo 401k plan had loans taken from the plan without promissory notes, pledges of account balances, etc. The loans at one time (several years ago) exceeded $50,000. Repayments have not been made. The sole participant now wants to withdraw what benefits there are and close the plan. It's been a couple of years since I prepared any corrections under EPCRS, much less a failure like this. Can you get me started off in the right direction?
BenefitsLink Message Boards

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Press Releases

Most Popular Items in the Previous Issue

Where, Oh Where, Have My Retirement Benefits Gone?
Retirement Learning Center, LLC, 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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