Retirement Plans Newsletter

October 18, 2019 logo logo
Search   ·   Past Issues   ·   Get Message Boards Digest   ·   Get Health & Welfare News

Job Openings

View job as Business Intelligence Analyst Business Intelligence Analyst

Directors Guild of America - Producer Pension and Health Plans
Los Angeles CA

View job as Senior Retirement Plan Administrator Senior Retirement Plan Administrator

Carlson Quinn
Emeryville CA

View job as Senior Counsel - Employee Benefits and Insurance Product Tax Senior Counsel - Employee Benefits and Insurance Product Tax

New York NY

View job as 401(k) Retirement Plan Administrator (remote opportunities available) 401(k) Retirement Plan Administrator (remote opportunities available)

Tampa FL / Telecommute

View job as Defined Benefit Consultant Defined Benefit Consultant

Woodcliff Lake NJ

View job as Management and Program Assistant (Pathways Intern) Management and Program Assistant (Pathways Intern)

Pension Benefit Guaranty Corporation [PBGC]
Washington DC / Telecommute

►Get Instant Job Alerts

►View More Jobs

►Post a Job

Webcasts, Conferences


New Topics on the BenefitsLink Message Boards

New Comments and Topics

All Topics, Grouped by Forum

This Newsletter:
Subscribe Now

BenefitsLink Health & Welfare Plans Newsletter:
Subscribe Now

Message Boards Digest:
Subscribe Now

[Guidance Overview]

Editor's Pick IRS Adopts Final Regs with Required and Optional Changes to Hardship Distribution Rules for 401(k) and 403(b) Plans

"Most employers need to make plan document and administrative changes.... The potential sources of hardship distributions are expanded ... [A]mounts attributable to QNECs and QMACs in 403(b) custodial accounts are still not distributable on account of hardship.... The changes in the final regulations and their permissible and required effective dates, as well as the deadline for amending individually designed plans for the new rules, are summarized in detail in tabular form[.]"
Clark Hill PLC


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

Second Circuit Revives Fiduciary Breach Claim Against NYU Plan Investment Advisor

"On October 1, 2019, the Second Circuit overturned the Southern District of New York's dismissal of the participants' lawsuit against the independent investment advisor who advised NYU on its retirement plans, even though the complaint alleged substantially the same claims against NYU in a separate lawsuit on which NYU prevailed.... This is a notable victory for plaintiffs because they ultimately lost at trial against NYU ... The Second Circuit's holding is cause for concern for ERISA plan co-fiduciaries who were not named in litigation that has been adjudicated or resolved." [Sacerdote v. Cammack LaRhette Advisors, LLC, No. 18-1558 (2d Cir. Oct. 1, 2019)]
Drinker Biddle

Federal District Court Opinion Denying DOL's Claim of Fiduciary Breach by Severstal Wheeling Retirement Committee (PDF)

21 pages. "[T]he DOL argues that Defendants breached their fiduciary duty by failing to monitor LaBow and WPN and remove them when LaBow failed to properly invest the trust in accordance with their instructions.... Defendants respond that they fulfilled their duty to monitor by implementing a routine monitoring procedure, adhering to it ... and taking corrective action with the assistance of counsel.... The duty to monitor does not carry with it the duty to review an investment fiduciary's every decision. ... It is pure speculation that had the Retirement Committee acted sooner somehow the outcome would have been different." [Scalia v. WPN Corp. and Severstal Wheeling, Inc. Retirement Committee, No. 14-1494 (W.D. Pa. Sept. 30, 2019)]
U.S. District Court for the Western District of Pennsylvania

PBGC Technical Update 19-1 Waives Financial Information Reporting Requirement for Certain Pension Plan Controlled Group Members

"PBGC in Technical Update 19-1 is waiving the requirement ... to provide member-specific financial information for filers whose ultimate parent ... is: [1] Not a foreign entity. [2] A foreign entity, if filers provide: [a] consolidated financial statements (or federal tax returns if consolidated financial statements are not available) for US controlled group members; and [b] any other financial information required for the filing."
Thomson Reuters Practical Law

PBGC Premium Increases Continue

"[A]fter spending 23 years at 0.9% of underfunding, the premium is now fully five times the 2013 rate. This unwelcome development for sponsors of plans underfunded on a PBGC basis reinforces the importance of optimizing the selection of the PBGC interest rate methodology.... [S]ponsors should also consider less common headcount reduction strategies, such as lump sum windows for retirees, or a more complex transaction that would allow employees to access their benefits while working."
River and Mercantile Solutions


Now is a great time to join Worldwide Employee Benefits Network (WEB)

Sponsored by WEB - Worldwide Employee Benefits Network

Worldwide Employee Benefits Network represents more than 30 areas of expertise within the Benefits Industry. Join todayLearn more

Motivations and Measurement of Financial Wellness Initiatives (PDF)

"Employees' financial wellbeing remains an evolving concept among employers. There is little consensus on what financial wellness looks like.... Retirement preparedness is a top issue that financial wellness initiatives are geared to address. However, in sectors that still tend to offer defined benefit plans -- such as education and government -- this is less of a focus.... The number of employers using financial wellbeing metrics to gauge the financial wellbeing of their employees rose from 14 percent in 2018 to 23 percent in 2019."
Employee Benefit Research Institute [EBRI]

Benefits in General

[Official Guidance]

Text of Draft Instructions for 2020 IRS Forms 1099-R and 5498: Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, Etc., and IRA Contribution Information (PDF)

26 pages. "File Form 1099-R ... for each person to whom you have made a designated distribution or are treated as having made a distribution of $10 or more from profit-sharing or retirement plans, any individual retirement arrangements (IRAs), annuities, pensions, insurance contracts, survivor income benefit plans, permanent and total disability payments under life insurance contracts, charitable gift annuities, etc. Also, report on Form 1099-R death benefit payments made by employers that are not made as part of a pension, profit-sharing, or retirement plan."
Internal Revenue Service [IRS]

Executive Compensation
and Nonqualified Plans

Why Employee Stock Purchase Plans Are a Great Deal: Understanding Key ESPP Features

"An ESPP discount is a good benefit. It's even better when the plan also has a lookback provision. A lookback takes the purchase-price discount from either the stock price at the start of the offering or the stock price on the purchase date, whichever is lower.... [U]nlike stock options, an ESPP with a lookback cannot go underwater."

Selected Discussions
on the BenefitsLink Message Boards

Contingent Benefit Rule Violation Here?

In its 401(k), the employer matches 100% up to 4% of compensation. For people earning above the 401(a)(17), their match is limited by the 401(a)(17) cap at under 4% of their total compensation. So if they earn $400,000 and defer $19,000, their match is capped at $11,200 ($280,000 * 0.4) whereas a match based on 4% of their total compensation would have been $16,000 ($400,000 * 0.4). If the "missed" amount due solely to reaching the 401(a)(17) limit ($4,800 above) is either paid in cash or is contributed (as an employer nonelective contribution) to a nonqualified plan, does that violate the contingent benefit rule?
BenefitsLink Message Boards

Audit Fees Paid from the Plan Participant Accounts

I think I have read that the financial audit (large plans) fees charged by a CPA firm can be paid from the plan each year. My question: what is a fair way to allocate those fees among the plan participants? If the same amount is charge each participant, then some small account balances could almost be wiped out. Most of my clients just pay it from the company and deduct it as a business expense. For the client who insists on the plan participants paying for it, should they allocate the fee based on account balances?
BenefitsLink Message Boards

Distribution Lawsuit Over Cybersecurity! (Estee Lauder Plan)

Did folks see this? I find it so interesting and timely. What do people think? Anyone else intrigued? Hopefully more details will become available as the suit moves forward. Who approved the distributions? What was the process? Was it an online request? How come they haven't provided a copy of the plan documents? How did the money go into accounts that weren't in her name? Wouldn't someone catch that? Why haven't they settled? So many interesting things. Distribution fraud is booming and a very real problem. See the "Retirement Plan Cybersecurity at Issue in New Lawsuit" item on BenefitsLink -- includes a link to the text of the complaint.
BenefitsLink Message Boards

► Subscribe to the BenefitsLink Message Boards Digest— a free daily email of all new discussions (not just the selected few shown above). View a sample issue.

Most Popular Items in the Previous Issue, 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.

Links to web sites other than and are offered as a service to our readers; we were not involved in their production and are not responsible for their content.

Unsubscribe  |   Change Email Address  |   Privacy Policy