Retirement Plans Newsletter

October 24, 2019

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[Official Guidance]

Text of PBGC Maximum Monthly Guarantee Tables for 2020 and Prior Years

As a result of the indexing rules provided by law, the guarantee limits for single-employer plans that fail in 2020 will be 3.65% higher than the limits that applied for 2019.
Pension Benefit Guaranty Corporation [PBGC]

[Sponsored]

Are You Helping Your Plan Participants Prepare?

Sponsored by International Foundation of Employee Benefit Plans [IFEBP]

Are your participants prepared for retirement? Get the Ready or Not: Your Retirement Planning Guide -- it helps employees prepare for a satisfying and comfortable retirement. Quantity discounts on group orders for all your participants! Order today! Learn more


[Official Guidance]

Treasury Department Notice of Multiemployer Pension Plan Application to Reduce Benefits: Carpenters Pension Trust Fund -- Detroit and Vicinity Pension Plan

"The Board of Trustees of the Carpenters Pension Trust Fund -- Detroit and Vicinity Pension Plan ... has submitted an application to reduce benefits under the plan in accordance with [MPRA]. The purpose of this notice is to announce that the application ... has been published on the website of the Department of the Treasury, and to request public comments on the application from interested parties[.]"
U.S. Department of the Treasury

[Guidance Overview]

DOL Issues Proposed Regs Regarding Electronic Disclosure of Pension Plan Information

"Prior to reliance upon these proposed regulations, a plan administrator must furnish to each individual a paper notification that some or all covered documents will be provided electronically; a statement of the right to request and obtain a paper version of the requested document, free of charge; and the right to opt out of receiving documents electronically, and an explanation of how to exercise these rights."
The Wagner Law Group

[Guidance Overview]

DOL Proposes Regs on Electronic Disclosures by Retirement Plans

"The proposed safe harbor would create a 'notice and access' structure similar to what the DOL adopted in FAB 2006-03 for pension benefit statements and what the SEC adopted for certain investor relations. Under the notice and access structure, plans that use the proposed safe harbor must provide to each covered individual a notice of internet availability for each covered document. The covered documents will be posted on a website that covered individuals can access."
Thomson Reuters Practical Law

[Guidance Overview]

Two Years in the Making: The Final IRS Hardship Distribution Regs Are Here

"There are only two parts of these rules that are mandatory to implement - removal of the suspension of deferrals post hardship distribution and the modification to the list of safe harbor expenses. Everything else is optional.... That means it is critically important to keep track of which, if any, of the new rules have been applied in operation. To assist you in documenting these items, [the authors] have prepared a one-page sample administrative procedure that you can download here."
DWC

2020 Social Security Amounts and Projected Covered Compensation

"Social Security benefits payable in 2020 will increase by 1.6% ...  IRS has not yet issued 2020 covered compensation tables, but Mercer has projected these amounts based on the increase in the taxable wage base to $137,700 for 2020 from $132,900 for 2019."
Mercer

Increasing 401(k) Participation: Hacks You Can Steal from Netflix

"Start incorporating text messages into your enrollment communications.... Using an integration between your payroll system and 401(k) provider, your 401(k) could build a detailed financial profile on each employee ... Then, it can serve them specific 401(k) recommendations based on their unique financial situations.... [If] you want employees to join the 401(k), make it super easy."
ForUsAll

What Open MEPs May Mean for Your Business (PDF)

12 pages. "This whitepaper highlights the: [1] Legislative actions currently under consideration by the Senate. [2] Features and benefits of Open MEPs. [3] Opportunity for employers to promote financial security for their employees. [4] Making the most of Open MEPs. [5] Importance of working with a MEP expert."
MassMutual

Why GDPR Matters for U.S. Retirement Plan Service Providers and Plan Sponsors (PDF)

"The primer outlines the GDPR's key components and explores its potential implications for multi-national employee benefit plan sponsors and their defined contribution (DC) plans. This document also answers related questions, including: [1] What are an individual's rights under the GDPR? [2] What are the different definitions/categories of data under the GDPR? [3] How can organizations implement GDPR compliance? [4] Of what specific regulatory issues should service providers administering retirement plans be aware?"
Defined Contribution Institutional Investment Association [DCIIA]

Report Examines Links Between TDF Quality and Market Share

"The report thus asks whether market share can be used as a predictor of the quality of a fund in the target-date investment category -- and likely an even better predictor of poor quality. While there is some evidence for this case, the report explains, a simple assessment of market share alone obviously cannot be used as a substitute for normal due diligence."
PLANSPONSOR; free registration may be required

When Annuities Are a Better Deal for Women Than Men

"When it comes to retirement, women often have it worse than men. They typically have higher poverty rates, lower Social Security benefits, and less saved in 401(k)s. But women do have a leg up on one aspect of retirement: When buying an income annuity through a workplace retirement plan, they can expect higher benefits relative to their male counterparts."
The Wall Street Journal; subscription may be required

Why Retirement Plan Sponsors Should Consider Offering Automated Emergency Savings Funds

"Individuals with emergency funds are far more likely to use those funds in an emergency instead of borrowing/withdrawing from their retirement plan, reducing plan leakage. Individuals with emergency funds are in a better financial position to save into the retirement plan. The automation for retirement plan savings and after-tax savings is similar; thus, participants who are acclimated to one process are more likely to participate in both."
Cammack Retirement Group

Benefits in General

Choice of Law Provisions in ERISA Plans Will Not Result in Uniformity

"It seems likely that in the next few years the United States Supreme Court will decide whether ERISA plans may include enforceable forum selection clauses. The vast majority of federal district courts and the only two federal appellate courts to address directly the issue have held that forum selection clauses in ERISA plans are enforceable. The [DOL], however, persists in its opposition to such clauses. Indeed, the DOL's arguments have persuaded a few, isolated district courts that they should not enforce forum selection clauses."
Thompson Coburn

Selected Discussions
on the BenefitsLink Message Boards

Is the Approved Interest Rate When Calculating an EBAR in a Cash Balance Plan Still Between 7.5% and 8.5%?

Is the approved interest rate when calculating an EBAR in a Cash Balance Plan still between 7.5% and 8.5%? I was discussing this with someone and know that used to be the acceptable range, but I wasn't sure if that had been changed or indexed. Thanks!
BenefitsLink Message Boards

If One Has a Participant's E-Mail Address, Why Not Just Attach the Document to Be Furnished?

The DOL has published notice of a proposed rulemaking under which fiduciaries of an ERISA-governed retirement plan could furnish some ERISA-required communications under a notice-and-access regime with a notice that the communication is available at a plan-maintained website. Relying on the new regime would require, among other conditions, having an electronic address for the person entitled to the communication to be furnished. If that electronic address is an e-mail address (rather than a smartphone number): Is there a reason why a plan's fiduciary should not attach to the e-mail message a .pdf of the document to be furnished?
BenefitsLink Message Boards

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Press Releases

Most Popular Items in the Previous Issue

The Circular Challenges of Earned Income and Plan Compensation (PDF)
Joni L. Jennings, ERPA, CPC, via Journal of Pension Benefits

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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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