Retirement Plans Newsletter

October 25, 2019

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Los Altos CA

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Kansas City MO

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Webcasts, Conferences

Employer Approaches to Financial Wellbeing Solutions
November 7, 2019 WEBCAST
EBRI [Employee Benefit Research Institute]

Return to Work: How to Bring New Parents Back After Leave
November 12, 2019 WEBCAST
Employee Benefit News

The Future Is Coming to the DOL: And It's Electronic!
November 19, 2019 WEBCAST
ERISApedia.com

Responsibilities of Internal ESOP Fiduciaries
January 9, 2020 WEBCAST
Beyster Institute

Administering Your ESOP: Company Responsibilities
January 13, 2020 in CA
Beyster Institute

Certificate Program for Non-Professional ESOP Fiduciaries
February 10, 2020 in CA
Beyster Institute

Getting the Most out of Your ESOP Company Board of Directors
May 7, 2020 WEBCAST
Beyster Institute

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Discussions

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[Guidance Overview]

DOL's Proposed Website-Based Electronic Disclosure Option Is a Welcome Change

"The Department's existing electronic disclosure regulations date from 2002, and as a result, they have long been perceived as out of date, difficult to use, and in need of a refresh. The announcement of the proposed website option is, therefore, a welcome development that is intended to make the electronic disclosure of ERISA documents easier and more in line with current technologies."
Morgan Lewis

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[Guidance Overview]

DOL Proposes New Safe Harbor for Electronic Disclosures

"Under the proposed safe harbor, a plan administrator must provide a 'notice of internet availability' for each covered document it intends to post on its website.... The website address must either [1] lead the recipient directly to the covered document, or [2] lead the recipient to a login page that provides, immediately after logging in, a prominent link to the document. The proposed rule has several requirements that are designed to protect participants who prefer paper, or who lack access to the internet[.]"
Spencer Fane

[Guidance Overview]

DOL Proposes Rules for New Electronic Disclosure Safe Harbor for ERISA Retirement Plan Documents

"[T]he new safe harbor would not apply to any plan documents that an eligible person requests in writing. Additionally, the new safe harbor does not apply to employee welfare benefit plans, such as plans providing group health or disability benefits."
Holland & Knight

[Guidance Overview]

Expanding Retirement Plan Coverage Through Association Retirement Plans

"While the Regulation seeks to expand retirement plan access by generally lowering the entry barriers to qualified retirement plans for smaller employers, some of the Regulation’s provisions are complex and require careful analysis against the specific facts. Also, MEPs are subject to separate Internal Revenue Code requirements applicable to tax-qualified retirement plans, including non-discrimination testing and service-counting requirements."
Troutman Sanders

SOA Releases New Mortality Improvement Scale and New Base Mortality Table

"The Society of Actuaries (SOA) has released mortality improvement scale MP-2019 ... [and] a new base mortality table that will generally replace the RP-2006 ... base mortality rates in use since 2014.... The SOA found that surviving beneficiaries generally have less favorable experience (lower life expectancy) than annuitants, and released a separate assumption for such individuals.... [T]here may be additional implications going forward in regard to choosing updated actuarial equivalence assumptions for non-lump sum plan benefit options."
Cowden Associates, Inc.

Best Interest Standard of Care for Advisors, Part 14

"Unfortunately, we are left with little guidance on what best interest means.... At one level, [the regulation] could be read to be circular, that is, a recommendation is in the best interest of a retail customer if it is in the retail investor's best interest. But perhaps a closer reading would be that a recommendation is in the best interest of the retail customer if the broker-dealer and/or the advisor engages in a diligent, careful and skillful process to develop a recommendation, focusing on the customer's investment profile and the potential costs, risks and rewards to the retail customer."
FredReish.com

Editor's Pick How Best to Annuitize Defined Contribution Assets?

"[T]his paper compares the level of lifetime utility generated by alternative annuitization approaches -- immediate annuities, deferred annuities, and additional Social Security through delayed claiming. The analysis also tests different assumptions for the share of initial wealth that participants use to purchase these products."
Center for Retirement Research at Boston College

Top Democrat Floats Pension Fix to White House as Lawmakers Near Final Decision on New NAFTA Vote

"A top House Democrat has approached Treasury Secretary Steven Mnuchin about adding legislation that would rescue certain union pensions to the pending North American trade pact.... House Ways and Means Committee Chairman Richard E. Neal (D-Mass.) said Mnuchin's response was 'courteous' to his suggestion about tacking the Butch Lewis Act onto the trade deal. The Butch Lewis bill is a longtime priority for Neal and other Democrats that would shore up failing pensions for more than a million American workers through the sale of Treasury bonds."
The Washington Post; subscription may be required

Vanderbilt Settlement Finally Settled

"Aside from being the largest 403(b) university plan monetary settlement to date, the Vanderbilt settlement stands out for the 'certain additional relief' contained ... For the Schlichter law firm, anyway, these settlements seem to have moved beyond 'mere' money, and into some fairly extensive procedural guidelines in plan administration and review. While arguably none seem to go beyond what might reasonably be expected of the ERISA fiduciaries of a multi-billion dollar plan, there's little question that the external oversight of - and reporting to - plaintiffs' counsel over an extended period could become tedious, at best." [Cassell v. Vanderbilt Univ., No. 16-2086 (M.D. Tenn., proposed settlement filed Apr. 22, 2019)]
National Association of Plan Advisors [NAPA]

Selected Discussions
on the BenefitsLink Message Boards

401(k) Loan Payment Withholding Not Stopped After Loan Repaid

"I have a participant whose loan was repaid on one payroll but the loan payment deduction was not stopped for two more payrolls. Can I just refund the incorrect deductions to him?"
BenefitsLink Message Boards

Is a Terminating Amendment Needed for This Individually Designed DB Plan?

"Plan year end is November 30th. Plan will be terminating soon after December 1, 2019. Last favorable LOD dated 4/28/2018 with respect to amendment and restatement signed February 10, 2017 that had an effective date of 12/1/2016. The LOD states that it considered the 2015 Cumulative List of Changes in Plan Qualification Requirements. In conjunction with a plan termination soon after December 1, 2019, I presume that there is an amendment needed that considers a more recent Cumulative List. If so, what is the year of the latest Cumulative List that must be included? Could the Cumulative List amendment requirement be sidestepped by adopting a volume submitter plan by the end of this cycle's end date of 4/30/2020?"
BenefitsLink Message Boards

So a Client Has Stolen from the Plan's Assets...

"A client terminates her DB plan (it's not subject to PBGC rules) and transfers all of the assets to her IRA. We inform her that she must return the part of the distribution that is in excess of her accrued benefit. She refuses. Other participants have not been paid out yet. Further, the amount transferred exceeds her Section 415 limit. What are our obligations and duties with respect to the client and how should we proceed? Do professional designations affect the result?"
BenefitsLink Message Boards

Penalty Abatements for Late Filings?

"Are the IRS and DOL entertaining waivers of late filing fees? I was under the impression that after the advent of the late filer program, they didn't want to be bothered with 'my dog ate it' stories. I just heard someone say that they do it regularly. Also do(n't) late filing penalties go back to the original due date if you miss the extension?"
BenefitsLink Message Boards

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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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