Retirement Plans Newsletter

October 31, 2019 logo logo
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17th Annual ERISA Update
November 7, 2019 in WA
ASPPA Benefits Council [ABC] of Great Northwest

Fall Qualified Retirement Plan Program
November 15, 2019 in TX
ASPPA Benefits Council [ABC] of Central Texas

Young Executives in Pensions Networking and Hockey
November 21, 2019 in IL
ASPPA Benefits Council [ABC] of Chicago

Employee Releases in ERISA Disputes: Minimizing Claims With Effective Release Provisions
January 15, 2020 WEBCAST

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[Guidance Overview]

DOL Proposes New Electronic Disclosure Rules for Retirement Plans

"[In] addition to summary plan descriptions, the new rules will cover documents that must be furnished because of the passage of time (such as benefit statements and summary annual reports), as well as documents that must be furnished because of a specific triggering event (such as a summary of material modifications or blackout notice). Note that the new rules will not cover documents that must be furnished in response to a specific request made by a participant or beneficiary under Section 104(b) of ERISA."
Verrill Dana LLP


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[Guidance Overview]

DOL Proposes New Electronic Disclosure Option for Retirement Plans

"The proposed website option is welcome news for plan sponsors, providing an easier, more cost-effective and technologically advanced means of furnishing ERISA-required notices in a manner that is likely to appeal to most individuals. The DOL will accept comments on the proposed rules through November 22. The proposed rules cannot be relied upon until finalized."

The New DOL E-Disclosure Regs

"Unlike under prior DOL guidance, there is no longer a requirement that participants have a computer at work, or otherwise affirmatively consent to e-disclosure, in order to receive disclosures electronically."
Cammack Retirement Group

DOL Weighs in on 'Actual Knowledge' Standard in Supreme Court ERISA Case

"In an amicus brief ... U.S. Solicitor General Noel J. Francisco and lawyers from the [DOL] have thrown their support behind Christopher Sulyma, a former participant in the Intel plan.... The brief noted that Intel sought 'a conclusive legal presumption that plan participants actually know all the information in the mandatory disclosures made available to them, no matter what,' but that that was 'at best a form of constructive knowledge, and constructive knowledge is not enough.' " [Sulyma v. Intel Corp. Investment Policy Comm., No. 17-15864 (9th Cir. Nov. 28, 2018; cert. pet. granted June 10, 2019)]
American Society of Pension Professionals & Actuaries [ASPPA]

Supreme Court to Consider Liability of Insiders for Mismanagement of Pension Plans That Invest in Employer Stock

"To the extent the justices believe that the securities laws should manage the disclosure of insider information about public companies, a stark exception from ERISA barring actions predicated on the failure to respond to such information would make a great deal of sense.... [It] would essentially overrule the part of Dudenhoeffer that validated a full-fledged fiduciary duty for the ESOP's fiduciaries, but it would flow naturally from the later part of that opinion." [Jander v. Retirement Plans Committee of IBM, No. 17-3518 (2d Cir. Dec. 10, 2018; cert. pet. granted Jun. 3, 2019)]


Form 5500 Reporting Update

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Nov. 4 webinar. Navigating the maze of changes with Form 5500 can leave you lost and helpless without all the important must know information. Also covers Form 8955SSA. BenefitsLink discountLearn more

University Faces Setback in 403(b) Plan Fiduciary Breach Case

"The case alleged that the fiduciaries responsible for the [University of Pennsylvania's] retirement plan failed in their decision-making process and as a result, overpaid fees for investment and plan administration by up to 600%.... While other fee cases against institutions of higher learning have been dismissed, the court in Sweda, in a 2-1 majority opinion, chose not to dismiss the case, reminding benefits lawyers that ERISA plaintiffs have the benefit of the doubt." [Sweda v. Univ. of Penn., No. 17-3244 (3d Cir. May 2, 2019; rehearing denied Jul. 19, 2019)]
Hall Benefits Law

401(k) Investment Fund Lineup: Best Features

"[1] Options for different investor types ... [2] Diverse asset classes ... [3] A high quality safe option ... [4] Enough fixed income choices ... [5] A generous number of index funds ... [6] High quality target date funds ... [7] The right number of options ... [8] Cost effective choices."
Lawton Retirement Plan Consultants

Institutional Solutions: Prelude to Pension Risk Transfer

"The pension world has preludes of its own in the form of cost and risk management strategies that are sometimes employed before a permanent exit strategy such as a pension risk transfer (PRT) or pension risk buyout is consummated. Two of those preludes are often plan hibernation and investment hedging strategies. Both approaches have upsides as well as downsides, the latter primarily being the inability of these approaches to completely remove all financial risks over the long term."

How Would 401(k) 'Rothification' Alter Saving, Retirement Security, and Inequality?

"This paper develops a dynamic life cycle model to show how and whether 'Rothification' -- that is, taxing 401(k) contributions rather than payouts -- would alter household saving, investment, and Social Security claiming patterns.... [M]oving to a system that taxes pension contributions instead of withdrawals will lead to later retirement ages, particularly for the better-educated."
Pension Research Council, The Wharton School of The University of Pennsylvania

The Over-Stated Retirement Crisis (PDF)

14 pages. "Are retirement savers really facing a crisis? In reality, the answer is No. Each generation of retirees has been better off than the previous generation. In fact, in 2017, retirement assets represented 337% of employee wages, seven times the amount retirees saved during the time when traditional pensions were the retirement savings vehicle of choice. This trend is expected to continue."
Empower Institute


American Benefits Council Comment Letter to EBSA on 'Open MEPs' and Other Issues Under Section 3(5) of ERISA

10 pages. "The DOL acknowledged in the preamble to the MEP Proposed Rule that it is unaware of any evidence that defined contribution MEPs present a greater risk of fraud or abuse than single employer defined contribution plans.... [T]he DOL has identified no policy reasons to continue applying restrictive conditions to MEPs in a manner that effectively prohibits open MEPs, especially when such conditions are not required under ERISA."
American Benefits Council


Multi-Vendor 403(b) Plans for Teachers: Gaslighting 101

"Multi-vendor plans do not lead to higher participation rates. The K-12 403(b), which operates in a largely multi-vendor environment, has been mired in a 35%-40% participation rate. Do you know who has a rising participation rate? Montgomery County Public Schools in Rockville, MD. Guess what they did two years ago? They went to a single vendor."


Another Small Crack in the Retirement System

"Congress is on the verge of adding yet another way to take money penalty-free out of a retirement account. It's not that this provision is particularly terrible or problematic, but it adds to a fundamental problem with our system: Employers and advisors usually act as though we have a retirement system. We don't. We have a savings system, because the money can be -- and is -- used for a variety of other, nonretirement purposes."
Aron Szapiro, in Morningstar Advisor

Executive Compensation
and Nonqualified Plans

Security Studies Can Provide Tax Benefits and Protect Valued Executives

"It is common for employers to take advantage of tax exclusions for health insurance, life insurance, and business travel, meals, and entertainment. However, many employers do not realize that an 'overall security program' that provides for bodyguard chauffeurs, private air travel, and/or security features on company-provided automobiles may also be excluded under the very favorable provisions of section 132 of the Internal Revenue Code."
Winston & Strawn LLP

Press Releases

Most Popular Items in the Previous Issue

Peaceful Coexistence: The Facts About Pensions and Education Funding (PDF)
National Conference on Public Employee Retirement Systems [NCPERS], 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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