Retirement Plans Newsletter

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Webcasts, Conferences

Employee Stock Purchase Plans: The Introductory Course
November 14, 2019 WEBCAST
Hunton Andrews Kurth

Global Plan Sponsor Perspectives on ESG Implementation
December 4, 2019 WEBCAST
Defined Contribution Institutional Investment Association [DCIIA]

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[Guidance Overview]

DOL Attempts to Modernize Its Electronic Disclosure Rules with Proposed Safe Harbor

"[1] The rule would supersede the 'continuous access website' rule outlined in [FAB 2006-03] ... for pension benefit statements and participant-level fee disclosures. [2] The rule for QDIAs that either the DOL or IRS electronic delivery rules can be relied on has been eliminated. [3] The system must be designed to alert [the] administrator of invalid or inoperable electronic addresses."
Frost Brown Todd LLC


ASC Webcast: Current Developments (2019)

Sponsored by ASC

Don't let your professional knowledge of this ever-changing ERISA industry become outdated! John Griffin, J.D., LL.M. will tell you what you need to know about the latest developments in the retirement plan industry. Learn More! Learn more

[Guidance Overview]

PBGC Proposes Change in Interest Rates for Plans That Still Refer to PBGC Lump-Sum Rates

"Whether the change proposed for private plan rates will affect the lump-sum payments made by a plan that refers to PBGC rates will depend on the plan's current language and whether that language is interpreted to refer to PBGC trusteed plan rates, which would be the Section 417(e)(3) rates, or to PBGC private sector rates, which would be the new 4 percent/1.5 percent PBGC rates."
Segal Consulting

[Guidance Overview]

PBGC's Revised Collection of Information Will Require Additional Reporting from DB Plans Offering a Lump Sum Window

"PBGC is: [1] Modifying the 2020 premium filing instructions to require defined benefit plans offering a lump sum window to separately report the number of plan participants in pay status who were offered and elected a lump sum.... [2] Changing the reporting period for risk transfer activity ... [and] [3] Modifying the premium payment filing instructions to require a defined benefit plan to complete a coverage determination request when the plan reports that a premium filing will be the last for the plan[.]"
Thomson Reuters Practical Law

District Court Orders Individual Arbitration in ERISA Lawsuit

"[T]he judge has granted the defense's motion to compel individual arbitration of the [ERISA] lawsuit, which had sought class action status on behalf of participants in the Greystar 401(k) Plan. Without directly citing it, the pro-arbitration decision from the Texas District Court calls to mind a recent and increasingly influential [9th Circuit ruling in Dorman v. The Charles Schwab Corp.], which cited new Supreme Court precedents that seemingly allow for forced arbitration under ERISA." [Torres v. Greystar Mgmt. Services, L.P., No. 19-510 (W.D. Tex. Oct. 25, 2019)]

Ninth Circuit Signals Potential Rehearing of Denial of Class Action in Charles Schwab ERISA Suit

"At its core, the issue deals with whether an ERISA fiduciary claim is always a claim on behalf of everyone in a plan or whether a court can limit the claim to include losses to only one, or a select group, of participants. The issue also affects whether class-action waiver agreements are enforceable and, whether class actions are inherently included in every ERISA fiduciary-breach claim." [Dorman v. The Charles Schwab Corp., No. 18-15281 (9th Cir. Aug. 20, 2019; also unpub. memo. opinion)]
McDermott, Will and Emery, via National Law Review

MassMutual Provides a Vision for Open MEPs (If They Become Reality)

"[MassMutual] has been managing multiple-employer plans for enterprises linked by associations, franchises, or Professional Employer Organizations since 1989, with more than 4,000 adopting employers and $4 billion in assets under management. Assuming that the legislation eventually passes, [MassMutual] urges employers and plan advisors to consider these issues when evaluating an Open MEP: [1] Selecting the plan design.... [2] Deciding on hands-on vs. hands-off plan administration.... [3] Choosing limited vs. customized investment menu.... [4] Determining fiduciary oversight."
Retirement Income Journal

What a State-Run Retirement Plan Would Mean to Your Company

"[S]tate-sponsored retirement plans carry a $6,000 annual salary deferral limit compared to the 2019 $19,000 annual salary deferral limit ... Most state-sponsored retirement plans use after-tax dollars ... [and] do not have an employer-matching contribution feature ... [E]mployers who choose to offer a state program will be responsible for performing certain administrative tasks, whereas with a 401(k) plan, that work usually is handled by a plan administrator."
Employee Benefits Report

What if OregonSaves Went National: A Look at the Impact on Retirement Income Adequacy

"[A] 'national' OregonSaves plan would provide a 16.3 percent reduction in retirement deficits ... for the youngest age cohort simulated (those currently ages 35-39) ... with the reduction being only 3.1 percent for those currently ages 60-64.... [A] 401(k) safe harbor plan expansion would reduce the retirement deficits for the youngest cohort by an additional 8.8 percentage points ... [but] by ages 60-64 the additional reduction would only be 2.5 percentage points."
Employee Benefit Research Institute [EBRI]

FAS87 ASC715 Discount Rates and Moody's Rates, Updated November 1, 2019

An unofficial monthly report as of October 31, 2019, of the Moody's Daily Long-term Corporate Bond Yield Averages and Moody"s Daily Treasury Yield Averages (used as benchmarks by some corporate pension plans).
David Rigby, via BenefitsLink Message Boards

Recent Changes in Pension Benefits for State and Local Workers Not Covered by Social Security

"[N]ewly hired workers in 2018 face greater burdens in financing their pensions compared to workers hired in 2008. These burdens include higher contribution rates and longer vesting periods, lower multiplier rates, and other changes. State and local workers who are also covered by Social Security faced more significant increases in financing burdens than their non-covered counterparts."
Urban Institute

Why Are 401(k)/IRA Balances Substantially Below Potential?

"The main reasons why 401(k)/IRA balances fall short of their potential are the immaturity of the 401(k) system and the lack of universal coverage, followed by leakages and fees. The same pattern holds if workers under 30 and those with defined benefit plans are excluded from the analysis. Even in a mature system, the lack of universal coverage means that balances are still expected to fall well below potential."
Center for Retirement Research at Boston College

Starting Young Can Really Pay Off When It Comes to Retirement Planning

"Assuming a dollar-for-dollar match, at age 70, the saver who started at age 22 would have over $8 million, and the saver who started at age 30 would have about $2.4 million."

Benefits in General

Best Practices in Administering Benefit Claims: Full and Fair Review

"What is the timing for an initial claim decision? ... What information must an adverse claim decision include? ... What is the timing for decision on appeal? ... Who decides the appeal and what information must an adverse appeal decision include? ... Special rules for group health plans."

Editor's Pick A Look at Teachers' Job Requirements, Employer Costs, and Benefits

"In March 2018, dental care plans were available to 53 percent of private industry workers in educational services and to 57 percent of state and local government workers. Vision care plans were available to 34 percent of state and local government workers in educational services and to 29 percent of workers in the private industry. ... [Defined benefit] plans were available to 90 percent of state and local government workers in the educational services industry. Defined contribution plans ... were available to 35 percent of state and local government workers in the educational services industry."
U.S. Bureau of Labor Statistics [BLS]

Selected Discussions
on the BenefitsLink Message Boards

S-Corp 401(k) Plan: Use K-1 as Compensation for Plan Purposes?

"We are looking at a prospect, small law firm, one 100% owner, his wife and about 6 staff. Entity is an S-Corp that has K-1 income. Can that be used as compensation for plan purposes? Or must it be be W-2 comp?"
BenefitsLink Message Boards

401(k) Funded Business (ROBS) Exempt in Personal Bankruptcy?

"Nowadays many people will roll their retirement funds into a ROBS account to self-fund a business. Is a 401k funded business (ROBS) protected or exempt from personal bankruptcy?"
BenefitsLink Message Boards

Employee in Both Union Plan and Employer Plan?

"I have a client with a safe harbor match only plan, which excludes union employees. The union plan is DB. Employer now wants to include only one of their 14 union employees in the 401k plan. All union employees are NHCEs. Assuming the CBA allows it, and aside from creating dissension in the ranks, is this OK?"
BenefitsLink Message Boards

Filed Form 5558 But Now Realize a Form 5500 Is Not Required

"In July, we had a new one-person plan for which we filed Form 5558. But the client's assets ended up being below the $250,000 threshold for the Form 5500 filing requirement. Will we eventually receive a notice stating a 5500 filing is late? Are we better off to just wait, or to call the IRS now?"
BenefitsLink Message Boards

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Most Popular Items in the Previous Issue

Another Small Crack in the Retirement System
Aron Szapiro, in Morningstar Advisor, 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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