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Ridgewood NJ / San Diego CA

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[Guidance Overview]

Tax Reporting Guidance for Uncashed Checks Issued by Qualified Plans (PDF)

"[According to Rev. Rul. 2019-19,] a check that was distributed and received by the payee so he or she could cash the check in the year issued is taxable income to the participant (or beneficiary) and subject to Form 1099-R reporting and withholding rules. This answer does not vary regardless of whether the participant or beneficiary keeps the uncashed check, sends it back to the plan, destroys it, or cashes it in a subsequent year."

Groom Law Group, via TAXES, the Tax Magazine


Electronic Disclosure under ERISA: How to Effectively Use Technology without Sacrificing Compliance

Sponsored by Lorman and BenefitsLink

Dec. 3 webinar. Gain a better understanding of how to use technology while staying compliant under ERISA. BenefitsLink discountLearn more

First Circuit Opinion: Private Equity Partners Not Responsible for Withdrawal Liability (PDF)

"The issues raised involve conflicting policy choices for Congress or PBGC to make. On one hand, imposing liability would likely disincentivize much-needed private investment in underperforming companies with unfunded pension liabilities. This chilling effect could, in turn, worsen the financial position of multiemployer pension plans. On the other hand, if the MPPAA does not impose liability and the Pension Fund becomes insolvent, then PBGC likely will pay some of the liability, and the pensioned workers (with 30 years of service) will receive a maximum of $12,870 annually. ... The district court held that there was an implied partnership-in-fact which constituted a control group. We reverse because we conclude the Luna test has not been met and we cannot conclude that Congress intended to impose liability in this scenario." [Sun Capital Partners III, LP v. New England Teamsters & Trucking Industry Pension Fund, Nos. 16-1376, 19-1002 (1st Cir. Nov. 22, 2019)]

U.S. Court of Appeals for the First Circuit

Supreme Court Declines to Hear ERISA Suit Against Great-West

"Great-West provided record-keeping, administrative and investment services to the sponsor as well as a stable value fund. Mr. Teets alleged that Great-West's setting of a stable value fund's terms violated ERISA because it favored Great-West's profits 'at the expense of participants who invest in its fund' ... In December 2017, a U.S. District Court judge in Denver granted Great-West's motion for summary judgment, saying that Great-West was not a fiduciary.... [T]he 10th U.S. Circuit Court of Appeals ... upheld the district court's decision in March 2019." [Teets v. Great-West Life & Annuity Ins. Co., No. 18-1019 (10th Cir. Mar. 27, 2019; cert. denied Nov. 25, 2019)]

Pensions & Investments

The Fiduciary Breach Lawsuits: Lessons Learned

"[L]imiting the number of investments to a reasonable range ... can enable participants to have a better understanding of their options and empower them to make thoughtful allocation decisions.... [P]lan sponsors should closely examine their reasons for including more than one provider in their plan.... [P]lan sponsors should consider conducting an RFP for their plan if one has not been done in the last several years[.]"

Cammack Retirement Group

Adding a 'Retirement Tier' of Plan Provisions for Participants Nearing Retirement

"[P]lan design ideas to assist those at or near retirement ... could include: [1] Offering former participants and retirees the option to fund their retirement through ad hoc partial withdrawals from the plan ...  [2] Including more retirement income investment options, such as annuities ... [3] Adding investment options that are appropriate for participants making withdrawals; [4] Providing targeted communications to participants who are near or in retirement on how to invest their savings while taking withdrawals; and [5] Encouraging employees to consolidate their retirement savings by rolling into the plan any amounts accumulated in IRAs and plans of former employers."

Trucker Huss


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Editor's Pick 2020 Retirement Plan Compliance Calendars Now Available

"For defined benefit (DB) and defined contribution (DC) plan years starting Jan. 1, these retirement plan compliance calendars list key IRS, PBGC, and [DOL] reporting and disclosure deadlines. Two calendars are available: A DB plan calendar provides key 2020 dates for plan years starting Jan. 1. A separate DC plan calendar supplies 2020 deadlines for plan years starting Jan. 1."


Legislation Would Allow 401(k) Withdrawals to Pay LTC Premiums

"Sen. Pat Toomey (R-PA) ... is working on a bill that would allow individuals to withdraw funds from their 401(k), 403(b), 457(b) and IRA accounts to pay for long-term care insurance without being subject to the 10% early withdrawal penalty. The draft legislation ... would also allow up to $2,000 in withdrawals annually per individual to be excluded from income tax, provided the amount is used to pay for qualified LTC insurance for the individual, their spouse or a dependent."

National Association of Plan Advisors [NAPA]

Senators Grassley and Alexander Release a Proposal on Multiemployer Pension Plan Reform

"The Reform Plan provides significant relief for plans that are heading toward insolvency by way of partitions, increased PBGC guarantees and funding to keep PBGC solvent and able to pay guaranteed benefits. The tradeoff, however, is more onerous rules for all other multiemployer plans. It is likely the rules will be opposed by the Democrats, multiemployer stakeholders and others, will be subject to continued negotiations and may be dropped or substantially altered."

Segal Consulting

New Multiemployer Pension Reform Proposal Released

"The proposal, called the 'Multiemployer Pension Recapitalization and Reform Plan', would substantially modify the multiemployer provisions of [ERISA] and the Internal Revenue Code. ...  The proposal has an uncertain future and may well draw opposition because the changes would have a significant impact on all multiemployer plans, participants, and beneficiaries."


Auto-Enrolled in Your 401(k)? Make Sure You're Saving Enough

"[C]ompanies that auto-enroll employees ... have participation rates that exceed 90% -- well above the 50% for opt-in plans.... [M]any savers leave their contributions set at the default rate, which averages just 3.4% nationwide. That's substantially lower than the amount workers need to contribute to receive the maximum company match, which averages 5.1% nationwide."

Charles Schwab

PBGC's Good News Could Sour Quickly

"The recent introduction of a Senate Republican proposal to help critically underfunded multiemployer pension funds and prevent more of them did little to calm fears that the proposed changes -- including higher premiums and lower discount rates -- could wind up hurting even healthy plans and the PBGC multiemployer program further."

Pensions & Investments

What's the Ideal Composition of a Defined Contribution Retirement Plan Committee?

"While committee members do not need to be experts in investments, having a basic knowledge of retirement plans and/or financial markets proves helpful. It is also important to include a range of individual perspectives."

Cammack Retirement Group


ERIC Comment Letter to EBSA on Proposed Regs for Default Electronic Disclosure by Employee Pension Benefit Plans (PDF)

"ERIC strongly supports the core of the Proposed Rule, which is a website posting safe harbor (the Notice and Access Safe Harbor) that permits plan administrators to satisfy the requirement that disclosures under Title I of [ERISA], be provided by delivery methods 'reasonably calculated to ensure actual receipt' by participants by posting the documents to a website and preserving the right of individuals who prefer paper disclosures to opt into paper delivery."

The ERISA Industry Committee [ERIC]


Pension Rights Center Comment Letter to EBSA on Proposed E-Disclosure Safe Harbor (PDF)

"The Pension Rights Center strongly objects to the proposed 'notice and access' delivery method in the proposed safe harbor which will harm many participants, particularly the most vulnerable populations, who are expected to understand their retirement plans and make good choices to ensure a secure retirement for themselves and their families.... The Pension Rights Center recommends that the [DOL] withdraw this flawed proposal for delivery of required disclosures and reconsider how to streamline ERISA disclosures without causing grave harm to participants and beneficiaries."

Pension Rights Center

Benefits in General

How Work, Rewards and Benefits Have Evolved Over the Past Century (PDF)

14 pages. "By exploring key forces of change, and through the lens of [Buck's] own history, this paper will show how the present-day employer-employee relationship has evolved, what lessons were learned that built the workforce of the 21 st century, what challenges are looming, and how some employers, including Buck, are responding to them. Call it the new social contract for the still-new century."

Buck, via WorldatWork


ACLI Comment Letter to EBSA About Proposed Regs for Electronic Disclosure by Employee Pension Benefit Plans Under ERISA

"Expand the safe harbor to include welfare benefit plan required disclosures ... Include a definition of 'electronic address' ... Provide additional flexibility in delivering the notice of internet availability ... Broaden the rule to allow for the direct electronic delivery of documents ... Maintain ERISA's current 'readability' standard ... Clarify the paper delivery/opt-out requirement ... Modify the notice consolidation provision ... Modify the applicability date ... IRS/Treasury should quickly adopt electronic disclosure rules that align with the department's final rule."

American Council of Life Insurers [ACLI]

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

Determining the Taxability of Employer-Provided Executive Health Examination Programs

"[A] medical diagnostic procedure arrangement may be designed to discriminate in favor of highly compensated employees without causing any taxable income to such employees ... [If] a physical examination program includes specific tests based on an executive's known illnesses, disabilities, injuries, or complaints, it will probably fail to meet the exception. An employer may also want to consider ensuring that the program does not offer any diagnostic procedures related to exercise, fitness, nutrition, recreation, or the general improvement of health."

Ogletree Deakins

Selected Discussions
on the BenefitsLink Message Boards

Provision for Distribution from Partially-Vested Account -- A Protected BRF?

"We have a bunch of plans that allow in-service and/or partial withdrawals fall all accounts, whether or not they are fully vested. Can we amend those plans to allow in-service or partial withdrawals only for fully vested accounts? Would that be a prohibited cutback of a 'benefit, right or feature?'"

BenefitsLink Message Boards

Controlled Group: Can Members Have Different Safe Harbor Contributions? How About Different Matches?

"Controlled group. 3 companies: A, B and C. Company A does not pass coverage on its own, Companies B and C do. I can test A and B together, because together they pass coverage excluding C. C passes excluding A and B. Can A and B have different Safe Harbor formulas? For example, one a 3% and the other a SH Match? If not, could I have A with SH match plus a discretionary match (that satisfies ACP Safe Harbor) and B with just the SH match?"

BenefitsLink Message Boards

Ugly IRA Problem -- Any VCP-Like Option?

"Ugly IRA excess contribution situation over 18 years and potential $400K excise taxes. Is there a person or department at IRS we could approach to make an anonymous VCP-type application proposing corrective action?"

BenefitsLink Message Boards

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Press Releases

PEI Launches New Website
Portfolio Evaluations, Inc.

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

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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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