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November 26, 2019 logo logo
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[Official Guidance]

PBGC Publishes Updated ERISA Section 4044/4050 Mortality Tables for 2020 Valuations

"PBGC has updated the ERISA section 4044 mortality table for 2020 valuations. This table is used to determine liabilities when a single-employer plan terminates in an involuntary or distress termination. It is also used when a multiemployer plan incurs a mass withdrawal. HTML and Excel versions of the 2020 mortality tables are available ... A unisex version of the table is also available ... The unisex version is used in specified situations to determine the benefit transfer amount under the Missing Participants Program."

Pension Benefit Guaranty Corporation [PBGC]


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[Official Guidance]

Text of 2019 Instructions for IRS Form 5329: Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts (PDF)

"You must file Form 5329 if any of the following apply ... [1] You received a distribution from a Roth IRA and either the amount on line 25c of Form 8606 ... is more than zero, or the distribution includes a recapture amount subject to the 10% additional tax, or it's a qualified first-time homebuyer distribution ... [2] You received a distribution subject to the tax on early distributions from a qualified retirement plan ... [3] The contributions for 2018 to your traditional IRAs, Roth IRAs, Coverdell ESAs, Archer MSAs, HSAs, or ABLE accounts exceed your maximum contribution limit ... [4] You didn't receive the minimum required distribution from your qualified retirement plan." [Also available: 2019 IRS Form 5329]

Internal Revenue Service [IRS]

[Guidance Overview]

Closed Defined Benefit Plans: Nondiscrimination Testing Relief Extended Through 2020, Expanded to Include BRF Testing

"Like the initial guidance, the new guidance provides relief for closed plans only if the amendment closing the plan was adopted before December 13, 2013. But this relief was only available for plans that satisfied coverage and nondiscrimination testing for 2013 either on a standalone basis or under one of two 'gateway' testing methods that relied on the sponsor also providing defined contribution plan benefits. The new relief in Notice 2019-60 doesn't impose such a requirement for benefits, rights, and features testing relief; that is, eligibility for this relief does not depend on the method used to satisfy the nondiscrimination requirements for the plan year beginning in 2013."

Morgan Lewis

[Guidance Overview]

What Would the Multiemployer Pension Recapitalization and Reform Plan Do?

"The proposal incorporates the work of the 2018 Joint Select Committee on the Solvency of the Multiemployer Pension System. Generally, it seeks to have the [PBGC] multiemployer pension plan insurance program adopt characteristics of the single employer pension insurance program. The Multiemployer Pension Recapitalization and Reform Plan proposal is based on a shared responsibility framework in which employers, unions, workers and retirees would make a sacrifice to shore up the PBGC's role as an insurance company. A 'limited infusion of taxpayer dollars' would be proposed to help the PBGC insure some liabilities of soon-to-be insolvent plans."

International Foundation of Employee Benefit Plans [IFEBP]

Sun Capital Prevails in Withdrawal Liability Dispute, But Pension Risks Remain for Private Equity Funds

"[The First Circuit] determined that, while certain factors weighed in favor of a 'partnership-in-fact' ... the preponderance of the factors tilted against the existence of the 'partnership-in-fact' ... [By] not modifying or overruling the 'partnership-in-fact' doctrine applied by the lower court, the First Circuit's recent decision leaves room for another court to weigh the 'partnership-in-fact' factors differently and arrive at an alternative conclusion[.]" [Sun Capital Partners III, LP v. New England Teamsters & Trucking Industry Pension Fund, Nos. 16-1376, 19-1002 (1st Cir. Nov. 22, 2019)]

Ropes & Gray LLP

Class Action Plaintiffs in Fiduciary Suit Against Former Employer Will Get 'Advisory Jury'

"The plaintiffs sought a monetary award against the defendant, Fidelity Investments, for allegedly managing their retirement plan in a manner that caused substantial losses.... [The federal district court judge's] decision to order an advisory jury could motivate parties in future cases similarly to characterize the jury question as a 'close call' and suggest an advisory jury as a fallback position.... [By] empaneling an advisory jury, the court is creating an inefficiency because it will need to exercise its independent judgment once the jury renders its advisory verdict." [Moitoso v. FMR, LLC, No. 18-12122 (D. Mass. Oct. 8, 2019)]

New England In-House

Editor's Pick 2019 End of Year Plan Sponsor 'To Do' List, Part 3: Qualified Retirement Plans

"[T]his Part 3 covers qualified plan issues ... [and] provides you with a 'To Do' List of items on which you may want to take action before the end of 2019 or in early 2020."

Snell & Wilmer

A Retirement Plan's Definition of Compensation: Are Tips a Trap?

"[E]mployees can still elect to defer a set percentage of total compensation, so if an employee elects to defer 3% of total eligible compensation, 3% of tip income must be withheld from the employee's regular pay, since the employee has already received the cash tips.... Some plan sponsors may want to avoid this trap altogether by excluding tips from the definition of eligible compensation in the plan document, but it may not be that easy."

Belfint Lyons Shuman

What Is a 401(k) Investment Policy Statement?

"It's not required by law, but it has become a best practice. And there's a good reason for this. The 401k Investment Policy Statement (IPS) offers plan sponsors an avenue for safety, but only if they're careful.... It can (and should be) a detailed document that sets forth the due diligence procedures the plan sponsor will follow regarding the selection and monitoring of investments. In doing this, the IPS creates a template for ongoing reporting; thus, providing valuable evidence that plan sponsors have abided by their fiduciary duty."

Fiduciary News


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Supreme Court May Resolve Key ERISA Statute of Limitations and Proprietary Fund Litigation Questions

"[This podcast, with transcript, reviews] current trends in proprietary funds litigation, the key legal issues surrounding the statute of limitations for claims arising under ERISA, and the upcoming Intel case before the Supreme Court that could have significant ramifications for 401(k) plan sponsors and employers."

Ropes & Gray LLP

Multiemployer Pension Plans Could See Significant Change

"U.S. Senators Chuck Grassley (R-IA) and Lamar Alexander (R-TN), released ... a proposal that, if passed, would dramatically change the playing field for multiemployer pension plans.... PBGC premium structure would be reformed ... PBGC multiemployer insurance guarantee would increase ... Expanded partition authority would address orphaned participants ... Mandated actuarial funding assumptions would be more conservative ... Revised zone certifications may result in additional restrictions ... Calculation of withdrawal liability could be simplified ... Federal funding would be required."


Annual Statistical Supplement to the Social Security Bulletin, 2019 (PDF)

432 pages. "About 62.9 million persons received Social Security benefits for December 2018, an increase of 1,002,862 (1.6 percent) since December 2017.... Sixty-nine percent of the 43.7 million retired workers received reduced benefits because of entitlement prior to full retirement age.... The number of beneficiaries aged 65 or older rose from about 40.8 million in 2013 to about 47.1 million in 2018 (15.4 percent)."

U.S. Social Security Administration [SSA]


Collected Comment Letters to EBSA on Proposed Regs for Default Electronic Disclosure by Pension Benefit Plans as Defined in ERISA Section 3(2)

254 letters posted to the DOL website as Nov. 25, 2019 were submitted to DOL in response to its request for comments on proposed regs for electronic disclosures by administrators of employee pension benefit plans as defined in ERISA section 3(2). The deadline for comments was Nov. 22, 2019.

Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]


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

17 pages. "The SPARK Institute shares the Department's belief that the proposed safe harbor will make retirement plan notices and disclosures more effective, more useful, and less costly for retirement savers.... [We] also believe that the Department can and should make modifications to its proposal to further reduce costs and improve the effectiveness of disclosures generally."

The SPARK Institute


Why ERISA Matters: Benefits for Surviving Spouses

"The Retirement Equity Act of 1984 was designed to change all of that. By implementing the requirement of a spousal survivor annuity, a whole class of non-working spouses received protection which was desperately needed. So in [a] speech to my friend's [plan administration] staff, I asked them to take a broader view -- if just for a moment -- of the important task they were being asked to implement. It was valuable social policy with real, human effect which they were responsible for pulling off, and they should take a measure of pride in the work they were doing."

Robert Toth, in Business of Benefits

Benefits in General

Understanding Attorney-Client Privilege in the Benefits Claims Process

"[A] plan fiduciary must act solely in the interests of participants and beneficiaries. Therefore, when a plan fiduciary speaks with a lawyer about matters relating to plan administration, the 'real client' ... is the participant or beneficiary who is impacted by the issue and not the plan fiduciary.... [T]he fiduciary exception is not without its limits."


Executive Compensation
and Nonqualified Plans

[Guidance Overview]

Independent Security Studies Provide Tax Benefits and Protect Valued Executives

"The Internal Revenue Code makes clear that, unless there is a specific authorized exemption from taxation, employers must treat any in-kind or cash benefit as taxable to the employee, include the benefits on Form W-2, and withhold employment taxes. ... [M]any 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 also may allow for exclusion of those benefits under the favorable provisions of Code Section 132."

Winston & Strawn LLP

Selected Discussions
on the BenefitsLink Message Boards

Participant Dies Before Depositing Distribution Check

"Participant requests a lump sum cash distribution payable to herself. It gets overnighted to her and received, but she dies before depositing it or cashing it or whatever transaction she was going to do. The participant's son wants to deposit it into the participant's checking account to make it part of the estate. The plan beneficiary (who is the late participant's mother) wants to have the whole transaction stopped and re-processed, arguing that since the check wasn't cashed yet, those are still plan assets and therefore the payment should now go to her as beneficiary."

BenefitsLink Message Boards

Need to Amend Form 5500 for 2014-15 -- EFAST2 Wants Current Version Instead?

"I am working with an ESOP to get their problems cleaned up. We need to file an amended Form 5500 for the 10/1/2014 to 9/30/2015 plan year. We can't access the 2014 form on ftwilliam. I don't do really old forms like this very often but something in the back of my mind says after so many years EFAST2 requires you to submit a very old 5500 using the current year's form instead. Can someone confirm this for me?"

BenefitsLink Message Boards

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Press Releases

Most Popular Items in the Previous Issue, Inc.
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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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