Retirement Plans Newsletter

December 2, 2019

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Webcasts, Conferences

Retirement Plan Audits -- Basics, Best Practices and Upcoming Changes
January 16, 2020 in CA
Western Pension & Benefits Council - Orange County Chapter

Litigation and Legal Challenges in the World of Benefits Webinar
January 22, 2020 WEBCAST
Conference of Consulting Actuaries

PBGC - Premiums and Beyond Webinar
February 12, 2020 WEBCAST
Conference of Consulting Actuaries

►See 104 Upcoming Webcasts and Conferences

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Discussions

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[Official Guidance]

IRS Announces New Mailing Address for Employee Plans Submissions

"Effective immediately, the mailing addresses for EP submissions for determination letters, letter rulings and IRA opinion letters are:
[1] Regular U.S. Postal Service mail: Internal Revenue Service, P.O. Box 12192, TE/GE Stop 31A Team 105, Covington, KY 41012-0192.
[2] Deliveries by private delivery service: Internal Revenue Service, 7940 Kentucky Drive, TE/GE Stop 31A Team 105, Florence, KY 41042."

Internal Revenue Service [IRS]

[Sponsored]

ASC CE Webcast: Ethics for Employee Benefit Practitioners

Sponsored by ASC

Our annual ethics webcast is here! Topics include an overview of ethical responsibilities, significant ethical concerns of the IRS Office of Professional Responsibility, new practical case studies and much more. Register Now! Learn more


Editor's Pick 2019 Year-End Compliance Reminders for Defined Contribution Plans Not Subject to ERISA (PDF)

"This information applies to defined contribution plans, such as qualified governmental plans (including 'grandfathered' 401(k) plans), qualified church plans that do not elect to be covered by ERISA ('non-electing church plans'), 403(b) plans, and section 457 plans that are not subject to Title I of ERISA."

Prudential

Editor's Pick 2019 Year-End Compliance Reminders for Defined Contribution Plans Subject to ERISA (PDF)

"This information applies to qualified defined contribution plans and 403(b) plans that are subject to Title I of ERISA. Every year, plan sponsors must make sure their plans meet certain compliance requirements ... This publication identifies the materials you need to review and will help you prepare for year-end."

Prudential

Advance Copies of 2019 Form 5500 Series Now Available

"The copies are only for information purposes -- they can't be used in place of electronic filing through EFAST2. The updates to the forms and instructions are relatively minor.... [C]hanges of interest to retirement plan administrators: [1] Information on missed contributions.... [2] Higher late-filing penalties."

Mercer

DOL Amicus Brief Opposing Supreme Court Review of ERISA Burden of Proof on Loss Causation (PDF)

"Petitioners contend that review is warranted to address which party bears the burden of proof on the issue of causation once a plaintiff has established a breach of fiduciary duty under ERISA ... and to address whether passively managed index funds can be appropriate benchmarks for establishing losses from the improper monitoring of actively managed funds.... Although some disagreement exists among the courts of appeals on the first question, this case would be a poor vehicle in which to resolve that disagreement ... [T]he second question is factbound, and petitioners do not identify any disagreement among the courts of appeals. Further review is therefore unwarranted." [Putnam Investments, LLC v. Brotherston, No. 17-1711 (1st Cir. Oct. 15, 2018; cert. pet. filed Jan. 11, 2019, No. 18-926)]

U.S. Department of Labor [DOL]

[Sponsored]

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 Reverses District Court's 'Partnership-In-Fact' Holding, Finds Private Equity Funds Not Liable for Portfolio Company's Pension Liabilities

"Having determined that the record pointed away from concluding that the Sun Funds had created an implied 'partnership-in-fact' in connection with their investment in SBI -- meaning their ownership interests could not be aggregated for purposes of determining whether they were under 'common control' with SBI -- the First Circuit held that the Sun Funds could not be held liable for SBI's multiemployer pension fund withdrawal liability.... The First Circuit did not rule on the 'trade or business' issue, so the existing Sun Capital 'trade or business' analysis remains intact." [Sun Capital Partners III, LP v. New England Teamsters & Trucking Industry Pension Fund, Nos. 16-1376, 19-1002 (1st Cir. Nov. 22, 2019)]

Proskauer

No Partnership, No Common Control, No Withdrawal Liability: Private Equity Funds Not Liable for Portfolio Company's Multiemployer Plan Withdrawal Liability

"The Circuit Court found that because the two PE funds were not acting in partnership with each other, neither was responsible for the portfolio company's withdrawal liability, and vacated an award of nearly $9.4 million to a union pension fund." [Sun Capital Partners III, LP v. New England Teamsters & Trucking Industry Pension Fund, Nos. 16-1376, 19-1002 (1st Cir. Nov. 22, 2019)]

Seyfarth

Sun Capital Partners Wins Appeal, But Decision May Not Help Private Equity Funds

"Among the reasons this decision may not be helpful for other private equity funds is that many of them do make parallel investments.... Another entity is litigating the issue of whether its fund IV is engaged in a trade or business in two other jurisdictions.... This most recent Sun Capital Partners decision doesn't prevent plans or the PBGC from continuing to pursue private equity funds for pension liabilities." [Sun Capital Partners III, LP v. New England Teamsters & Trucking Industry Pension Fund, Nos. 16-1376, 19-1002 (1st Cir. Nov. 22, 2019)]

Cohen & Buckmann, P.C.

PBGC Gets Green Light to Seek Assets from Former Plan Sponsor

"The [PBGC] can go after the owner of a company that took more than two decades to shut down its pension plan ... Liberty Lighting began liquidating in 1991 but never informed the PBGC. Following the company's dissolution, owner Joseph Wortley filed for personal bankruptcy. Pension benefits were paid until plan assets were depleted, and the plan was terminated in July 2012[.]" [PBGC v. 20 SE 3rd St LLC, No. 18-81009 (S.D. Fla. Nov. 22, 2019)]

Pensions & Investments

Building Emergency Savings Through Employer-Sponsored Rainy-Day Savings Accounts

"For every $1 that flows into 401(k)s and similar accounts, between 30¢ and 40¢ leaks out before retirement ... Automatically enrolling workers into an employer-sponsored 'rainy-day' or 'emergency' savings account ... funded by payroll deduction could be a cost-effective way to achieve this goal. [The authors] explore three specific implementation options: [1] after-tax employee 401(k) accounts; [2] deemed Roth IRAs under a 401(k) plan; and [3] depository institution accounts.... [A]ll three approaches merit exploration and field testing."

National Bureau of Economic Research [NBER]

Corporate Pension Plan Buyouts Surge in Q3

"U.S. corporate pension plan buyout sales totaled $7.7 billion in the third quarter ... The amount for the quarter was up 22% from the third quarter of 2018, when buyout sales totaled $6.3 billion. Pension plan buyout sales for the first nine months of 2019 totaled $16.7 billion, up 5% from the $15.9 billion in sales during the same period in 2018."

Pensions & Investments

Editor's Pick Using Online Calculators to Choose Between Traditional and Roth IRAs

"Many investment planning websites offer calculators that show investors how much they can save for retirement with each type of IRA -- but how useful are they at helping investors choose between them? The authors provide an overview of the different factors that affect this decision and an analysis of how well various online calculators weigh these factors."

The CPA Journal

Benefits in General

Planning for 2020: Year-End Deadlines and Considerations for Employee Retirement, Health and Welfare Plans

"As the end of the year approaches, employers should be aware of important year-end deadlines and considerations related to their retirement and health and welfare plans."

Husch Blackwell

The Value of an HSA as a Tool for Retirement Savings

"While many employees still think of an HSA as little more than an FSA with a rolling balance, its value as a retirement savings vehicle has been largely under-appreciated. In fact, some retirement experts are even going as far as to advise employees to max out their HSA contributions before maxing out what they’re kicking in to their 401(k)."

Chelko Center for Benefits Management

Selected Discussions
on the BenefitsLink Message Boards

Two Spouses Spousing, Three Companies Comping, and a Partridge in a Pear Tree

"Husband is 100% owner of S-Corp A. Husband & Wife are 50/50 owners of S-Corp B. Wife is 50% owner of LLC C (the remaining 50% is owned by an unrelated 3rd party). They do have minor children together. It is believed that S-Corp B and LLC C are considered an Affiliated Service Group, and that S-Corp A is not an ASG with any business. Based on that, S-Corp A and S-Corp B are a controlled group, and S-Corp B and LLC C are a controlled group -- correct? We are trying to determine if Husband can establish an individual 401(k) for S-Corp A without the need to perform coverage testing from LLC C."

BenefitsLink Message Boards

Exclude Class of Employees (Mostly NHCEs) from Eligibility for Match under Safe Harbor Plan

"Plan has 3% SH and a discretionary match. Can they exclude 'junior executives' from the match? Most of these will probably be NHCEs. Coverage is not an issue."

BenefitsLink Message Boards

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David Rhett Baker, J.D., Editor and Publisher  davebaker@benefitslink.com
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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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