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[Official Guidance]

Text of IRS Notice 2019-64: 2019 Required Amendments List for Qualified Retirement Plans and Section 403(b) Retirement Plans (PDF)

"December 31, 2021 generally is the last day of the remedial amendment period with respect to [1] a disqualifying provision arising as a result of a change in qualification requirements that appears on the 2019 RA List and [2] a form defect arising as a result of a change in Section 403(b) requirements that appears on the 2019 RA List.... December 31, 2021, generally is also the plan amendment deadline for a disqualifying provision arising as a result of a change in qualification requirements that appears on the 2019 RA List and for a form defect arising as a result of a change in Section 403(b) requirements that appears on the 2019 RA List. Later dates may apply to a governmental plan ...

"Changes in requirements that generally would require an amendment to most plans or to most plans of the type affected by the change:

  • Final regulations relating to hardship distributions ...
  • Final regulations regarding cash balance/hybrid defined benefit plans ...

"Other changes in requirements that may require an amendment:

  • None."

Internal Revenue Service [IRS]

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[Guidance Overview]

IRS Finalizes Regs on Changes to Hardship Distribution Rules (PDF)

"[F]or safe harbor plans, if the new hardship rules were not described in the 2020 safe harbor notice, employees must be provided an updated notice to reflect the new hardship withdrawal provisions and must be given the opportunity to change their election.... [It] is likely not practicable to provide the notice in advance of the January 1, 2020 effective date of the plan amendment ... [T]he notice should be provided as soon as practicable, but no later than 30 days after the amendment is adopted."

Boutwell Fay LLP

Massachusetts Rule Would Impose Fiduciary Standard for All Financial Advice

"Massachusetts Secretary of the Commonwealth William Galvin has signed off on a proposed rule that would impose a fiduciary conduct standard for broker-dealers, agents, investment advisers and investment adviser representatives providing financial advice to clients in the state.... A public hearing will be held on the proposal next month ... with adoption to follow as soon as Feb. 1."

Advisor News

Are Mandatory Individual Arbitration Clauses in 401(k) Plans a Good Idea?

"The answer requires a careful balancing of potential pros and cons of mandatory individual arbitration clauses ... ... The key potential benefit [is] ... the potential deterrent effect on frivolous ERISA fiduciary breach class action claims.... The key potential risk [is] ... the potential for mass filings of individual arbitration claims. "

Troutman Sanders

Court Rejects Equitable Exception to MPPAA's 'Pay Now, Dispute Later' Regime

"[The federal district court] looked to other Circuit courts that had recognized an equitable exception, finding that those courts (the Fifth and Seventh Circuits) had conditioned the exception on an affirmative showing by the employer 'that the pension fund lacks a colorable claim' for withdrawal liability. Absent any allegation that the fund's claim was frivolous, the court denied the employer's request for an equitable exception to the pay now, dispute later requirement." [Boilermaker-Blacksmith National Pension Trust v. PSF Industries, No. 18-2467 (D. Kan. Nov. 27, 2019]

Jackson Lewis P.C.

Dismissal of DOL's Failure to Monitor Suit Was Appropriate Based on Retirement Committee's Swift Action to Rectify Undiversified Trust

"[T]he district court held (and the DOL conceded) that the Committee did not have actual notice of LaBow's breach until it received the quarterly report from Mercer on December 29, 2008. No duty to monitor arose until that point, and the record was replete with evidence that the Committee and its ERISA counsel were engaged in overseeing LaBow on an almost daily basis thereafter until the large cap energy account was dissolved. Within this context and with the extreme volatility of the market, the court held that the Committee did not breach its duty to monitor and granted summary judgment in its favor." [Scalia v. WPN Corp., Ronald LaBow, Severstal Wheeling Retirement Committee, et al., No. 14-1494 (W.D. Pa. Sept. 30, 2019)]

Hodgson Russ LLP

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

"[It] remains possible for two or more co-investing private investment funds to be deemed to be engaged in a 'trade or business' and under 'common control' with a portfolio company under a 'partnership-in-fact' analysis.... [T]his ruling should not preclude, but may hamper, the efforts of multiemployer pension plans and the PBGC to collect plan termination and withdrawal liability from private investment funds (and their other portfolio companies) based on a 'partnership-in-fact' analysis." [Sun Capital Partners III, LP v. New England Teamsters & Trucking Industry Pension Fund, Nos. 16-1376, 19-1002 (1st Cir. Nov. 22, 2019)]


Schwab Self-Directed Brokerage Account Indicators, Quarter Ending September 30, 2019 (PDF)

10 pages. "The average account balance for all participants in the Schwab Personal Choice Retirement Account® (PCRA) was up less than 1% to $276,929 from $275,362 a year ago and almost identical $276,547 from last quarter. Trading volumes were even with last quarter at an average of 6.7 trades per account.... SDBA participants aged 55 and over were 38.6% out of all participants, while the Gen X (age 39-54) participants were slightly higher at 41.8% and Millennials (age 27-38) at 12.9%."

Charles Schwab

Editor's Pick A Clear Roadmap to Navigating Your Plan's LDI Challenges

"In this environment, corporate defined benefit pension plan sponsors pursuing LDI generally turn to the U.S. long bond market to hedge long-term liabilities. A detailed understanding of this $3.5 trillion market is critical for crafting an effective investment strategy.... [1] An active approach to LDI ... [2] Charting the LDI opportunity set ... [3] Questions all plan sponsors should ask."

Institutional Investor

State and Local Government Spending on Public Employee Retirement Systems (PDF)

Updated Dec. 2019. "In the wake of the 2008-09 market decline, nearly every state and many cities have taken steps to improve the financial condition of their retirement plans and to reduce costs.... This update provides figures for public pension contributions as a percentage of state and local government direct general spending for FY 2017, and projects a rate of spending on pensions on an aggregate basis for FY2018."

National Association of State Retirement Administrators [NASRA]

FAS87 ASC715 Discount Rates and Moody's Rates, Updated November 26 and 27, 2019

An unofficial monthly report 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

Editor's Pick Navigating the Government Pension Offset Rule for Social Security Spousal Benefits

"While there are stirrings of legislative proposals to eliminate the [Government Pension Offset (GPO)] rule, the population actually affected by these rules is relatively small (approximately 1% of all Social Security beneficiaries in 2018 were affected by the GPO).... [A]dvisors can help their clients by understanding when the GPO needs to be factored into a client’s financial plan, especially given that it the GPO can heavily or fully eliminate Social Security spousal or survivor benefits that they might have otherwise anticipated receiving!"

Nerd's Eye View

Benefits in General

Judicial Trend Away from Recognizing Equitable Remedies for Benefit Claims Under ERISA

"A court in Florida has declined to expand the remedies available under a claim for benefits due under 29 U.S.C. Section 1132(a)(1)(B) of ERISA.... The court dismissed the plaintiff's claim for 'equitable estoppel by silence' under that provision of ERISA's civil remedies. This supports the trend in other courts following the U.S. Supreme Court's 2011 decision in CIGNA Corp. v. Amara, which marked firm boundaries for litigation of claims under Section 1132(a)(1)(B) versus under Section 1132(a)(3) of ERISA." [Keys v. Bert Bell/Pete Rozelle NFL Player Retirement Plan, No. 18-2098 (M.D. Fla. Nov. 12, 2019)]

Jackson Lewis P.C.

Selected Discussions
on the BenefitsLink Message Boards

RMDs Needed for Parents Due to Being Deemed 5% Owners?

"I own a company (100%) and have my parents as employees (no ownership). My company sponsors a pension plan. Under the Code section 318 attribution rules, my parents are 5% owners, so RMDs are required. Correct?"

BenefitsLink Message Boards

SIMPLE IRA -- Move from 5305 to 5304

"We have a client who owns a small business. The small business operates a SIMPLE IRA with the 5305-SIMPLE form being the governing document. She wants to move her account to our firm to manage the investments, but not force the other partners and employees to move their accounts. Obviously this would mean amending the plan to be governed by a 5304 document. Can she amend the plan to be a 5304 whenever, or would it be subject to the 11/2 (60 Day) notices?"

BenefitsLink Message Boards

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Press Releases

Most Popular Items in the Previous Issue

DOL Inspector General Semiannual Report to Congress (PDF)
Office of Inspector General, U.S. Department of Labor [DOL], 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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