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Retirement Plans Newsletter December 11, 2019 |
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Webcasts, Conferences Executive Compensation in Volatile Times: Advice for Privately-held Companies and Their Executives
Cash Balance Plans, Compliance and Design
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Discussions |
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This Newsletter:
BenefitsLink Health & Welfare Plans Newsletter:
Message Boards Digest:
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[Guidance Overview] "The DOL and IRS would facilitate the use of MEPs for employers that might otherwise be concerned that they lacked a nexus of interest to be in a single plan or that a single employer's lack of compliance with applicable law could result in the entire MEP being disqualified." McDermott Will & Emery |
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[Guidance Overview] Best Interest Standard of Care for Advisors, Part 20 "While June 30 may seem like distant date, it will be upon us before we know. From the firm's perspective (i.e., the broker-dealer or RIA), the [Form CRS/ADV Part 3] must be developed, training must be developed and delivered, policies and procedures need to be written, supervisory systems need to be designed and put in place, and on and on. Now is the time to be working on this project regardless of whether your firm is an investment advisor, a broker-dealer or a dual registrant." FredReish.com |
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401(k) Administration Checklist for the 2020 Plan Year "[This checklist is] broken into 3 sections: [1] Deadline Tasks -- Summarizes the tasks that must be completed by a specific deadline. [2] Periodic Tasks -- Summarizes the tasks that may need to be completed during the year. [3] Plan Records -- Summarizes the plan year records to keep for documentation purposes." Employee Fiduciary |
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Aligning a Plan Sponsor's Plan Design with Their Business Objectives "Taking time to evaluate the plan sponsor's goals each year can help pinpoint features of the plan that are no longer aligned with the current needs of the business.... [1] Review plan objectives ... [2] Review plan metrics ... [3] Benchmark plan metrics and features ... [5] Introduce plan design features that align with plan objectives." Newport Group |
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Investment Management Fee Study Highlights Key Industry Trends "98% of total fees paid went to active managers, while 70% of assets were managed actively. Fees were concentrated; 50% of total fees went to under 10% of management firms. Hedge fund-of-funds had the highest fees: 112 basis points. Passively managed U.S. large cap/all cap had the lowest: 2 bps. Pricing power was strongest for private real estate and non-U.S. equity products." Callan |
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[Sponsored]
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Hidden Payments and Costly Plans Dent Teachers' Retirement Savings "Hidden financial ties exist between some administrators hired by school districts for their teacher retirement plans and the companies whose investment products those administrators promote.... [S]ome third party administrators offer teachers investment options mainly from companies willing to pay them to promote their products, including by defraying some or all of a plan's administration costs." The Wall Street Journal; subscription may be required |
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"As part of the Pacific Coast Fund's rehabilitation plan, the Fund's trustees used Amendment 24 to the Plan to specifically create 'non-benefit contributions' and excluded those from the definition of 'contributions' for which contributions would need to be made to a traveler's home fund.... The Court held that travelers' pass-through contributions made to home funds are not assets of the Pacific Coast Fund, that attempts to make 'benefit contributions' into 'non-benefit contributions' pursuant to a collective bargaining agreement are unavailing and that all traveler contributions must be passed through the Plan as required by the Plan." [Lehman v. Nelson, No.18-35321 (9th Cir. Dec. 3, 2019)] Kantor & Kantor |
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Republicans Propose Wholesale Reform of Multiemployer Pension Plan System "If implemented, the proposed reforms (not yet introduced as a bill) would represent dramatic and far-reaching changes to the multiemployer pension plan system.... The proposed reforms would attempt to finance improvements and strengthen the [PBGC] by creating a new premium structure, including increasing the annual per-participant premium from $29 to $80 and imposing a copayment on active employees and most retirees." Jackson Lewis P.C. |
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"In mid-2019, 36 percent of US households owned [IRAs]. More than eight in 10 IRA-owning households also had employer-sponsored retirement plan accumulations or had defined benefit plan coverage. All told, more than six in 10 US households had retirement plans through work or IRAs; three-quarters of near-retiree households did.... About six in 10 traditional IRA -- owning households in mid-2019 indicated their IRAs contained rollovers from employer-sponsored retirement plans.... Traditional IRA-owning households with rollovers cite multiple reasons for rolling over their retirement plan assets into traditional IRAs." Investment Company Institute [ICI] |
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[Opinion] "It is not too late to prevent this looming retirement crisis. To do so, we need to expand the part of the system that works -- Social Security -- and fix the one that does not: 401(k)-style plans. We also need to protect remaining DB pensions, the only type of employer-based plan that shields workers from investment risks. Finally, we need to ensure that the system is fair and government subsidies help those who need it rather than magnifying wealth inequality." Economic Policy Institute |
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[Opinion]
"The shift from pensions to account-type savings plans has been a disaster for lower-income, black, Hispanic, non-college-educated, and single workers, who together add up to a majority of the American population. But even among upper-income white college-educated married couples, many do not have adequate retirement savings or benefits.... [This] underscores the importance of preserving and expanding Social Security, defending defined benefit pensions for workers who have them, and seeking new solutions for those who do not." Economic Policy Institute |
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Selected Discussions |
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For Terminating Overfunded Cash Balance Plan, Which Assets Are Subject to QJSA Requirements? "For a terminating cash balance plan that's overfunded, must all assets from the plan retain QJSA options for distribution? Or instead must one only preserve the QJSA option for amounts correlated to respective individual hypothetical account balances?" BenefitsLink Message Boards |
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4% Minimum Deferral Requirement Permitted in Plan with Safe Harbor Match? "A sponsor wants to amend their plan to require employees who defer to defer at least 4%. Employees cannot elect a lower percentage unless it is zero. Other than needing to be tested under 401(a)(4), how would we even do this? Is this permissible? It seems like it would flagrantly disfavor NHCEs. Complicating matters is the fact that the plan presently has a Safe Harbor match, and plans to keep it for the foreseeable future." BenefitsLink Message Boards |
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Press Releases |
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OneDigital Health and Benefits Acquires Managed Benefit Systems, Inc.
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Securian Financial Introduces Secure Insights Data Modeling Tool for Group Insurance Customers
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The Path Forward for Mental Health and Substance Use Names Eight Regions to Spearhead Employer Efforts to Improve Access to Effective Care
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Most Popular Items in the Previous Issue |
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All in the Family: Why Controlled Group Rules Matter
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BenefitsLink.com, Inc.
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Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager
Article submission: Online form
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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