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Webcasts, Conferences

Loans: Correcting Taxation, Qualification and Fiduciary Failures
January 15, 2020 WEBCAST
ASPPA [American Society of Pension Professionals & Actuaries]

The Fiduciary Rule, Again?
January 22, 2020 WEBCAST
ASPPA [American Society of Pension Professionals & Actuaries]

Communicating Employee Benefits and Compensation Symposium
February 12, 2020 in NY
The Conference Board

►See 94 Upcoming Webcasts and Conferences

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[Official Guidance]

Text of IRS Notice 2020-01: Weighted Average Interest Rates, Yield Curves, and Segment Rates for December 2019 (PDF)

"This notice provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates used under Section 417(e)(3), and the 24-month average segment rates under Section 430(h)(2) ... In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under Section 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate under Section 431(c)(6)(E)(ii)(I)."

Internal Revenue Service [IRS]


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[Official Guidance]

Text of PBGC Interest Rate Update for Benefits Payable in Terminated Single-Employer Plans, and for Valuing and Paying Benefits, January and First Quarter 2020

"The January 2020 lump sum interest assumptions will be 0.25 percent for the period during which a benefit is in pay status and 4.00 percent during any years preceding the benefit's placement in pay status. In comparison with the interest assumptions in effect for December 2019, these assumptions represent no change ... The first quarter 2020 interest assumptions will be 2.12 percent for the first 25 years following the valuation date and 2.26 percent thereafter. In comparison with the interest assumptions in effect for the fourth quarter of 2019, these interest assumptions represent no change in the select period, a decrease of 0.41 percent in the select rate, and a decrease of 0.27 percent in the ultimate rate."

Pension Benefit Guaranty Corporation [PBGC]

[Official Guidance]

Text of 2019 Instructions for IRS Form CT-1, Employer's Annual Railroad Retirement Tax Return (PDF)

"Use Form CT-1 to report taxes imposed by the Railroad Retirement Tax Act (RRTA).... File Form CT-1 if you paid one or more employees compensation subject to tax under RRTA. A payer of sick pay (including a third party) must file Form CT-1 if the sick pay is subject to Tier 1 railroad retirement taxes. Include sick pay payments on lines 8-11 and, if the withholding threshold is met, line 12 of Form CT-1."

Internal Revenue Service [IRS]

[Official Guidance]

Text of IRS Rev. Proc. 2020-09: Amendments Treated as Integral to Hardship Distribution Provisions (PDF)

"This revenue procedure clarifies which amendments are treated as integral to a plan provision that fails to satisfy the qualification requirements of the Internal Revenue Code by reason of a change to those requirements made by the recently published regulations under Sections 401(k) and 401(m) relating to hardship distributions of elective deferrals. This revenue procedure also extends the deadline, applicable to pre-approved plans, for adopting an interim amendment relating ... to December 31, 2021."

Internal Revenue Service [IRS]

[Guidance Overview]

PBGC Approves Revisions to AAA's Withdrawal Liability Arbitration Rules; Employer Fees Reduced

"Under the new AAA fee schedule approved by PBGC, [disputes involving amounts between $1 million and $5 million] will carry a maximum AAA fee of $3,750. Similarly, AAA fees for disputes involving amounts over $5 million ... are reduced from a maximum of $77,500 to $5,000 ... The new rules (which become effective January 1, 2020) also change the default rules for designating an arbitrator where the parties cannot agree on one."

Jackson Lewis P.C.

First Circuit: Private Equity Funds Not Liable for Portfolio Company's Multiemployer Plan Withdrawal Liability

"[T]he First Circuit's decision was very narrow and fact specific -- the court did not reverse the district court's earlier decision that the Sun Funds were 'trades or businesses,' and the court noted that it did not 'reach other arguments that might have been available to the parties.' This suggests that had the facts been different, the court could have ruled the other way." [Sun Capital Partners III, LP v. New England Teamsters & Trucking Industry Pension Fund, Nos. 16-1376, 19-1002 (1st Cir. Nov. 22, 2019)]

Seyfarth Shaw LLP

First Circuit Reverses Finding of Controlled Group Pension Liability

"Notably, the First Circuit, in overruling the prior district court decision, did not go so far as to hold that companies' choice of organizational structures will be respected in all cases. Rather, it looked to an eight-factor test that had previously been adopted by the 1964 US Tax Court case Luna v. IRS Commissioner and held that, in this particular situation, most of the Luna factors pointed away from supporting a finding that a partnership-in-fact had been created." [Sun Capital Partners III, LP v. New England Teamsters & Trucking Industry Pension Fund, Nos. 16-1376, 19-1002 (1st Cir. Nov. 22, 2019)]

Morgan Lewis

Pension Plan Suit Against Newark Archdiocese Will Move Forward

"Among other things, the archdiocese of Newark was accused of filing for 'church plan' status to avoid having to fund the pension plan of hospital employees." [Salvia et al. v. The Roman Catholic Archdiocese of Newark, New Jersey, No. L-3418-19 (Sup. Ct. Essex Cty., complaint filed May 7, 2019)]


Top ERISA Litigation Developments of 2019

"Seventh Circuit holds withdrawal liability cannot be 'decelerated.' ... Striking down 35-year-old precedent, Ninth Circuit greenlights ERISA individual arbitration provisions ... Ninth Circuit finds that Hawaii law is not preempted by ERISA.... U.S. Supreme Curt to reconsider stock-drop pleading standards.... U.S. Supreme Court to resolve circuit split on erisa statute of limitations 'actual knowledge' requirement."

Ice Miller LLP


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New E-Delivery Rules on the Horizon for ERISA Retirement Plans

"The DOL often attempts to provide clear instruction to plan sponsors in its regulatory pronouncements, and in this proposed rule, the DOL makes it a safe harbor condition that disclosures be written in a manner calculated to be understood by the average plan participant. To that end, a plan may satisfy the 'understandability standard' if disclosures use short sentences without double negatives, everyday words in place of technical and legal terminology, and active voice."

McBrayer PLLC

Estimates of the Financial Effects on Social Security of Enacting the Social Security Enhancement and Protection Act of 2019 (PDF)

"HR 5392, the Social Security Enhancement and Protection Act of 2019 ... includes six provisions with direct effects on the Social Security trust funds.... [E]nactment of these provisions would extend full solvency of the OASDI program for an additional 34 years, with the projected depletion of combined OASI and DI Trust Fund reserves moving from 2035 under current law to 2069[.]"

U.S. Social Security Administration [SSA]


Five Features That Retirement Plans Can Do Without

"[T]here are ... numerous plan features that [the author finds] to be relatively useless, mostly because they are impossible for participants to understand, cause administrative nightmares, and/or add little in the way of benefit to plan sponsors or participants. ... [1] The 15-year catch-up election ... [2] Hardship distributions ... [3] Rollovers/plan-to-plan transfers/contract exchanges ... [4] Revenue sharing ... [5] Non-standard plan definitions of compensation."

Cammack Retirement Group


Update on the Senate Multiemployer Pension Rescue Proposal: The NCCMP's Point of View

"The answer is, of course, compromise -- a mix of government funds, increased funding/premiums, and benefit cuts that asks as much as is reasonable of plan sponsors and participants and retirees ... and uses federal funds to fill in the gaps. Has the Senate's proposal hit this target? It's hard to say ... but, in a letter addressed to Senators Grassley and Alexander by the National Coordinating Committee for Multiemployer Plans (NCCMP), the NCCMP and its executive director, Michael Scott, report that, in their view, the proposal falls short."


Benefits in General

DOL Restores Over $2.5 Billion to Employee Benefit Plans and Participants During FY2019

"EBSA's enforcement and benefit advisor programs recovered over $2.5 billion in payments to plans, participants and beneficiaries. EBSA's enforcement program reported over $2 billion in recoveries from its investigations. Under its Terminated Vested Participant Project, EBSA helped participants collect nearly $1.5 billion in retirement benefits owed to them in the form of lump sum payments, present value of lifetime annuity payments and interest. EBSA's criminal investigations led to the indictment of 76 individuals -- including plan officials, corporate officers, and service providers -- for offenses related to employee benefit plans." [Also available: Fact Sheet -- EBSA 2019 Program Results]

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

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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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