|
Retirement Plans Newsletter December 13, 2019 |
|
|
||||||
|
Webcasts, Conferences |
||||||
|
Discussions |
||||||
|
This Newsletter:
BenefitsLink Health & Welfare Plans Newsletter:
Message Boards Digest:
|
|
[Guidance Overview] "In developing the Pri-2012 tables, the SOA gathered data from over 400 private-sector pension plans across the U.S., including a substantial amount of information from multiemployer plans who were not represented in the RP-2006 tables. What was striking, however, is that participants in multiemployer plans were not found to have a significantly different mortality experience than participants in single-employer plans." Bolton |
|
[Guidance Overview] Federal Employees' Retirement System: Budget and Trust Fund Issues "Most of the civilian federal workforce is covered by one of two retirement systems: [1] the Civil Service Retirement System (CSRS) for individuals hired before 1984 or [2] the Federal Employees' Retirement System (FERS) for individuals hired in 1984 or later.... Because CSRS retirement benefits have never been fully funded by employer and employee contributions, the [Civil Service Retirement and Disability Fund (CSRDF)] has an unfunded liability. The total unfunded liability of the CSRDF was $ 968.1 billion in FY2017. According to actuarial estimates, the unfunded liability of the CSRDF has already peaked, will steadily decline, and is projected to be eliminated by FY2085." [RL30023, updated Dec. 13, 2019] Congressional Research Service [CRS] |
|
Supreme Court Ruling in Intel ERISA Statute of Limitations Suit Could Have Far-Reaching Implications "After oral argument, it remains unclear exactly where the Court will land on the 'actual knowledge' issue.... [C]ourts may be stuck determining whether each plan participant in a class read and understood each mailing sent out by their plans. Individualized questions regarding each plan participant's actual knowledge of investment decisions would certainly threaten future class certification in ERISA cases[.]" [Sulyma v. Intel Corp. Investment Policy Comm., No. 17-15864 (9th Cir. Nov. 28, 2018; cert. pet. granted June 10, 2019; oral arg. Dec. 4, 2019)] Groom Law Group |
|
Some Less Egregious Aggregation? First Circuit Reverses the District Court in Sun Capital Partners "The First Circuit's reversal of the latest District Court opinion in Sun Capital Partners is a welcome decision that overturns the District Court's arguably overbroad application of the aggregation and liability rules as applied in the ERISA context. The most recent Sun Capital Partners decision also provides some potentially significant guidance on when funds within the same fund family might indeed effectively be aggregated notwithstanding that neither fund individually owns 80% or more of the underlying company. However, fund sponsors should keep in mind that the First Circuit's initial 'trade or business' decision remains in effect." [Sun Capital Partners III, LP v. New England Teamsters & Trucking Industry Pension Fund, Nos. 16-1376, 19-1002 (1st Cir. Nov. 22, 2019)] Dechert, via Lexology; free registration required |
|
Defined Contribution Benchmarking Survey "The rise of workers in the 65+ population continuing to work can be attributed to employee preference to work longer, the need to keep health care coverage, and unmet financial needs that prevent retirement. In response, plan sponsors are shifting focus to a broader picture of financial wellness to better understand the short-term and intermediate barriers participants face in saving for retirement. They are changing plan features to improve effectiveness, enhancing digital capabilities, and moving toward a more focused approach on participant financial well-being ... [This] report explores whether it has been enough." Deloitte |
|
DOL Private Pension Plan Bulletin: Abstract of 2017 Form 5500 Annual Reports (PDF) 72 pages. "The total number of pension plans grew again in 2017, to approximately 710,000, a 1.0 percent increase over 2016. The number of DC plans grew by 1.0 percent, while the number of DB plans increased by 0.9 percent. The growth in participants of 0.9 percent, or 1.2 million ... was composed of a 2.3 percent increase in DC plan participation and a 3.0 percent reduction in DB plan participation.... The number of 401(k) type plans increased by 2.0 percent, from 560,000 to 572,000.... Of the 710,000 plans, 702,000 were single employer, 2,500 were multiemployer, and 4,700 were multiple-employer. This is the first year multiple-employer plans have been reported separately." [Also available: data tables in XLSX and XML formats.] Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL] |
|
Proxy Voting Update Appears on DOL Regulatory Agenda "[T]he DOL now operates under the assumption that it is not always appropriate for retirement plan fiduciaries to routinely incur significant expenses and to engage in direct negotiations with the board or management of publicly held companies with respect to which the plan is just one of many investors.... [There is no] requirement that the plan vote each proxy, and a number of factors, including the expense related to properly reviewing and voting the proxy, should generally be considered." planadviser |
|
Ethics, ESG, and ERISA: Ethical-Factor Investing of Savings and Retirement Benefits "There is increasing broad agreement that some ethical factors highlight business risks and opportunities in a predictable fashion, such as the effects of climate change, human capital needs, or corporate governance.... There are three prudent approaches to ethical-factor investing.... Each of these approaches can be socially beneficial[.]" Albert Feuer, via SSRN |
|
ESG: An Overview for Asset Managers (PDF) 16 pages. "ESG standards used by investors and managers are currently influenced by a variety of public and private organizations and initiatives. There is little guidance from governments or regulators on the best approach to implementing ESG standards, although ESG is now attracting greater focus from legislators and regulators ... This article focuses on ESG matters, which are distinct from (but of course related to) impact investment. The former is ultimately a risk framework used as a tool in the investment and monitoring process, whereas the lattergoes a step further and requires social and/or environmental matters to form part of the investment strategy, with the positive intention of making a measureable impact." Dechert LLP |
|
Analysis of the Cost Impact of the Grassley/Alexander Multiemployer Plan Proposal (PDF) 13 pages. "The total annual premium paid by all 143 [United Association of Journeymen and Apprentices of the Plumbing, Pipefitting and Sprinkler Fitting Industry of the United States and Canada (UA)] multiemployer plans would increase from approximately $13.8 million to an estimated $169.3 million. The increase in premiums would require an increase in contribution rates (or equivalent benefit reductions) of 8% to 13%, or more.... Retirees would be responsible for an estimated $25 to $50 million in co-payments on top of the $169.3 million paid by UA multiemployer plans[.]" Horizon Actuarial Services LLC, for Mechanical Contractors Association of America, Inc.; and United Association of Journeymen and Apprentices of the Plumbing, Pipefitting and Sprinkler Fitting Industry of the United States and Canada |
|
"Each year, CBO updates its projections of the Social Security system's finances to incorporate newly available data and methodological improvements. CBO published its latest long-term budget projections in June 2019. This report compares those with the ones CBO prepared in 2018 and with the latest projections by the Social Security trustees." Congressional Budget Office [CBO] |
|
Selected Discussions |
|
Changing Retirement Plan to a 2020 Safe Harbor Plan Today? "I have a brand new start-up plan that started 1/1/19. The owner is just now calling me on 12/11/2019, wanting to amend the plan to a SH plan because the company did well and he has extra funds to put to work (and not get taxed on). Obviously it's too late for that. And it's too late to change to SH for 2020. BUT the owner is saying that his accountant, other attorneys and colleagues are saying we should be able to backdate this and thus be able change the plan to SH for the 2020 plan year. I can tell you that my Trust Co. and our TPA partner would never go for doing something like that. But he thinks there should be no problem doing that, especially if each employee signs off that they received their SH notice. Thoughts/opinions on how to handle?" BenefitsLink Message Boards |
|
Too Much Paid in Form of Safe Harbor Matching Contributions "The plan sponsor went from a basic safe harbor match in 2018 to a safe harbor non-elective in 2019. Unfortunately the basic safe harbor match deposits were still being made during all of 2019. Can we do a self-correction? If so, I'd like to just reclassify the funds as SHNEC but some participants may have overages if they were deferring over 3% of pay. Can I just forfeit the overages? Am I required to calculate earnings on the overages to be forfeited?" BenefitsLink Message Boards |
|
Limit Loans to Vested Percentage of Participant's Account? "Can a plan have a provision in its loan program that loans are only available from sources that are 100% vested for the participant?" BenefitsLink Message Boards |
|
► Subscribe to the BenefitsLink Message Boards Digest -- a free daily email of all new discussions (not just the selected few shown above). View a sample issue. |
|
Press Releases |
|
Most Popular Items in the Previous Issue |
|
Text of IRS Rev. Proc. 2020-09: Amendments Treated as Integral to Hardship Distribution Provisions (PDF)
|
|
Text of IRS Notice 2020-01: Weighted Average Interest Rates, Yield Curves, and Segment Rates for December 2019 (PDF)
|
|
Top ERISA Litigation Developments of 2019
|
BenefitsLink.com, 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
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.
Links to web sites other than BenefitsLink.com and EmployeeBenefitsJobs.com are offered as a service to our readers; we were not involved in their production and are not responsible for their content.