Retirement Plans Newsletter

January 14, 2020 logo logo
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Job Openings

View job as Senior ESOP Retirement Account Administrator Senior ESOP Retirement Account Administrator  View details

Alerus Financial
East Lansing MI / Troy MI / Bedford NH / Albert Lea MN / Arden Hills MN

View job as Pension Compliance Administrator Pension Compliance Administrator  View details

Associated Pension Consultants
Chico CA / Telecommute

View job as Customer Service Representative Customer Service Representative  View details

Nova 401(k) Associates
Houston TX

View job as Retirement Plan Relationship Advisor Retirement Plan Relationship Advisor  View details

Prosperity Advisors, LLC and SS&G Wealth Management
Akron OH

View job as Client Success Specialist Client Success Specialist  View details

Ubiquity Retirement and Savings
San Francisco CA / Telecommute

View job as ERISA Consultant ERISA Consultant  View details

Brainerd MN / Dresher PA

View job as Institutional Relationship Manager Institutional Relationship Manager  View details

San Jose CA / Telecommute

View job as Benefits / COBRA Specialist Benefits / COBRA Specialist  View details

Champaign IL

View job as Retirement Distribution Processor Retirement Distribution Processor  View details

Alerus Financial
Arden Hills MN / Albert Lea MN

View job as Student Trainee (Health Insurance) (GS 4 - 5) Student Trainee (Health Insurance) (GS 4 - 5)  View details

Centers for Medicare & Medicaid Services [CMS]
Boston MA / New York NY / Philadelphia PA / Atlanta GA / Chicago IL / Dallas TX / Kansas City MO / Denver CO / San Francisco CA / Seattle WA / Woodlawn MD

View job as Student Trainee (Health Insurance) (GS 7) Student Trainee (Health Insurance) (GS 7)  View details

Centers for Medicare & Medicaid Services [CMS]
Boston MA / New York NY / Philadelphia PA / Atlanta GA / Chicago IL / Dallas TX / Kansas City MO / Denver CO / San Francisco CA / Seattle WA / Woodlawn MD / Washington DC

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Webcasts, Conferences

Adapting Your IRA Programs for the SECURE Act of 2019
January 23, 2020 WEBCAST
Convergent Retirement Plan Solutions

Innovative Approaches in Total Rewards & Human Capital Management
February 13, 2020 in OH
Worldwide Employee Benefits Network [WEB] - Northeast Ohio Chapter

Certificate in Employee Benefits Law Seminar
April 20, 2020 in GA
Institute for Applied Management & Law, Inc.

►See 116 Upcoming Webcasts and Conferences

►See 1443 Recorded Webcasts


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[Official Guidance]

Text of PBGC Final Regs: Adjustment of Civil Penalties for Inflation

"Section 4302 ... authorizes PBGC to assess a civil penalty of up to $100 a day for failure to provide a notice under subtitle E of title IV of ERISA (dealing with multiemployer plans). Section 4071 ... authorizes PBGC to assess a civil penalty of up to $1,000 a day for failure to provide a notice or other material information under subtitles A, B, and C of title IV and sections 303(k)(4) and 306(g)(4) of title I of ERISA.... The new maximum amounts are $2,233 for section 4071 penalties and $297 for section 4302 penalties."

Pension Benefit Guaranty Corporation [PBGC]

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[Official Guidance]

Text of PBGC Interest Rate Update for Benefits Payable in Terminated Single-Employer Plans, February 2020

"The February 2020 lump sum interest assumptions will be 0.25 percent for the period during which a benefit is (or is assumed to be) 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 January 2020, these assumptions represent no change in the immediate rate and are otherwise unchanged."

Pension Benefit Guaranty Corporation [PBGC]

[Official Guidance]

Text of 2019 IRS Publication 915: Social Security and Equivalent Railroad Retirement Benefits (PDF)

33 pages. "This publication explains the federal income tax rules for social security benefits and equivalent tier 1 railroad retirement benefits.... This publication covers the following topics. [1] Whether any of your benefits are taxable. [2] How to report taxable benefits. [3] How much is taxable. [4] How to treat lump-sum benefit payments. [5] Deductions related to your benefits, including a deduction or credit you can claim if your repayments are more than your gross benefits."

Internal Revenue Service [IRS]

[Guidance Overview]

SECURE Implementation: Effective Dates of Key Provisions

"Changes to current rules applicable to retirement plans made by the Setting Every Community Up for Retirement Enhancement (SECURE) Act are (in most cases) already effective.... Given SECURE's precipitous implementation schedule, new compliance issues with respect to plan administration are likely to emerge as sponsors, providers, and regulators begin working with the new rules."

October Three Consulting

Supreme Court Opinion Vacating and Remanding Decision on Pleading Standard for Claim of Insider Trading Fiduciary Breach (PDF)

"The question presented in this case concerned what it takes to plausibly allege an alternative action 'that a prudent fiduciary in the same circumstances would not have viewed as more likely to harm the fund than to help it.' ... In their briefing on the merits, however, the petitioners (fiduciaries of the ESOP at issue here) and the Government (presenting the views of the [SEC] as well as the [DOL]), focused their arguments primarily upon other matters.... We believe that the Court of Appeals should have an opportunity to decide whether to entertain these arguments in the first instance. For this reason we vacate the judgment below and remand the case, leaving it to the Second Circuit whether to determine their merits, taking such action as it deems appropriate." [Retirement Plans Committee of IBM v. Jander, No. 17-3518 (S. Ct. Jan. 14, 2020)]

Supreme Court of the United States


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Supreme Court Mulls Fiduciary Case for Overfunded DB Plan

"Justice Brett Kavanagh highlighted the intricacies of the case during a line of questioning to Sopan Joshi, assistant to the solicitor general, who argued in favor of the plaintiff's position. Mr. Kavanagh said that since it's '99.9% certain' the participants will get their promised benefits, it's difficult to grant standing. However, he said trust law history backs the participants' right to sue." [Thole v. U.S. Bank, N.A., No. 16-1928 (8th Cir. Oct. 12, 2017; cert. pet. granted Jun. 28, 2019; oral arg. Jan. 13, 2019)]

Pensions & Investments

Supreme Court Declines to Consider Putnam Fiduciary Breach Case

"The U.S. Supreme Court ... declined to hear a petition by Putnam Investments asking to rule on the contentious issue of whether plaintiffs must prove a loss in an ERISA fiduciary breach lawsuit or whether sponsors must disprove a loss and that the loss was caused by the fiduciary breach.... [The case] will now return to the U.S. District Court with the appeals court's instructions to follow guidelines requiring Putnam to disprove the loss." [Putnam Investments, LLC v. Brotherston, No. 17-1711 (1st Cir. Oct. 15, 2018; cert. pet. denied Jan. 13, 2020, No. 18-926)]

Pensions & Investments

PBGC Approves Facilitated Merger of Two Multiemployer Pension Plans

"[PBGC] today announced its first approved facilitated merger under [MPRA].... To help facilitate the merger of the Laborers International Union of North America 1000 Pension Fund with the Laborers Local 235 Pension Fund, PBGC will provide three annual installments of $8.9 million to the merged plan beginning this month."

Pension Benefit Guaranty Corporation [PBGC]

As Out-of-Pocket Childbirth Costs Soar, SECURE Act Offers Relief

"Effective January 1, 2020, the SECURE Act exempts new parents from the 10% penalty tax that ordinarily would apply to retirement plan or IRA withdrawals before age 59.5, for distributions of up to $5,000 on account of a 'qualified' birth or adoption.... The out-of-pocket costs of childbirth for women with health insurance have been reported to have increased 50% between 2008 and 2015[.]"

E is for ERISA


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Millennials and Retirement 2020: Understanding, Saving, and Planning (PDF)

24 pages. "Millennial retirement expectations are not well aligned with the planning steps they've taken to date, but they are open to annuities in general, and guaranteed lifetime income in particular, as solutions that can help them plan to have lifetime retirement income and alleviate their concerns about investing."

Insured Retirement Institute [IRI]

Target Date Funds and Portfolio Choice in 401(k) Plans

"Target date funds in corporate retirement plans grew from $5B in 2000 to $734B in 2018, partly because federal regulation sanctioned these as default investments in automatic enrollment plans.... Including these funds in retirement saving menus raised equity shares, boosted bond exposures, curtailed cash/company stock holdings, and reduced idiosyncratic risk. The adoption of low-cost target date funds may enhance retirement wealth by as much as 50 percent over a 30-year horizon."

The Wharton School of The University of Pennsylvania

Understanding the Fees Paid by Your Governmental Retirement Plan

"[M]ost plan providers, such as recordkeepers and investment advisors, structure their fee arrangements so that they are paid a percentage of the AUM.... [T]he fiduciaries of governmental retirement plans are responsible for ensuring that the fees charged to the plan are reasonable and appropriate. The difficulty with monitoring and evaluating the reasonableness of plan fees is the considerable number of ways in which a provider can structure its compensation."

Best Best & Krieger LLP

The Sources of Retirement Income for Older Americans

"[A] large portion (40 percent) of older Americans rely only on Social Security income in retirement while only a small percentage of older Americans (seven percent) receive income from Social Security, a defined benefit pension, and a defined contribution account.... Absent income from defined benefit pensions, the number of poor older households would have increased by 19 percent to more than four million households in 2013.... Without income from defined contribution accounts, the estimated number of poor older households would have increased by five percent."

National Institute on Retirement Security [NIRS]


Texas Pension Board Is a Model for Pension Reform

"PRB is a state agency that oversees Texas's 90-plus defined-benefit public pension plans.... This paper and the accompanying model legislation make the case for a state-level pension review board. Policymakers who wish to implement a PRB-style agency in their state can use them as a road map."

Manhattan Institute


The New American Retirement Plan: The Time Is Right, Even If the Politicians Aren't Yet Ready

"The first -- and most important -- step of retirement-plan reform is to jettison the employer's responsibilities.... There are three major issues. One is if employee participation should be mandatory.... Another concerns the employer match.... The third issue is the plan's investment design.... Forget tax penalties; they do not sufficiently deter foolishness. Instead, ban early withdrawals outright."

John Rekenthaler, Morningstar

Benefits in General

[Official Guidance]

Text of DOL Final Regs: Federal Civil Penalties Inflation Adjustment Act -- Annual Adjustments for 2020

41 pages. "The cost-of-living adjustment multiplier for 2020, based on the Consumer Price Index (CPI-U) for the month of October 2019, not seasonally adjusted, is 1.01764. In order to compute the 2020 annual adjustment, the Department multiplied the most recent penalty amount for each applicable penalty by the multiplier, 1.01764, and rounded to the nearest dollar."

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

Selected Discussions
on the BenefitsLink Message Boards

Deferrals from Severance Package to a Terminated Employee

"Participant terminated employment December 2019. The company wants to now give her a severance package of $30,000 and wants her to be able to defer from it. My inclination is she cannot defer from it. They want to instead now say it's a bonus, but I still say no based on this wording under Compensation: 'The payment would have been paid to the Participant prior to a severance from employment if the Participant had continued in employment with the Employer.' Which it would not have been. Agree?"

BenefitsLink Message Boards

Application of SECURE Act to Pre-1/1/2020 Death But No Distributions Made Yet

"Does the 10 year rule to non-spousal beneficiaries apply to death benefit payments after 12/31/2019 or to deaths after 12/31/2019? That is, if a participant died prior to 12/31/2019 but the distribution is not elected or processed until after 1/1/2020, can the non-spouse beneficiary still take advantage of the old 'stretch IRA' rules by rolling to inherited IRA or are they locked into the new 10 year payout rule?"

BenefitsLink Message Boards

Add Another Deferred Comp Plan to an Existing Irrevocable Rabbi Trust?

"We have seen many circumstances where an employer has an existing rabbi trust and now has a 2nd or 3rd deferred compensation plan that they want to add an account for under the existing rabbi trust. Is this an acceptable amendment? Would consent of the existing beneficiaries be required?"

BenefitsLink Message Boards

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Most Popular Items in the Previous Issue

How the SECURE Act Could Change the Landscape for Retirement Plans and IRAs
Ropes and Gray, via Lexology; free registration required

DOL Releases Search Tool for Top Hat Plan Statements
Employee Benefits Security Administration [EBSA], 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 2020, 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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