Retirement Plans Newsletter

February 27, 2020

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Alliance Benefit Group of Houston, Inc.
Houston TX

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Centers for Medicare & Medicaid Services [CMS]
Woodlawn MD / Telecommute

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Pension Benefit Guaranty Corporation [PBGC]
Washington DC / Telecommute

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E.H. Thomson & Co., Inc.
Sea Girt NJ

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Pension Benefit Guaranty Corporation [PBGC]
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Ascensus
Dresher PA

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Webcasts, Conferences

Getting It Right - Know Your Fiduciary Responsibilities: Retirement and Health Plan Sponsors - Day 2
March 12, 2020 WEBCAST
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

Impact of the SECURE Act
March 18, 2020 in MI
Fraser Trebilcock

16th Annual Employee Benefits Symposium - Current Status of Executive Compensation: 45 years after ERISA
April 16, 2020 in IL
UIC John Marshall Law School Center for Tax Law & Employee Benefits

Plan Terminations - Lessons Learned & New Perspectives
April 22, 2020 WEBCAST
Conference of Consulting Actuaries

►See 130 Upcoming Webcasts and Conferences

►See 1469 Recorded Webcasts


Discussions

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[Official Guidance]

PBGC Announces New Guidance Document Database

"PBGC announces its new guidance document database. Guidance documents currently in effect are accessible through the database."

Pension Benefit Guaranty Corporation [PBGC]

[Guidance Overview]

Editor's Pick PBGC's Regulatory Spring Cleaning: Numerous Changes, Updates, and Clarifications to PBGC Reporting, Termination, and Premium Rules

"The Final Rule impacts plan sponsors' or administrators' obligations to the PBGC in several ways.... [1] Changes to reportable events rules ... [2] 4010 reporting guidance ... [3] Plan termination post-distribution certification ... [4] PBGC premiums."

Groom Law Group

[Guidance Overview]

SECURE Act Deep-Dive: Unscrambling PEPs, MEPs and GoPs

"Although less hyped, in practice, [the Group of Plans (GoPs)] may actually be the most successful arrangement. However, retirement plan sponsors will need to wait until regulations are issued to determine how these consolidated Form 5500s will work. While PEPs, and the new MEP rules are effective in 2021, the GoP provision is not effective until the 2022 plan year Form 5500 filings."

Cammack Retirement Group

Editor's Pick Supreme Court's Definition of 'Actual Knowledge' Could Make Class Certifications More Difficult

"The plaintiff bar will hail this decision as a victory, but the result is more subtle with a major impact in class certification. First, defendants will conduct discovery as to 'actual knowledge.' What did each class member actually know from the routine distributions sent by plan sponsors? Second, the Court's invocation of the willful blindness standard is significant.... Discovery as to whether class members purposely close their eyes to information contained in plan disclosures will demonstrate individualized conduct inconsistent among all class members. Discovery as to these aspects of the three-year statute of limitations defense should trigger disparities among class members, a significant weapon in opposing class certification." [Intel Corp. Investment Policy Comm. v. Sulyma, No. 18-1116 (S. Ct. Feb. 26, 2020)]

Jackson Lewis P.C.

Justices Unanimously Side with Retirement Plan Participant in Plain Reading of 'Actual Knowledge'

"Although Intel did not argue that actual knowledge was established in the case, the opinion lays out a roadmap -- including strategies that rely on data collected when participants engage with electronic disclosures -- for how Intel and other plan fiduciaries may try to establish actual knowledge in the future." [Intel Corp. Investment Policy Comm. v. Sulyma, No. 18-1116 (S. Ct. Feb. 26, 2020)]

SCOTUSblog

SCOTUS Ruling May Open Floodgates for Increased Lawsuits

"[E]mployers and third-party service providers may want to explore systems that track who has viewed or opened documents available online, in order to later prove they had 'actual knowledge' of the plan and its investment strategies." [Intel Corp. Investment Policy Comm. v. Sulyma, No. 18-1116 (S. Ct. Feb. 26, 2020)]

Fisher Phillips

Association Retirement Plan Debuts in Connecticut in Wake of New DOL Regs

"[The Southington Chamber of Commerce] announced that [it] would act as a closed multiple employer plan (MEP) sponsor and enrollment is now open for its new Association Retirement Plan. The plan is believed to be one of, if not the first in the nation to be enacted as a result of the DOL rule allowing businesses to enter into association retirement plans unrelated by geography or industry."

401(k) Specialist

GAO Report: Individual Retirement Accounts -- IRS Could Better Inform Taxpayers About and Detect Noncompliance Related to Unconventional Assets

"IRS Publications 590-A and B offer guidance to taxpayers with IRAs, but details on unconventional assets are limited. For example, investing in some types of bullion is permitted, but storage requirements are not explained. [GAO] recommended that IRS assess its options -- like directing IRA owners to webpages with specialized information and technical regulations -- to help taxpayers fully understand the rules on unconventional assets." [GAO-20-210, pub. Jan 27, 2020, released Feb. 26, 2020]

U.S. Government Accountability Office [GAO]

2020 Legislative and Regulatory Outlook for Retirement Plans (PDF)

"The next crop of retirement reforms is contained in familiar and wide-ranging bipartisan bills previously offered in Congress.... Lawmakers will continue to grapple with the increasingly urgent issue of how to shore up some large, severely underfunded multiemployer plans and the looming insolvency of the PBGC's multiemployer insurance program.... Concerns about the perilous state of that program will complicate efforts by single-employer plan sponsors to roll back rapidly escalating premiums and take premium increases 'off budget.' ... The SECURE Act tasks both Treasury/IRS and DOL with regulatory action, so employers should expect some significant guidance from both agencies, particularly for provisions with immediate effect."

Mercer

Record Number of U.S. Single-Premium Pension Buy-Out Contracts Sold in 2019

"A record-breaking 501 U.S. single-premium pension buy-out contracts were sold in 2019, totaling $28 billion ... The number of contracts sold in 2019 increased 2%, compared with 2018 results. Total 2019 sales were 5% higher than prior year and represent the highest annual buy-out sales total recorded since 2012."

LIMRA

Defined Contribution Plan Participants' Activities, First Three Quarters of 2019 (PDF)

16 pages. "In the first three quarters of 2019, 3.3 percent of DC plan participants took withdrawals, compared with 2.9 percent in the first three quarters of 2018. Levels of hardship withdrawal activity also remained low.... Only 1.9 percent of DC plan participants stopped contributing in the first three quarters of 2019, compared with 2.2 percent in the first three quarters of 2018.... 7.1 percent of DC plan participants changed the asset allocation of their account balances, compared with 8.4 percent in the first three quarters of 2018."

Investment Company Institute [ICI]

Benefits in General

Editor's Pick Litigating the Scope of ERISA's 'Catchall' Civil Enforcement Provision

"Recent ERISA benefits denial cases show that allowing more types of Section 1132(a)(3) claims past the pleading stage has consequences, not all of which may have been intended -- particularly where those claims are closely related to, or in some cases duplicative of, Section 1132(a)(1)(B) claims advanced in the same case."

Manatt, Phelps & Phillips, LLP

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

Proposed Section 162(m) Regs Affect REIT Compensation Arrangements

"Proposed Treasury Regulation Section 1.162-33(c)(3)(ii) provides that the allocated distributive share of the deduction attributable to compensation paid to a covered employee of a publicly held corporation by an affiliated partnership is subject to Section 162(m). This will effectively end the ability of publicly traded REITs and other similarly structured businesses, like 'Up-C' structures, to take the position that compensation paid to their top executives by their operating partnerships is exempt from Section 162(m) deductibility limitations."

Pepper Hamilton LLP

GAO Report: Private Pensions -- IRS and DOL Should Strengthen Oversight of Executive Retirement Plans

"Executive retirement plans allow some executives to defer their pay and related income taxes to future years.... [GAO] found: Benefits for executives -- e.g., no limits on how much pay can be deferred; Risks for executives -- if companies go bankrupt, they may not receive deferred pay; Little oversight information -- oversight agencies don't have much data on who's participating; Federal revenues -- the effect of these plans on federal revenues is unknown. [GAO's] recommendations to IRS and the [DOL] are to improve information about these plans and strengthen oversight." [GAO-20-70: Published Jan. 28, 2020; Released Feb. 27, 2020]

U.S. Government Accountability Office [GAO]

Selected Discussions
on the BenefitsLink Message Boards

What Amount to Show on Relative Value Disclosure Upon Termination of Cash Balance Plan?

"We are in the process of terminating a client's cash balance plan. I realize that as a DB plan, we must give each participant a relative value disclosure of their options, e.g., lump sum, annuity, 10YC, etc. The client is asking, what does he do if one of the participants in fact elects a monthly benefit? If the plan is terminating, where do those options come from? If the participant takes a lump sum and buys an annuity, depending on interest rates, the lump sum very well will throw off a different monthly annuity amount than what is shown on the relative value disclosure."

BenefitsLink Message Boards

Late Deferrals Due to Snag Arising During Blackout Period

"I am just wondering if any of you have had a plan affected by a blackout period where deferrals were submitted late because there was an issue with the new provider accepting them? Did you calculate lost earnings on the late deferrals?"

BenefitsLink Message Boards

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Upcoming Events About Retirement Plans or Executive Compensation

Mar. 2
Colorado
IRA Institute
Ascensus
Fee is required
Mar. 2
Texas
IRA Seminar
Ascensus
Fee is required
Mar. 3
Webcast
Navigating Change in an Evolving Government Retirement Industry
CBIZ, Inc.
Mar. 4
Webcast
Understanding Earned Income
American Society of Pension Professionals & Actuaries [ASPPA]
Fee is required
Mar. 4
Texas
IRA and HSA Seminar
Ascensus
Fee is required
Mar. 4
Webcast
Controlled Group Liability and Successor Employer Rules After PBGC v. Findlay Industries Inc.
Strafford
Fee is required
Mar. 4
Ohio
What To Do When Culture Sucks
Worldwide Employee Benefits Network [WEB] - Greater Cincinnati Chapter
Fee is required
Mar. 5
Webcast
Open MEP/PEP Strategies: Answers to Your Pressing Questions
Faegre Drinker

Most Popular Items in the Previous Issue

ARA Report: Sources Say IRS Planning Big Changes to VCP
American Retirement Association [ARA]

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BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2020 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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