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February 28, 2020 logo logo
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Webcasts, Conferences

SECURE Act Video Series: Increased Penalties for Plan Reporting Failures

Getting It Right - Know Your Fiduciary Responsibilities: Retirement and Health Plan Sponsors - Day 3
March 17, 2020 WEBCAST
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

March 26, 2020 in PA
ASPPA Benefits Council [ABC] of Western Pennsylvania

2020 National Conference
May 14, 2020 in LA
PSCA [Plan Sponsor Council of America]

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[Guidance Overview]

March 31 Deadline for 403(b) Plan Sponsors

"If your organization sponsors a 403(b) plan for employees and has not adopted an up-to-date written plan document that complies with the applicable regulations, you have until March 31, 2020 to do so. Failure to do could cause substantial negative tax consequences for employees (and the organization) or cause the organization to incur substantial penalties to avoid those consequences."

Jackson Lewis P.C.

Supreme Court's Intel Decision Gives ERISA Class Action Defendants a Powerful New Weapon

" 'Actual knowledge' now may depend on whether a participant read certain disclosures and that usually can be determined only through evidence specific to a particular participant.... [W]hether a claim is time-barred will be a highly individual issue that will require mini-trials to resolve and thus cannot be decided on a classwide basis. Courts will now have to carefully scrutinize whether to certify ERISA class actions in which an actual knowledge issue is present." [Intel Corp. Investment Policy Comm. v. Sulyma, No. 18-1116 (S. Ct. Feb. 26, 2020)]

Sidley Austin LLP

Supreme Court Rules Six Year Statute of Limitations Applies to More ERISA Lawsuits

"[T]he underlying question of whether a retirement plan sponsor can be held liable for breach of fiduciary duty for including alternative investment strategies like hedge funds or private equity funds in a plan's investment menu may now be litigated for the first time.... [The] decision may usher in a new wave of class action suits in jurisdictions that had previously followed a more sponsor-friendly concept of 'actual knowledge,' particularly in the Second, Third, Fifth, Seventh and Eleventh Circuits." [Intel Corp. Investment Policy Comm. v. Sulyma, No. 18-1116 (S. Ct. Feb. 26, 2020)]

Ropes & Gray LLP

Supreme Court Gives Plaintiffs Cover to Beat ERISA's 3-Year Statute of Limitations

"[D]espite the Court's acknowledgement that actual knowledge is still provable 'at any stage in the litigation,' and its optimism that plaintiffs will heed their deposition oath and admit that they gained knowledge of an alleged breach outside of the limitations period, this decision makes it more difficult for defendants to succeed on a three-year statute of limitations defense." [Intel Corp. Investment Policy Comm. v. Sulyma, No. 18-1116 (S. Ct. Feb. 26, 2020)]

Trucker Huss

Uncertainty Remains After Supreme Court's Intel Ruling

"Sources debate whether electronic delivery of retirement plan disclosures could blunt some of the impact of the Supreme Court's ruling[.]" [Intel Corp. Investment Policy Comm. v. Sulyma, No. 18-1116 (S. Ct. Feb. 26, 2020)]

PLANSPONSOR; free registration may be required

Brotherston v. Putnam's Far Reaching 401(k) Fallout

"[T]he First Circuit Court of Appeals handed down a decision that could have far-reaching impact in the 401k industry.... [N]ow that the Supreme Court has denied [review], the industry seems to have gone silent ... This shift in the burden of proof could have significant impact on the role of plan fiduciaries and their investment advisors to whom plan fiduciaries will turn to justify their recommendations. Putnam argued that this could have a chilling effect on the adoption of 401k plans, but the First Circuit was having none of it. " [Brotherston v. Putnam Investments, LLC, No. 17-1711 (1st Cir. Oct. 15, 2018; cert. pet. denied Jan. 13, 2020, S. Ct. No. 18-926)]

401(k) Specialist

Elements of a Clearly Defined Investment Policy Statement for DC Plans (PDF)

"Fiduciaries are not only re-examining their current investment decision-making practices, they are also seeking to ensure that those practices allow for enough flexibility in implementation to maximize the likelihood of investment success, while protecting the plan sponsor from potential litigation. Central to the idea of a well-managed program, a clearly articulated investment policy statement (IPS) serves as the foundation of sound governance and a robust oversight process."

Russell Investments

Iowa Proposes Best Interest Regulation for Annuity Sales

"Iowa's regulation follows a vote two weeks ago by the National Association of Insurance Commissioners (NAIC) to amend its model Suitability in Annuity Transactions Model Regulation.... Iowa Insurance Commissioner Doug Ommen, who is also the state's securities regulator, was a driving force behind the NAIC best-interest effort. Iowa is one of the first states to put forth annuity rules that harmonize with the NAIC model."

What Are the True Costs of 401(k) Loan Defaults After a Big Lay-Off?

"[A] FORTUNE 500 retailer [recently] announced their intent to lay off 2,000 employees in the coming years.... If a fifth of the 2,000 employees had a loan out, which evidence suggests that they do, that equates to approximately $984K in outstanding loans that either will need to be repaid by the impacted employees, or risk defaulting, costing the employees' taxes, penalties, and lost earnings.... [Applying] a modest 6% growth rate to this amount for the next 33 years, the $984K grows to over $7M in lost retirement savings for these employees."

Retirement Loan Eraser

Editor's Pick Your 401(k) Will Soon Show Monthly Retirement Income -- Beware the Math

"Retirement plan providers, consultants, and researchers applaud the idea of focusing 401(k) participants' attention on retirement income, but they're starting to sweat the details that will feed into the lifetime income projections. A simplistic calculation that omits key details, critics say, may mislead participants or serve mainly as an annuity sales tool."


How 401(k) Bankruptcy Exemption Can Be Lost

"Even if a bankruptcy court were to determine that the large employer's plan has a qualification failure, the benefits of a plan participant who is in bankruptcy will nevertheless be exempt from the bankruptcy estate, since in very few instances would the participant have been materially responsible for the failure. On the other hand, as exemplified by the Xiao case, the same will often not be true where the owner of a small business files for bankruptcy." [Xiao v. Chorches, No. 18-1477 (D. Conn. Sept. 30, 2019)]

Blank Rome LLP


Supreme Court Says You Can Keep Ignoring Financial Disclosures

"You know all those reports you get in the mail from investment funds and toss in a drawer or the shredder? Not your balances, but the detailed notices about investment strategies and the like? The U.S. Supreme Court just gave you another reason not to read them."

Bloomberg; subscription may be required

Selected Discussions
on the BenefitsLink Message Boards

SH 401(k) Switch Between SH NEC and SH Match -- Plan Amendment Required?

"In 2018, small plan sponsor adopted a SH 401(k) plan with SH match provisions, using the ftwilliam Basic Plan Document. For 2019 plan sponsor wanted to switch to the SH NEC so we prepared the SH notice with that language to hand out to employees by 12/1/2018. Again for 2020 he wanted to do the SH NEC so again the SH notice had the SH NEC language and was distributed to employees around 12/1/2019 (right before the SECURE Act was signed). Now that notices are no longer required if a plan sponsor wants to do the SH NEC, does the plan document need to be amended to remove the SH match language?"

BenefitsLink Message Boards

Safe Harbor Match True-Up: Adjust for Earnings?

"Plan document states that safe harbor matching contributions (SHMAT) are determined/allocated on a plan year basis. Client makes SHMAT contributions payroll by payroll throughout the year. At the end of the year, true-up contributions are needed. My question is: do the true-up contributions need to be adjusted for earnings?"

BenefitsLink Message Boards

Update on 2020-2022 Plan Restatements?

"Does anyone know of any updates on the upcoming plan restatements due to begin on 05/01/2020?"

BenefitsLink Message Boards

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Press Releases

Upcoming Events About Retirement Plans or Executive Compensation

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

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David Rhett Baker, J.D., Editor and Publisher
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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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