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Newly Posted
Webcasts, Conferences

Washington Watch: The CARES Act and What It Means for You
Voya Financial

CARES Act: Practical Considerations for Plan Sponsors
CAPTRUST Financial Advisors

COVID-19's Impact on Retirement Plans: Easing Business Cash Flow, Understanding Relief Provisions and Navigating the Current Financial Market
April 9, 2020 WEBCAST
CBIZ, Inc.

Remote Control - Tips to Help Keep Your Finger on the Play Button As Your Practice Goes Remote
April 14, 2020 WEBCAST
National Association of Plan Advisors [NAPA]

Employee Benefits and Bankruptcy: A Timely and Multi-Perspective Look
April 20, 2020 WEBCAST
Wagner Law Group P.C.

CARES Act Legislative Update
April 23, 2020 WEBCAST

Pensions on Peachtree
May 18, 2020 WEBCAST
FIS Relius Education

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View Coronavirus (COVID-19) News and Resources
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[Guidance Overview]

CARES Act Questions and Answers for Retirement Plan Sponsors

"[1] Is there a risk to the plan in offering (or not) CARES Act distributions? ... [2] Which provisions are mandatory, and which are optional? ... [3] How long will the provisions be in effect? ... Can we wait and add the provisions later if there is more demand/need? ... [4] How are the Coronavirus Related Distributions (CRDs) different than regular hardships? ... [5] How does the participant recontribute the CRD to a qualified plan, and which qualified plans can receive the recontribution? ... [6] If a participant takes a new CARES Act loan for $100k, can they defer loan payments for a year?"

Multnomah Group

[Guidance Overview]

SEC Publishes Risk Alerts Providing Advance Information Regarding Inspections for Compliance with Regulation Best Interest and Form CRS

"The [SEC's] Office of Compliance Inspections and Examinations (OCIE) has issued two risk alerts: Examinations that Focus on Compliance with Regulation Best Interest and Examinations that Focus on Compliance with Form CRS. These risk alerts provide broker-dealers and investment advisers with advance information about the expected scope and content of the initial examinations for compliance with Regulation Best Interest and Form CRS."

U.S. Securities and Exchange Commission [SEC]

Retirement Contributions and the Paycheck Protection Program

"[T]he Department of the Treasury clarified that employer contributions to both defined contribution plans and defined benefit plans are included in the definition of payroll costs when calculating the maximum amount of a PPP loan. Further, the $100,000 cap on compensation applies only to salary; the cap does not apply to employer contributions to DC and DB plans."

American Retirement Association [ARA]

Appellate Court Says Mercy Health's Pension Plan Is a Church Plan

"What the appellate court said is 'most damaging,' to the plaintiff's argument is that the complaint stated that '[t]he Benefits Committee has all discretionary powers and authority necessary to carry out the provisions of the plan.... Those are more than managerial tasks.... Thus, under "maintain's" ordinary meaning, the committee maintains the plan,' the appellate court stated[.]" [Sanzone v. Mercy Health, No. 18-3574 (8th Cir. Mar. 27, 2020)]

PLANSPONSOR; free registration may be required

Seventh Circuit Upholds Dismissal of 403(b) Plan Lawsuit Against Northwestern University in Apparent Split with Third Circuit

"[T]he Seventh Circuit ... concluded that plaintiffs' claims did not assert plausible ERISA violations, but rather merely amounted to plaintiffs' 'preference' for certain investment options and record-keeping arrangements.... Although the Seventh Circuit purported to agree with the framework applied by the Third Circuit, the fact remains that many of the allegations in the case against the University of Pennsylvania that were allowed to proceed were nearly identical to those asserted against Northwestern and dismissed." [Divane v. Northwestern Univ., No. 18-2569 (7th Cir. Mar. 25, 2020)]


ERISA Litigation: Lessons for Today from the Great Recession

"[P]lan participants ignore operational errors or debatable practices when the market is climbing, but not when it collapses.... [Y]ou can expect disability claims to rise ... [B]eware of ERISA exposures buried within corporate transactions that were started before the downturn but either will conclude in the near future or be abandoned.... [M]any sponsors simply decide to not fund certain benefits or to otherwise deviate from the written plan to reduce costs in the short term. History has shown that this is as close to a certain route to being sued as exists."

The Wagner Law Group

Critical Qualified Plan Fiduciary Issues for Employers to Consider in Light of COVID-19

"Changing the investment mix without changing the statement of investment policy or funding policy exposes an employer to liability ... The TDF investment 'glidepath,' and particularly, whether the TDF is a 'to' fund or a 'through' fund, are key investment elements to communicate to plan participants.... If an employer is considering providing investment advice for a fee to plan participants, it will need to address its oversight responsibilities  ... Soft and hard freeze issues under defined benefit/cash balance plans.... Put option issues for ESOP-owned company."

Jackson Lewis P.C.

Corporate Pensions See Surprising $93 Billion Funding Gain in March

"Corporate pensions in March experienced a $93 billion increase in funded status, despite deteriorating economic conditions and in the midst of the global COVID-19 pandemic that brought heavy investment losses.... March's funding improvement was the direct result of a massive surge in the monthly discount rate, from 2.69% to 3.39%."


Pension Indicator, March 2020

"Plans that fared best in March were open/accruing benefits but have a large allocation to high quality long duration fixed income (this is a select group).... [S]uch ongoing plans saw liabilities decrease by approximately 7.6% in March, whereas old frozen plans experienced a 4.8% reduction in liability values. Plans with a more growth-oriented asset allocation strategy (i.e. more public equity) could have experienced larger asset declines (approximately -10%) than those with more of an LDI focus (approximately -7%)."


Have Local Governments Shifted Away from Traditional Defined Benefit Plans? (PDF)

11 pages. "[B]etween 2001 and 2018, the number of local governments offering retirement benefits outside of a traditional DB increased from about 11% to 19%, a similar trend to states, but localities were more likely to adopt a core DC relative to state employers.... [W]hile the employer costs for the new DC benefit are lower (and will potentially provide a lower benefit to employees), these governments must continue to service legacy DB plans, and therefore will likely not experience cost reductions for many years."

Center for State & Local Government Excellence

Don't Expect Pension Solvency to Get Shored Up in Next Stimulus

"Shoring up pension solvency got left out of the $2 trillion stimulus package enacted last month and the early signs aren't encouraging for a bipartisan compromise coming together in the next one."

Bloomberg Law

ESOP Sponsors and Paycheck Protection Program Loans (PDF)

"Companies that sponsor [ESOPs] are at least partially owned by employee stock ownership trusts (ESOTs) ... Pursuant to the instructions to the loan application, the Paycheck Protection Program loan application should be signed and certified on behalf of the ESOT by an authorized signatory of the employer corporation, which is the 'Trustor' or 'grantor' of the ESOT."

Morrison Cohen LLP

Social Security: Bad Luck for Those Born in 1960?

"Andrew G. Biggs estimates that those born in 1960 could suffer an approximately 14% decrease in their projected Social Security benefits as a result of lower total wages paid in 2020.... [T]his unanticipated negative impact results directly from the way Social Security uses national economywide wages in the year the worker turns age 60 to calculate benefits.... [The authors] estimated about how much more someone born in 1960 might have to save over the next seven years (to age 67) to make up the decrease."

Ken Steiner, FSA Retired

Benefits in General

Compensation and Benefits Issues for Employers in Light of the COVID-19 Pandemic

"[1] Cash conservation, salary reductions and deferral arrangements ... [2] Stock option repricing programs ... [3] Impact on performance-based compensation arrangements ... [4] Furloughs, layoffs, and benefits continuation ... [5] Section 125 plan election changes ... [6] Retirement plans and relief provisions in the CARES act ... [7] Suspending employer contributions to retirement plans ... [8] RIFs and partial plan terminations  ... [9] Plan terminations  ... [10] Plan fiduciary considerations."

Goodwin Procter

Sixth Circuit Holds Exhaustion of Administrative Remedies Not Required Where Plan Document Is Silent on Claims Review Process

"[T]he court found that because the plan document did not describe an internal claims review process or any remedies, it was procedurally deficient under the ERISA regulations, and thus Wallace's claim with Reliance was 'deemed exhausted.' In doing so, the court rejected Reliance's argument that the denial letter was sufficient because it set forth appeal procedures." [Wallace v. Oakwood Healthcare, Inc., No. 18-2316 (6th Cir. Mar. 31, 2020)]

Kantor & Kantor

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

Glass Lewis, COVID-19 and Public Company Executive Compensation

"[Glass Lewis (GL)] recently provided guidance on its approach to navigating the governance issues, including compensation issues, related to COVID-19.... GL makes clear that a 'business as usual' approach to executive pay will face opposition in situations where employees and shareholders see their own paychecks cut."

Snell & Wilmer

Editor's Pick Checklist for Incentive Compensation Impact of COVID-19 (PDF)

"This checklist includes items for companies and their boards to consider with respect to incentive compensation in light of the COVID-19 outbreak and the resulting market uncertainty. Boards and management teams"

Shearman & Sterling LLP, via Bloomberg Law

Selected Discussions
on the BenefitsLink Message Boards

CARES Act Loans/Distributions -- SMM's Needed?

"So client amends the plan to add all of these wonderful new options. What are the obligations to tell the participants about the options?"

BenefitsLink Message Boards

Corp 'A' Has No Plan, Buys Corp 'B' Which Has a 401(k) -- How to Take Over Sponsorship?

"Corporation A has no Plan, and buys all the stock in Corporation B, which has a 401(k) plan. Corporation A wants to keep the plan. What's the simplest way to do that? Just change plan name and tax ID?"

BenefitsLink Message Boards

Loan Payoff by Beneficiary

"If a wife takes a loan from a 401k plan and passes away before it is paid off, can the husband pay off the loan before the end of the quarter following her passing? Or is it automatically defaulted?"

BenefitsLink Message Boards

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Press Releases

Most Popular Items in the Previous Issue

COVID-19: Retirement Plan Questions and Answers (PDF)
S. Derrin Watson, for

Coronavirus-Related Distributions Under the CARES Act: Optional or Required?
Robert Richter, for American Retirement Association [ARA]

Enhanced Loans for Qualified 401(k) Participants
Fred Reish, for 401(k) Specialist, 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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