[Guidance Overview]
FINRA/SEC Will Not Slow Down for COVID-19
"[T]he proposed changes to FINRA's suitability rules will clarify whether Reg BI or the suitability rules will apply, eliminating confusion and allowing firms to focus on compliance with the higher standards in Reg BI, when applicable. At the same time, the change will provide continued protection for customers who are not retail customers covered by Reg BI.... If adopted, the proposed amendment to this rule will take effect on June 30, 2020."
Wilson Elser
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Addressing Problematic Defined Benefit Data
"Defined benefit plan sponsors often express how complicated their plans are to administer. Many times, the reasons are due to unique plan provisions, but more frequently are related to missing and/or incomplete historical participant data.... [W]ith thoughtful planning and consulting, data concerns can be mitigated, if not [mostly] eliminated[.]"
Milliman Retirement Town Hall
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Evaluating Connecticut's Pension Benefits During the Pandemic
"The coronavirus pandemic threatens the financial stability of Connecticut's pension plan for state employees, one of the nation's worst-funded retirement plans. This strain could lead to benefit cuts, but recent plan changes have already reduced future pensions and raised mandatory employee contributions.... Alternative plan designs could increase retirement incomes for many of Connecticut's public servants."
Urban Institute
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Trends in Public-Sector Employee Tenure (PDF)
24 pages. "All classes of public-sector workers had longer tenures, on average, than those of private-sector workers.... [P]ublic-sector workers were less likely to change jobs, which means fewer opportunities for leakage and more continuous participation. However, tenure for some groups of public-sector workers was shortening, so understanding how to incorporate more shorter-tenure workers may involve some tweaking of the retirement programs. The most striking result of this study is the age distribution of workers in the public sector, as the share of those in their 40s is sharply declining." [Also available: Study Snapshot]
Public Retirement Research Lab [PRRL]
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Social Security Finances: Findings of the 2020 Trustees Report (PDF)
"The 2020 Trustees Report shows that Social Security income from payroll contributions, tax revenues, and interest on reserves exceeded outgo by $2 billion in 2019. Reserves, now roughly at $2.9 trillion, are projected to begin to be drawn down in 2021 to pay full scheduled benefits. After the projected depletion of the combined OASDI trust funds in 2035, Social Security contributions and tax revenues would continue to be received and would cover about 79 percent of scheduled benefits."
National Academy of Social Insurance [NASI]
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Benefits in General
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[Guidance Overview]
DOL and IRS Provide Relief on Deadlines
"The DOL indicates it will focus on compliance assistance instead of enforcement during this time.... The relief does not require employers to issue a broad-based notice about the suspension of the deadlines or to change forms."
Dorsey & Whitney LLP
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[Guidance Overview]
Agencies Extend Certain Deadlines for Employee Plans During COVID-19 National Emergency
"The Joint Rule generally provides that the Outbreak Period must be disregarded for purposes of ... Special enrollment periods ... Deadlines for [COBRA] notices, elections and Payments ... Time periods for claims, appeals and request for external review.... Note that the extensions do not apply to the plan sponsor’s obligations to timely decide submitted benefit claims and appeals."
Sidley Austin LLP
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Executive Compensation and Nonqualified Plans
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COVID-19 Effects on Executive Compensation of Private Companies
"[If] the employment agreement permits the employer to reduce the Executive's salary and other compensation, doing such may give the Executive good reason to terminate the agreement triggering a severance pay obligation.... [T]he terms of the reduced pay should be negotiated and an amendment to the employment agreement setting forth the terms should be drafted and executed. This amendment should also provide a mechanism for compensation to return to normal ... [T]he employer could take the opportunity to work with the Executive to amend the incentive compensation formula to a more realistic goal or simply substitute a simpler cash bonus instead."
Murphy Austin
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Selected Discussions on the BenefitsLink Message Boards
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Employer Requiring Employee to Pay for 3% Safe Harbor Contribution
"Four years ago, my employer complained that he had to make a Safe Harbor payment into the Profit Sharing Plan for me in the amount of 3% of my compensation. Because it was not addressed in my employment agreement, he pressured me to reimburse the 3% payment. Each year since I have done so. No one else at the firm has been required to do so. It seems to me that it's not a Safe Harbor contribution if the employer is reimbursed for the entire payment. Am I right?"
BenefitsLink Message Boards
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