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Newly Posted
Webcasts, Conferences

COVID-19 Employer Advisory Session: An Employer's Guide to Navigating 401(k) Retirement Plans
OneDigital Health and Benefits

Department of Labor Guidance on Private Equity Adds Flexibility for Defined Contribution Plans
June 11, 2020 WEBCAST
Groom Law Group

Preventing Fraud in Your Retirement Plan
June 12, 2020 WEBCAST
SPARK Institute

Non Discrimination Testing and Cash Balance Plans
June 24, 2020 WEBCAST
ASPPA Benefits Council [ABC] of North Florida

Fireside Chat with the "Wealthy Custodian"
July 16, 2020 WEBCAST

Employee Benefit Plans of Tax-Exempt and Governmental Employers 2020
October 29, 2020 in DC
American Law Institute Continuing Legal Education Group [ALI CLE]

►See All 149 Upcoming Webcasts and Conferences

►See All 1563 Recorded Webcasts


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[Guidance Overview]

DOL Allows Private Equity Investment Exposure in 401(k) Plans

"The DOL's [Information Letter 2020-06-03] and the SEC's regulatory initiatives signal a willingness on the part of the regulators to consider creative solutions when exploring retail investor access to private equity investments.... [T]he information letter should provide a pathway for including access to private equity investments in individual account plans as part of the overall portfolio mix in diversified investment options."

Paul Hastings LLP

Big Win for Plan Sponsor: Class Certification Denied in Actuarial Equivalence Case

"The plaintiffs may here, and in similar lawsuits likely will, attempt to define the class more narrowly to exclude any participants or beneficiaries who may be harmed by use of more current mortality tables. This may be difficult, however, where the underlying plan terms use actuarial assumptions more broadly, ... because the Torres court explicitly rejected the idea of reforming the same plan terms for one purpose but not another." [Torres v. American Airlines, Inc., No. 18-983 (N.D. Tex. May 22, 2020)]

Groom Law Group

Supreme Court Nixes ERISA Fiduciary Case Over DB Plan Investments (PDF)

"Because the plaintiffs suffered no injury from the alleged ERISA fiduciary breach, the court concluded they lacked standing to sue under Article III of the US Constitution. Unlike the lower court decisions, however, the opinion focused on the contractual nature of DB plan benefits -- not on whether the plan was sufficiently funded to avoid any risk to participants' benefits. The decision arguably sets a very high bar for establishing Article III standing to sue over DB plan investments and could deter these cases going forward." [Thole v. U.S. Bank N.A., No. 17-1712 (S. Ct. Jun. 1, 2020)]


Supreme Court Rules DB Plan Members Can't Sue Fiduciaries If Payments Unaffected

"The Thole opinion underscores the tension between ERISA's purpose to protect the rights of beneficiaries from plan mismanagement and fiduciary misconduct, and the notion that ERISA plans are largely contractual in nature even if governed by federal statute. The former view, held by the dissent, would find that plan participants may suffer a cognizable injury when a plan is mismanaged even if they do not personally suffer a monetary loss, as fiduciary misconduct could cause tens of millions of plan participants to suffer losses. The majority view, however, focuses more narrowly on monetary injury and limits participants' rights in this case to their pension benefits." [Thole v. U.S. Bank N.A., No. 17-1712 (S. Ct. Jun. 1, 2020)]

Holland & Knight

Auto Features Help Boost Participation and Saving for DC Participants

"Last year, plans offering auto enrollment had an average participation rate of 87%, while plans lacking this plan design had an average participation rate of 62%. Half of DC plans now have a participation rate of at least 90%, compared to 21% in 2010[.]"

Pensions & Investments

Lowering 401(k) Fees: Options for Plan Sponsors and Participants

"How to lower your 401(k) fees as a plan sponsor: [1] Check for lower-cost share classes.... [2] Replace your funds with lower-cost alternatives.... [3] Renegotiate with your current provider.... [4] Switch to a new provider.... How to lower your 401(k) fees as a plan participant: [1] Replace your funds with index funds.... [2] Lobby your employer.... [3] Move your assets to an IRA."

Employee Fiduciary

Editor's Pick Decoding Retirement: A Detailed Look at Retirement Distributions Reported on Tax Returns (PDF)

83 pages. "This paper addresses the question of how leakage should be defined when using tax data.... [P]enalized distributions ... are a reasonable approximation for leakage ... In 2010, 28 percent of all taxpayers received gross distributions -- either directly or through a spouse -- and 26 percent received non-rollover distributions."

Investment Company Institute, for the Statistics of Income Joint Research Program of the Internal Revenue Service [IRS]

Editor's Pick Retirement Beneficiaries Potentially Eligible for Widow(er)'s Benefits (PDF)

18 pages. "Of the 100 retirement beneficiaries sampled, 69 were eligible for higher widow(er)'s benefits.... This occurred because SSA employees [1] did not always assess and take action when cases were alerted for possible payment increases, and/or [2] did not have processes to detect beneficiaries potentially eligible for higher widow(er)s benefits."

Office of Inspector General, Social Security Administration

Benefits in General

When Does Fraud Not Mean Fraud? Second Circuit Further Educates Us About Equitable Remedies

"This week, the Second Circuit ... went back only 60 years to cite cases explaining that, in a court of equity, 'fraud' does not mean what you were taught in law school. Fraud has a broader meaning in equity than at law. The intention to defraud or to misrepresent are not a necessary. Rather, 'fraud' in a court of equity properly includes all acts, omissions, and concealments which involve a breach of legal or equitable duty, trust, or confidence, 'justly reposed, and are injurious to another.' You get this education for free. For Verizon, it might cost them $571,200 plus attorneys' fees and costs. Why?' [Sullivan-Mestecky v. Verizon Communications Inc., No. 18-1591 (2nd Cir. June 1, 2020)]

Kantor & Kantor

Recent Developments in Employee Benefits Law (PDF)

10 pages. "This article surveys recent developments in employee benefits law from Fall 2018 through Fall 2019. In particular, this survey reviews six decisions issued by United States Circuit Courts of Appeals during this time frame. Last year, the Circuit Courts provided important analysis regarding ... the 'actual knowledge' standard under Section 413(2), the pleading standard of employer 'stock drop' lawsuits, cross-plan offsetting of overpayments, fee investment litigation, and mandatory arbitration provisions. This article surveys key cases from the last year on these topics."

Alston & Bird, and Katten Muchin Rosenman LLP, via Tort Trial & Insurance Practice Law Journal

Executive Compensation
and Nonqualified Plans

How Employee Stock Purchase Plans Can Offer Shelter in Down and Volatile Markets

"Sometimes an ESPP can still be a good deal even when the company's stock price falls. Here's what you need to know for participating in your company's ESPP with a falling or volatile stock price. The good news: ESPPs can't go underwater.... Volatility does not always matter.... The bad news: limits on the amount of stock you can purchase.... Special plan features in down markets."

Insurance Company Settles With SEC for Failing to Disclose Executive Perquisites

"From 2014 through 2018, Argo: [1] Incorrectly recorded payments for the benefit of, and reimbursements to, the CEO as business expenses, and not compensation so that its books, records and accounts did not accurately and fairly reflect the disposition of its assets. [2] Failed to devise and maintain internal controls relating to payments for the benefit of, and reimbursements to, the CEO."

Thomson Reuters Practical Law

Selected Discussions
on the BenefitsLink Message Boards

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Plan Sponsor Withheld Too Much in Salary Deferrals

"Participant elected to contribute 10% of pay. Whoops, typo -- the employer-client then enters 12% contribution on payroll. Very, very strict recordkeeper says "OK, the correction here is to pay the extra 2% of pay out to the participant as a taxable distribution, Code 8, no excise tax, etc." That's probably more strict than I would be in this situation but I certainly cannot disagree with them. As far as I know, ECPRS has nothing on this kind of an error. Has anyone heard of a correction that would allow the participant to leave the money in the plan?"

BenefitsLink Message Boards

Employee Wants CARES Act Distribution But Had No Financial Impact from COVID-19

"Plan sponsor has an employee requesting a CARES Act withdrawal. The employee has disclosed in an email that he hasn't had a negative financial impact from COVID-19 -- he just wants the money to invest outside of the plan. The withdrawal paperwork requires trustee signoff. Should the trustee sign off on the withdrawal knowing that the employee has admitted that he hasn't had a financial setback? Thoughts?"

BenefitsLink Message Boards

Our Recent Experience with a VCP Submission

"We had wondered how long the IRS is taking during this pandemic to process VCP applications, and thought others might be interested. Here is data from one of ours: January 23, 2019 submitted; June 11, 2019 acknowledgement from IRS; April 17, 2019 IRS requests additional information; May 18, 2019 we respond' May 19, 2020 VCP compliance statement (1 year after last contact)."

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Press Releases

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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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