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Retirement Plans Newsletter September 21, 2020 |
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Newly Posted Fiduciary Risks & Opportunities In the Digital Age: Retirement Plans & Remote Workers
Election 2020 - Retirement Policy
Artificial Intelligence in Human Resources - Solutions to Support an Evolving Workforce
Politics, Policy and the Future of Retirement + Chris Gardner of The Pursuit of Happyness
Retirement Plan Alternatives for Small Plan Sponsors: CalSavers, or Pooled Employer Plans -- Which Is the Best Alternative?
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Discussions |
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This Newsletter:
BenefitsLink Health & Welfare Plans Newsletter:
Message Boards Digest:
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[Official Guidance]
"Of the voters identified by the Fund who received a ballot, 96 (or 21.72% of all eligible voters who received a ballot) voted to reject the benefit reduction, 60 voted to approve the benefit reduction, and 286 did not return a ballot. Because a majority of voters identified as eligible by the Fund did not vote to reject the benefit reduction, the benefit reduction is permitted to go into effect." U.S. Department of the Treasury |
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[Official Guidance]
"[OPM is revising] the table of reduction factors for early commencing dates of survivor annuities for spouses of separated employees who die before the date on which they would be eligible for unreduced deferred annuities, and to revise the annuity factor for spouses of deceased employees who die in service when those spouses elect to receive the basic employee death benefit in 36 installments under the Federal Employees' Retirement System (FERS) Act of 1986. These rules are necessary to ensure that the tables conform to the economic and demographic assumptions adopted by the Board of Actuaries and published in the Federal Register on April 6, 2020[.]" U.S. Office of Personnel Management [OPM] |
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[Guidance Overview]
"[Notice 2020-68] clarifies that if a retirement plan is amended to allow qualified birth or adoption distributions, the plan is required to accept recontributions if the individual received such a distribution from that plan and the individual is eligible to make a rollover distribution to that plan at the time of recontribution. This suggests that an employee who receives a qualified birth or adoption distribution and then separates from service will not be able to make a recontribution to that plan. Presumably, however, these individuals would be able to recontribute the amount to an IRA." Hall Benefits Law |
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"[The] fiduciary of the master trust holding the assets of the employee [DB] plans that participate in the National Retirement Program of the Blue Cross and Blue Shield Association, has filed an [ERISA] lawsuit against Allianz Global Investors and Aon Investments USA. The trust claims that promised downside protection for several AllianzGI Structured Alpha funds was not implemented, resulting in 'staggering' losses to the trust during the market crash and volatility caused by the COVID-19 pandemic." [Blue Cross and Blue Shield Assoc. Nat. Emp. Benefits Comm. v. Allianz Global Investors U.S. LLC, No. 20-7606 (S.D.N.Y. complaint filed Sep. 16, 2020)] PLANSPONSOR; free registration may be required |
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"The IBM fiduciaries asked the Supreme Court ... to review the appeals court decision ... [and] resolve differing lower courts' interpretations of Supreme Court rulings on stock-drop cases. 'Three courts of appeals have now correctly rejected as legally insufficient generalized allegations that the harm from inevitable disclosure only increases over time and thus earlier disclosure is always prudent,' IBM fiduciaries wrote in their petition to the Supreme Court. The New York court 'has doubled down on its contrary view.' " [Jander v. Ret. Plans Comm. of IBM, No. 17-3518 (2d Cir. Jun. 22, 2020; cert. pet. filed Sep. 1, 2020)] Pensions & Investments |
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"Congress loosened the rules for taking money out of retirement accounts for those adversely affected by COVID-19, but ... there's a deadline coming up for taking enhanced loans: It's September 22. The deadline for taking 401(k) or IRA distributions under the special rules is December 31." Forbes |
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"Year-to-Date annuity purchase prices have been volatile and are currently higher for both Annuity Plan 1 and Annuity Plan 2. Annuity purchase prices relative to GAAP PBO liabilities have also been volatile but are currently in line with historical expectations. This past month annuity purchase prices dropped 1.16% for Annuity Plan 1 and 4.53% for Annuity Plan 2." October Three Consulting |
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[Opinion]
"[At] the end of 2019, only 36% of workers age 25-64 had a retirement plan at work (a fall in coverage rates from 41% in 2015).... The voluntary system was never robust, but we keep pretending that relaxing regulations and giving more tax breaks will incentivize employers to sponsor a plan. Now we are left with self-interested advisors, tax breaks worth $250 billion ... and less than half the workforce with a retirement plan at work." Teresa Ghilarducci, via Forbes |
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[Opinion]
"There is a coverage gap -- though not as wide, nor as deep, as Ghilarducci assumes. In fact, the system she chooses to characterize as a 'failure' works remarkably well for those who have access to it -- thanks to the hundreds of thousands of employers that have… voluntarily, supported and encouraged by tax considerations, chosen to provide them." American Retirement Association [ARA] |
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Benefits in General |
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[Official Guidance]
"The terms of five Council members expire at the end of this year. The groups or fields they represent are as follows: [1] employee organizations; [2] employers; [3] the general public; [4] corporate trust; and [5] investment management.... [S]ubmit nominations to Christine Donahue, Council Executive Secretary ... Nominations must be received on or before [45 days after publication in the Federal Register, currently scheduled for Sep. 22, 2020]." Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL] |
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"To gauge how well employees are utilizing their benefits, plan sponsors can ask their administrators to answer [specific] questions ... If the data shows employees aren't taking full advantage of the financial features of their benefits, additional employee education and communication may be in order." Strategic Benefits Advisors |
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Executive Compensation |
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31 pages. "This report covers ... 2017 to 2019, and includes the following: [1] Company-wide annual grant rates ... [2] Overhang, measured based on potential share dilution as well as the fair value of outstanding grants.
[3] Frequency and prevalence of long-term incentive plan share requests. [4] Allocation of long-term incentive pools to the CEO and other proxy officers ('Top 5')." FW Cook |
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Selected Discussions |
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► It's easy to sign up and participate in discussions! Post answers, ask questions, create custom feeds and views. Join your peers (and potential referral sources or customers)—there is no charge. |
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"A plan terminated in 2019 with last distribution say 10/31/19. One year wait is 10/31/20. I know a new plan could start 1/1/21 for sure. What about anything in 2020? Could they do a short plan year, say 11/1/20 through 12/31/20, and have everything prorated? Safe harbor would be a no-go." BenefitsLink Message Boards |
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"Two beneficiaries are 50/50. Participant died recently (i.e., within a month or so). Beneficiary A is well off and does not want the money. Wants it all to go to Beneficiary B who is not as well off. Can Beneficiary A disclaim the benefit?" BenefitsLink Message Boards |
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"With regard to the whole issue due to PLR 201833012, and a 401(k) plan with a new comparability formula with everyone in their own group -- During discussion, an idea was floated about -- the plan would not be formally amended, but an employer would simply make a contribution to the accounts of any non-highly compensated employee who make a student loan repayment. This doesn't pass the 'smell' test, but based upon the PLR's analysis of the contingent benefit rule, what rule(s) might this violate?" BenefitsLink Message Boards |
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Press Releases |
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Most Popular Items in the Previous Issue |
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PBGC Modernizes De Minimis Distribution Rates
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