Retirement Plans Newsletter

January 6, 2021

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View job as Retirement Plan Distribution Specialist for Karel-Gordon & Associates
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Karel-Gordon & Associates
Northbrook IL

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Alerus
Scottsdale AZ / Mesa AZ

View job as Sr Director & Assistant Counsel for The Standard Sr Director & Assistant Counsel

The Standard
Telecommute / Portland OR

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Court Permits Claims to Proceed Against ERISA Fiduciaries Related to Pension Benefit Misstatements

"this case is about a plan participant who was successful in defeating two motions to dismiss ERISA and state-law claims based on defendants' misrepresentations in overstating his pension benefits, misstatements on which the participant specifically relied in deciding to accept a severance package ending his long-term employment[.]" [Wallace v. Int'l Paper Co., No. 20-2478 (W.D. Tenn. Dec. 23, 2020)] Icon to read more

Kantor & Kantor

[Sponsored]

ASC CE Webcast: Basics of 401(k) Plans Series for 2021

If you are new to the qualified retirement plan field or need a refresher on the rules applicable to 401(k) plans, then you won't want to miss this series with industry expert and ERISA attorney, John Griffin, J.D., LL.M. Register now! Learn more

Sponsored by ASC


Plaintiffs Claim Fiduciary Breach Acknowledging Insufficient Data to Determine Reasonable Fee Levels

"[T]he suit ... alleges that the defendants breached their fiduciary duties by ... '[1] authorizing the Plan to pay unreasonably high fees for recordkeeping and administration; [2] authorizing the Plan to pay unreasonably high fees for managed account services; and [3] engaging in self-dealing with regard to administration of the Plan.' " [Guyes et al. v. Nestle USA Inc., No. (E.D. Wis. complaint filed Oct. 9, 2020)] Icon to read more

Hall Benefits Law

Retirement Planning During COVID

"Nearly 60% of respondents took a withdrawal or loan from their retirement accounts in 2020. However, even as the stock market was touching new highs, investment mixes reported in the poll were very conservative. Stocks accounted for just 36% of the average allocation, and cash made up a whopping 24% of portfolios." Icon to read more

Kiplinger

A Monte Carlo 50% Retirement Success Probability Can Work

"One concern when reporting Monte Carlo results to a client framed around 'probability of success' is that anything less than 100% can sound scary.... [T]his metric alone actually tells us nothing about how severe 'failure' is.... Moreover, adjustments can often save a 'failing' plan, so simply shifting a 50% probability of success framing to a 50% probability of adjustment can take a lot of sting out of that result.... [A] 50% probability of success means adjustment at any point in time in the future, and not necessarily even an adjustment in the near future." Icon to read more

Nerd's Eye View

Pension Finance Update, December 2020

"December gave us one more turn of the screw from extraordinary 2020 stock markets, pushing pension sponsors into the black for the year. Both model plans ... gained ground last month, with Plan A adding 3% and Plan B gaining 1% during the month. Plan A ended the year with close to a 2% gain, while Plan B managed a 1% gain during 2020[.]" Icon to read more

October Three Consulting

[Opinion]

Pension Spending Supports U.S. Economy

"Retiree spending of pension benefits in 2018 generated $1.3 trillion in total economic output, supporting nearly seven million jobs across the nation. Pension spending also added nearly $192 billion to government coffers at the federal, state and local levels.... Each dollar paid out in pension benefits supported $2.19 in total economic output nationally. Each taxpayer dollar contributed to state and local pensions supported $8.80 in total output nationally." Icon to read more

National Institute on Retirement Security [NIRS]

Benefits in General

2020 ERISA Litigation Trends Hint at What's Ahead This Year (PDF)

"By any measure, 2020 was a record-setting year for litigation under [ERISA]. The U.S. Supreme Court issued four ERISA decisions, more than it has issued in a single year in the 45-year history of the statute.... As 2021 begins, this trend shows no sign of slowing down, with important developing issues related to fee and performance litigation for smaller retirement plans, COBRA notices, arbitration clauses and class action waivers, actuarial assumptions, cyber theft, and employee stock ownership plans, or ESOPs -- among others." Icon to read more

Groom Law Group

Selected Discussions
on the BenefitsLink Message Boards

► 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.

New Determination Letter for ESOP?

"Say an ESOP plan that was individually designed (weren't they all until relatively recently?) applied for and received a determination letter in 2014. Didn't Rev. Proc. 2016-37 eliminate the 5-year cycle, and isn't it true that one generally cannot file for a determination letter currently (except for initial qualification, plan termination, etc.)?" Icon to read more

BenefitsLink Message Boards

Advisor Access to Participant Transactions

"Wondering if anyone is aware of functionality that allows the plan's advisor to view participant-level transactions and, if permitted, execute transactions or act on behalf of the participant?" Icon to read more

BenefitsLink Message Boards

Prohibit Prepayment of Participant Loans?

"Client wants to NOT allow prepayment on participant loans. Not seeing anything in 1.72(p) or 2550.408(b)-1 specifically prohibiting this, but it seems wrong on so many levels that I've got to assume this has been addressed somehow before." Icon to read more

BenefitsLink Message Boards

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David Rhett Baker, J.D., Editor and Publisher  davebaker@benefitslink.com
Holly Horton, Business Manager  hollyhorton@benefitslink.com

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BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2021 BenefitsLink.com, 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 BenefitsLink.com, 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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