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Retirement Plans Newsletter

July 18, 2022

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DOL Sues Administrator of Multiple Employer Plan

"The lawsuit alleges that, from January 2018 through April 2021, CEB received nearly $2 million in salary deferral contributions from employees' pay. According to the lawsuit, however, CEB 'failed to timely remit the amounts withheld to the plan.' In some cases, the lawsuit alleges, the plan fiduciaries took up to 482 days to make the required contributions." [Walsh v. Preece, No. 22-0066 (E.D. Ky. complaint filed Jul. 13, 2022)]  MORE >>

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Alert (High Risk Issue) icon DC Circuit Says Discount Rate Used for Withdrawal Liability Must Be Similar to Discount Rate Used for Funding

"[T]he court held that, if the assumptions used in the withdrawal liability calculation are to reflect anticipated experience under the plan, the discount rate should reflect the plan's actual investments. Under this standard, using PBGC rates to determine withdrawal liability would not be appropriate, as they reflect the underwriting practices of insurance companies in pricing annuities and not the investments in any particular plan." [United Mine Workers of America 1974 Pension Plan v. Energy West Mining Co., No. 20-7054 (D.C. Cir. Jul. 8, 2022)]  MORE >>

October Three Consulting

Alert (High Risk Issue) icon Another Cybertheft Lawsuit Spotlights 401(k) Recordkeeper Procedures

"[T]he cases filed make the point that call center employees are a vulnerable part of any recordkeeper system, and that they must be properly trained to consult managers and/or secure additional identifying information before putting through any suspicious transactions.... Plan sponsors can take steps now to reduce the probability a theft like this will harm participants."  MORE >>

Cohen & Buckmann, P.C.

2022 Financial Life Benefits® Impact Report (PDF)

11 pages. "Majority of employees participate in 401(k), but still room to improve ... 401(k) balances are growing but significant gender disparities exist ... Employees still need education on the benefits of maximizing their retirement savings contributions ... Employees have significantly increased the portion of their assets in [ESG] focused investments ... Employees are embracing Target Date Funds -- often investing their full account balance ... Health Savings Account (HSA) utilization continues to accelerate with more education needed."  MORE >>

Bank of America Merrill Lynch

July 2022 Annuity Purchase Update

"The average Annuity Purchase Interest rates jumped again this past month, with the average duration 7 rate at 4.04% and average duration 15 at 4.05%.... [A]verage annuity rates thus far in 2022 are substantially higher than 2021 average annuity rates.... [A}nnuity purchase cost relative to pension accounting value (GAAP PBO) is well below [historical averages] making Pension Risk Transfer solutions even more appealing."  MORE >>

October Three Consulting

Planning to Retire Soon? Follow This Checklist to Prepare

"[1] Are you handing over a business? ... [2] Will you continue to work in some capacity? ... [3] What will you do during your retirement? ... [4] How much money do you have? ... [5] Do you have suitable health insurance? ... [6] Have you paid off your debts? ... [7] Trust your instincts."  MORE >>


CRS Report: The Social Security Statement

36 pages. "Policymakers may be interested in ways to improve the Statement, thus providing individuals more sufficient and accurate information to prepare for retirement. Those improvements may involve [1] developing more accurate benefit estimates for younger workers, women, lower earners and those with zero earnings in the two years prior to receipt of the Statement; [2] providing additional information related to benefits for spouses and survivors, benefits for workers with earnings not covered by Social Security, an accrued benefit illustration ... and other retirement plan information ... [3] assessing the effectiveness of the latest version of the Statement introduced in fall 2021; and [4] exploring Statement delivery methods." [R47183 Jul. 18, 2022]  MORE >>

Congressional Research Service [CRS]


An Inconvenient Truth: Cost-Inefficiency and Closet Indexing in 401(k) Plans

"[By] agreeing to release a plan adviser from their co-fiduciary status and duties, a plan sponsors arguably allows a plan adviser to legally provide a lower quality of advice under the SEC's Regulation Best Interest (Reg BI) than the adviser would have been required to provide as a fiduciary.... Reg BI provides advisers with a loophole, the 'readily available alternatives' language, which effectively allows an adviser to put the best interest of their broker-dealer and themselves ahead of plan participants and their beneficiaries. This creates an obvious problem[.]"  MORE >>

The Prudent Investment Fiduciary Rules

Executive Compensation and Nonqualified Plans

Morgan Stanley Seeks to Send Brokers' Deferred Comp Lawsuit to Arbitration

"Morgan Stanley has asked a federal court to stay a proposed class action lawsuit related to its deferred compensation plan and compel 12 of its former brokers who filed the suit to arbitrate their claims.... Matthew T. Shafer ... sought class action status for claims based on allegations that Morgan Stanley violates federal laws governing vesting and anti-forfeiture rules for pension and retirement packages by withholding deferred pay when brokers move to the competition. In response, Morgan Stanley has argued that the deferred compensation program is a bonus plan, which is generally not covered by ERISA."  MORE >>


Employee Benefits Jobs

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          for Hilb Group Senior Plan Administrator

Hilb Group


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          for Hilb Group

Selected New Discussions

Death Benefit to Spouse When Both Spouses Have an Account Balance in Same 401(k) Plan

"Both Husband and Wife have separate participant account balances in a plan. Wife has died. Husband, being her surviving spouse, wants to receive a distribution of Wife's account in John's plan as a subaccount under his account in John's plan. Is this type of distribution allowed? Is it considered an eligible rollover distribution under Code Section 402(c)(2) and (4)?"

BenefitsLink Message Boards

Press Releases

New Social Media Template and Strategy Kit Available for 401k Advisors

Attorney Beth A. Davis Joins The Wagner Law Group

The Wagner Law Group P.C.

Cleary Gottlieb Expands Leading Executive Compensation, Employee Benefits and ERISA Practice in New York

Cleary Gottlieb Steen & Hamilton LLP

Webcasts and Conferences
(Retirement Plans / Executive Compensation)

Accessing the IRS: Understanding the Identity Verification Process

July 19, 2022 WEBCAST

IRS [Internal Revenue Service]

Last Issue's Most Popular Items

2023 IRS Limits: Updated Forecast


Biden's Pension 'Guarantee' Illegally Stretches the Law to Bail Out Unions

Aharon Friedman, via The Hill

A Conjunction Is Worth Thousands of Dollars: Recent Case Highlights Significance of 'And' vs. 'Or'


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BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587.

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