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Retirement Plans Newsletter

August 26, 2022

2 New Job Opportunities 2 New Job Opportunities


CUNA's 401(k) Is Latest to Be Targeted with BlackRock TDF Suit

"As in the other suits ... this one argues that, rather than comparing the target-date suite to a selected custom benchmark, the funds would be better compared with the performance of what it calls 'comparator' TDFs, basically the leading target-date funds ... And though they have different glidepaths ... the plaintiffs argue that BlackRock TDFs de-risk at a quicker pace than most of the Comparator TDFs, and that what they call 'the resulting equity allocation discrepancy' is only reflected in the two funds that are closest to the retirement date." [Abel v. CMFG Life Ins. Co., No. 22-0449 (W.D. Wis. complaint filed Aug. 19, 2022)]  MORE >>

American Retirement Association [ARA]

ERISA Litigation Roundup: Damned If You Do, Damned If You Don't

"[A string of recent] lawsuits allege the companies, in their capacities as plan sponsors, breached their fiduciary duty by choosing the low fee investment options offered by BlackRock Inc., despite their funds' underperformance. This new litigation sparks concern amongst 401k plan sponsors who may now have to worry about lawsuits involving investment fees from all sides -- for choosing the high fee options and for choosing the low fee options."  MORE >>

Faegre Drinker

Participant Data Claims Dismissed in Excessive Fee Suit

"ADP got something of a split decision in an excessive fee case -- with a federal judge allowing claims regarding high record-keeping fees and expensive investments to proceed -- but culling claims about the use of participant data." [Berkelhammer v. ADP TotalSource Group Inc., No. 20-5696 (D.N.J. Aug. 23, 2022; unpub.)]  MORE >>

American Retirement Association [ARA]

Second Circuit: Participant's 401(k) Plan Accounts Were Subject to Garnishment

"After the participant was convicted of conspiracy to commit wire fraud and conspiracy to commit securities fraud, he was ordered to pay $10,447,979 in restitution.... [T]he government applied for a writ of garnishment ... [T]he Second Circuit concluded that the participant's 401(k) accounts were subject to garnishment but remanded to the district court to consider issues related to the 10% tax on early distributions." [United States v. Greebel, No. 21-993 (2d Cir. Aug. 24, 2022)]  MORE >>

Thomson Reuters Practical Law

Judge Orders Kentucky Pension Agency to Release Report About Hedge Fund Deals

"A judge has ordered Kentucky's state pension agency to release a suppressed report about possible fraud in its controversial hedge fund investments, ruling that taxpayers deserve to see a report that cost them $1.2 million.... The suits claim that several hedge fund dealers cheated the [Kentucky Public Pensions Authority (KPPA)] on $1.5 billion in risky, poorly disclosed, high-fee investments from 2011 to 2017, aided by some KPPA trustees and employees."  MORE >>

Lexington Herald-Leader

Pension Funds Are Selling Their Office Buildings

"Major U.S. and Canadian pension funds are cutting back investments in office buildings, betting that prices will likely fall as the five-day office workweek becomes a thing of the past. Retirement funds are still buying property, partly in a bid to reduce the impact of inflation. But those investments are more focused on warehouses, lab space, housing and infrastructure such as airports."  MORE >>

The Wall Street Journal; subscription may be required

Retirement Plans Outperformed the S&P 500 During a Volatile Second Quarter

"Despite higher inflation, rising interest rates and falling stock markets, the average retirement plan outperformed the S&P 500 during a volatile second quarter, as 401(k)s, 403(b)s and individual retirement accounts bested the index by an average of nearly 250 basis points ... Fidelity's second-quarter analysis of savings behaviors and account balances also found that despite the economic headwinds, 401(k) savings rates remained near record levels."  MORE >>

PLANSPONSOR; free registration may be required

Sequence Risk During Retirement

"Formal financial plans are more complex than the model presented in this article, but they are not more prescient. Inevitably, a retiree's portfolio will not match the forecast's performance, often dramatically.... Nevertheless, making the effort provides the groundwork for future decisions. Critically important is understanding and appreciating the effects of sequence risk. The order of a portfolio's returns matters greatly -- sometimes, even more than their level."  MORE >>

John Rekenthaler , via Morningstar

Benefits in General

[Guidance Overview]

Inflation Reduction Act Includes Retirement Plan and Prescription Drug Implications

"[Q]ualified DB pension plans and other non-pension DB benefit plans would be treated for purposes of the alternative minimum tax the same way they are treated for regular federal income tax purposes ... [P]ublicly traded corporations that repurchase more than $1 million in stock will be subject to an excise tax of 1% of the stock's fair market value.... The excise tax will not apply in cases where the repurchased stock (or an amount equal to its value) is contributed to an employer-sponsored retirement plan, employee stock ownership plan or similar plan.... HSA-qualifying HDHPs will be permitted to cover insulin before the annual deductible is satisfied."  MORE >>

Willis Towers Watson

Executive Compensation and Nonqualified Plans

[Official Guidance]

Text of SEC Final Rule: Pay Versus Performance (PDF)

234 pages. "The [SEC] is adopting amendments to implement ... Section 953(a) of the [Dodd-Frank Act] ... requiring registrants to provide disclosure of pay versus performance. The disclosure is required in proxy or information statements in which executive compensation disclosure is required. The disclosure requirements do not apply to emerging growth companies, registered investment companies, or foreign private issuers."  MORE >>

U.S. Securities and Exchange Commission [SEC]

[Guidance Overview]

SEC Adopts Pay Versus Performance Disclosure Rules

"[The final rule requires] registrants to provide a table disclosing specified executive compensation and financial performance measures for their five most recently completed fiscal years.... Using the information presented in the table, registrants will be required to describe the relationships between the executive compensation actually paid and each of the performance measures, as well as the relationship between the registrant's [total shareholder return (TSR)] and the TSR of its selected peer group."  MORE >>

U.S. Securities and Exchange Commission [SEC]

Statement of SEC Chair on Final Rule for Disclosures of Pay Versus Performance

"[T]he final rule provides for new disclosures, describing which performance measures a company deems most important when determining what it pays executives.... [T]he final rule requires certain companies to provide a five-year history of pay versus performance-related metrics, with a shorter, three-year reporting requirement for smaller reporting companies.... The Commission benefitted greatly from public comment on the proposal[.]"  MORE >>

U.S. Securities and Exchange Commission [SEC]

Employee Benefits Jobs

View job as Retirement Plan Administrator
          for TriStar Pension Consulting Retirement Plan Administrator

TriStar Pension Consulting


View job as Retirement Plan Administrator
          for TriStar Pension Consulting

View job as Manager, Retirement Services Relationship Management
          for Fulton Bank Manager, Retirement Services Relationship Management

Fulton Bank

Remote / Lancaster PA / DE / MD / NJ / VA

View job as Manager, Retirement Services Relationship Management
          for Fulton Bank

Selected New Discussions

Safe Harbor Plan Exclude Some HCEs, But Not All

"Plan sponsor is considering excluding certain HCEs, but not all, from the safe harbor from a safe harbor match. Would such a design still be considered to be a plan consisting 'solely' of a safe harbor 401(k) arrangement?"

BenefitsLink Message Boards

Loan to Now-Deceased Participant -- Can It Be Repaid by Estate?

"Can it be repaid by the estate or family prior to the beneficiary taking a distribution?"

BenefitsLink Message Boards

Dual-Qualified Plan in Puerto Rico

"Does anyone know what's involved in getting a plan to become a dual-qualified plan so a person who lives in Puerto Rico could be eligible?"

BenefitsLink Message Boards

Webcasts and Conferences
(Retirement Plans / Executive Compensation)


January 18, 2023 in AZ

NIPA [National Institute of Pension Administrators]

Last Issue's Most Popular Items

When It Comes to Your RMDs, Be Very, Very Afraid!


New York Department of Financial Services Proposes New Cybersecurity Rules

King & Spalding

Congress Considers Major Changes to Adjudication of ERISA Claims

Hall Benefits Law

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

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