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Roots of ERISA Litigation

"[T]here will be no decrease in the amount of ERISA litigation as long as the main proponents and beneficiaries of frivolous litigation in this country remain rooted.... Defense lawyers who might sympathize with the plight of their clients have no incentive to curtail baseless lawsuits as it means fees for them ... Big settlements mean big profits [for insurers] since loss ratios determine premium rates.... [S]tate governments get a premium tax from insurance companies as a percentage ... of the premiums written in each state."

5500 Season Tips

"Retroactive filings ... Automatic extension if you miss filing 5558 ... 5500-EZ combined trust asset ... Cash or Accrued basis ... Participant count for [accountant's opinion] ... Don't miss the deadline ... But if you do ... Don't forget the Schedule SB ... If the data to prepare the SB is 'suspect' ...If late and penalized despite your best efforts."

Primer on IRS Form 5330: Return of Excise Taxes Related to Employee Benefit Plans

"Form 5330 is used to report and pay excise taxes related to employee benefit plans, particularly for prohibited transactions under ERISA. [... [1] When to pay ... [2] Penalty for late filing of Form 5330 ... [3] Filing the form ... [4] Excise tax revenue."

Considerations for Those Selling Cash Balance Plans

The author provides nine suggestions for TPAs and Financial Advisors who have chosen CB plans as their go-to Defined Benefit (DB) plan of choice in a 401(k) world.

Takeaways from the 2025 Enrolled Actuaries Conference

"[1] No representatives from IRS, DOL, JBEA, or PBGC appeared ... [2] Websites showing segment rates for funding and calculating 417(e) lump sums are not being updated ... [3] In response to [a] question ... about what to expect from the new administration on pensions the feeling was fewer audits, regulations, and oversight[.]"

When a TPA's EA Goes MIA

"When an EA vanishes suddenly it could be a nightmare for everyone, including the new EA.... The main lesson ... is not to be rushed no matter how many status-checking emails the TPA sends. Takeover plans take longer to get up to speed on and the more time you invest initially the less time you will need to spend later in possibly having to fix mistakes (some of which may be your own)."

'Meaningful Benefits' After Chevron

"Cash Balance plans designed to maximize benefits for older, higher-paid participants combined with Defined Contribution plans that provide enough in contributions to the staff so that the plans can pass arcane nondiscrimination tests have become popular ... The problem is that IRC 401(a)(26) requires Defined Benefit plans (which Cash Balance plans are) to cover a minimum number of eligible participants so some rank-and-file employees may need to be in the Cash Balance plan AND get a ‘meaningful benefit’.... [W]ho now gets to decide what words like ‘reasonable’, ‘fair’, and ‘meaningful’ written in a law really mean now that the Chevron’s default preference for regulators has been overturned?"

SECURE 2.0: Death of 401(k) Testing as We Knew It

"[A] lot of plans get around having to return excess deferrals to HCEs after a failed ADP test by recharacterizing deferrals for some HCEs as catch-up. Would this no longer be possible if the deferrals were all regular 401(k) as catch-ups would need to have been Roth?"

SFA Bailout Flood: $98 Billion and Counting

"As of now 69 plans covering 686,540 participants have had $45,844,757,860 approved for them. Another 43 plans covering 923,077 participants are asking for $23,099,259,941.... [PBGC] recognized last week that they were about to get a flood of applications and so they instituted a waiting list. Based on available 2020 Schedule MB information for 101 of those plans ... those plans have $29.4 billion [in unfunded liabilities] ... That would bring the total bailout to over $98 billion and the wave has not yet crested."

Central States Has Filed Request for SFA with PBGC

"The first 34 plans that filed requested a total $8.4 billion in bailout money from the PBGC Special Financial Assistance program for troubled multiemployer plans.... [T]he PBGC weekend update showed one new plan -- the Central States, Southeast & Southwest Areas Pension Plan, with 364,908 participants -- which is asking for $35 billion dollars."