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Court Disallows Use of 'Segal Blend' for Calculation of Withdrawal Liability
"Judge Sweet found the arbitrator's emphasis on fairness to be misplaced. Instead, he focused on the [statutory] requirement in ERISA Section 4213(a) that the interest rate assumption 'offer the actuary's best estimate of anticipated experience under the plan.' ... In the same manner as Judge Sweet attacked the use of the 'Segal Blend' (a combination of the funding interest rate assumption and PBGC Rates) as 'including interest rates for assets not included in the Fund's portfolio' and, therefore, not representative of the 'best estimate of anticipated experience under the plan,' plans using PBGC Rates to calculate withdrawal liability also would be susceptible to attack." [ The New York Times Co. v. Newspapers & Mail Deliverers'-Publishers'
Pension Fund
, No. 17-6178 (S.D.N.Y. Mar. 26, 2018)]
Jackson Lewis P.C.
Happy National Employee Benefits Day!
This National Employee Benefits Day learn more about the theories of behavioral decision making and how to positively influence the decisions of your participants. Last Chance to Register! Free webcast TODAY at 3 p.m. Eastern. Register now!
Multiemployer Pension Plans: Potential Successor Liability from Buyer's Attempts to Continue Seller's Business
"The Seventh Circuit said the lower court ... improperly created a 'Big Buyer' loophole ... [which] would destroy 'a finding of continuity even where a large buyer in essence swallows a smaller seller whole and continues its business as part of the buyer's business.' To avoid this result, the Court instructed the district court to reevaluate the continuity factors by properly focusing on the extent to which the business of the predecessor company was continued by the putative successor after the asset purchase." [ Indiana Electrical Workers Pension Benefit Fund v. ManWeb Services, Inc.
, No. 16-2840 (7th Cir. Mar. 12, 2018)]
Jackson Lewis P.C.
Tax Cut and Jobs Act Loosens Certain Restrictions on Hardship Distributions from 401(k) and 403(b) Plans (PDF)
"The Act directs the Department of the Treasury to modify the existing regulations to remove the 6-month prohibition on employee contributions within one year of the enactment of the Act. The revised regulations will apply to plan years beginning after December 31, 2018 and will apply to both 401(k) and 403(b) plans."
Boutwell Fay LLP
Loosened Rules at Odds with Efforts to Cut Loans, Hardship Withdrawals
"2.3% of participants made hardship withdrawals in 2017. Over the same period, 10% of participants initiated loans, and 21% had loans outstanding ... While the implications of the new hardship withdrawal provisions are still being assessed by many plan sponsors, [some companies] are working in the meantime to ensure employees are making informed decisions about withdrawals and loans, and not jeopardizing their retirement nest eggs."
Pensions & Investments
Tough Questions to Ask Your 401(k) Financial Advisor
"[1] Are you a fiduciary for the recommendations you make? ... [2] How are you paid? ... [3] Does the company you work for sell investment funds/products? ... [4] What professional credentials do you have? ... [5] What is your educational background? ... [6] How many years have you been a 401k investment adviser? ... [7] What does your ideal client look like? ... [8] What happens to my business if you are gone?"
Lawton Retirement Plan Consultants
The 'Future' of Retirement Planning
"if you have planned your retirement with a spreadsheet model, you should take another look, especially if your plan shows a single straight path to doubling (or more) your initial portfolio. It could happen; it just isn't likely and if it does happen it certainly won't be a smooth path. If you're using an online calculator, make sure it incorporates simulation.... But simulations have issues, too, so they're only a starting point."
The Retirement Cafe
Press Releases
Call for Speakers ECFC Annual Symposium 2018 ECFC [Employers Council on Flexible Compensation]
BenefitsLink.com, Inc.
1298 Minnesota Avenue, Suite HWinter Park, Florida 32789
(407) 644-4146
Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager
BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2018 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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