Mid-Sized Retirement Conference

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Pension Management Consultants, Inc.
in CA

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Milliman
in TX

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Treasury Department Notice of Multiemployer Pension Plan Application to Reduce Benefits: Plasterers Local 94 Pension Fund

"The Board of Trustees of the Plasterers Local 94 Pension Fund, a multiemployer pension plan, has submitted an application to reduce benefits under the plan in accordance with [MPRA].... [T]he application ... has been published on the website of the Department of the Treasury ... [P]ublic comments on the application [are requested] from interested parties, including participants and beneficiaries, employee organizations, and contributing employers[.]"
U.S. Department of the Treasury

Immersive Investments Education Opportunity

Learn from Wharton School faculty and uncover alternative investment strategies you can use for your benefit plans at the Alternative Investment Strategies program. Limited seats are being offered for this advanced-level program. Register today.

DOL Issues More Guidance on ESG Investments, Shareholder Activities

"[F]iduciaries may wish to review their process for determining whether and to what extent ESG factors are economic factors affecting the plan's investment choices. Similarly, it may make sense for fiduciaries to review how they conduct the cost-benefit analysis for various types of shareholder activities. And, as was the case under the 2015 and 2016 guidance, ERISA fiduciaries should not consider ESG factors based on their 'collateral' social impact (unless such social impact represents a 'tie-breaker' between two otherwise equally prudent investment choices)." Morgan Lewis

DOL Warns About Socially Responsible Investing and Shareholder Activism

"Any proxy voting or shareholder engagement policies approved by plan fiduciaries should be intended to enhance the economic return of investments and take into account the costs of exercising shareholder rights. Where plan fiduciaries are considering courses of actions that may involve routine or substantial costs in voting proxies that take into account social factors, fiduciaries should be able to demonstrate that they have analyzed the economic benefit in view of the costs to the plan and that they are not using plan assets to promote public policy preferences." Kilpatrick Townsend

Lowe's, Aon Hewitt Targeted Over $100M in 401(k) Losses

"The proposed class action ... challenges Lowe's decision to move more than $1 billion in 401(k) assets into the Hewitt Growth Fund. The fund was untested -- with no large retirement plan investors and only $350 million in assets before the Lowe's plan's investment -- and performed worse than the funds previously in the company's 401(k) plan, the lawsuit claims. Both Lowe's and Aon Hewitt, which provides investment consulting services to the Lowe's plan, are accused of breaching their fiduciary duties under [ERISA]." Bloomberg BNA

Self-Dealing Ban Eliminates Greatest Fiduciary Conflict of Interest

"[W]hether intentional or not, there has been a movement to define the term 'conflict-of-interest' so broadly that it loses any meaning.... It's important to note a 'self-dealing' transaction is specifically limited to transactions involving assets of the trust.... Preventing self-dealing speaks to the very nature of the role of the trustee.... It's therefore quite simple. If you agree to serve in a trust capacity, you agree to subordinate your needs to the needs of the beneficiary." Fiduciary News

Post-Crisis Pension Portfolios Include More Fixed Income, LDI Strategies

"Equity prices have strongly recovered since the Great Recession, bringing some benefit to corporate pension funded status, but pension plan sponsors have still faced periods of unprecedented volatility, a prolonged slowdown in global growth, and historically low interest rates." PLANSPONSOR

Steps to Fund and Meaningfully Reduce Liabilities: What CFOs Need to Know

"Underfunded plan sponsors have thus far focused on 'pruning' pension risk by settling small benefit retirees. However, as sponsors fund their plans, CFOs should take bold steps to meaningfully shrink the size of their liabilities to improve their financial flexibility. This will allow a greater focus on their company's core business, position them to better endure the next economic downturn, and enable them to pursue growth initiatives at a time when their competitors may be unable to do so." Prudential

New Actuarial Standard of Practice Focuses on Pension Risk

"ASOP No. 51 requires actuaries to identify and assess risks that may reasonably be anticipated to significantly affect a pension plan's future financial condition. The goal is to help users of actuarial reports better understand those risks. The new standard applies to annual funding valuations and pricing valuations.... It permits actuaries to use various methods to assess risks. It also requires actuaries to recommend that a more detailed risk assessment be performed if the actuary judges that it would be significantly beneficial for the plan sponsor to understand those risks." Segal Consulting

PBGC Releases Strategic Plan for 2018-2022

"The PBGC has identified five priorities to effectively manage its insurance programs.... They include: [1] Encouraging continuation and maintenance of voluntary private pension plans for the benefit of their participants; [2] Enhancing production quality and reducing the inventory of unissued benefit determination letters; [3] Completing implementation of enterprise risk management; [4] Addressing workforce challenges to prevent an impact on the PBGC's ability to carry out its mission; and [5] Continuing to improve the internal control environment." Wolters Kluwer Law & Business

Litigation, Scale Push Private Colleges to Adopt Multiple Employer Plans

"Small and independent, nonprofit private colleges -- in search of ways to improve the retirement outlook for faculty and staff, and mindful of regulatory and litigation risks -- are banding together at the state level to establish multiple employer plans, or MEPs. State associations of independent private colleges in both Virginia and Wisconsin recently established MEPs using 403(b) plans, blazing a trail that others may want to follow. Pennsylvania and New York are reportedly exploring their own MEPs." InvestmentNews

Stagnant Growth in Pension Contributions to Intensify State Plans' Pension Burdens

"For state plans reporting their fiscal year 2017 data, the median actuarially determined contribution rose 3.5%. Actual contributions, meanwhile, rose faster, increasing 3.7%. Recent increases are well below the post-recessionary peaks, when the median ADC rose 8.6%, in fiscal 2011, and actual contributions rose 8%, in fiscal 2014." Pensions & Investments

FAS87 ASC715 Discount Rates and Moody's Rates, Updated April 30, 2018

An unofficial monthly report, as of April 30, 2018, of the Moody's Daily Long-term Corporate Bond Yield Averages and Moody's Daily Treasury Yield Averages (used as benchmarks by some corporate pension plans). David Rigby, via BenefitsLink Message Boards

ERISA: How to Argue That 'Conflict Discovery' Should Not Supplement the Administrative Record

"The Court rejected Plaintiff's request to supplement the record with [1] portions of Unum's Claims Manual addressing procedures Unum uses to assess the claimant's ability to perform her own occupation.... [2] requirements in Unum's Claims Manual regarding how reviews by non-examining physicians employed by Unum must be performed.... [3] requirements in Unum's Claims Manual that Unum 'giv[e] deference to the opinion of the claimant's [attending physician(s)].' " [ Prohkorova v. Unum Life Ins. Co. of Am. , No. 17-30064 (D. Mass. April 23, 2018)]
Lane Powell PC

California Abandons 30-Year-Old Test for Determining Independent Contractor Status, Broadens Definition of 'Employee'

"The new standard adopted by the Supreme Court (dubbed the 'ABC test') requires hirers to establish three factors in order to properly classify a worker as an independent contractor -- and in the process greatly expands the definition of 'employee' under California law: [A] The worker is free from the control and direction of the hirer in connection with the performance of the work, both under contract for the performance of such work and in fact; and [B] The worker performs work that is outside the usual course of the hiring entity's business; and [C] The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed by the hiring entity." [ Dynamex Operations West, Inc. v. Superior Court of Los Angeles County , No. S222732 (Cal. Apr. 30, 2018)]
Proskauer Rose LLP

California Supreme Court Transforms Test for Who Is an Employee

"The state supreme court said in an April 30 ruling that a three-factor 'ABC' classification is the correct test under state law, shifting from a separate standard that looked at nearly a dozen different factors.... [The] decision could have a large impact in California, home to Silicon Valley. That's because California also is home to many lawsuits involving the classification of many app-based gig economy workers." [ Dynamex Operations West, Inc. v. Superior Court of Los Angeles County , No. S222732 (Cal. Apr. 30, 2018)]
Bloomberg Law

ICI and ARA Letter to EBSA on E-Delivery Study (PDF)

39 pages. "Allowing plans to make electronic delivery the default method for communicating with participants (while still allowing participants to opt for paper) will: [1] enhance the effectiveness of ERISA communications, particularly to individuals with disabilities or for whom English is not the primary language; [2] produce significant cost savings for 80 million retirement investors; [3] maintain security of information; and [4] reduce the environmental impact of tons of discarded paper every single year." Investment Company Institute [ICI]

Failure to Timely Repay Loan Due to Employer's Error in Payroll System

A plan sponsor erroneously put in a stop date in its payroll system for a participant's loan. The last loan payment was in September 2017. The loan now is past the cure period of December 31. It's set to be re-amortized over the term of the loan. Does the sponsor need to file through VCP, or can it self-correct because it's within the two-year period? BenefitsLink Message Boards

Calculating Vested Percentages Despite Missing Payroll (Service) Records

A large client with a 401k plan has a subsidiary that's an adopting employer. The subsidiary was acquired in 2009. They don't have payroll records for this location prior to 2013. They need to process a distribution request for an employee with service from 2004-2014. They have 2013-2014 but payroll is missing from 2004-2012. They need to determine the participant's vesting for years prior to 2013 and want us to come up with a clever assumption. Could they go to the IRS for copies of prior W-2's? Or use elapsed time for 2004 -- 2012 and grant 9 years of vesting service such that the participant would be 100% vested, and do the same thing for all other affected participants? BenefitsLink Message Boards

Employee Has Excess Deferrals in 2017 Between Current and Former Employers, Now Past April 15 Deadline

Employee has excess deferrals between current employer and former employer (unrelated). Now past April 15 deadline. Does either employer need to issue a corrected W-2? BenefitsLink Message Boards

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Press Releases

Lockton Offices Merge to Form New Practice in the Midwest Lockton

U.S. DOL Investigation Results in Court Ordering Illinois Business Owner to Restore Losses to Retirement Plan and Trust after Fiduciary Violations Employee Benefits Security Administration [EBSA], U.S. Department of Labor

ICI Hires Cynthia Pullom as Director, Financial Services Policy Investment Company Institute

Financial Engines Announces Agreement to Be Acquired by Hellman & Friedman for $45.00 Per Share in Cash Financial Engines, Inc.

PSCA 2018 Signature Award Winners Announced at National Conference PSCA [Plan Sponsor Council of America]

Pepper Hamilton Strengthens Employee Benefits Services With Addition of Paul L. Porretta Pepper Hamilton LLP

NIPA to Announce Lifetime Achievement and Outstanding Volunteer Award Recipients at the 2018 NAFE NIPA [National Institute of Pension Administrators]

Advantus Capital Management Rebrands as Securian Asset Management Securian Financial Group

LIMRA and OMG Partner to Advance Technology Standards for Workplace Benefits LIMRA

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