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Text of IRS Issue Snapshot: Spousal Consent Period to Use an Accrued Benefit as Security for Loans

"Although the final regulation ... and the statute itself continue to reflect a 90-day period, plans may use a 180-day period for spousal consent to the use of accrued benefits as security for a plan loan and still meet the requirements of Section 417(a)(4) because the 2008 proposed regulations contain an explicit statement that taxpayers may rely on them.... Although the reliance statement itself does not mention loans, from the context of the proposed regulations as a whole, there is no indication that the drafters intended to exclude the loan spousal consent provision from taxpayer reliance."
Internal Revenue Service [IRS]

ERISApedia.com -- Get Help with All of your Form 5500 Questions

"ASK THE AUTHOR" Personalized help for all of your tough 5500 questions in 4 business hours from noted author and speaker S. Derrin Watson, J.D. Including any supporting schedules: 8955-SSA,1099-R, 5330 and more). Sign up or email sales@ERISApedia.com .

Text of IRS Issue Snapshot: How to Change Interest Crediting Rates in a Cash Balance Plan

"Issues covered: [1] Protecting the old interest crediting rate on the account balance earned as of the date of the amendment. [2] Using the A plus B approach in an ongoing plan. [3] Wearaway and restrictions on 'greater of' interest crediting rates under the market rate of return rules. [4] Plans terminating to avoid wearaway." Internal Revenue Service [IRS]

Interesting Angles on the DOL's Fiduciary Rule, Part 92

"Reg BI, which imposes a best interest standard of care on broker-dealers, is strikingly similar to the DOL's Best Interest Contract Exemption (BICE). There are major differences -- for example, the SEC proposal does not create a private right of action for investors, and some of the disclosure requirements are eliminated. However, ... the similarities are striking." FredReish.com

Edison Executives Beat Latest Challenge to Stock Losses in 401(k)

"The worker's second amended lawsuit failed to state a valid claim of fiduciary breach under [ERISA] against two Edison executives ... Judge John A. Kronstadt ... held ... The worker again failed to allege a sufficient alternative action the executives could have taken other than continuing to hold the stock as an investment option in the plan[.]" [ Wilson v. Edison Int'l Inc. , No. 15-9139 (C.D. Cal. May 29, 2018)]
Bloomberg BNA

Northwestern University Beats 403(b) Excessive Fees Case

"[Plaintiffs] alleged that inclusion of a CREF Stock fund was a breach of fiduciary duty because the fund underperformed and charged a high expense ratio. The court refused to find that including the fund was a breach of fiduciary duty.... The court also rejected the plaintiffs' allegation that offering too many funds was a breach of fiduciary duty, finding the plans offered them the types of funds they wanted -- low-cost index funds." [ Divane v. Northwestern Univ. , No. 16-8157 (N.D. Ill. May 25, 2018)]
Greensfelder

Private Equity Seeks Second Chance on ERISA Liability Ruling

"Trilantic sued in federal court asking for a ruling that it wasn't an employer in the same controlled group as Angelica Corporation. It claimed the fund was merely a passive investor that acted consistently with that role as a shareholder ... The Trilantic case is pending in a different jurisdiction than the Sun Capital case ... The ultimate issue then comes down to a matter of degree how much control, involvement, or economic benefit does it take to become a trade or business as opposed to a passive investor."
Kaufman & Canoles, P.C.

DOL Continues Fiduciary Rule Enforcement Relief, But Confusion Remains

"DOL noted in the FAB that the non-enforcement policy does not address the rights or obligations of other parties. While the risk of private litigation has been greatly diminished by the repeal of the fiduciary rule, institutions providing advice to [ERISA]-covered retirement plans may still be liable for fiduciary breaches." HR Daily Advisor

Reducing Retirement Saving Barriers for Gig Workers

"As it is currently drafted, [the Retirement Enhancement and Savings Act (RESA)] would create incentives for small employers who do not sponsor their own retirement plans to join a [multiple employer plan], or MEP.... Gig workers, via their sole proprietorships, could elect to join an open MEP. This would allow for gig workers to make 401(k) contributions to their own retirement plans and for businesses to make matching contributions." Fisher Phillips

How Technology Is Disrupting Retirement Planning

"[Olivia Mitchell, Executive Director of the Pension Research Council at the Wharton School of the University of Pennsylvania, said] '[T]here are lots of people that need more access to saving and investment advice, people who might have small accounts, who financial advisers are not particularly interested in. So, access is critical, low cost is critical, and again, fintech has a lot of promise in that arena.' The most potential for fintech, however, is in the decumulation phase where fintech has not yet begun to tiptoe, she said." TheStreet

Former ASPA Executive Director Chet Salkind Dies

"Longtime ASPA Executive Director Chester Salkind passed away on May 19, 2018, while in hospice care in Durango, CO.... Salkind served as ASPA Executive Director from 1979 to 1997, and worked alongside 19 different ASPA Presidents." American Retirement Association [ARA]

Pension Deal Removes Potential $180 Million Hurdle in Tops Bankruptcy

"The agreement means Tops no longer would be liable to pay as much as $183 million over 20 years to meet funding obligations to the Teamsters pension fund. Instead, Tops, C&S and the Teamsters pension fund will contribute a total of $15 million that will help replace -- at least in part -- the pension benefits that the warehouse workers would have accumulated since the end of 2013. Those payments likely would be made into a type of retirement account." Buffalo News

State and Local Government Pension Funding: Moving in the Right Direction

"There are over 6,000 public retirement plans in the U.S. with about $3.7 trillion in assets supporting 10.3 million retirees.... Many states and local issuers have implemented some form of change to their pension plans to help improve future funding levels ... Investors should not expect funding levels to return to pre-recession levels in the near-term as most pension funds manage to a 20- or 30-year investment horizon." BMO Retirement Services

Bob Veres' Comment Letter to the SEC on Proposed Regulation Best Interest and Broker Standards

"The proposed disclosure language for broker-dealers, under 'Standard of Conduct,' would say 'We must act in your best interest and not place our interests ahead of yours when we recommend an investment or an investment strategy involving securities.' However, there is no evidence that the Commission intends to actually hold broker-dealers to this standard. In fact, there is abundant contrary evidence in your accompanying regulatory Proposal." Bob Veres in Inside Information

Employee Stock Ownership Plans: Vulnerable to Abuse?

"Even though ESOPs are technically considered to be retirement plans existing for the benefit of employees, the assets of these plans can be -- and often are -- used to enrich the management of the company, to create liquidity for existing shareholders, and to serve as a lucrative 'exit strategy' for company founders. This can result in significant conflicts of interest, between the management of the company and its employees, and between existing shareholders and the employees who are 'buying' the shares via an ESOP." Cohen Milstein

What a High Court Swing Vote Exit Would Mean for Employee Benefit Cases

"Supreme Court watchers are patiently waiting for decisions and speculating wildly about the possible departure of the high court's swing vote: Justice Anthony Kennedy. The departure of the current longest-serving justice would mean the loss of the most institutional knowledge on the court, including the most experience in employee benefits cases. Kennedy has written the second-highest amount of majority and separate opinions in employee benefits cases of all the sitting justices. His record is bested only by Justice Clarence Thomas, who has been the court's most prolific author in [ERISA] cases." Bloomberg BNA

What to Do with Mistakenly Excessive 401(k) Deferrals?

For whatever reason, too much money has been deposited into a deferral account at the end of the plan year. Perhaps it was a duplicate payroll submission or an error in the amount submitted. It definitely was not an intentional prefunding. Should one simply allow that amount to stay in the participant's account and be used to reduce the next scheduled 401k deferral? Or should the employer allocate it as a discretionary contribution? Or move it into a suspense account to be used to reduce a future discretionary contribution? Or first use it to offset any current year's receivable of employer contributions? BenefitsLink Message Boards

Processing a QDRO -- Does Your TPA Firm Require a Hard Copy of the Order?

Do you permit participants to submit QDROs in electronic format (with a raised seal visible), or do you require a hard copy original? Why? BenefitsLink Message Boards

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Press Releases

T. Rowe Price To Close Tampa Operations Center In June 2019 T. Rowe Price

Charles Schwab Opens 50-Acre Campus in Austin Featuring Modern, Flexible and Open Concept Elements Charles Schwab Corporation

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