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Compass Retirement Consulting Group
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IRS Blesses Use of Forfeitures for QNEC/QMAC/Safe Harbor Contributions (PDF)

"The IRS has finalized regulations that allow employers to use forfeitures as qualified nonelective and qualified matching contributions to help pass nondiscrimination tests and as safe harbor contributions. The change is effective for plan years beginning on or after July 20, but, as previously offered in IRS' proposed regulation, can be relied on for earlier periods." Conduent

Findley Davies | BPS&M is now Findley

We make the complex world of retirement, benefits, human capital and M&A simpler for organizations across the nation. Learn how!
FINDLEY is: F lexible, I nnovative, N imble, D ynamic, L oyal, E xperienced and integrit Y

IRS Issues Final Regs on QMACs and QNECs

"By providing that the amounts used to fund QNECs and QMACs must be nonforfeitable and subject to the applicable distribution restrictions when they are allocated to plan participants' accounts, rather than when they are first contributed to a defined contribution plan, the final regulations help ensure that defined contribution plans can fund QMACs and QNECs with the amounts in plan forfeiture accounts." Thomson Reuters Practical Law

How to Correct Improper Exclusion of Employee from Elective Deferrals

"[H]ow much will the contribution be? That depends on how soon the error was discovered and corrected and whether the plan provides for automatic enrollment.... The corrective contribution for the failure to make a matching contribution is equal to the applicable match that the employer would have made had the employee made an elective deferral equal to the missed deferral amount, and the missed match is adjusted for earnings." Graydon

Can You Make Extra Payments on a 401(k) Loan to Pay It off Faster?

"[C]heck your plan document and loan policy to see what it says ... [and] whether plan documents require that payments be made via payroll deduction.... [T]he second step is to find out what the plan's recordkeeper can accommodate in terms of applying the extra payment amount.... Many 401(k) record keeping systems ... are not able to deviate from the amortization schedule that was created at the beginning of the loan." DWC

Text of District Court Opinion Dismissing Participant Claims of Breach of ERISA Duty of Loyalty in Wells Fargo Stock Drop Claim (PDF)

"[P]laintiffs do not claim that defendants misled them about 'plan- and benefit- specific information,' such as the terms of Wells Fargo's 401(k) plan.... Instead, plaintiffs claim that defendants failed to disclose inside corporate information 'that might affect the value of the corporation's stock' -- information that would be of interest to every member of the investing public.... [To] the extent that plaintiffs' loyalty claim relies solely on defendants' nondisclosure of inside information about Wells Fargo's present and future financial condition, plaintiffs' loyalty claim must be dismissed." [In re: Wells Fargo ERISA Litigation, No. 16-3405 (D. Minn. July 19, 2018)] U.S. District Court for the District of Minnesota

ESG: A Profile of Plan Sponsors' Perspectives (PDF)

"A handful of plans have incorporated ESG into their manager selection process. [Plan sponsors in the healthcare industry] express the strongest interest.... Almost a third of plan sponsors are interested in exploring ESG. Main reasons cited on why these plans have not incorporated ESG to date -- more education (37%) and data on ESG's impact to performance required (32%)." NEPC

What Retirement Plan Sponsors Need to Know about Rising Interest Rates

"Bonds are meant to serve four primary functions in a diversified portfolio: capital preservation, income, inflation protection, and diversificaton from equities. While the optimal allocation to bonds and within the sub-asset classes can vary greatly depending on an investor's risk tolerance and time horizon, bonds will continue to perform these critical functions in any type of market environment." Cammack Retirement Group

Navigating Retirement Portfolios During Market Volatility

"Retirement plan investors should stick to the long-term plan and avoid emotional biases such as reacting to media coverage of falling markets or checking account balances too frequently.... Diversification is one of the most powerful tools for long-term investing, and market volatility reinforces the value of diversification.... A period of dramatic loss may be a good time to ensure that a portfolio's asset allocation remains aligned within its target.... [H]olding all of a retirement portfolio in cash can be detrimental over the long term." Cammack Retirement Group

PBGC Posts Second Set of 2016 Data Tables (PDF)

PBGC has updated the 2016 Data Tables, which includes statistics for PBGC's single-employer and multiemployer programs and for the private defined benefit pension system. This installment provides information about plan funding levels, demographics, and premiums, and multiemployer plan zone status, including, for the first time, information specific to critical and declining plans. Also available in XLSX format .
Pension Benefit Guaranty Corporation [PBGC]

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Open the Curtains and Take a Closer Look at Your Pension Plan's Experience

"The assumptions used to value liabilities in a pension plan should be validated periodically by conducting an experience analysis to ensure employers are not over contributing or under contributing to the plan.... An experience analysis looks back at the experience that occurred over a single period, typically a year, and determines the extent to which particular assumptions or factors affected the change in the plan over that time. The analysis will provide insight by evaluating the changes by factor as gains or losses to the plan." Findley

Rhode Island May Require Transparency for Church Plans

"[Rhode Island state Treasurer Seth Magaziner] plans to seek legislation in the 2019 General Assembly session to require pension plans managed by religious organizations in Rhode Island to send regular ERISA-quality updates to plan participants." Pensions & Investments

Proposal Would Create Private-Sector Version of Thrift Savings Plan

"The proposed American Savings Act would make available to workers without workplace access to a retirement savings plan ... with the same low-fee investment options that are in the TSP.... [E]mployers not now offering plans would send 3% of workers' earnings to the accounts, but employees can lower that to 2%, raise it to as much as $18,000 per year, or opt out entirely. Participants could roll in their existing individual retirement accounts, or roll ASA funds into an employer-sponsored 401(k) or 403(b) plan." Pensions & Investments

401(k): Winds of Change are Blowin' Around Washington!

"[A]mong the changes rumored to be under consideration are: ... [1] Expanding the ability for participants to tap into retirement savings in the event of emergencies; [2] Repeal of the current rule preventing individuals who have attained age 70-1/2 from contributing to [IRAs] ... [3] Requiring 401(k) plans to disclose to participants the monthly annuity income that their account balances would support; ... [4] Provisions that would permit employers to allow participants to defer beyond ten percent (10%) of their compensation." Compliance Dashboard

What's Your Ideal Retirement Age?

"Americans, on average, think the ideal age to retire is 61 years old. Here's a breakdown on average of what various age groups thought was the ideal time to call it quits. Millennials (18 to 37): 61; Gen Xers (38 to 53): 60; Baby Boomers (54 to 72): 62; Silent Generation (73 and older): 65." The Washington Post; subscription may be required

Reasons Retirement Income Solutions Stall

"There are [1] plenty of surveys out there suggesting that participants want lifetime income options ... [2] no shortage of academic studies that suggest participants would benefit from their availability ... [3] the occasional legislative proposal to expand and/or mandate them as a distribution default ... And yet the reality is that when actually given the choice ... the vast majority of participants don't avail themselves of the option. Even those in defined benefit plans seem inclined to 'take the money and run' given the chance." Data 'Points'

Sixth Circuit Grants Benefits Based on SPD Language, Despite Exclusionary Clause in the Plan, on the Grounds of Equitable Estoppel

"[T]he SPD omitted an exclusionary clause contained in the Plan document itself, which said that an employee who was terminated was ineligible for the early retirement supplement.... [T]he Sixth Circuit Court of Appeals reversed the district court's grant of summary judgment to the Plan on Pearce's request for reformation, [and] affirmed summary judgment on Pearce's request for equitable estoppel under which the provisions of the SPD would be applied." [ Pearce v. Chrysler Group LLC Pension Plan , No. 17-1431 (6th Cir. June 20, 2018)]
Cary Kane ERISA Lawyer Blog

Participant Is Entitled to Deferred Compensation Benefits Despite Termination for Refusal to Transfer Positions

"Defendants argued that Peck was an at-will employee without any employment contract assigning him to a specific position or specific duties so the company could direct him to perform whatever duties it chooses. Thus, his refusal to accept the new position constitutes a 'refusal to perform' the 'material duties and obligations' of his employment. The Court determined that Defendant's interpretation of the Plan is incorrect because it is incompatible with the terms of the Plan and 'upsets the parties' reasonable expectations about the duties of a person's employment with the company.' It would require an at-will employee's 'material duties and obligations' to be completely unconnected to his or her current position." [ Peck v. SELEX Systems Integration, Inc. , No. 17-7138 (D.C. Cir. July 17, 2018)]
Kantor & Kantor

After Year of Plan Termination and Asset Distribution, Is Another SAR Required?

If a defined contribution or 403(b) plan terminates in 2018 and all assets are distributed by 12/1/2018, a final 5500 will be due 7 months after the date of complete distribution of assets: 7/31/2019. Will an SAR need to be distributed in connection with this final 2018 5500? BenefitsLink Message Boards

Paying for Filings with Plan Assets: Any SEC Guidance?

Any SEC guidance concerning whether filings such as the Form 11-K can be paid with plan assets? There is some scant DOL guidance on the issue of paying for expenses that benefit the employer from plan assets, but none that specifically mention SEC filings. BenefitsLink Message Boards

Can a Processed QDRO Be Appealed/Reversed?

We processed a QDRO that said the Alternate Payee gets 50% of the participant's account as of 1/1/2018, including earnings from 1/1/2018 through the date of division. The QDRO was processed and the Alternate Payee took her portion as a lump sum distribution. Now the parties are saying the Alternate Payee's portion shouldn't have included earnings. But the QDRO clearly says to include earnings. All parties and their attorneys signed it, so there was no error on our part. So now the parties want to reverse part of the distribution to the alternate payee (i.e., they want the AP to return the earnings amount to the participant's plan account). BenefitsLink Message Boards

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