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Getting It Right - Know Your Fiduciary Responsibilities
September 18, 2018 in FL
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

Fiduciary Institute 2018
September 27, 2018 in DC
American Bar Association Joint Committee on Employee Benefits [JCEB]

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PBGC Announces New Staff Guidance Q&A Web Page

"PBGC has developed a new web page that compiles PBGC staff responses to questions received from practitioners about Title IV requirements that may be of interest to other practitioners. The questions cover issues such as bankruptcy claims, liens arising from large missed contributions, guaranteed benefits, and reportable events. Also included is a response to a question received several times in recent months about whether a two-step transaction, sometimes called a 'reverse spinoff,' is an acceptable strategy for avoiding certain premium payments. PBGC intends to update this web page periodically as additional questions arise." Pension Benefit Guaranty Corporation [PBGC]

Cycle 3 Defined Contribution Plan Restatement time is fast approaching!

Come to ASC for comprehensive and flexible pre-approved DC documents that you can easily create using our top-of-the-line Document Management and Generation System! Click here for more information.

Proposed Actuarial Standard Would Require Disclosure of Market-Based Liability

"While the proposed ASOP revision includes changes to a number of technical items relating to funding calculations, the most significant proposed change is the addition of a requirement to calculate and disclose an 'Investment Risk Defeasement Measure' [IRDM], which is the value of liabilities using a risk-free interest rate.... Because it is based on current interest rates for bonds, the IRDM will be a volatile measure that will fluctuate from year to year as market interest rates change. In addition, the actuary will need to ascertain the accrued benefit (benefit earned to date) for each participant even where the plan does not contain such a definition, as is common for public plans." Cheiron

DB Plan Amendment That Lessened Effect of Raises Did Not Violate Anti-Cutback Rule

"A defined benefit plan amendment that, for certain employees, calculated benefits accrued in years after the amendment by assuming a fixed annual salary increase, disregarding any higher raise a participant might receive, did not violate ERISA's anti-cutback rule, the [Seventh Circuit] has ruled. The court also determined that the amendment did not violate the Age Discrimination in Employment Act (ADEA)." [ Teufel v. The Northern Trust Co. , No. 17-1676 and 17-1677 (7th Cir. Apr. 11, 2018)
Wolters Kluwer Law & Business

USC Can't Force Arbitration of Retirement Fee Lawsuit

"The University of Southern California can't force its retirement plan investors to take their fiduciary breach claims to arbitration, a federal appeals court ruled. The decision could be a blow to litigants such as Franklin Templeton and Charles Schwab Corp., which are currently trying to force their workers' fiduciary breach claims under [ERISA] to arbitration." [ Munro v. Univ. of Southern Calif. , No. 17-55550 (9th Cir. July 24, 2018)]
Bloomberg BNA

Brown University Only Partially Successful in 403(b) Lawsuit

"[The court] allowed plaintiffs to proceed with claims relating to record-keeping services, including engaging more than one record-keeper, incurring excessive administrative fees and failing to conduct a competitive record-keeping bidding process. Of note, the court indicated that whether particular record-keeping fees are excessive involves questions of fact that cannot be resolved on a motion to dismiss." [ Short v. Brown Univ. , No. 17-318 (D.R.I. July 11, 2018)]
McDermott Will & Emery

The Increasing Growth of Retirement Plan Advisors

"[C]ritical reasons why plan sponsors should hire a retirement plan advisor or consultant include: [1] Minimizes your risk from lawsuits or huge losses by ensuring that the plan is properly administered and maintains qualified status; [2] Offloads or limits your fiduciary responsibilities resulting in less liability for the plan sponsor; [3] Provides plan sponsors the knowledge to educate employees about retirement saving, their investment options, potential benefits, and how to make changes." PlanPILOT

401(k) Participant Disclosures: What Employers Need to Know

"[This article provides a] description of the various participant disclosures that can apply to a participant-directed 401(k) plan -- with guidelines for their distribution ... [1] Disclosures that must be distributed by all participant-directed 401(k) plans ... [2] Additional disclosures that must be distributed when certain 401(k) features apply ... [3] Disclosures that must be distributed upon the occurrence of certain events ... [4] Disclosures that must be distributed upon participant request ... [5] Acceptable methods for distributing participant disclosures." Employee Fiduciary

What CFOs Should Know about Retirement Plan Audits

"Many CFOs approach a retirement plan audit from a pure expense perspective ... But there are broader aspects to consider, including how well a plan improves outcomes for its participants, how financially healthy employees are, and how the plan measures up as a tool for attracting and retaining talent. It's important for a company's top financial executive to recognize how these elements fit into a comprehensive cost-benefit analysis in order to maximize the value of the retirement plan and protect against downside risk." CFO

House Republicans Unveil Tax Plan Focused on Savings, Retirement

"Retirement and savings incentives ... make up one of the three bills in the House GOP's 'Tax Reform 2.0' package.... [U]niversal savings accounts would be funded with post-tax dollars but would allow tax-free earnings and offer more flexible withdrawal rules than existing retirement accounts. The House Republican plan would also allow families to use money saved in 529 college savings accounts to pay for things aside from college tuition, including costs associated with home schooling and student debt and apprenticeship fees." The Wall Street Journal; subscription may be required

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Increasing Financial Security with Workplace Emergency Savings (PDF)

"[E]mployees may need a holistic solution to their savings challenges -- a dual-track approach that helps them build short-term reserves for unexpected expenses while still setting aside money for long-term savings goals.... Building on the success of DC plans, a 'reimagined DC plan' could potentially help employees balance a broader array of needs by meeting the short-term needs that DC plans are not designed to address." Prudential

New Connecticut Study Group Aims to Solve State Employees' Pension Mess

"The general assembly authorized the sustainability team's creation in February ... The group's members ... will conduct an inventory of Connecticut's capital assets, and how they will minimize unfunded liability, and suggest what to do with them as they are moved into a state trust reserved for the pension plans[.]" Chief Investment Officer [CIO]

What's Behind the U.S. Public Pension Crisis?

"The two most important reasons as to why Canada's large pensions are fully funded are ... world-class governance which separates governments from pensions allowing public pensions to manage more internally, and adopting a shared risk model typically in the form of conditional inflation protection.... U.S. public pensions need to [1] get real on their return assumptions; [2] adopt world-class governance to attract top talent to their pensions and manage more internally; and last but not least [3] adopt a shared risk model and replace guaranteed inflation protection with conditional inflation protection." Pension Pulse

Merging 401(k) Plan Into Plan of Unrelated Company; All Participants Now Employed by That Company

401k plan sponsor (Company A) wants to know if it can merge its plan into the plan of another employer (Company B). There's been no transaction between the 2 companies; they're separate ongoing entities. Company A's employees were terminated, and then were hired by Company B. The language in the Company A's plan document doesn't specify that a merger may take place only as a result of an acquisition. If we are allowed to merge, do the former employees need to be offered an opportunity to take distributions? BenefitsLink Message Boards

Deceased Participant Allegedly Murdered by Her Primary Beneficiary

The Plan Sponsor called me about making a distribution for a deceased participant. Her boyfriend, who is listed on her Designation of Beneficiary as the primary beneficiary, has been arrested and charged with her murder. He is in custody awaiting trial. The deceased participant's family is asking about getting a distribution to help with funeral expenses. I know there are secondary beneficiaries but I don't know who they are at this point. Common sense would tell me that no distribution should be made until the boyfriend is either proven guilty or non-guilty. If guilty, does he would forfeit his right to the funds? BenefitsLink Message Boards

Removal of QJSA Provisions in Document

Is there a process that a plan can follow to eliminate the QJSA provisions (joint and survivor annuity) when the money sources do not require it? BenefitsLink Message Boards

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Press Releases

Alliance Benefit Group Partners with an Industry Veteran Alliance Benefit Group

Susan Hoffman and Marc Machiz Join Together to Form Justican Mediation LLC Justican Mediation LLC

National Business Group on Health Appoints Tracy Kofski, General Mills HR Executive, as Board Chair National Business Group on Health [NBGH]

NAGDCA Announces 2018 Leadership Recognition Award Recipients National Association of Government Defined Contribution Administrators [NAGDCA]

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