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Client Solution Advisor
PNC
in PA

Assistant Retirement Plan Administrator
Law Offices of R. David Danziger, P.C.
in NJ, PA

Compliance Attorney - Consultant
Gallagher Benefits Services, Inc.
in MA

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What You Should Know About Your Retirement Plan
September 20, 2018 WEBCAST
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

Section 199A Deduction for Qualified Business Income: What Advisors and Business Owners Should Know
September 25, 2018 in FL
ASPPA Benefits Council [ABC] of North Florida

Current Developments (2018)
November 8, 2018 WEBCAST
ASC

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Text of PBGC Interest Rate Update for Benefits Payable in Terminated Single-Employer Plans, September 2018

"The September 2018 interest assumptions under the benefit payments regulation will be 1.25 percent for the period during which a benefit is in pay status and 4.00 percent during any years preceding the benefit's placement in pay status. In comparison with the interest assumptions in effect for August 2018, these assumptions represent no change in the immediate rate and are otherwise unchanged." Pension Benefit Guaranty Corporation [PBGC]

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What Employers Need to Know About the Illinois Secure Choice Mandatory Retirement Savings Program

"Secure Choice applies to Illinois employers that do not sponsor a qualified retirement plan. The program ... requires employers to automatically withhold five percent of an employee's compensation, unless the employee elects a different amount or opts out of the program entirely, and to remit those contributions to the Secure Choice program. Employers who do not comply ... may face a penalty of $250 per employee for the first year, and $500 per employee for each subsequent year." Jackson Lewis P.C.

401(k) or ATM? Automated Retirement Savings Prove Easy to Pluck Prematurely

"The retirement savings made possible for millions of Americans thanks to automatic enrollment in 401(k)-style plans is proving to be an alluring pool of money for workers to borrow from or cash out when they leave a job.... Within eight years of joining a 401(k) plan, the results indicate that automatically enrolled workers withdraw nearly half of the extra they manage to save, compared with workers left to sign up for the retirement plan on their own." The Wall Street Journal; subscription may be required

District Court: ESOP Arbitration Provision Doesn't Apply to 'Cashed-Out' Participant

"The U.S. District Court for the Southern District of Ohio has ruled that the arbitration provision of an employee stock ownership plan (ESOP) does not apply to the plaintiff's class representative because she had 'cashed out' of the ESOP before the arbitration provision was added and because she was not a 'claimant' subject to the arbitration provision.... The District Court's decision did not address the question of whether the plaintiff has standing to challenge the arbitration provision if she is not subject to the arbitration provision." [ Brown ex rel. Henny Penny Corp. ESOP v. Wilmington Trust , No. 17-250 (S.D. Ohio July 24, 2018)]
Holland & Knight

Eighth Circuit Sets High Bar for Labeling Retirement Plan Investments 'Imprudent' (PDF)

"[T]he Eighth Circuit held that '[t]o show that "a prudent fiduciary in like circumstances" would have selected a different fund based on the cost or performance of the selected fund, a plaintiff must provide a sound basis for comparison -- a meaningful benchmark.' As one of the first appellate decisions to tackle this thorny issue head on, litigants should expect Meiners to be cited as persuasive authority beyond the Eighth Circuit." [ Meiners v. Wells Fargo , No. 17-2397 (8th Cir. Aug. 3, 2018)]
King & Spalding

Don't Leave Your Benefit Plans to Chance!

Hit the jackpot with cost-savings strategies, compliance updates and winning engagement plans when you attend the Las Vegas Mid-Sized Retirement & Healthcare Plan Management Conference , September 30 - October 3. Register today and receive $200 off!

Fifth Circuit Affirms Dismissal of ERISA Stock Drop Action

"The Fifth Circuit rejected the participant's argument that where, as here, an imprudence claim was based on publicly available information, he need not prove 'special circumstances' if the underlying allegations are that the stock was too risky as opposed to artificially inflated.... [T]he court found that a potential conflict does not equate to a plausible disloyalty claim, and that Kopp's allegations at most showed that defendants acted to protect the value of Idearc stock, which was consistent with protecting the plan." [ Kopp v. Klein , No. 16-11590 (5th Cir. June 27, 2018)]
Proskauer's ERISA Practice Center

Advisers Are Still Fiduciaries Under the Five-Part Test (PDF)

"[ DOL FAB 2018-02 ] states that advisers may continue to apply transition versions of the BIC exemption, which allows advice fiduciaries to engage in riskless principal transactions, or of the principal transaction exemption, which lets them engage in principal transactions with respect to certain securities.... [T]he FAB is only temporary and provides only enforcement relief from the DOL. Thus, the FAB may be more helpful when a principal transaction involves an IRA rather than an ERISA-governed plan."
Groom Law Group, via PLANADVISER

Seven Things a Professional Fiduciary Must Never Do

"[1] Never provide legal advice ... [2] Never get emotionally involved ... [3] Never violate your trust ... [4] Never play favorites ... [5] Never place the client in a precarious position ... [6] Never sell a product ... [7] Never keep a client longer than they need you." Fiduciary News

Make Sure 401(k) M&A Is Done Right

"Executives at the acquiring company must determine whether the target's retirement plans have ERISA liability issues or IRS qualification issues. If the target's plans have significant issues, then a decision must be made about whether to terminate the plan." 401K Specialist

Newspapers Seek Help in Congress on Pension Requirements

"Frank Blethen, publisher of the Seattle Times, said the Girl Scouts of the USA and other nonprofit groups received similar relief in 2014. He said the new legislation would allow newspapers to postpone millions of dollars in pension contributions over the next few years.... Total employment in the industry dropped from about 400,000 in 2008 to just under 175,000 in 2018[.]" The Virginian-Pilot

New Jersey Commission Recommends Moving New Employees to Hybrid Fund

"The proposal calls for 'a blended defined benefit/defined contribution plan for new non-uniformed state, county and municipal government and school district employees, as well as employees in these job categories with less than five years of service ... Longer-tenured employees would remain in the traditional DB plan." Pensions & Investments

Recent SEC Settlement Reinforces Need for Public Companies to Properly Disclose Perks

"On July 2, 2018, the SEC instituted a cease and desist order against The Dow Chemical Company for failing to properly disclose $3 million in perquisites that Dow Chemical provided to its chief executive officer.... Dow Chemical agreed to pay a civil monetary penalty of $1.75 million and to complete certain remedial undertakings.... Dow Chemical's circumstances should remind each public company that it needs to carefully identify and analyze each benefit that it provides to its NEOs to determine whether it requires disclosure as a perquisite." Stevens & Lee

How Must a 404(a)(5) Notice Be Delivered?

If a 401(k) plan is on a platform like John Hancock, and JH produces the 404(a)(5) notice, how must it be distributed? It's available on the participant's account page at JH. Is it enough to tell the participants via an email or a written memo how they can access it themselves on their account page? Or must the employer access it off the Plan Sponsor page, download it, and either distribute paper copies or email it to the participants? Must this be done every quarter? I am not picking on John Hancock -- I could have used any platform provider -- we just happen to have a number of plans with them. BenefitsLink Message Boards

What's the Practical Benefit of Becoming an ERPA?

Nowadays, retirement plan documents are mostly about IRS-preapproved documents. Seldom does an employer apply for an IRS determination letter. Beyond Form 5300 applications, what is it that enrollment as a retirement plan agent permits an ERPA to do that one could not do absent enrollment? Is it only about the Employee Plans Compliance Resolution System? Does the right to represent a taxpayer in the IRS's examination of a Form 5500 report matter? Is there something else allowed for an ERPA (but precluded for others)? BenefitsLink Message Boards

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Most Popular News Items in the Previous Issue

The State of America's Workforce: The Reality of Retirement Readiness (PDF) Indexed Annuity Leadership Council [IALC]

Text of IRS Publication 4285: SEP Checklist (PDF) Internal Revenue Service [IRS]

Non-ERISA 403(b) Plan Sponsor Cited for Late Deposit of Deferrals planadviser

Press Releases

Mercer to Acquire Investment and Alternatives Consulting, and Wealth Management Operations of Pavilion Financial Corporation Mercer

Mercer Signs Agreement to Acquire Summit Strategies Group Mercer

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