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Benetrends
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Section 162(m) Developments - Get Up to Speed!
October 25, 2018 in NY
Worldwide Employee Benefits Network [WEB] - New York Chapter

Fall 2018 Advocacy Update
December 12, 2018 WEBCAST
National Tax-Deferred Savings Association [NTSA]

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New Topics on the BenefitsLink Message Boards

New Comments and Topics

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Retirement Proposal Speeds From DOL to White House

"It took less than a month for the [DOL] to respond to President Donald Trump's order directing the agency to expand small businesses' access to retirement plans. The DOL's proposed rule to expand access to multiple employer retirement plans [has been] sent to [OMB] for review before the proposal becomes public."
Bloomberg BNA

ERISApedia.com -- Grow your business using our Business Development Tools

Prepare for and add value to meetings with prospective and current clients with our Plan Data Intelligence/Operational Benchmarking tool. Customize with your logo/color themes. Contact us 612-605-2266, sales@ERISApedia.com

What Every Company 401(k) Plan Fiduciary Needs to Know About MEPs

"While it's clear 401k MEPs reduce fiduciary liability -- sometimes quite significantly -- companies need to be mindful this liability cannot be fully eliminated. They need to know what liability they will retain.... [T]he cost savings benefit may not be as good as it seems.... [It] would not be unusual for a single business association to offer multiple 401k MEP plans, each designed to cater to specific company needs." Fiduciary News

More Than Half of All U.S. Workers Have Difficulty Understanding Retirement Savings in Terms of Future Monthly Income

"52 percent of all U.S. workers (ages 20?79) say it is difficult to know how retirement savings will translate into monthly income. The study suggests offering workers retirement savings income estimates can help bridge this gap.... About 4 in 10 retirees wished they had seen more frequent estimates of how much monthly income their savings would generate in retirement before becoming retired. Women lead this group compared to men 52 percent to 33 percent." LIMRA

How to Successfully De-Risk and Transfer Pension Obligations (PDF)

16 pages. "The relative health of a company's pension funding ratio is an important starting point for any [pension risk transfer (PRT)] evaluation ... Sponsors must [also] weigh ... the quality of their assets, the makeup of their employee and retiree populations, the quality of their participant data, and longer-term goals before pursuing a PRT.... Management of pension risks is inherently a long-term proposition ... With an eye towards managing mortality risks that often stretch a half century or more, life insurers are best positioned to manage long-term obligations such as pension payments." MassMutual

Alternatives for Pension Cost Recognition: Implementation Issues (PDF)

9 pages. "This practice note ... reviews a number of issues that may arise when implementing a granular approach to calculating pension cost, particularly the application of individual spot rates ... [M]any of the valuation-related issues discussed in this practice note may also have applicability under the traditional aggregated pension costing approach." American Academy of Actuaries

J.P. Morgan Retirement Link: Helping you build stronger retirement plans

97% of clients agree Retirement Link takes a proactive approach in helping participants reach their goals. Through our strategic business planning process, our Relationship Managers work to simplify the complex and empower better decisions.

Text of PBGC Motion for Summary Judgment in Participant Challenge to Termination of Delphi Salaried Employees Pension Plan (PDF)

52 pages. "After unsuccessfully challenging the agreement to terminate the Plan in the Bankruptcy Court, Plaintiffs filed this action alleging that PBGC's termination of the Plan by agreement was improper. Over seven years of discovery have failed to reveal any factual or legal basis to support Plaintiffs' claims. Contrary to Plaintiffs' allegations, the termination of the Salaried Plan through agreement with the plan administrator is fully consistent with the express language of ERISA and well-established precedent." [Black v. PBGC, No. 09-13616 (E.D. Mich; motion filed Sept. 21, 2018)] [ More information about this protracted litigation is on the PBGC website -- Editor ]
Pension Benefit Guaranty Corporation [PBGC]

A Survey of Public Plan Maturity Measures (PDF)

"A new actuarial standard of practice on the assessment and disclosure of risk (ASOP 51) requires actuaries to identify and assess significant risks to pension plans and to disclose plan maturity measures that are important to understanding those risks.... Understanding plan maturity and how it affects the ability of pension plans to tolerate risk is essential to understanding how they are affected differently by investment return volatility, other economic conditions, improvements in longevity and other demographic changes." Cheiron

Collective Investment Trusts Gaining Ground in Governmental DC Plans

"Last year, 59% of plans responding to the NAGDCA survey offered collective investment trusts vs. 57% in 2016 and 54% in 2015.... The survey also found a slightly lower offering of mutual funds among government DC plans, falling to 82% last year vs. 84% in 2016 vs. 88% in 2015.... The survey also found that passive investments are playing an increasing role in plan assets, growing to 33% last year vs. 28% in 2016 and 22% in 2015." Pensions & Investments

ESG Investing for Public Pensions: Does It Add Financial Value? (PDF)

10 pages. "ESG investment measures have become increasingly politicized through institutional investors and pension funds' growing reliance on proxy advisory firms. These advisory firms have introduced political agendas for corporate governance decision-making, leaving corporations and pension funds to operate at the whims of advisory firms with serious conflicts of interest that disregard investor value.... ESG investments should be made when they add value to a fund. When such investments will not improve the financial performance of the fund, or the decision to invest in them is based on political motives, they should be forgone." Institute for Pension Fund Integrity

Lawmakers Continue to Consider Employer Health and Retirement Plan Issues Ahead of Midterms

House GOP's 'Tax Reform 2.0' legislation looks to retirement reforms[:] ... The retirement provisions have support from both parties in the House and Senate and alone are likely one of the few discretionary packages that could get passed this year.... Proposals aim to control unexpected medical bills[:] ... Current law requires plans to apply in-network cost-sharing [for emergency care] ... but allows the provider to balance bill the patient. The new proposal sets a more rigid standard for plan payments to providers, which might impact employer costs." Lockton

Will Incentive Plans Reflect Strong Performance in 2018?

"On the surface, the robust financial performance would suggest strong incentive plan payouts.... Most incentive plan goals account for more than year-over-year performance, i.e., they flex up and down along with rising and declining expectations. That's one reason we typically find incentive plan payouts following a bell-shape distribution curve." Willis Towers Watson

Key Facts to Know About Your Restricted Stock and RSU Grants

"Do I have a grant of restricted stock or a grant of restricted stock units? What are the key differences? ... Is vesting based on duration of employment or on performance goals? What would happen to the vesting of my grant if I were to leave or lose my job, die, become disabled, or retire? ... With RSUs, can I defer the delivery of the shares at vesting? If my company pays dividends to shareholders, will I get dividends on my restricted stock? If so, when? ... What would happen to my restricted stock in a corporate acquisition or merger?" myStockOptions.com

BRF Testing Consequences: Amendment of Plan to Use Lower Match Rate for New Employees

The old different match rates conundrum has come up again. Employer wants to keep existing match level for all current employees but use a lower match rate for all new employees. Passes current availability testing just fine (for now) but because current employees include ALL of the HC, I don't see any way for this to pass effective availability. Anyone have any ideas? BenefitsLink Message Boards

Missed Minimum Funding Deadline of Sept. 15, 2018, But It Was a Saturday

Client missed minimum funding deadline of September 15, but said date falls on a weekend. Client got the funding in by the following Monday. Is this an issue or is the deadline pushed back because Sep. 15 fell on a Saturday this year? BenefitsLink Message Boards

RMD Due Date When Rolling Over Account

A non-key employee is still employed at her company that has a 401k plan. She turned 70?1/2 in 2017 and would have been due her initial RMD 4/1/18. But, since she is still employed, chose not to take that. Given her age, the plan allows for her to take all of her money out of the plan as an in-service withdrawal. Although still employed, she wants to roll all of her money out of the 401k plan and into an IRA before the end of 2018. She would like to avoid taking an initial RMD from these assets until 2019. If she were to transfer the plan assets to an IRA before the end of 2018, would she then be required to take a 2018 RMD from the IRA or could that be delayed until 2019? BenefitsLink Message Boards

Is This Deferred Compensation?

A business is 100% owned by one person. We have set up a restricted stock plan under which participants vest in their stock as the owner sells his ownership. So, for example, if the owner sells 10%, a participant will vest in 10% of what he is granted. If the owner later sells another 16%, a participant will vest in another 16% of what he is granted. I don't think this is a problem, because restricted stock is exempt from 409A. Hence I don't think we have to follow the payment trigger rules of 409A. A participant generally has to be employed on the vesting date, but if he terminates employment not for cause or due to death or disability, he can vest if the owner sells any stock during the 12 months following termination. BenefitsLink Message Boards

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Press Releases

The Shopping Center Group Announces Acquisition of Investment Management Firm The Shopping Center Group

NFP Acquires Specialty Insurance Consultants, LLC NFP Corp.

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Most Popular Items in the Previous Issue

IRS Issues Revised Model Rollover Notices Ferenczy Benefits Law Center

Important Facts About 401(k) Plans (PDF) Investment Company Institute [ICI]

A Hidden Hazard of Plan Administration: The Mishandled Power of Attorney Findley