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BOK Financial
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Ascensus
in GA, Telecommute

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NRECA
in VA

401(k) / Pension Administrator
Legacy Retirement Solutions, LLC
in PA

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Ethics 2018
December 13, 2018 WEBCAST
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Text of PBGC Approval of Special Withdrawal Liability Rules: Alaska Electrical Pension Plan of the Alaska Electrical Pension Fund

"The Plan's proposed amendment would be effective for withdrawals occurring on or after January 1, 2017, and would create special withdrawal liability rules for employers contributing to the Plan whose employees work under a contract or subcontract with federal government agencies governed by the Service Contract Act ... provided that substantially all of the employees for whom the employer is required to make a contribution work under a service contract.... PBGC has determined that the plan amendment adopting the special withdrawal liability rules will apply only to an industry that has characteristics that would make the use of special withdrawal liability rules appropriate, and [2] will not pose a significant risk to the insurance system. Therefore, PBGC hereby grants the Plan's request[.]" Pension Benefit Guaranty Corporation [PBGC]

Don't let lost participants stop your plan termination process.

PBI's Fiduciary Locate Service ensures you have all the documentation guidance set forth by the DOL, IRS and PBGC. Contact us now to ensure your diligence obligation is completed and you can move ahead with your plan termination by year end.

Text of Treasury Department Approval of Application to Reduce Benefits by Ironworkers Local Union 16 Pension Fund (PDF)

"The Fund identified 1,044 participants and beneficiaries who were eligible to vote, and ballots were delivered successfully to 1,038 of these individuals by the vote administrator.... 496 returned a ballot; 352 (or 33.9% of all eligible voters) voted to reject the benefit reduction, 144 voted to approve the benefit reduction and 542 did not return a ballot....Because a majority of voters identified as eligible by the Fund did not vote to reject the benefit reduction, the benefit reduction is permitted to go into effect. Treasury, in consultation with DOL and PBGC, has issued a final authorization to reduce benefits under the Fund as described in the Application, effective October 1, 2018, subject to the conditions described [in this letter]." U.S. Department of the Treasury

IRS Charts Path to a 401(k) Plan Student Loan Feature -- Will Plan Sponsors Follow?

"[A] number of open questions remain about how (and whether) to implement a program like the one described in the ruling, such as how to verify student loan repayments and what effect the program would have on other tax qualification requirements.... The IRS's ruling provides only limited guidance, and it fails to address how such programs comport with technical plan qualification requirements other than the contingent benefit rule." Perkins Coie LLP

IRS Updates Guidance on Safe Harbor Notices for Eligible Rollover Distributions

"The model notices also include clarifications, such as: [1] Confirming that the 10% premature distribution penalty tax ... applies only to amounts includable in income, but the section 72(t) exception for qualified public safety employees does not apply to payments from IRAs; [2] Explaining how the rollover rules apply to governmental section 457(b) plans that include designated Roth accounts; and [3] Recognizing the possibility that the 60-day deadline for making rollovers may ... be extended for those taxpayers affected by certain events such as federally declared disasters." Eversheds Sutherland

Questions Remain on Administration of New Hardship Distribution Rules

"What issues do we hope the IRS will address with respect to the hardship changes? [1] Which plans can keep the 6-month suspension/loan requirement? ... [2] If a plan eliminates the suspension period, what happens with those participants who took a hardship within 6 months prior to January 1, 2019? ... [3] What are the consequences to a plan if the plan sponsor elects to keep the suspension period or the loan requirement? ... [4] Can safe harbor contributions in a QACA plan be withdrawn for a hardship? ... [5] Can earnings on elective deferrals to a 403(b) plan be withdrawn for a hardship? ... [6] Will the Treasury modify the regulations to fix the hardship criteria for casualty losses?" FIS Relius

Settlement Means Supreme Court Will Not Resolve Circuit Split on Burden of Proof for Fiduciary Breach

"When Pioneer Centres Holding Co. Stock Ownership Plan v. Alerus Financial on September 20 was settled instead of going before the Supreme Court ... the expected clarity the decision would offer [was] lost.... The 10th U.S. Circuit Court of Appeals found that Pioneer Centres was required to prove a transitional trustee was at fault for a failed transaction and failed to do so.... Other courts have said that once a participant makes out a prima facie case, alleging the elements, that the burden shifts to the fiduciary to say whatever harm that is alleged to have been caused is not harm that fiduciaries caused."
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Summary of 403(b) Plan Survey Results: Many Organizations Adopt Best Practice Designs

"The use of an investment advisor who acts as a plan fiduciary has increased by 40 percent in just 4 years ... The use of automatic enrollment increased by 45 percent from 2008, and is now used by nearly a quarter of plans (23.9%).... [N]early 60 percent of plans have an investment policy statement, up from 46 percent in 2008.... The number of employers making Roth contributions available to employees is up 169 percent from 2010 (13.9 percent) to 2018 (37.4 percent). Nearly half of plans with more than 1,000 workers now offer Roth." Plan Sponsor Council of America [PSCA]

LGBTQ Retirement Savings Risk Study (PDF)

35 pages. "LGBTQ respondents worry most about health care costs and not having enough money to enjoy themselves in retirement.... Seven in ten ... believe that they will have enough retirement income to last as long as they live.... [O]nly about a third ... believe they need 75% or more of their pre-retirement income to live comfortably in retirement.... Eight in ten ... are comfortable with at least some investment risk." MassMutual

New Jersey Governor Announces Plan to Require NJ Financial Industry to Put Customers' Interests First

"The rulemaking, being initiated by the New Jersey Bureau of Securities, would impose a fiduciary duty on all New Jersey investment professionals, requiring them to place their clients' interests above their own when recommending investments." Phil Murphy, Governor of the State of New Jersey

CalPERS Agencies Should Track and Verify Employee Hours

"[C]ommon employment situations that require careful tracking of hours for CalPERS purposes and an explanation of the consequences for working beyond established thresholds: Out-of-class appointments ... Retired annuitants ... Less than full-time or part-time/temporary employees." Liebert Cassidy Whitmore

Year 2 CEO Pay Ratio Decisions May Be Complicated

"Some organizations will be surprised to discover that, despite population changes (including those from acquisitions or divestitures), they will be permitted to use the same median employee in Year 2. Other organizations may discover that using the same median employee in Year 2 may yield a different pay ratio, while still others may be compelled by their circumstances to identify a new median employee." Willis Towers Watson

ISS Issues FAQs on New Global Industry Classification Standard (GICS) Code 5020

"The first FAQ discusses how GICS Code 5020 will affect the evaluation of equity compensation plans under ISS's US Equity Plan Scorecard. ISS will immediately establish new burn rate thresholds for the companies in GICS Code 5020 ... The first FAQ explains how ISS burn rates of other GICS Codes will be affected, as well.... [T]he FAQs are high-level guidance and are not a guarantee of how ISS's Global Research Department will apply its benchmark policy in any particular situation." Thomson Reuters Practical Law

Refinancing a Participant Loan: How Many Times Allowed?

Is there a limit (with the exception of the $50,000 or one-half the vested account balance) that should be followed regarding the number of times a participant can refinance a loan? BenefitsLink Message Boards

Contribution Limits for Non-calendar Plan Year

For a 401k plan whose plan year begins 10/1/2017 and ends 9/30/2018, is the contribution limitation $54,000, or $55,000 (exclusive of the catch-up)? Is the considered compensation limit $270,000 or $275,000? I always get confused on this. BenefitsLink Message Boards

Meaning of 'Offset Arrangement' for Form 5300: Two DB Plans

Does anyone have any thoughts on the meaning of "offset arrangement" on the Form 5300? We have a defined benefit plan that offsets benefits by the benefits under another defined benefit plan. (There are complicated reasons for this structure.) I'm seeing lots of discussion that a "floor offset" plan involves only a DB plan that is offset by a DC plan, not by another DB plan. But I can't find a specific definition of "offset arrangement," without the "floor" part. BenefitsLink Message Boards

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Press Releases

Trucker Huss Director Ben Spater Inducted as a Fellow of American College of Employee Benefits Counsel Trucker Huss

Lincoln Financial Group Wholesalers Win National Association of Plan Advisors 'Wingman' Award Lincoln Financial Group

MassMutual Appoints Patrick Kendall to lead Defined Benefit Pension Business Development, Product Management MassMutual

Three New Leaders Join AHIP Senior Executive Team America's Health Insurance Plans [AHIP]

National Business Group on Health Honors 49 U.S. Employers with "Best Employers for Healthy Lifestyles" Awards National Business Group on Health [NBGH]

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Most Popular Items in the Previous Issue

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

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