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Charitable Giving Through ESOPs
November 1, 2018 in AL
Bradley Arant Boult Cummings LLP

Legislative Update: Year-End Review of Legal Changes Affecting Benefit Plans
November 15, 2018 in GA
Worldwide Employee Benefits Network [WEB] - Atlanta Chapter

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Treasury Department Notice of Multiemployer Pension Plan Application to Reduce Benefits: Western Pennsylvania Teamsters and Employers Pension Fund

"The Board of Trustees of the Western Pennsylvania Teamsters & Employers Pension Fund, a multiemployer pension plan, has submitted an application to reduce benefits under the plan in accordance with [MPRA]. The purpose of this notice is to announce that the application ... has been published on the website of the Department of the Treasury, and to request public comments on the application from interested parties, including participants and beneficiaries, employee organizations, and contributing employers of the Western Pennsylvania Teamsters & Employers Pension Fund."
U.S. Department of the Treasury

Treasury Department Notice of Multiemployer Pension Plan Application to Reduce Benefits: IBEW Local Union No. 237 Pension Fund

"The Board of Trustees of the IBEW Local Union No. 237 Pension Fund, a multiemployer pension plan, has submitted an application to reduce benefits under the plan in accordance with [MPRA]. The purpose of this notice is to announce that the application ... has been published on the website of the Department of the Treasury, and to request public comments on the application from interested parties, including participants and beneficiaries, employee organizations, and contributing employers of the IBEW Local Union No. 237 Pension Fund."
U.S. Department of the Treasury

DOL Issues Regs Regarding Multiple Employer Pension Plans

"One issue not addressed in the proposed regulations ... is the 'one bad apple rule,' under which the action of one participating employer with respect to the MEP can jeopardize the tax qualified status of the MEP for all other participating employers. The Treasury Department is expected to modify this rule.... [T]he proposed regulations do not address two other types of MEPs: 'open' MEPS and 'corporate' MEPs." The Wagner Law Group

DOL Issues Proposed Regs on Association Retirement Plans

"The preamble to the proposed regulations indicates that ... they would establish more flexible standards and criteria for sponsorship of these MEPs than provided in earlier guidance.... Additional guidance is expected from the Department of Treasury on the qualification of MEPs.... In addition to the agency proposals, a number of legislative proposals have been introduced that could broaden the use of MEPs beyond the DOL's proposed regulations." Thomson Reuters Practical Law

Breach of Fiduciary Duty Claim Against ERISA Fiduciaries Can Proceed to Jury Trial

"[A] New York federal judge in the Second Circuit declined to grant a request by Cornell University to appeal, in the middle of the case, a decision granting plaintiffs the right to a jury trial on at least one claim.... [T]he Cornell University decision created a split within the Second Circuit and could set a precedent for bringing a claim under ERISA that can be put to a jury." [ Cunningham v. Cornell Univ. , No. 16-6525 (S.D.N.Y. Oct. 11, 2018)]
Winston & Strawn LLP

The Value of a Fiduciary (PDF)

"Ask the advisor or broker if he or she serves in a fiduciary capacity.... If the answer is indeed yes, ask to see that acknowledgement in writing.... Demand that the fiduciary be able to explain its fiduciary responsibilities, particularly the duties of loyalty and prudence. Ask how the fiduciary will help with your duty to monitor service providers.... Seek education and training." Qualified Plan Advisors

Your Retirement Plan Participants May Be Hiring Advisors and Using Plan Assets to Pay for Them

"While such arrangements are ostensibly approved at some point, usually when the plan was first established, or when the recordkeeper first made the option available and a participant wished to sign up, they often have not been revisited since the time of establishment.... [S]tandards are not all that stringent, with advisors permitted to charge as much as 2% or more in fees, and advisors with multiple SEC enforcement actions against them being permitted to participate. Obviously, this can be an issue from a fiduciary perspective, particularly for ERISA plans." Cammack Retirement Group

The Role of the Default Asset Allocation in Defined Contribution Plan Design

"Modest inclusion of risky assets is beneficial for all plan participants and a more substantial inclusion is potentially beneficial for many participants. Relatively less-experienced employees with modest funding in the employer's account are more likely to use the default asset allocation. Age-based target-date funds, which are used frequently as the default portfolio, may not align with particular employee preferences, such as desired retirement age." TIAA Institute

Finding a 'Goldilocks' Solution to the Plan Termination Deficit vs. Surplus Challenge

"One obvious strategy for managing the risk of overfunding is to under-contribute to the plan ... Another strategy that may be used to reduce market-driven uncertainty as to a plan's funded status is liability driven investments ... The master strategy to get to full-funding-but-no-surplus on termination is to reduce plan risk by gradually changing the plan's asset strategy as the plan approaches full funding." October Three Consulting

Annual Update to the RPEC 2014 Model and Corresponding Mortality Improvement Scales

"This new version of the model reflects historical U.S. population mortality experience through 2016. For clarity, the updated mortality improvement scale based on this 2018 version of the model is called Scale MP-2018. The Scale MP-2018 Report has been posted ... along with an Excel version of Scale MP-2018." Society of Actuaries

SOA Releases Mortality Improvement Scale MP-2018 Plus a Second Option

"In general, the update should decrease plan liabilities slightly for plans that pay annuity type benefits.... The second option provides a mortality improvement table that should be more stable year to year, but at the cost of some accuracy in tracking the historically volatile changes year to year in published mortality improvement data. For 2018, the more stable option generally results in a slight increase in plan liabilities vs. scale MP-2017." Cowden Associates, Inc.

Figuring Out How Long Your Retirement Will Last

"[A]mong people in their middle fifties, 1 in 2 women and 1 in 3 men can expect to celebrate a 90th birthday. In addition to considering how long your grandparents and parents lived, you can also use modern technology to zero in on your own life expectancy. Here are two calculators that make this task easier than you might think." Financial Finesse

American Benefits Council Letter to IRS on Lump Sum Windows for Defined Benefit Plan Participants

"The Fall 2018 Unified Agenda of Regulatory and Deregulatory Actions ... indicates that the Treasury aims to release proposed regulations on lump sum windows in March 2019.... Unless [Notice 2015?49] is withdrawn, we are concerned that the Notice could be interpreted to impose a de facto rule that prohibits plan sponsors from offering lump sum windows to participants who have already begun receiving benefits, despite a lack of procedural, legal, or policy justifications." American Benefits Council

Public Wealth Maximization: A New Framework for Fiduciary Duties in Public Funds

"[E]conomic logic suggests that public pension fund trustees owe their duties to the public collectively.... [In] practice, individual pension fund claimants function more like senior creditors than the residual claimants that are the typical recipients of fiduciary duties, [and] the public -- and current and future taxpayers specifically -- are the true residual risk bearers for public pension funds." Paul Rose, in Illinois Law Review

Severance Planning During an Economic Boom

"While many employers think they do not have an ERISA-covered plan -- because it is not written or is not distributed to employees -- they may in fact have a de facto plan if they have a routine policy for providing severance benefits that requires ongoing administrative discretion.... ERISA coverage is generally a good thing." Morgan Lewis

BLS Making It Easier to Find Data on Pay and Benefits

"To make it easier to figure out which source is right for your needs, [BLS now has] an interactive guide to all BLS data on pay, benefits, wages, earnings, and all the other terms we use to describe compensation.... The guide lists 12 sources of compensation data and 32 key details about those data sources. 12 x 32 = a LOT of information!"
Bureau of Labor Statistics

SIMPLE IRA Plan Sponsored by Ineligible Employer

A correction method exists for the situation where an employer maintains a SIMPLE plan but it's become ineligible to do so. But have you encountered a situation when an employer was ineligible to adopt a SIMPLE plan from the outset? Now, 10 years later, the employer realizes it has a problem. BenefitsLink Message Boards

Rollover from Deceased Spouse's Account: Effect on Top-Heavy Status

We have a key employee (5% owner) whose wife passed in late 2014. He took distribution of her account balance in 2015 and rolled it over within the same plan. Would the distribution from her account to his be considered a "related" rollover for calculating top-heavy status because the money remains in the plan? If yes, would it drop off after 1 year? BenefitsLink Message Boards

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Press Releases

Couple Indicted For Embezzling $14.5 Million from Retirement Funds U.S. Department of Justice

Owner and Operator of New Jersey-Based Real Benefits Association LLC Sentenced to 18 Months in Prison for Selling Bogus Health Insurance U.S. Department of Justice

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Most Popular Items in the Previous Issue

2018 Year-End Qualified Plan Amendments Winston & Strawn LLP

DOL Proposes Multiple Employer Plan Expansion Groom Law Group

PBGC Reportable Events: Reference Sheet for Small Plans Pension Benefit Guaranty Corporation [PBGC]