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Present Value of PBGC Maximum Guaranteed Benefit, 2019

PBGC has updated their online table to show present value of the maximum guaranteed benefit, by age, for benefits with an annuity starting dates in 2019. Tables for earlier years are included. Also online: a printer-friendly version .
Pension Benefit Guaranty Corporation [PBGC]

ERISApedia.com announces Free 5500 Search Service

ERISApedia.com is pleased to announce a new free service for finding Form 5500 filings - Free ERISApedia.com. Quickly and easily find Form 5500 filings and attachments. Contact us 612-605-2266, sales@ERISApedia.com or simply Sign up here .

401(k) Deferral Limit Increases to $19,000 for 2019; IRA Limit Increases to $6,000

"The IRS today issued technical guidance detailing these items in Notice 2018?83 .... The limit on annual contributions to an IRA, which last increased in 2013, is increased from $5,500 to $6,000. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000. The income ranges for determining eligibility to make deductible contributions to traditional Individual Retirement Arrangements (IRAs), to contribute to Roth IRAs and to claim the saver's credit all increased for 2019."
Internal Revenue Service [IRS]

SEC Proposes Summary Prospectus Option and Modernized Disclosure for Variable Insurance Products

"Perhaps the most striking aspect of the proposal is the 'access equals delivery' approach to prospectus delivery for the mutual funds that serve as the underlying investments of these products (underlying funds).... [T]he initial summary prospectus may only describe a single currently offered contract, but may describe more than one class of a currently offered contract.... The proposal noted that as of the end of 2017, more than half of the Securities Act registrations for variable insurance products may be the subject of alternative disclosures permitted by the no-action letters." Carlton Fields

IRS Ruling on Student Loan Program Under 401(k) Plan Leaves Important Compliance Issues Unanswered

"[A] PLR-type student loan repayment program is more expensive for employees than making elective contributions to a 401(k) plan.... [It] is reasonable to assume a student loan repayment program along the lines described in the PLR will be utilized predominantly by nonhighly compensated employees.... How are the nonelective contributions to be tested for coverage and nondiscrimination? Can a student loan repayment program be offered under a safe harbor 401(k) plan? Can a student loan repayment program be offered under a non-401(k) plan?" Trucker Huss

An Update on University Plan Lawsuits with NYU's Victory at Trial

"[K]ey takeaways from [the NYU] decision: [1]  Lack of knowledge by a few committee members regarding the plan and the plan's investment options does not necessarily mean that the committee as a whole breached its fiduciary duties.... [2] While a committee may engage an expert, such as an investment advisor, it must still exercise independent judgment.... [3] Even if requests for proposals are not done on a regular basis, negotiating a lower fee may be sufficient to show that fiduciaries are carrying out their fiduciary duties." [ Sacerdote v. New York Univ. , No. 16-6284 (S.D.N.Y. July 31, 2018)]
Trucker Huss

Pension Plan Liabilities to Decrease with Updated Mortality Scale

"Mortality rates are continuing to improve, but at a much slower rate than previously observed.... [T]he age-adjusted mortality improvement rate averaged just 0.5% per year from 2009 to 2016, compared to a 1.6% per year improvement from 2000 to 2009. It remains to be seen whether this slower pace of mortality improvement is a short-term trend or if it indicates a more fundamental shift in long-term U.S. mortality patterns." Findley

Sixth Circuit Expands Controlled Group and Successor Liability for Pension Plan Termination Funding

"[T]he court adopted the position taken by several other circuit courts in cases involving multi-employer plans, and extended its application to single-employer plans.... [B]uyers should consider one or more of the following actions when negotiating an asset purchase agreement: [1] A purchase price reduction based on the anticipated pension liability. [2] An escrow to cover the potential pension liability. [3] Indemnity provisions that address any pension liability imposed on the buyer. [3] Where available, consider pursuing the asset purchase in bankruptcy[.]" [ PBGC v. Findlay Industries, Inc. , No. 17-3520 (6th Cir. Sept. 4, 2018)]
King & Spalding

Study: Multiemployer Pension Plan Crisis Has Deepened (PDF)

"As many as 121 multiemployer pension plans covering 1.3 million workers are underfunded by $48.9 billion and have informed regulators and participants that they could become insolvent within 20 years ... Cheiron's August 2017 study found 114 multiemployer pension plans were underfunded by $36.4 billion ... Some plans have since terminated because all the employers withdrew. Even after removing these plans, the number of failing multiemployer pension plans increased by 6.1 percent ... The plans in this year's study have total assets of $40.7 billion and liabilities of $89.6 billion." Cheiron

Government Pension Plans in Focus: Is the Plan Actuarially Sound? (PDF)

14 pages. "This article examines how the simple phrase 'actuarially sound' can be a source of confusion for government entity stakeholders, and it provides more specific questions to follow the first critical follow-up question: In what context?" Findley

Casualties of the Retirement Plan Recordkeeping Fees Race to the Bottom

"[C]ost savings are going to become less robust over time as plan sponsors continue to go back to the well to renegotiate pricing.... [M]ost recordkeepers have been able to [cut costs] by becoming more efficient, via technology or otherwise (which is fine), or by encouraging plan sponsors to purchase higher margin products/services, such as managed accounts (which is not so fine). Ultimately, such efficiencies/higher margin services will dry up." Cammack Retirement Group

Mitigating the Risk of Cyber Attacks to Your Employee Benefit Plan

"[The DOL has] identified four areas of effective practices. [1] Data management -- protect and control data; and ensure that your employee benefit plans fall under the organization's cybersecurity policies. [2] Technology management -- maintain up-to-date technology and perform routine scans for potential vulnerabilities. [3] Service provider management -- understand the data security controls at your third-party service providers as well as their procedures in the event of a breach. [4] People management -- properly train and manage your employees." Schneider Downs

Employee Benefit Pitfalls for Closely-Held Businesses

"Common compliance challenges when setting up and running a health insurance program: [1] Offering coverage to ineligible employees/individuals [2] Providing better 'family office' benefits as compared to ''rank and file'' benefits... [3] (In) Appropriately continuing coverage.... [4] Accessing or accepting health insurance information or information regarding employee coverage...Common pitfalls in adopting a 401(k) plan: [1] Assuming the plan Is on 'auto-pilot'... [2] Not closely monitoring payroll set-up... [3] Confusing how 'covered' the fiduciaries are." Michael Best

When Does Partial Plan Termination Occur?

We have a PSP wherein the employer has not made a contribution since 2013 and has the investment broker send duplicate statements for one account (but there are several). I know what a partial plan termination is, but as of when is this determined? From 2 to 3 years from the last contribution, which would make all participants 100% vested? BenefitsLink Message Boards

Client with SIMPLE IRA Wants to Start a 401(k) Plan

Prospective client started SIMPLE IRA in early 2018, but wants to start a 401(k) plan for 2019. The problem seems to be the 2-year rule for distributions from the SIMPLE. Can they start the 401(k) for 2019, cease contributions to the SIMPLE as of 12/31/2018, and just not terminate it until the 2-year clock has run on the contributions to the SIMPLE? BenefitsLink Message Boards

New Form 5500 for 2019?

Has there been any news about the possibility of new Form 5500s with major updates for the 2019 plan year? BenefitsLink Message Boards

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Press Releases

Empower Retirement Voted No. 1 by Plan Advisors in Six Key Categories Empower Retirement

Mercer's Renee McGowan Recognized by Employee Benefit Adviser's 2018 Top Women in Benefit Advising Mercer

Trucker Huss Recognized in 2019 Best Law Firms List Trucker Huss

Russell Investments Hires Jennifer McPeek as New Chief Financial Officer Russell Investments

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Most Popular Items in the Previous Issue

Issues with 401(k) Plan Notices: Be Aware (or Beware) Hawley Troxell

Text of IRS Form 8717-A: User Fee for Employee Plan Opinion Letter Request (PDF) Internal Revenue Service [IRS]

Benefits Administrators: Time to Provide End-of-Year Notices Vorys