July 2017 Archive

Missing participants – part 2

July 28, 2017

“Missing participants” is becoming a target issue for regulators and policymakers. In our first article in this series we discussed DOL’s missing participant audit project and Field Assistance Bulletin 2014-01 – fiduciary obligations with respect to missing participants in terminated defined contribution plans. In this article we discuss the Pension Benefit Guaranty Corporation’s 2016 proposal to expand and modify its missing participant program. Read More

Missing participants – part 1

July 27, 2017

There are widespread reports of Department of Labor audits focusing on plan procedures with respect to “missing participants.” As we understand it, this audit/enforcement effort began in early 2016 and initially focused on large defined benefit plan procedures for missing participants in connection with the minimum distribution requirements. DOL is treating the failure to adopt and follow adequate missing participant search procedures as a fiduciary breach and (it is reported) a possible prohibited transaction. DOL is also, as we understand it, challenging certain plan policies that apply when a participant cannot be found, e.g., certain forfeiture practices. Read More

Fidelity wins stable value lawsuit

July 18, 2017

On June 19, 2017, the US District Court for Massachusetts handed down a decision for the defendant in Ellis v. Fidelity. Plaintiffs were two participants in the Barnes & Noble 401(k) plan, representing a class including all participants in defined contribution employee pension benefit plans investing in the Fidelity Group Employee Benefit Plan Managed Income Portfolio (“Portfolio”) (a stable value fund (SVF) managed by Fidelity), beginning January 1, 2010. Read More

DOL fiduciary rule update – July 2017

July 02, 2017

In this article we review recent developments with respect to the Department of Labor’s fiduciary rule, including DOL’s RFI, recent testimony by DOL Secretary Acosta, and comments by Securities and Exchange Commission Chairman Clayton regarding the rule. Read More

State retirement plan initiatives – update July 2017

July 11, 2017

We have been following initiatives by several states, including California, Connecticut, Illinois, Maryland and Oregon, to implement mandatory, private employer payroll deduction auto-IRA programs. In this article we review developments since May, 2017, Congressional action repealing the Obama Administration’s regulatory “path forward” for these programs. Read More

June 2017 Pension Finance Update

July 03, 2017

Pension sponsors suffered modest declines in funded status last month, due to mixed stock markets and lower long-term interest rates, but both model plans we track have enjoyed modest improvement overall in the first half of 2017. Plan A lost close to 1% last month but is still ahead almost 2% for the year, while Plan B lost a fraction last month but is still up about a half percent during the first half of the year. Read More

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