Tag: Retirement plans

How Beneficiary Dispute Is Resolved Determines Overpayment for Death Benefits

By Todd Castleton Another recent court dispute among would-be beneficiaries highlights the options facing retirement plan administrators when distributing a deceased participant’s benefit. If two or more parties are claiming to be the rightful beneficiary of a deceased participant’s benefit, one option is to review all the facts and make a determination applying the plan’s terms through […]

Novant Health Settles ‘Excessive Fee’ Participant Suit for $32M

A hospital company accused of using participant funds to pay “excessive fees” for retirement plan administration services agreed to a $32 million class-action settlement and extensive adjustments in the way it selects and reviews the plan’s portfolio. As more participant suits are filed accusing defined contribution plans of overpaying for investment and administration services, it’s […]

DOL Rescinds ERISA Guidance Discouraging Sustainable Investments

The U.S. Department of Labor on Oct. 21 reversed 2008 guidance that discouraged retirement plan fiduciaries and their investment advisers from considering environmental, social and governance (ESG) factors when choosing companies for their portfolios. The reversal, made through a new interpretive bulletin that reinstates 1994 guidance, recognizes a growing consensus that fiduciary duty may in […]

Investment Adviser Penalized $15M for Failing to Diversify

A novel approach to determining damages owed by an investment adviser to two defined contribution retirement plans in an ERISA fiduciary-duty breach was part of a decision including a $15 million reimbursement request handed down recently by a New York federal judge. Plan sponsors should note that the defendant, WPN Corp., was ordered by the […]

QLACs could increase younger workers’ retirement readiness, EBRI

Qualifying longevity annuity contracts in 401(k) plans could significantly increase the retirement readiness of younger workers with longer life expectancies, the Employee Benefit Research Institute reported recently. Modeling two scenarios involving the recently approved QLACs, EBRI found that, while the general population might experience a “small reduction” in retirement readiness by purchasing a QLAC with […]

IRS Details Procedures for e-Filing Hardship Waivers

IRS on Sept. 14 released a new revenue procedure guide for retirement plan administrators seeking to avoid filing certain annual forms electronically, usually for economic hardship reasons. The changes are most likely to apply to small plans. In Revenue Procedure 2015-47, IRS provided some clarity on when some filers can continue using paper to submit […]

Verizon Pension Buyout Not Illegal, 5th Circuit Rules

A federal appellate court affirmed the legality of Verizon Communications Inc.’s 2012 decision to offload more than $7 billion in pension obligations, in a ruling that lent further support for popular pension derisking measures. In Lee. v. Verizon, 2015 WL 4880972 (5th Cir., Aug. 17, 2015), two classes of plaintiffs — retirees whose benefits management […]

Mutual Fund Companies Tend to Favor Own Funds in 401(k) Menus

Who has the most influence on an employer’s 401(k) retirement plan investment menu — you as the plan sponsor? Participants? The company’s ERISA attorneys or investment committee? Chances are, it’s the plan’s mutual fund manager. A new study from two U.S. university business professors and an economist for the U.S. Federal Reserve concludes that fund […]

IRS Freezes New DB Lump-sum Distributions for Retirees, Beneficiaries

IRS on July 9 announced that it intends to amend regulations to prohibit defined benefit retirement plans from replacing retiree benefits being paid through joint and survivor, single-life or other annuity benefits with lump-sum distributions or other accelerated payments. The change is effective immediately, IRS said. Notice 2015-49 will amend IRS required minimum distribution regulations […]

Catch-up 401(k) Contributions Didn’t Increase Savings Rate Much

The participants 50 or older who have taken advantage of contributing much more of their salary to 401(k) retirement plans through catch-up provisions already were among the highest savers — and so few workers overall are constrained by the annual IRS limits that catch-up contributions aren’t a solution for  low retirement savings rates. Those conclusions […]