Hello, PLANSPONSOR readers! Pension Benefit Guaranty Corporation Premiums (PBGC) are a growing cost for defined benefit (DB) plans. Sources from October Three say most DB plan sponsors are overpaying premiums and they offer a solution for plan sponsors and options especially for those in the health care industry. In Part II of a series, Michael Kreps and Mark Carolan of Groom Law Group discuss funding waivers and in-kind contributions as options for unaffordable pensions. Vanguard advocates for a global bond strategy to improve DB plan returns. Enjoy the holiday weekend!
It is not uncommon for employers to face cash flow challenges that make it difficult, if not impossible, to fund their defined benefit (DB) plan in a timely way. In this second part of a series on unaffordable pensions, attorneys with Groom Law Group provide an overview of two options—funding waivers and in-kind contributions—that can alleviate the immediate need to use operating cash to make minimum required contributions.
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The 6th Circuit noted that Firestone Tire & Rubber Co. v. Bruch, in which an arbitrary-and-capricious standard of review is required by the court if the plan “gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan,” should have been used by the district court.
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Commenting on the decision, Segal Consulting says it is “consistent with every other decision handed down in similar cases except for one,” the Southern District of New York Court’s decision in The New York Times Company v. Newspaper and Mail Deliverers’-Publishers’ Pension Fund, which is being appealed.