PLANSPONSOR Weekend Newsdash
Week ending May 25th, 2018

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!

Editor's choice
Administration
Reducing PBGC Premiums by Splitting Up a DB Plan
The idea is to put participants with lesser unfunded vested benefits (UVBs) in one plan, and those with greater UVBs in another. Read more >
Industry Voices
Hospitals Burdened By PBGC Premiums Have Solutions Available
John Lowell, Atlanta-based partner and actuary for October Three, shares solutions for health care organizations to possibly decrease their PBGC premium payments. Read more >
Administration
Options for Unaffordable Pensions: Funding Waivers and In-Kind Contributions
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. Read more >
Investing
Vanguard Researchers Urge Investors to Go Global With Bond Allocations
A global bond allocation hedged for currency risk can result in greater risk-adjusted returns than an allocation to local-only bonds, a report says. Read more >
Compliance
Plan Sponsor Interpretation Must Be Given Deference in Lawsuits Challenging Plan Terms
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. Read more >
MOST POPULAR STORIES
IRS Announces 2019 HSA Contribution Limits

For an individual with family coverage, the 2019 health savings account (HSA) contribution limit is $7,000, up from the recently reset $6,900 limit for 2018.

4% Rule Not a Reliable Retirement Income Withdrawal Strategy for All People
A retiree’s investment portfolio is a large factor in determining an optimal, safe withdrawal rate in retirement, but longevity, expected spending and whether guaranteed retirement income is available plays a part as well.
Lawsuit Argues MetLife Pension Calculations Use Outdated Mortality Table

A newly filed complaint takes issue with the way MetLife calculates the actuarial equivalence of different types of annuity benefit options available in the firm’s pension plan.

401(k) Plan Sponsors Enhancing Plan Design

The availability of Roth contributions has doubled in the last decade, and more plan sponsors are using a default deferral rate with automatic enrollment that is higher than 3%, a Plan Sponsor Council of America survey found.

Financially Well Employees Buoy the Bottom Line

According to John Hancock data, helping employees reduce their financial worries is well worth employer’s time and attention.

Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

Advertising: Paul Zampitella paul.zampitella@strategic-i.com

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