Category Archives: Defined contribution

What should sponsors consider when implementing a Taft-Hartley defined contribution loan provision?

Like other types of defined contribution plans, Taft-Hartley Defined Contribution (DC) participant loans are an optional plan provision that a plan sponsor can choose to offer participants. Plan sponsors should ensure that participant loan provisions in a Taft-Hartley DC retirement plan be thoroughly vetted and in compliance. Milliman’s John Donohue and Jinnie Olson provide more perspective in this article.

Milliman adds International Brotherhood of Electrical Workers Local Unions Savings and Security Plan as a retirement services client

Milliman today announced it has added the International Brotherhood of Electrical Workers (IBEW) Local Unions Savings and Security Plan as a defined contribution client. The multiemployer plan includes more than 30 locals of the IBEW primarily in the Telecommunications Department. The plan has more than $650 million in assets, with participants in 48 states.

“Milliman was chosen due to their flexible recordkeeping platform and understanding of the plan’s unique structure,” says Julie Permutt, Division Vice President of Scarborough Alliance Group, the plan administrator and investment advisor. “Milliman has experience administering multiemployer plans and provides our office the support and assistance to bring the best retirement plan and service to the members that we serve.”

Milliman will provide recordkeeping and compliance services for the IBEW Local Unions Savings and Security Plan.

We are pleased that our flexible service model and multiemployer plan expertise was fully demonstrated during the process of finding a new recordkeeping platform for the plan. We look forward to a longstanding relationship with both the IBEW’s members and Scarborough Alliance Group.

For information on Milliman’s employee benefit services, click here. For information on Milliman’s multiemployer services, click here.

Milliman adds International Union of Operating Engineers (IUOE) Local 25, Marine Division, as a retirement services client

Milliman today announced it has added the International Union of Operating Engineers (IUOE) Local 25, Marine Division, as a defined contribution client. IUOE Local 25, Marine Division, covers approximately 2,000 participants in the dredging industry from Maine to Florida.

“We chose Milliman because of their long track record of full fee transparency and their independence from investment management,” says Jerry Abell, Business Manager for Local 25. “Milliman has experience administering multiemployer plans and provides our trust office the support and assistance to bring the best retirement plan and service to our members.”

Milliman will provide recordkeeping, compliance, and communication services for the IUOE Local 25, Marine Division, Annuity Plan. ICS is the independent investment adviser providing consulting services for the plan and assisted with the recordkeeper search.

We’re gratified that Milliman’s independence and objectivity played a decisive factor in IUOE Local 25’s retirement services selection process, and we look forward to a long-standing relationship with the union and its members.

For more information about Milliman’s employee benefit services, click here.

Bitcoin considerations for retirement plan sponsors

Bitcoin is a digital “currency” or cryptocurrency not tied to a sovereign or bank. It is mainly a tool for transactions (purchase of goods, payment of services), and the number of bitcoins is governed by the blockchain technology that underlies its use.

Bitcoin is most popular with people and institutions on the leading edge of technology, and a large number of investors, rather than the everyday consumer. Very few businesses currently accept bitcoin or other cryptocurrencies as payment, but cryptocurrencies are being used by a small number of companies and may be used more often in the coming years.

In this article, Milliman’s Charles Hodge discusses bitcoin and whether it is an appropriate investment vehicle for retirement plan sponsors.

Milliman receives PLANSPONSOR award for excellence in Defined Contribution Survey

Milliman is pleased to announce that it is the recipient of a PLANSPONSOR Silver award for excellence in the publication’s 2017 Defined Contribution (DC) Survey. The annual survey catalogued nearly 3,500 responses from defined contribution plan sponsors nationwide, who were asked how satisfied they were with their providers. Milliman is one of three organizations recognized as a “Survey Standout” in the midsize ($50 million to $200 million) asset class market, having received 18 Best in Class Awards in this category.

At Milliman, we strongly believe in providing high-quality service and responsiveness to our defined contribution clients, and work hard to exceed their expectations, so we’re pleased and gratified to once again receive an award for excellence from PLANSPONSOR.

Across the three asset class markets for which Milliman qualified ($25 million to $50 million, $50 million to $200 million, and $200 million to $1 billion), the firm won a total of 45 “Best in Class” awards—which includes the Silver Cup for the midsize market—and five “Service Commendations.” “Best in Class” awards are based on a PLANSPONSOR-designated “net satisfaction score” tabulated from survey responses. Since 2012, Milliman has won 11 Gold, Silver, and Bronze Cups in the DC Survey.

For more information about Milliman’s employee benefit services, click here.

Searching for missing plan participants per the U.S. Department of Labor

The U.S. Department of Labor (DOL), the Internal Revenue Service (IRS), the Social Security Administration (SSA), and the Pension Benefit Guaranty Corporation (PBGC) all review whether retirement plans have paid their participants on time. Last year, the Philadelphia office of the DOL conducted a pilot program that recovered $274 million owed to missing plan participants. Because of this success, DOL offices nationwide added “missing participant search compliance” to their plan audits. Plans failing to locate and contact plan participants regarding unpaid benefits could be found in breach of their ERISA duty to act on behalf of participants. Before receiving a letter of inquiry from the local DOL office, plan sponsors should review the protocols used to locate and pay their plans’ list of unpaid participants.

How do the various agencies learn of unpaid vested participants? Any terminated plan participant with an unpaid benefit at year-end is added to a plan’s running list of unpaid participants, one time, via IRS Form 8955. Terminated participants include alternate payees and beneficiaries. The IRS shares this information with both the SSA and the DOL, each of which maintains a running list of unpaid benefits from a plan. Once a vested participant starts a benefit, or cashes it out, an update via Form 8955 informs the IRS, SSA, and the DOL. Depending on whether the plan administrator removed participants as they were paid, the agencies may have an inflated list of unpaid participants.

When is a participant’s payment considered late? Just before age 65, the SSA sends letters to participants informing them that they “may have a benefit from their former employer.” The IRS considers payments late after a participant’s required minimum date. The DOL, however, reviews a plan’s overall list of vested participants regardless of age. Based on the participant’s earliest retirement age, the DOL could determine that a plan sponsor is not notifying and then paying participants in a timely manner. Please note that beneficiary or alternate payee required start dates can vary due to either 401(a)(9) rules or the participant’s, not the alternate payee’s, actual age.

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