Tag Archives: defined contribution

Year-end compliance issues for single-employer retirement plans

By year-end 2019, sponsors of calendar-year single-employer retirement plans must adopt necessary and discretionary plan amendments to ensure compliance with the statutory and regulatory requirements of ERISA and the tax code. This Client Action Bulletin looks at key areas – including administrative compliance issues – that defined benefit (DB) and/or defined contribution (DC) plan sponsors should address by Dec. 31, 2019.

How are cash flows and current day value used to calculate the duration of actuarial liabilities?

Actuaries calculate retirement plan liabilities by taking a stream of benefit payments, or cash flows, expected to be received from a plan and assigning a measure of current day value to each payment in the stream, expressed as a single cash amount as of a valuation date. Current day value is the concept that money available today has the potential to earn interest. When describing a sum of money to be provided in the future, its value today should be less in order to account for earnings potential. It is the sum of all expected payments, measured at current day value, which defines an actuarial liability. This article by Milliman actuary Reid Earnhardt explains how cash flows and present value are used to calculate the duration of actuarial liabilities.

2019 key administrative dates and deadlines for calendar-year defined contribution retirement plans

Milliman’s 2019 defined contribution retirement plan calendar with key administrative dates and deadlines is now available. The calendar lists relevant 2019 administrative dates encountered by most defined contribution retirement plans, including deadlines for government filings and participant disclosures. The calendar also provides short descriptions of the actions required to meet each deadline.

To download the calendar, click here.





2018 year-end compliance issues for single-employer retirement plans

By the end of the year, sponsors of calendar-year single-employer retirement plans must adopt necessary and discretionary plan amendments to ensure compliance with the statutory and regulatory requirements of ERISA and the tax code. This Client Action Bulletin looks at key areas—including administrative and compliance issues—that sponsors of such defined benefit or defined contribution plans should address by December 31.





State-run defined contribution plan considerations

Soon, retirement is going to be largely funded by the individual rather than an employer. What does this mean for the 27% of workers who don’t have access to an employer-sponsored defined contribution plan?

In 2016, the Employee Benefits Security Administration of the U.S. Department of Labor (DOL) released a final rule that provided a safe harbor for state payroll deduction individual retirement accounts from ERISA coverage. This change offered protection for workers’ rights by ensuring that employees are notified and given sufficient time to opt out of participation. In 2017, Congress overrode the DOL’s action, repealed the rule, and made it easier for state-run plans to exist.

The ERISA exemption would have permitted employers to avoid state mandates in benefit plans because they offer the savings plan under federal pension law.

Despite Congress repealing the action, California, Connecticut, Illinois, Maryland, Massachusetts, New Jersey, Oregon, and Washington state have already enacted legislation to establish a state-run defined contribution (DC) plan. And over 30 states have considered such legislation.

In this article, Milliman’s Darlene Laursen Medrano and Jinnie Olson discuss the possible effects of a state-run plan on participants and employers and outline what an ideal plan design would include.





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.