PLANADVISER - September/October 2018 - 12

Legislative and Judicial Actions
compliance news
Trump Executive Order
Targets Retirement Plans
President Donald Trump signed an
executive order that states, " It
shall be the policy of the federal
government to expand
access to workplace retirement
plans for American
workers. "
Focusing
especially
on small and midsize
employers, the order
called on the secretary
of the Department of
Labor (DOL) to clarify
and expand the circumstances
under which these
companies may sponsor
or adopt an open multiple
employer plan (MEP)-subject
to appropriate safeguards-as
a workplace retirement option for
their employees. The order also asked
the DOL to increase retirement security
for part-time staff, sole proprietors, working
owners and other entrepreneurial workers in nontraditional
employer-employee relationships by expanding
their access to workplace retirement plans, including MEPs.
Further, the president ordered the Treasury secretary
to look into updating the life expectancy and distribution
period tables found in the regulations dictating retirement
plan required minimum distributions (RMDs). To
be considered is whether the tables should be changed to
reflect current mortality data and whether such updates
should be made annually or on another periodic basis.
While Trump noted that expanding access to MEPs
can reduce administrative costs-especially for small
businesses-when establishing a retirement plan, he also
pointed out that reducing the number and complexity
of currently required employee benefit plan notices and
disclosures would ease regulatory burdens.
Republicans Flesh Out Tax Reform 2.0
Republican members of the House Ways and Means
Committee have introduced three bills aimed at advancing
their Tax Reform 2.0 agenda ahead of the November midterm
elections: the Protecting Family and Small Business
Tax Cuts Act (H.R. 6760), the Family Savings Act (H.R. 6757)
and the American Innovation Act (H.R. 6756), all of 2018.
House Ways and Means Committee Chairman Kevin
Brady, R-Texas, suggests that the three bills " collectively
build on the growing economic successes of the Tax Cuts
and Jobs Act [of 2017]. "
The most wide-ranging of the
proposals is the Small Business Tax
Cuts Act, which seeks to solidify
many of the temporary tax cuts
implemented as part of last
year's tax legislation.
The Family Savings Act
is probably of the most
relevant
for
retirement
industry stakeholders, as
it includes many of the
provisions written
into
the popular Retirement
Enhancement and Savings
Act of 2018. It would allow
for wider adoption of
multiple
employer
plans
(MEPs), referred to here as
" pooled employer plans. "
The American Innovation
Act, the most narrowly focused
of the three, runs just 15 pages and
calls for various simplifications and
expansions of tax deductions for start-up
organization expenditures.
Frontier Faces Stock Drop Litigation
Lead plaintiff Mary Reidt is seeking class certification for
similarly situated Frontier Communications 401(k) Savings
Plan participants in a new Employee Retirement Income
Security Act (ERISA) stock drop lawsuit filed on September
11 in the U.S. District Court for the District of Connecticut.
This action " concerns the plan's excessive concentration in
Verizon common stock. "
Starting in July 2010, Frontier began acquiring significant
capital assets of Verizon, starting with wireline operations
that provide services to residential, commercial and
wholesale communications customers.
According to the complaint, between July 2010 and
end of year 2011, the Frontier Communications 401(k)
plan received and retained approximately $150 million
in Verizon stock, then representing over 15% of the plan's
total assets. In April 2016, Frontier acquired additional
Verizon assets, and the plan fiduciary defendants allegedly
invested over $200 million of additional plan assets
in Verizon stock.
The lead plaintiff suggests that the failure of the plan's
fiduciaries to liquidate the significant holdings in Verizon
common stock in a timely manner, and the decision to
concentrate plan investments in Verizon common stock,
breached their " fiduciary duty under ERISA to diversify the
investments of the plan so as to minimize the risk of large
losses. "
12 | planadviser.com September-October 2018
Art by Mary Kate McDevitt
http://www.planadviserdigital.com/planadviser/september_october_2018/TrackLink.action?pageName=12&exitLink=http%3A%2F%2Fplanadviser.com
PLANADVISER - September/October 2018

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