Products October 3, 2017

Ubiquity and HealthEquity Link 401(k) and HSA

Savers can now invest intelligently and reduce costs with a single view of their retirement and health funds, the firms suggest. 
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Ubiquity Retirement + Savings announced a partnership with HealthEquity, Inc., a national provider of health savings accounts (HSA) as a non-bank custodian, meant to encourage individuals to save toward their future while also saving for healthcare expenses.

According to the firms, the integration of Ubiquity Retirement + Savings and HealthEquity services will encourage employers and their employees to invest in both HSAs and 401(k)s. The end goal is to help participants maximize tax benefits, contribution rates, investment returns and overall savings.

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“While 401(k)s and HSAs have benefited sophisticated savers separately over the last several years, the market has failed, to this point, to produce a viable combination of the two accounts that can be easily accessed and managed by small businesses,” says Chad Parks, CEO of Ubiquity. “Ubiquity and HealthEquity will offer optimal contribution and investment strategies to employers while employees will be able to see their 401(k) and HSA balances from either platform.”

Jon Kessler, president and CEO of HealthEquity, says the combined services of the firms are being rolled out in response to employers asking for a comprehensive investment strategy that ties health and retirement benefits together. “Empowering employees to make decisions about consumer-driven healthcare and retirement together will create a long-term plan for retirement savings,” he adds.

More information is available at www.myubiquity.com.

Compliance October 3, 2017

PBGC Issues Technical Update on Reportable Events

The technical update specifically addresses active participant reduction event requirements.
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The Pension Benefit Guaranty Corporation (PBGC) has issued Technical Update 17-1, which provides guidance about compliance with the active participant reduction event requirements of section 4043(c)(3) of the Employee Retirement Income Security Act (ERISA) and the PBGC’s regulation on Reportable Events and Certain Other Notification Requirements (29 CFR part 4043.23(a)).

The PBGC is providing an alternative method for determining whether reporting an attrition event to the PBGC is required under § 4043.23(a)(2) to avoid possible duplicative reporting.

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This reportable event occurs when, as a result of a single cause (such as a reorganization or layoff), or through employee attrition, the number of active participants in a plan is reduced below 80% of the number at the beginning of the year or below 75% of the number at the beginning of the prior year.

Since publication, the agency has received questions from practitioners about whether the regulatory text requires a plan that files a single-cause event notice to file an “attrition event” notice at a later date due to the same active participant reduction. This was not the PBGC’s intent.

The agency plans to issue a new proposal to clarify this and avoid duplicative reporting, but because it has not yet issued a rule, there is a need for interim guidance to avoid duplicative reporting while complying with the existing (unamended) regulation.

To determine whether reporting is required for an attrition event for a plan year, a potential filer may disregard any cessations of active participant status reported to the PBGC for single-cause events during the plan year or preceding plan year.

Specifically:

  • When determining whether the number of active plan participants at the end of the plan year is less than 80% of the number of active participants at the beginning of the plan year, plans may include in the year-end active participant count participants who ceased to be active participants during the plan year due to a reported single-cause event.
  • When determining whether the number of active plan participants at the end of the plan year is less than 75% of the number of active participants at the beginning of the preceding plan year, plans may include in the year-end active participant count participants who ceased to be active participants during the current or prior plan year because of a reported single-cause event.

The Technical Update is here.

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