Subject:                                     BCG Pension Insider March 2019



The Pension Insider


The Pension Insider is a monthly newsletter developed for individuals who work in the pension arena. The Pension Insider was created to share ideas, success stories, coming events and industry specific articles.



March 2019 - Volume 89, Edition 1



Offering a Lump-Sum Payment Option to Retirees Currently Receiving Annuity Payments under a Defined Benefit Plan


IRS | March 06, 2019 | Issue number: N-2019-18


Notice 2019-18 informs taxpayers that the Treasury Department and the IRS no longer intend to amend the required minimum distribution regulations under § 401(a)(9) of the Internal Revenue Code to address the practice of offering retirees and beneficiaries who are currently receiving annuity payments under a defined benefit plan a temporary option to elect a lump-sum payment in lieu of future annuity payments.


Notice 2019-18 will be in IRB: 2019-13, dated March 25, 2019.

Click here to access document



PBGC Seeks Recovery of Investment Losses for Terminated Retirement Plan


PLANSPONSOR | February 28, 2019 | By: Rebecca Moore


The lawsuit claims owners of Freedom Communications made ill-advised, highly speculative investments which caused the pension plan to lose tens of millions of dollars.


The Pension Benefit Guaranty Corporation (PBGC) has filed a lawsuit for breach of fiduciary duties and prohibited transactions under the Employee Retirement Income Security Act (ERISA) against owners and service providers of Freedom Communications’ pension plan, which, after the company’s bankruptcy, was terminated and transferred to the PBGC as trustee.


The agency charges defendants with breaches of fiduciary duties under ERISA, including the duties of loyalty, prudence, and adherence to plan documents; transactions prohibited by ERISA; and knowing participation in breaches of fiduciary duties. The lawsuit claims owners of Freedom Communications made ill-advised, highly speculative investments which caused the pension plan to lose tens of millions of dollars.


According to the complaint, one of the failed investments started when members of Pension Advisory Group, based in North Carolina, approached Freedom’s owners with a proposal which they claimed would instantly improve the plan’s funding status. Under this program, which the owners implemented, the plan purchased life insurance policies with Freedom employees as the insureds. An actuary retained and compensated by Pension Advisory Group then allegedly inflated the value of the policies by valuing them at the net present value of future death benefits, rather than using the correct valuation method, the cash surrender value of the policies. Freedom’s owners abandoned the program when they realized that the plan was legally required to use the cash surrender value, resulting in a loss to the plan of more than $7 million.


The lawsuit also alleges that Freedom’s owners invested in another life insurance scheme, which involved a complex program in which the pension plan purchased a portfolio of loans used to finance life insurance premiums for people unrelated to Freedom or the plan. PBGC says that although such portfolios can have economic value when the insured persons are in poor health with decreased life expectancies, members of Pension Advisory Group failed to obtain the medical information needed to make a meaningful evaluation. Rather than acquiring a valuable asset, the defendants acquired a program with no market value, and lost millions of dollars of pension plan assets.


Freedom’s owners are also accused of losing millions of dollars in plan assets by investing in a highly speculative and unproven foreign hedge fund, which is now worthless, and by causing the plan to buy stock in Freedom when they knew that the company was in financial distress. The stock is also now worthless.


The PBGC is seeking to recover these losses. Click Here for full article






Austin Office

Patrick McLean


(800) 832-7742



 Boston Corporate Office

Michael E. Devlin, Principal

(855) 432-7658  ext. 403


Steve Keating

(203) 955-1566


David Geloran


(855) 432-7658 ext. 401



Chicago Office

David Rumas


(855) 432-7658 ext. 406


Karen Ambrose

(855) 432-7658 ext. 410


Karl K. Oman


(312) 550-3844



Cincinnati Office

Debbie M. Sharp


(855) 432-7658 ext. 405



Boise/Los Angeles Offices

Sean O'Flaherty


(855) 432-7658 ext. 402



ANNUITY RATES Standard Pension Closeout/Terminal Funding Case Rates:

(No lump sums, no disability or unusual provisions)

Retirees - 3.18%

Term Vesteds - 3.23%

Actives - 3.30%

Annuity Purchase Rates as of March 11, 2019



BCG Pension Risk Consultants

We specialize in settling pension liabilities for terminating and ongoing pension plans.

Today’s Solutions for Tomorrow’s Needs. 




BCG Pension Risk Consultants | 100 Grandview Road, Suite 303, Braintree, MA 02184

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