DOL Secretary Acosta Resigns; Pizzella To Serve As Acting Secretary

After much scrutiny for his handling of a plea deal for the New York financier Jeffrey E. Epstein, Labor Secretary Acosta is stepping down. With pressure from both pollical parties to resign, Acosta announced his resignation which will take effect in one week; leaving the current labor Deputy Secretary Patrick Pizzella as acting secretary until the President names a permanent replacement. 

Trouble arose for Acosta when Federal prosecutors recently unveiled new charges of sex trafficking and sex trafficking conspiracy against Epstein. Acosta was a U.S. prosecutor in Florida when Epstein received a plea deal to avoid significant jail time.

Considered by many as being more aggressively pro-business than Acosta, Pizzella is anticipated to move more quickly than his predecessor to reverse Obama-era regulations that trouble businesses. President Trump nominated Pizzella and was sworn into office by Acosta in April 2018, before which Pizzella served as a Member of the Federal Labor Relations Authority (FLRA), after being nominated by President Barack Obama and confirmed by the U.S. Senate to that post in 2013.

Pizzella has a long history of federal service holding positions at the Federal Housing Finance Board, Department of Education, Office of Personnel Management, Small Business Administration, and the General Services Administration.

Employer’s Fiduciary Responsibility Relating to Group Health Plans

The Employee Retirement and Income Security Act (ERISA) sets out specific employer responsibilities (fiduciary responsibilities) relating to the establishment and operation of a Group Health Plan. These fiduciary responsibilities include:

• Acting solely in the interests of the plan participants and their beneficiaries
• Carrying out duties prudently
• Following plan documents unless contradicted by ERISA
• Holding plan assets (if the plan has any) in trust
• Paying only reasonable plan expenses

Employers may want to hire a firm, such as a 3^rd Party Administrator, who is experienced in ERISA legislation and Plan operation, to help them comply with their responsibilities. The process of hiring an outside firm to help employers with their fiduciary responsibilities is not a process to be taken lightly. Employers must utilize diligence when hiring a firm to partner with regarding fiduciary oversight.

First off, the employer must ensure fees relating to the plan are reasonable. Next, the employer must verify that the partnering firm is capable of performing the services which it was engaged to perform and is knowledgeable in ERISA and other legislation which may impact Plan operation.

When choosing an outside firm, employers need to thoroughly document every step in the engagement process. Documenting the process helps ensure that it was fair, open, and honest. An employer’s diligence and documentation of the hiring process, including rationale for decision making, could be key if later challenged by individuals or entities such as the Department of Labor.

During the interview process, provide prospective firms with the same Scope of Work and ask them the same questions. This process should provide you with enough information to make an informed decision as to who would be the best firm for the employer to partner with.

FBG Statement Regarding Recent Litigation With FCE Benefits

Fringe Benefit Group, Inc. (“FBG”), an industry leader in the design, implementation, and administration of health and retirement plans for government contractors, has provided working Americans with valuable benefits for more than 30 years. As a result of FBG’s business success, competitors will occasionally make false claims against FBG in an attempt to discredit the company or steal FBG’s customers.

In 2015, the U.S. District Court for the Western District of Texas ordered a competitor to stop deceptive marketing and copyright infringement against FBG. The judge found that the competitor violated the Lanham Act, Copyright Act, and engaged in unfair competition against FBG.

Recently, FBG became aware that another competitor has engaged in a campaign to mislead FBG customers by distributing untruthful information about FBG. In response to this competitor’s repeated attempts to discredit FBG and the services it provides to its customers, FBG has filed suit against FCE Benefits Administrators, Inc. (“FCE Benefits”) and Chris Porter, the Senior Vice President of Sales and Marketing for FCE Benefits.

FBG’s CEO Travis West stated, “From time to time, a competitor will cross the line and attempt to malign our corporate reputation. We have been made aware that FCE Benefits is spreading untruthful information about us in the marketplace. We cannot and will not tolerate these unscrupulous business practices, which is why we have filed suit against them. We will aggressively defend our business against FCE Benefits’ false claims and have taken legal action against FCE Benefits to protect our reputation and to comfort our customers, who have received untruthful information from FCE Benefits. We are very proud of the services we provide to government contractors and the working Americans they employ. Thousands of working Americans are now able to access health insurance for themselves and their families – and build retirement savings accounts – as a result of the plans we offer. We believe that that the court will compel FCE Benefits to stop its deceptive marketing practices, just as the court previously stopped another competitor.”

Complaint Filed

Information Regarding Recent Litigation Involving Fringe Benefit Group

In July of 2017, Fringe Benefit Group, Inc. was sued alleging that The Contractors Retirement Trust and The Contractors Plan Trust charge excessive fees for the administrative services it provides to our valued customers. The lawsuit has no merit and was dismissed by the court on November 7, 2017. The court gave the plaintiffs a short window to re-file their lawsuit, which they did on December 4, 2017. After review of this amended filing, we continue to believe the lawsuit is without merit and filed a motion to dismiss this amended complaint on January 15, 2018.

The suit was filed by three employees of one of our clients. Our client, their employer, is not a party to the litigation. The allegations in the lawsuit reflect a lack of understanding of the administrative services we provide and the compliance assistance that we offer our employers. The language in the complaint is not supported by any market data. We deny these allegations and are vigorously defending this matter.

Plaintiff class action lawsuits alleging excessive fees have become common in the ERISA litigation landscape. Most of these actions have not been successful. Many have been settled for a small fraction of the demanded amount to make the lawsuit go away and not because the defendant companies or financial institutions believed the lawsuits had any merit.

Since 1983, Fringe Benefit Group, Inc. has provided a turnkey arrangement to assist employers subject to prevailing wage laws. We believe that we offer the highest quality services to close to 2,000 employers that have sponsored plans through The Contractors Plan. The allegations in the recent complaint distort the fees, services and value we provide and are baseless.

Please let us know if you have any additional questions. If you would like to review the related documents and filings, please feel free to click on the links below.

Complaint Filed

Motion to Dismiss

Order Granting Motion to Dismiss

Amended Complaint

Motion to Dismiss- Amended Complaint

Top-Rated Funds Added To Fringe Benefit Group’s Retirement Program, The Contractors Plan

AUSTIN, Texas–(BUSINESS WIRE)–Fringe Benefit Group, Inc., an industry leader in the design, implementation and administration of benefit plans for hourly workers, today announced the expansion of the retirement plan investment options available to The Contractors Plan customers. In addition to Vanguard, the target-date fund investment options now include American Funds, BlackRock, Inc., and T. Rowe Price. The inclusion of these additional top-rated target date funds provides more investment choices to The Contractors Plan participants as they prepare for retirement.

Offering retirement and health plan products from the nation’s leading carriers, Fringe Benefit Group is known for its full-service suite of tools and services that greatly reduce the administrative burden for contractor employers. The Contractors Plan is Fringe Benefit Group’s prevailing wage benefit program, which helps government contractors bid more effectively on public projects while complying with government regulations.

Numerous studies have shown that Americans are at risk for having inadequate retirement savings. The Employee Benefit Research Institute (EBRI)’s 2017 Retirement Confidence Survey found that only 18% of workers felt very confident they will be able to afford a comfortable retirement. Companies performing prevailing wage work, such as jobs subject to the Davis-Bacon Act and Service Contract Act, state prevailing wage laws, and living and responsible wage ordinances, are able to help their workers save for retirement by using the fringe portion of the prevailing wage as it was intended, to provide bona fide benefits such as retirement plans.

“We are continually looking to evaluate, evolve, and expand the products and services offered by The Contractors Plan. We know the value we can provide by helping employees save towards their retirement, and the addition of these highly rated and strong performing investments to the portfolio has been very well received by our customers,” said Jenny Pagano, vice president of Retirement Products and Services at Fringe Benefit Group.

Pentegra Trust Company, the discretionary trustee for The Contractors Plan Master Trust, provides ERISA Section 403(a) investment fiduciary services for the plans that participate in the Master Trust, including selection and monitoring of the investment funds made available to The Contractors Plan retirement plan participants.

Working with a Third-Party Administrator (TPA) experienced in prevailing wage administration not only benefits prevailing wage workers, but can also help employers identify opportunities to increase the amounts that owners, key employees, and non-prevailing wage workers can contribute to their retirement accounts.

About Fringe Benefit Group

Fringe Benefit Group has designed and administered programs that simplify the benefits process for employers with hourly workers since 1983. Through its nationwide network of more than 600 independent brokers and agents, Fringe Benefit Group offers products from the industry’s leading carriers and is recognized for its full-service suite of tools and services designed specifically for employers with hourly and part-time workers. For more information, visit www.fbg.com, www.thecontractorsplan.com or www.theamericanworker.com.

Pension Plan Limits For 2018 Tax Year Announced

THE IRS ANNOUNCED COST OF LIVING ADJUSTMENTS WHICH AFFECT DOLLAR LIMITATIONS FOR PENSION PLANS AND OTHER RETIREMENT-RELATED ITEMS FOR THE 2018 TAX YEAR.

Highlights:

• The elective deferral (contribution) limit for employees who participate in 401(k) plans changes to $18,500.
• The catch-up contribution limit for employees aged 50 and over who participate in 401(k) plans remains $6,000.
• The total annual limit for contributions made to defined contribution retirement plans increases to $55,000.
• The maximum compensation allowed to be used for retirement plan purposes increased from $270,000 to $275,000. 

Fringe Benefit Group Announces New Benefits Package Designed for Employers with Hourly Employees

Austin, October 16, 2017 – As the national debate on health care coverage continues, many employers are searching for group benefit plans with real-world cost control options. Fringe Benefit Group, an industry leader in the design, implementation and administration of benefit plans for hourly workers, offers affordable benefits to employers via The American Worker, a turnkey benefits platform utilized by many of the nation’s leading restaurant, retail, hospitality and staffing companies.

Fringe Benefit Group today announced it has launched The American Worker Triple Option plan, which consolidates fully insured fixed indemnity, self-funded Minimum Essential Coverage (MEC) and self-funded major medical insurance options into a single benefits package under one insurance/stop-loss policy. This allows employers to offer a wide variety of health insurance options to their diverse workforce with minimal administrative burden. Employers utilizing The American Worker Triple Option also have access to a wide range of specialty benefit options such as Dental, Vision, Short Term Disability and Life Insurance, which are tied into the platform’s payroll cycle billing administration.

For more than 30 years, Fringe Benefit Group has specialized in providing insurance for companies with hourly and part-time employees. Through its two national brands, The American Worker and The Contractors Plan, it works closely with more than 600 brokers across the U.S. to deliver benefit solutions to this unique market, which can be challenging to serve because of high turnover, geographically dispersed locations and difficult to reach employee populations. The American Worker Triple Option is designed specifically for employers with a contingent workforce and / or hourly employees, and allows employers to offer a broad range of benefit plans that provide employees with choices while allowing the employer to meet their Affordable Care Act (ACA) obligations.

“Fringe Benefit Group has a long and successful history of serving the diverse and sometimes challenging needs of hourly employees. We are very experienced with indemnity, MEC and major medical plans, and we are known for our outstanding customer service and administrative excellence,” said Jon Duczak, vice president, Fringe Benefit Group. “The American Worker Triple Option gives employers and their employees access to multiple products at multiple price points and lessens the administrative burden on employers. We know how to handle contingent workforce and hourly employees and are excited to help employers provide valued benefits to their entire workforce while reducing their administrative burden at the same time.”

As part of its focus on simplifying benefit plan administration and providing value to employers, Fringe Benefit Group offers an electronic platform that manages eligibility, payroll deductions and billing according to a client’s payroll schedule. The platform allows administration of benefit programs to occur on a weekly, bi-weekly and semi-monthly basis, which minimizes the hassles typically associated with monthly bill reconciliation and manual deduction processing.

About Fringe Benefit Group

Fringe Benefit Group and its affiliate companies have designed and administered programs that simplify the benefits process for employers with hourly workers since 1983. Through its nationwide network of independent brokers and agents, Fringe Benefit Group offers products from the industry’s leading carriers and is recognized for its full-service suite of tools and services designed specifically for employers with hourly and part-time workers. For more information, visit http://www.fbg.com/, http://www.thecontractorsplan.com/ or http://www.theamericanworker.com/.

U.S. Department of Labor Announces Change to SCA Fringe Rate

The prevailing health & welfare fringe benefits issued under the McNamara-O’Hara Service Contract Act (SCA) awarded before January 1st, 2017 with Option Years on or after August 1st, 2017 will utilize the new fringe rate of $4.41.

Additional SCA Health & Welfare Fringe Benefit Rate Information

All service contracts awarded on or after January 1st, 2017, that contain paid sick leave (EO 13706) will utilize the newly reduced $4.13 SCA health & welfare benefit rate. The DOL memorandum is posted on the Wage and Hour Division (WHD) website.

For more information: Click Here To Read The Full Memo

John Malnar Joins Fringe Benefit Group as Chief Operating Officer/Chief Financial Officer

Austin, June 12, 2017 — Fringe Benefit Group, an industry leader in the design, implementation and administration of benefit plans for hourly workers, today announced that John Malnar has joined the company as Chief Operating Officer/Chief Financial Officer (COO/CFO). Malnar brings significant operational and financial leadership experience to Fringe Benefit Group, most recently having served as CFO for two high-growth companies headquartered in California.

In his new role, Malnar will leverage nearly two decades of financial services experience to manage corporate and financial operations, oversee business analytics and reporting, and assist with strategic initiatives. Malnar most recently served as CFO of YapStone Holdings, Inc., where he worked closely with the company CEO and president on financial reporting, company strategy and operational efficiencies. During his tenure at YapStone, he was a key contributor to acceleration of the company’s revenue and profitability growth, being named a finalist for the 2015 Los Angeles Business Journal Private Company CFO of the year. Prior to YapStone, Malnar served as CFO at PayPros, which was acquired by Global Payments, Inc., and over a decade in New York at BlackRock, Merrill Lynch and JP Morgan. He graduated from the University of Texas at Austin, with honors.

“Fringe Benefit Group is growing at a fast pace and we are looking to John to help us manage that growth and identify new opportunities to streamline our business processes. He has many years of experience helping grow successful companies and we are excited about bringing his talents to our organization,” said Travis West, CEO of Fringe Benefit Group.

Fringe Benefit Group offers plan design, compliance, claims and benefits administration for insured and self-insured major medical, retirement, Minimum Essential Coverage (MEC), and specialty benefits plans (e.g., dental, vision, life and disability coverage) to companies with hourly employees via its two national brands, The Contractors Plan and The American Worker. Fringe Benefit Group works closely with more than 600 brokers across the U.S.

About Fringe Benefit Group

Fringe Benefit Group and its affiliate companies have designed and administered programs that simplify the benefits process for employers with hourly workers since 1983. Through its nationwide network of independent brokers and agents, Fringe Benefit Group offers products from the industry’s leading carriers and is recognized for its full-service suite of tools and services designed specifically for employers with hourly and part-time workers. For more information, visit www.fbg.com, www.thecontractorsplan.com or www.theamericanworker.com.

How Acosta May Lead If Confirmed As Secretary Of Labor

President Trump has nominated attorney Alexander Acosta to head the Labor Department. With over two decades of public service, Acosta has a reputation for having a competent management style and a distinct respect for justice which may provide some insight into how he may lead the Labor Department.

Currently, Acosta is the Chairman of U.S. Century Bank and dean of the Florida International University College of Law. But perhaps influencing his character and career direction most may have been his first job after graduating Harvard law school, where Acosta clerked for Supreme Court Justice Samuel Alito when he was a judge on the U.S. Court of Appeals for the 3rd Circuit. Justice Alito has been described as a conservative jurist with a libertarian streak; words also used at times to describe Acosta.

Later Acosta was appointed by President George W. Bush to the National Labor Relations Board (NLRB) and then served as Assistant Attorney General for Civil Rights.

While at the NLRB it was reported that Acosta usually demonstrated an independent and nonpartisan approach when evaluating cases, often voting alongside fellow Republicans in favor of employers in the major cases while also not shying from occasionally siding with unions. However, during his time in the CRD, Acosta and those working under him were deemed as having a tendency to hire more like-minded conservatives.

Looking at Acosta’s previous work experiences may suggest that he is someone who could competently execute and reinforce the broader theme of Trump’s conservative agenda. At this time, Acosta has had several major unions endorse him, and surprisingly this has not discouraged his support within the business community. As it stands now, Republicans are looking to move him through the confirmation process as swiftly as possible.