Products October 6, 2020

Transamerica Debuts Student Loan Repayment Program

It enables sponsors to shift their benefits dollars to the retirement plan or to an employee’s student loan servicer.

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Employers that use Transamerica as the recordkeeper for their retirement plan now have access to Transamerica’s Student Loan Repayment Program to help workers pay back student loans.

The program allows employers to shift their benefit dollars, allowing them to make contributions to the employee’s retirement plan or student loan servicer. Transamerica notes that because clients will already have their retirement plan recordkept with it, the process will be streamlined. The program also enables participants to consolidate or refinance their loans.

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Sponsors can choose from one of three providers to power the student loan repayment: Common Bond, Futurefuel.io and Tuition.io. Transamerica says each provider has a state-of-the-art online platform.

“Transamerica recognizes that student loans continue to be an especially heavy burden for employees,” says Kent Callahan, chief executive officer of Transamerica’s workplace solutions division. “While federal student loan repayments are deferred for the remainder of 2020, many employees with privately held student loans are still seeking relief. Many more employees will be looking for support once their loan payments begin again. We know that wealth and health are connected. Workers struggling with debt can have higher stress and may become less productive.”

Compliance October 6, 2020

Supreme Court Denies Review of PE Firm Withdrawal Liability Case

The denial lets stand an appellate court decision that two entities of Sun Capital Partners, which bought a firm that withdrew from a multiemployer plan, are not liable for unfunded vested benefits owed to the plan.

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Without explanation, the U.S. Supreme Court has denied a petition to review the case of New England Teamsters and Trucking Industry Pension Fund v. Sun Capital Partners, et. al.

The fund has been in a long-running legal attempt to collect withdrawal liability from two entities of Sun Capital Partners as members of an implied partnership-in-fact under “common control” with Scott Brass Inc. (SBI), a withdrawing employer from the fund. The Supreme Court’s denial lets stand a 1st U.S. Circuit Court of Appeals decision in which it reversed a U.S. District Court ruling that there was an implied partnership-in-fact which constituted a control group and made the two funds liable for the pro rata share of unfunded vested benefits owed to the pension fund. In other words, the appellate court ruling determined the private equity firms are not responsible for paying the withdrawal liability.

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In its petition to the high court in August, the New England Teamsters and Trucking Industry Pension Fund said the appellate court’s decision reversing the district court’s finding of a partnership-in-fact is based on its “reluctance” to impose withdrawal liability for private equity (PE) funds and provides “a blueprint for such funds to escape withdrawal liability while securing virtually risk-free investments in portfolio companies with known, unfunded pension liability.” The pension fund says the decision limits recovery of withdrawal liability by multiemployer pension funds.

“In essence, it has created a judicial exemption to withdrawal liability that shields private equity firms,” the fund claimed in its petition.

John Lowell, an Atlanta-based actuary and a partner with October Three Consulting LLC, has told PLANSPONSOR that more private equity funds are doing acquisitions in industries where multiemployer plans are common.

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