Headlines about "Communication and disclosure to participants"
Gathered from the web by the editors at BenefitsLink.com.
[Guidance Overview] DOL Makes Small Changes to Field Assistance Bulletin 2012-02 (Participant Disclosure FAQs)
"DOL revised its response to Q-19 regarding website performance information, making clear that a website in connection with a variable return DIA should be updated to show 1-, 5-, and 10-year performance information for the period ending on the most recently completed calendar quarter." (Groom Law Group)
[Guidance Overview] Plan Sponsors Working Diligently and in Good Faith on Summary of Benefits and Coverage Will Not Face Penalties During First Year
"The Departments will not impose penalties for failure to provide an SBC or Uniform Glossary on plans and issuers that are working diligently and in good faith to comply.... Plan sponsors with 'carve-out' arrangements, such as a carved-out outpatient prescription drug program or mental health program, may provide multiple partial SBCs during the first year, as long as the multiple SBCs together provide all relevant information to meet SBC content requirements.... The Departments will not enforce penalties for failure to provide an SBC with respect to expatriate coverage during the first year of applicability." (The Segal Company)
[Guidance Overview] Court of Appeals Rejects Equitable Remedies When SPD Promises More Generous Benefits Than Pension Plan Document
"In some ways, the Ninth Circuit's recent decision in Skinner v. Northrop Grumman Retirement Plan B is a garden-variety example of a classic fact pattern: the terms of a summary plan description ('SPD') promise better benefits than the plan document it summarizes, and participants sue for the difference. Skinner demands our attention, however, because it is the first decision by a federal court of appeals to interpret the Supreme Court's most recent high-profile decision on ERISA remedies: CIGNA Corp. v. Amara." (Spencer Fane)
[Opinion] Text of Morningstar Comment Letter to SEC on Need for More Disclosure to Investors in Target-Date Funds
"Target-date funds are quickly becoming Americans' primary -- if not only -- retirement-savings tool, so it's critical that investors understand how these dynamic funds are run. Also, plan sponsors, researchers, and fiduciaries need more data to evaluate target-date series side by side. Morningstar's specific suggestions for how to improve the funds' disclosure follows in the text of the letter." (Morningstar)
[Guidance Overview] EBSA Makes Small Clarifying Correction to FAB 2012-02 FAQs on Participant-Level Fee Disclosure
From an EBSA email distributed on May 17: "The Department of Labor's Employee Benefits Security Administration made a technical correction to recently released Field Assistance Bulletin No. 2012-02, which contains frequently asked questions and answers about the Department's participant-level fee disclosure regulation (29 CFR section 2550.404a-5). It has come to the Department's attention that, as initially released on May 7, 2012, a sentence in the answer to Question 19 concerning quarterly Web site updates to 'average annual total return' information inadvertently referred to the most recently completed calendar 'year' rather than the most recently completed calendar 'quarter.' The Department corrected this error on May 17, 2012 in order to accurately restate the requirements of the regulation. The word 'calendar' also was removed from the phrase '... 10-calendar year periods ...' in the same sentence. See Q-19, n.2." (Employee Benefits Security Administration)
[Guidance Overview] 9th Circuit Case Addresses Equitable Remedies Post-Amara and Says Mere Violations of Law Do Not Establish 'Harm' Creating Equitable Remedies
"Plaintiffs [in Skinner v. Northrop Grumman Retirement Plan B] argued the plan documents should be reformed to match the terms of the 2003 SPD. The Court held that reformation is appropriate only in cases of fraud or mistake. The Court found there was no evidence that: (a) the Plan participants were intentionally and materially misled, or that (b) plaintiffs actually relied on purportedly misleading information." (Lane Powell)
Six Smart Steps to Get Your Employees Ready for Retirement
"You need to communicate differently with a 25-year-old than with a 62-year-old. The older worker doesn't need to hear about the benefits of a company match. If you're looking to change behavior, make it easier. For example, call a meeting to explain how to enroll, and then let employees check a box on a card so you can enroll them. Don't make them do it themselves later -- they may never do it." (Business Management Daily)
[Official Guidance] Form W-2 Reporting of Employer-Sponsored Health Coverage: IRS Informational Page Updated May 2, 2012
"The chart ... illustrates the types of coverage that employers must report on the Form W-2. Certain items are listed as 'optional' based on transition relief provided by Notice 2012-9 (restating and clarifying Notice 2011-28)." (Internal Revenue Service)
DOL Begins Enforcing the ACA Through Plan Audits
"Generally, plan sponsors and administrators must be able to demonstrate that their plans comply with the ACA, which requires documentary evidence -- from plans, record keepers, and/or service providers. Written records of the steps taken to comply with the ACA since September 23, 2010, including detailed records of participation information and communications with participants about enrollment periods and coverage, should be retained in a readily accessible fashion. For example, plans should keep and be able to produce notices of coverage for children up to 26 years of age, and evidence of distribution. Likewise,any plan amendments or written policies that were adopted to implement the ACA mandates discussed above should be ready for production." (Proskauer Rose LLP)
[Official Guidance] Text of CCIIO Announcement on Medical Loss Ratio Rebate Notices, Reminding Health Insurers of August 1 Deadline (PDF)
"[The final regs require] an issuer to provide information in the form of a rebate notice to enrollees who are owed rebates, regardless of the form in which the rebate payment is made (e.g., check or future premium credit).... CMS has developed a standard form for the rebate notice that each issuer must send by August 1 of the following year to enrollees entitled to a rebate based upon the prior MLR reporting year. For example, notice of rebates based on the 2011 MLR reporting year must be provided by August 1, 2012.... Please refer to the Medical Loss Ratio (MLR) Rebate Notice Instructions at http://www.cciio.cms.gov/resources/other/index.html#mlr for the complete set of instructions." (Centers for Medicare & Medicaid Services, Center for Consumer Information and Insurance Oversight)
Educational Web Page on Retirement Plan Fees Comes Online from The Principal
"The online resource offers: [1] An explanation of retirement plan costs; [2] Tips on how to review plan services; [3] Help navigating cost considerations; [4] Tips for evaluating fee reasonableness; [5] Tips for addressing participant questions[.] The Principal also offers a new Fee Reasonableness Review Checklist, a sample template financial professionals can share with plan fiduciaries to help guide them through the evaluation process." (The Principal Financial Group)
[Opinion] Combination of Fee Disclosure DOL Regs and 'Strict Liability' Under Code Section 4975 Might Be Explosive
"Though [it is possible to] get lost in the detail of timely meeting the new disclosure requirements, the real impact will occur once the dust settles, and when [there are] all manner of prohibited transactions -- arising either from failure to properly disclose compensation or from what is revealed by the disclosure itself.... [One] of the most serious of the impacts of 408b2 promises to arise from application of Code section 4975, not from ERISA Section 406 to which 408b2 is connected.... Once the prohibited transaction occurs, the tax liability attaches, and there is a duty to report and pay that tax. The IRS has no ability to waive that tax -- unlike the prohibited transaction penalty under ERISA." (Business of Benefits)
Time's Up on 401(k) Fee Disclosure Compliance: New Potential Breaches of Fiduciary Duty Looming
"[Ian Dingwall, EBSA's chief accountant,] suggested that auditors call their clients to make certain that they, as plan fiduciaries, have a list of service agreements and know which ones are not in writing by July 1. A service agreement that is not in writing is not considered �reasonable� under the DoL regulations, and therefore results in a prohibited transaction.... Putting plan auditors in the position of enforcer of the service-provider disclosure requirement is beyond the scope of an auditor�s responsibility." (CFO)
[Guidance Overview] HHS Notice Addresses Rules for Insurers That Meet or Exceed Medical Loss Ratio Standards
"The extended notice requirement will hopefully reduce confusion that may have otherwise occurred when some individuals received rebates and others, in different insurance plans, did not. Importantly, the electronic disclosure rules for providing SBCs, which are referenced in the extended notice requirements for MLRs, were recently addressed in DOL frequently-asked-questions[.]" (Practical Law Company)
[Guidance Overview] FAQs on Summaries of Benefits and Coverage Address Electronic Distribution and Coverage Example Calculator
"Although the latest FAQs do not delay the fast-approaching compliance date for providing [Summaries of Benefits and Coverage, or "SBCs"], plans, plan sponsors and insurers may nonetheless welcome the first-year policies provided in the new guidance. In particular, the rule permitting partial SBCs for plans with multiple insurers may be helpful in preparing initial SBCs, though the FAQ also underscores challenges for later years when information from separate insurers must be combined in the same SBC. In addition, plans and insurers may want to document their SBC compliance efforts in case they wish to use the Departments' one-year good faith compliance policy." (Practical Law Company)
[Guidance Overview] DOL, HHS and Treasury Guidance on SBC Requirements Provides Compliance Exceptions During First Year
"[T]he agencies acknowledged the administrative difficulties for issuers and plans in some circumstances to provide such summaries. [For example, in] discussing a question about health plans that use two or more issuers to provide various types of coverage, the departments said issuers have no obligation to provide coverage information for benefits that it does not insure, but that group health plans �are responsible for providing complete SBCs with respect to a plan.�" (Bloomberg BNA)
[Guidance Overview] Final EBSA Fee Disclosure Requirements Addressed in Field Assistance Bulletin 2012-02
"The [Field Assistance Bulletin (FAB)] contains 38 questions and answers relating primarily to participant-level disclosure but also addressing service provider disclosure. It includes many helpful and practical solutions to uncertainties in the final disclosure regulations. It is clear from the text of the FAB that the DOL has no intention of extending either of disclosure deadlines. However, in Q&A 37, the DOL recognizes that many service providers and plan administrators may have initiated or even made disclosures prior to publication of the FAB based on interpretation of the regulations and may be unable to modify their disclosures by the deadlines without unreasonable difficulty or cost." (Warner Norcross & Judd LLP)
[Guidance Overview] FAB Addresses Investment Disclosures to Participants About a Plan's Designated Investment Alternatives
"Do the investment disclosure requirements apply to alternatives closed to new investments? Yes. If participants are allowed to retain current investments in a given fund, then the comparative chart of investments must include the fund, even though participants cannot move money into the fund. The plan administrator could (but need not) limit the disclosures to those participants invested in the fund." (SunGard Relius)
[Opinion] Text of Comments to IRS by Pension Action Center Urging IRS to Retain Strict Requirement of Providing Notices to Separated Plan Participants
"The Pension Action Center is writing to comment on the letter sent to your office by [ASPPA], dated December 20, 2011. ASPPA requested clarification of the Internal Revenue Code's notice requirement for separated plan participants who are listed on IRS Form 8955-SSA. ASPPA argued that plans should not have to provide separate notices of deferred vested pensions to plan participants because plans already satisfy this notice requirement with 'benefit statements and other documents.' The Pension Action Center strongly disagrees with ASPPA's interpretation[.]" (Pension Action Center, Gerontology Institute of the University of Massachusetts Boston)
PBGC to Request Comments on Information Collection for Locating and Paying Participants
"The collection consists of information participants and beneficiaries are asked to provide in connection with an application for benefits. In addition, in some instances, as part of an effort to identify participants and beneficiaries who may be entitled to benefits, the PBGC requests individuals to provide identifying information that the individual would provide as part of an initial contact with the PBGC. All requested information is needed to enable the PBGC to determine benefit entitlements and to make appropriate payments." (Wolters Kluwer Law & Business / CCH)
Good-Faith Efforts Already Taken to Comply with Participant Fee Regs Won't Be Penalized, EBSA Says
"[Phyllis C. Borzi, assistant secretary of labor for the Employee Benefits Security Administration] said plans that have already distributed, or are getting ready to distribute, their participant-level fee disclosures under Section 404(a) of [ERISA] will not be subject to DOL enforcement action if they acted in good faith to comply with the rule [prior to the recent issuance by the EBSA of 'Frequently Asked Questions' about the fee disclosure regulations].... However, Borzi cautioned that plans that discover they were not in totally in compliance with the participant disclosure rule in light of the FAQs will need to develop a plan to comply with the law before their next participant disclosure." (Bloomberg BNA)
[Guidance Overview] DOL Addresses Definition of Designated Investment Alternatives for Purposes of Required Participant Fee Disclosures
"The issue that has generated more attention and discussion regarding both the participant (404a-5) and the service provider (408b-2) regulations is the issue of what constitutes a designated investment alternative (DIA).... The issue is significant because an employer annually must provide participants a significant amount of investment information with respect to each DIA. Furthermore, under the 408b-2 regulations, a covered service provider that provides a platform of DIAs in connection with recordkeeping or brokerage services would need to make annual investment disclosures about the DIAs to the plan fiduciary. In this technical update, [the authors] discuss clarifications of the definition of a DIA provided by the recently released FAB 2012-2." (SunGard Relius)
Current Challenges and Best Practices Concerning Beneficiary Designations in Retirement and Life Insurance Plans (PDF)
"The complexity of the rules under ERISA may, in some cases, lead to beneficiary designations that do not accurately reflect the participant's intent, and can frequently result in disputes over who is entitled to ERISA plan benefits following the death of the participant.... [E]ven when the beneficiary designation correctly indicates the participant's intent, beneficiaries may be unaware of what to do to obtain the benefit or to determine the benefit to which they are entitled.... The Council is examining this topic and intends to draft recommendations to the Secretary of Labor for consideration." (2012 ERISA Advisory Council)
[Guidance Overview] Preauthorization of Surgical Procedure Not Covered by the Plan Was Not a Fiduciary Breach
"This case is another example of how participants may be left without a remedy for harm caused by the actions of a plan fiduciary. The U.S. Supreme Court's decision last year in Cigna v. Amara ... suggested that courts may be more inventive in using equitable principles to fashion remedies for fiduciary breaches. However, this court found no breach of fiduciary duty and therefore did not address the issue of remedies." (Thomson Reuters/EBIA)
[Guidance Overview] COBRA Notice Deadline Runs from Employment Termination Date
"This case illustrates COBRA's general rule that the deadline for providing an election notice runs from the date of termination, even if plan coverage extends beyond that date. The statute does provide an alternative, however. If the plan so provides, the notice period (and the maximum coverage period) may instead run from the date that coverage is lost. Given the court's silence on this point, we assume the plan in question was not written to take advantage of this delayed notice rule. The case also contains a helpful discussion of the factors that a court may consider in deciding whether to award attorney's fees or unreimbursed medical expenses incurred during the violation period." (Thomson Reuters/EBIA)
[Guidance Overview] DOL FAQs Address Implementation of Participant-Level Retirement Plan Fee Disclosures
"These long and detailed FAQs underscore the complexity of the new disclosure requirements.... The DOL also indicated that it is working on a second set of FAQs focused on the service provider fee disclosures. As a reminder, calendar-year plans are required to make their initial annual disclosure to participants no later than August 30, 2012 and provide their first quarterly statements no later than November 14, 2012." (Thomson Reuters/EBIA)
[Official Guidance] Agencies Revise Summary of Benefits and Coverage Template and , Sample Completed SBC, and Coverage Example Calculations
Q&A 14 in Part IX of "FAQs About ACA Implementation" explains the changes: "In the diabetes treatment scenario, the version originally posted contained a typographical error, listing the allowed amount for insulin as $11.92, rather than $119.20 -- a difference that impacts the total cost of care for diabetes in the coverage example calculations. To correct this error, the Departments have posted updated versions of the SBC template, the sample completed SBC, and the guide for coverage examples calculations - diabetes scenario. The updated SBC template and sample completed SBC also include sample taglines for obtaining translated documents ... as well as updated Sample Care Costs amounts for the diabetes coverage example, due to more accurate rounding in making these calculations. Finally, the updated versions include some appearance modifications (such as changes in bolding, underlining, shading, capitalization, margin justification, use of hyphens, and row and column sizing) to ensure the document is accessible to individuals with disabilities, consistent with section 508 of the Rehabilitation Act. Plans and issuers may use either version, or may make similar modifications to their own SBCs, without violating the appearance requirements for an SBC. The updated versions of these documents are labeled �corrected on May 11, 2012� in the lower right corner of the first page and are available at www.dol.gov/ebsa/healthreform and cciio.cms.gov. These three documents replace the prior versions issued contemporaneously with the final regulations in February 2012." (Employee Benefits Security Administration)
[Official Guidance] Text of Final CMS Regs for Medical Loss Ratio Requirements (PDF)
"[T]his final rule establishes a simple, straightforward notice requirement for health insurance issuers that meet or exceed the [Medical Loss Ratio, or 'MLR'] standards established by the Affordable Care Act, but only requires the notice for the 2011 MLR reporting year, the first year that the MLR rules are in effect, and does not require issuers to include information about the current or prior year MLR. The notice will direct enrollees to the HHS Web site for specific information about issuers' MLRs." (Centers for Medicare & Medicaid Services)
[Official Guidance] Affordable Care Act Implementation FAQs -- Set 9 -- The Summary of Benefits and Coverage
"[Question]: A previous FAQ provided a link where written translations for the SBC template and the uniform glossary would be available in the future. Are these translations available? [Answer]: Written translations in Spanish, Chinese, and Tagalog are now available. Navajo translations will be available shortly." (U.S. Centers for Medicare & Medicaid Services, The Center for Consumer Information and Insurance Oversight)
Employers� Outreach Methods Fail to Engage Employees in Retirement Savings
"Employers and their employees in the U.S. hold different perspectives on how to achieve retirement preparedness through 401(k) plans ... [D]espite efforts by employers to educate workers on the 401(k) offering, most workers remain disengaged and unprepared financially for retirement.... Relatively few 401(k) participants have the desire to manage their workplace savings plan ... [and] many employers are doubling down on outreach efforts that have not been effective:" (Society for Human Resource Management)
[Guidance Overview] DOL FAQs Address Retirement Plan Fee Disclosures (PDF)
"DOL acknowledges that it may be unduly difficult or expensive to bring such disclosures into compliance ... before the Regulations' respective effective dates [so the agency stated that] it generally will take no enforcement action against a covered service provider or plan administrator who has acted in good faith based on a reasonable interpretation of the Regulations and who also establishes a plan for complying with the requirements ... in future disclosures.... The Bulletin provides additional guidance with respect to the following topics:" (Sutherland)
[Guidance Overview] Describing Plan Administration Expenses When Making Participant Fee and Investment Disclosures
"Plan administrators annually must furnish an explanation of any fees and expenses for general plan administrative services (e.g., legal, accounting, recordkeeping), which may be charged against a participant's individual account, as well as the basis on which such charges will be allocated (e.g., pro rata, per capita) to, or affect the balance of, each individual account. The DOL explained that the annual administrative expense disclosure may be expressed in terms of an amount, formula, percentage of assets or a per capita charge, but must be written in a manner calculated to be understood by the average plan participant. How specific the disclosure must be depends on the facts and circumstances of the service and the fee or expense being disclosed." (SunGard Relius)
[Guidance Overview] DOL FAQs Clarify Participant-Level Disclosures, 'Good Faith' Standard for Enforcement Purposes
"The [ERISA section 404(c)] disclosure conditions -- which were effective for plan years beginning after November 1, 2011, and are therefore already in effect for many plans -- generally operate by reference to the participant disclosure rules. With the delay in the initial disclosure date, it was unclear whether the failure to provide the initial disclosures after the effective date of the section 404(c) changes would be considered noncompliance with the section 404(c) rules. DOL has now clarified that a plan need not furnish the participant disclosure information before it must be furnished under the new regulation to maintain section 404(c) status." (Morgan Lewis)
Reviewing Your 401(k) Plan's Hardship Distribution Procedures
"Once the plan document sufficiently provides for hardship distributions, the main traps for the unwary administrator are the failure to follow the terms of the plan and the failure to adequately document the decision to grant (or deny) the request for a distribution. Your documentation of each decision should include: The participant's application with the participant's written representations as to the hardship involved and whether other resources have been exhausted; and Your determinations regarding (i) whether the participant has an immediate and heavy financial need, (ii) whether the need can be met by other resources reasonably available to the participant, (iii) whether the amount to be distributed is not in excess of the amount needed, and (iv) the source of the distribution." (Chang, Ruthenberg & Long PC)
[Guidance Overview] New Q&As in DOL Field Assistance Bulletin 2012-2 Clarify, Expand Fee Disclosure Regs
"In 23 pages, the FAB provides a series of 38 FAQs addressing a variety of topics in the regulation. The answers provide examples and discussion on the disclosure requirements, amplifying many points that were previously unclear. They also set forth new rules, some of them quite surprising to those who have studied the regulation over the last year and a half, as well as some valuable exemptions. Sprinkled throughout is DOL commentary on fiduciary practices. Without a doubt, the FAB will mandate fine-tuning of programs and systems to comply with the new rules." (SunGard Relius)
Restricted Health Insurance Enrollment Periods As an Alternative to Individual Mandates
"[Healthcare Town Hall] recently ran a poll on the best course of action to reduce adverse selection if the PPACA individual mandate is struck down by the Supreme Court. The number one answer was 'use limited enrollment windows to reduce the occurrence of people joining a plan only when they become sick.'" (Healthcare Town Hall)
[Guidance Overview] DOL FAQs Address Retirement Plan Fee and Expense Disclosure Rules
"EBSA is working on a second set of FAQs that focuses specifically on the disclosure rules for covered service providers under ERISA Section 408(b)(2). However, these current FAQs are relevant to covered service providers as they offer guidance on what information covered service providers must give plan administrators to help the administrators comply with their disclosure requirements." (Practical Law Company)
As a Plan Sponsor, Are You Prepared to Provide Fee Disclosures to Participants?
This 39-minute video includes a description of the format of Vanguard"s reporting of its fees as a service provider to its plan sponsor customers, and what Vanguard will be doing to assist its customers with the participant-level fee disclosures. (Vanguard)
[Guidance Overview] Electronic Delivery of Disclosures under the Participant Fee Disclosure Regulation (PDF)
"The interim e-delivery guidance under Technical Release 2011-03R provides more liberal and user friendly options for e-delivery of plan-related information than for investment-related information. To provide all required disclosures using the same e-delivery option one of the two general e-delivery options described ... must be used, however both are complex and challenging to administer." (ING)
[Guidance Overview] How to Protect Your Company's 401(k) Plan Committee under New Service Provider Fee Disclosure Regs
"First, consult with your company's attorney to find out if you are the fiduciary of your company's 401(k) plan. Second, get a fiduciary liability policy before the rule goes into effect July 1. These plans are typically not expensive and can cover all individuals, trustees and board members who act as fiduciaries of the company's retirement plan. Finally, get a new [third-party] administrator for your plan that has low fees and accepts fiduciary responsibilities." (Smart Business)
[Guidance Overview] Final DOL Regs Address Fee Disclosures to Participants in Self-Directed Retirement Plans
"Plan sponsors of covered participant-directed individual account plans should review their summary plan descriptions, plan prospectuses, benefit statements, plan websites and other plan communications to determine what additional information must be provided under the final regulations and how they will comply with the information and disclosure requirement." (Pillsbury)
[Guidance Overview] DOL Issues Final Regs on Pension Plan Service Providers; Health & Welfare Plan Service Providers Next in Line?
"Failure to comply with the final regulations will cause the plan and service provider arrangement to be a prohibited transaction and subject the service provider to certain excise taxes under Code section 4975.... In light of the DOL's intention to include welfare plans under these regulations in the future, it may be wise for service providers and plan fiduciaries to begin reviewing any service provider arrangements under these plans as well." (Pillsbury)
[Guidance Overview] Action Items for Plan Fiduciaries: Handling Fee Disclosures by Service Providers, and Fee Disclosures to Participants
Includes a useful chart of the various deadlines that apply to participant-Level fee disclosures. (Pillsbury)
[Guidance Overview] Tussey v. ABB, Inc. Shows Importance of Implementing Process for Prudent Decision-Making and Following Plan Documents
"This case serves as a reminder to fiduciaries wrestling with decisions that may impact the use of plan assets of the importance of ensuring that they go through a documented process of determining whether the fees incurred by their plan are reasonable. Ensuring that a fiduciary has engaged in a prudent process with respect to fees paid to plan vendors will become even more important when the [DOL's] revised Section 408(b)(2) regulations become effective July 1, 2012." (Miller Chevalier)
[Opinion] ASPPA Letter to EBSA on Asset Allocation Strategies, Model Portfolios and Need for Transitional Relief
"The American Society of Pension Professionals and Actuaries ..., the Council of Independent 401(k) Recordkeepers ... and the National Association of Plan Advisors ... are writing to request that [DOL] provide guidance which clarifies that asset allocation strategies and models are not themselves Designated Investment Alternatives ... under both DOL Regulation Section 2550.408b-2(c) (the '408(b)(2) regulation') as well as DOL Regulation Section 2550.404a-5 (the '404(a) regulation') ... and to provide for a good faith transition period in recognition of the uncertainties that remain in regard to the regulations' application." (ASPPA)
[Official Guidance] Text of Proposed IRS Regulations Pertaining to the Disclosure of Return Information to Carry Out Eligibility Requirements for Health Insurance Affordability Programs (PDF)
"This document contains proposed regulations relating to the disclosure of return information under section 6103(l)(21) of the Internal Revenue Code, as enacted by the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010. The regulations define certain terms and prescribe certain items of return information in addition to those items prescribed by statute that will be disclosed, upon written request, under section 6103(l)(21) of the Internal Revenue Code." (Internal Revenue Service)
Sample Glossary of Investment-Related Terms for Disclosures to Retirement Plan Participants (PDF)
April 26, 2012 version. "The document is organized in two parts. Part 1 covers a broad group of general investment-related terms. Part 2 covers terms that are specific to insurance products." (The SPARK Institute)
[Guidance Overview] Tax Treatment of Employee MLR Rebates Is Clarified
"Plan sponsors are subject to restrictions in handling the MLR rebates. [DOL] issued a Technical Release explaining the analysis and procedures required by ERISA group health plan sponsors. [HHS] issued similar but distinct requirements for non-Federal governmental group health plans. The first round of rebates, based on financial data for 2011, is due from the issuers by August 1, 2012." (Deloitte)
[Guidance Overview] Ninth Circuit Rejects Claim for Equitable Relief under ERISA in Dispute Over Summary Plan Description
"In Skinner, the plaintiffs sued under ERISA, claiming the terms of their SPDs were misleading and that the administrative committee issuing the SPDs failed to provide them with an SPD that was sufficiently accurate and comprehensive. After the Supreme Court's decision in Amara foreclosed their primary theory of relief (damages under ERISA), the plaintiffs sought to obtain equitable relief under ERISA Section 502(a)(3). Specifically, the plaintiffs asked the court to reform the terms of their retirement plan's master documents to be consistent with the terms of the SPD they received." (Ford & Harrison LLP)
[Opinion] Text of Pension Rights Center's Criticism of U.S. Chamber's White Paper on the Private Retirement Plan System
"Like the Chamber, the Center is committed to financial literacy, but financial literacy is not just teaching people about compound interest and asset allocation. It is also about empowering employees and retirees by providing them with timely and plain-English information that helps them understand the terms of their plan the amount of benefits they have earned and how much they are paying in administrative and investment management fees. Hence, [the Center finds] it a bit of a contradiction that the Chamber recommends greater financial education, while at the same time advocating for the reduction or elimination of information -- such as quarterly statements in 401(k) plans -- that is necessary for people to be financially literate." (Pension Rights Center)
[Guidance Overview] Summary of Final DOL Regs on Service Provider Fee Disclosures (PDF)
"The final rules modify the interim rules by providing that frozen 403(b) annuity contracts or custodial accounts that are subject to ERISA will not be considered covered plans and are not subject to the fee disclosure rules [if the plan sponsor] had no obligation to make, and did not make contributions (including employee salary reduction contributions) to such contracts or custodial accounts after January 1, 2009; the contract or account was issued to a current or former employee before January 1, 2009; [and other prescribed conditions are met]." (Prudential)
[Opinion] U.S. Chamber Outlines Path Forward for Private Retirement Benefits
"The Chamber's white paper [titled: 'Private Retirement Benefits in the 21st Century: A Path Forward'] lays out a path to continue the success of the private employer-provided retirement system and increase retirement security for millions of workers. Specifically, it recommends: Encouraging employers to create and maintain retirement plans by growing plan sponsorship among small businesses, streamlining notice requirements and allowing for greater use of electronic disclosures, reforming multi-employer defined benefit funding rules to prevent bankruptcy among small employers, reforming single-employer defined benefit funding rules to allow for greater predictability, and clarifying the hybrid plan rules and regulations." (U.S. Chamber of Commerce)
GAO Report on Defined Contribution Plans: Approaches in Other Countries Offer Beneficial Strategies in Several Areas
"GAO was asked to examine, for selected countries' DC systems, (1) how are service providers overseen by regulatory agencies; (2) what key strategies are used to improve fee disclosure to participants; and (3) what key strategies are used to reduce fees? GAO selected Australia, Chile, Sweden and the United Kingdom based on, among other factors, the importance of the DC plans to the country's retirement system and the use of strategies to address service providers' fees." (Government Accountability Office)
Health Care Remains a Key Concern for Americans; Wellness Near Top of List
"Nearly half (42 percent) of people prefer to receive preventive care appointment reminders via email; however, preference for text messages providing reminders doubled in the past year, from eight to 16 percent. While the use of technology is growing, the research also indicates that more traditional forms of communication such as direct mail and print newsletters are still a valued resource for consumers." (Krames StayWell)
[Guidance Overview] Seventh Circuit Sides with Fiduciaries on Question of Out-of-Network Disclosures
"The dispute in this ... case arose out of the group health plan's refusal to [pay] out-of-network charges of $80,000. The Plaintiff claimed that there was no adequate proof in the record that the providers were out-of-network, and furthermore that, even if they were, the Defendants breached their fiduciary duty to inform him of that material fact." (Health Plan Law)
[Opinion] Statement of Consumer, Labor, Women's and Retiree Organizations Opposing Efforts to Eliminate Paper-Based Disclosures to Retirement Plan Participants
"Receiving clear and accessible information about 401(k) fees and investment options is critical if people are to be able to protect and understand their 401(k) benefits. In our view, [DOL] has already provided employers and financial institutions with sufficient latitude by allowing them to automatically provide information electronically to those people who work with their employer's computer network as an integral part of their day job. This is a compromise we support. But where employees do not use a computer in their everyday work, it must be up to them to decide -- not financial institutions or their employers -- whether they should get this critical information by mail or electronically." (Pension Rights Center)
Preparing Your Employees for a DB Plan Termination
"A DB plan termination involves many questions and issues such as funding, investments, government filings, securing a group annuity contract, data cleanup, and more. But it is equally important to consider how to help participants make this transition. As part of this daunting project, a well-planned and executed participant strategy can help maintain positive employee relations, and, importantly, can also help your participants stay on track for a more secure retirement." (Vanguard)
[Guidance Overview] Compliance Deadlines for Participant Fee Disclosures (PDF)
"To help navigate the participant fee disclosure rules, this Client Letter provides questions and answers about the final rules and includes two sample disclosure charts. One chart is the Model Comparative Chart issued by the DOL with the final rules that demonstrates how to disclose investment-related fees. The other is a sample template we drafted that might be used to comply with the plan-related fee disclosure." (Kelly, Hannaford & Battles P.A.)
[Guidance Overview] Are You Ready to Comply with Rules Requiring Investment and Fee Disclosures to Participants?
"A word of caution: If your plan is being operated as an ERISA section 404(c) plan, such that the plan's fiduciaries are not intended to be responsible for the consequences of participants' investment directions, you must comply with these new rules or run the risk of losing your 404(c) protection." (Chang, Ruthenberg & Long PC)
[Guidance Overview] Early Retirement Supplement Found to Be a 'Protected Benefit' Due to Plan Drafting
"An employer's defined benefit pension plan defined 'accrued benefit' to include early retirement supplemental benefits. However, the plan was amended to eliminate the early retirement supplemental benefit. A participant erroneously received payment of the early retirement supplemental benefit after the amendment and was asked by the employer to repay it to the plan. The employee claimed that elimination of the supplement violated ERISA's 'anti-cutback' rule." (Haynes and Boone)
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