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<< Older News   |  August 31, 2016

Benefits in the News


ERISA Advisory Council to Meet Sept. 27 by Phone
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]
Aug. 31, 2016
"[T]he 183rd open meeting of the Advisory Council on Employee Welfare and Pension Benefit Plans (also known as the ERISA Advisory Council) will be held as a teleconference on September 27, 2016.... The purpose of the open meeting is to discuss reports/recommendations for the Secretary of Labor on the issues of [1] Cybersecurity Considerations for Benefit Plans and [2] Participant Plan Transfers and Account Consolidation for the Advancement of Lifetime Plan Participation."
Watchdog Group Says HHS May Have Bilked Taxpayers
American Media Institute
Aug. 31, 2016
"The funds were collected under a provision of the [ACA], which established a reinsurance program for high-risk individuals. Insurance providers and third-party administrators of group health plans all paid into it. By law, these funds were supposed to go to both insurance plans that take on more high-risk individuals and to the Treasury. Yet when the government took in less money than projected, HHS appears to have taken about $5 billion earmarked for the Treasury and given it to insurance companies instead. Critics charge that this is a government bailout of the insurance industry[.]"
Call Me Maybe? Telemedicine ROI
International Foundation of Employee Benefit Plans [IFEBP]
Aug. 31, 2016
"Telehealth saves an average of $100 a visit, assuming an office visit costs $140 and a telehealth visit costs $40 ... Comparing a telemedicine visit for a minor ailment to an in-person visit, [one] vendor, reports it achieves an average savings of $673 per claim.... [One employer] saved about $192,000 since implementing telehealth, based on an average ER visit costing $1,233 average, urgent care visits at $150 and an e-visit average cost of $50."
The Proposed 2018 Notice of Benefit and Payment Parameters: Part 2
Timothy Jost, in Health Affairs
[Guidance Overview]
Aug. 31, 2016
"This post focuses on changes to benefit, eligibility, and enrollment standards and requirements, primarily as they pertain to qualified health plans (QHPs) offered through the exchanges."
Colleges and Universities Generous with Retirement Contributions
PLANSPONSOR
Aug. 31, 2016
"[According to recent] study of more than 450 private and public higher education institutions ... only 9% of private universities offer a defined benefit (DB) plan and instead utilize defined contribution (DC) plans at 99%. However, most public institutions offer both, with 91% offering both and 87% offering a DB plan.... 77% of all DC plans included contributions almost three times greater than corporate contributions in 401(k) plans. For universities that utilize DC plans, the study finds the median institution contribution to be 9%, with a 25th percentile at 7.1% and a mean contribution of 8.7%."
IRS Eases Rules for Fixing IRA 60-Day Rollover Mistakes
Michael Kitces in Nerd's Eye View
Aug. 31, 2016
"Ultimately, the new process won't resolve every possible scenario where an IRA rollover might be late, most notably where the taxpayer just botches the timing by not paying attention, due to aggressively using the rollover as a temporary personal loan, or due to bad advice from a financial advisor. Nonetheless, for what are likely the overwhelming majority of scenarios, the new self-certification process will make it fast and easy for most individuals to fix legitimately innocent rollover mistakes -- though the IRS still reserves the right to evaluate the situation after the fact, and make an adjustment if the individual was not forthright in the process!"
Employer-Provided Financial Wellness Needs More Than Nudges
Bloomberg BNA
Aug. 31, 2016
"Effective financial wellness programs share characteristics, such as being voluntary and incentive-based. They also typically are supported by employers throughout the year, rather than during open enrollment periods, like other employer-provided benefits."
Innovations in Employee Engagement in Health (PDF)
Employee Benefit Research Institute [EBRI]
Aug. 31, 2016
12 pages. "This ... article summarizes discussion on how employers are trying to increase individuals' involvement in health -- and why it's important, presented at the Employee Benefit Research Institute's 78th policy forum in Washington, DC, on May 12, 2016. The topic was 'Innovations in Employee Engagement in Health' and brought together about a hundred benefits-related experts to discuss a variety of health and retirement topics."
Public Pensions and Social Security, by State: Where Do Employees Get Both?
Burypensions
Aug. 31, 2016
"The theory is that for public employees not covered by Social Security their government pensions should be higher (as should the amount they contribute towards their pension). Since we have the raw data from actuarial reports and have now found a website that lists states where public employees are not covered by Social Security ... we can test that theory. As it turns out the top eight states where retirees receive the largest average payouts are all [on the list of those not covered by Social Security]."
DOL Finalizes, Clarifies, Expands Guidance for State-Run Private Sector Plans (PDF)
Ascensus
[Guidance Overview]
Aug. 31, 2016
"Between the eight states that have enacted legislation and others that are at some stage of program proposal, more than half the states have demonstrated the desire to act to fill this void. In general, these proposals require that all but the smallest employers establish an auto-enrollment payroll deduction IRA savings program if they have no other retirement plan.... If these now-finalized regulations are followed, such state programs will be considered exempt from ERISA and its numerous conditions."
Current Issues Affecting Pension Plan 401(h) Accounts (PDF)
Groom Law Group
[Guidance Overview]
Aug. 31, 2016
"Section 401(h) account overfunding has given rise to numerous issues for plan sponsors.... Recent developments in financial accounting may affect plan sponsors with 401(h) accounts, too. [The authors] briefly discuss both topics ... and recommend that affected plan sponsors work with legal counsel to identify reasonable approaches to maximize the use of 401(h) account assets consistent with the limited guidance currently available."
Navigating the DOL's New Fiduciary Rules: A Game Plan for Broker-Dealers (PDF)
Dechert LLP
[Guidance Overview]
Aug. 31, 2016
22 pages. "This [article] discusses: [1] the definition of 'fiduciary investment advice' and the circumstances under which a broker-dealer may be considered a 'fiduciary' when it provides investment advice to 'Retirement Investors'; [2] the exemptions that may be available to broker-dealers that are fiduciaries; and [3] various compliance considerations for broker-dealers seeking to rely on one or more exemptions under the Final Rules."
Error Messages and the ACA: A Practical Guide to Handling Missing and Incorrect TINs
Fisher Phillips
[Guidance Overview]
Aug. 31, 2016
"Because penalties for failures to report correct information increase as time goes on, it is recommended that you conduct a second solicitation ... sooner rather than later. If a TIN is incorrect but you have engaged in the [prescribed] solicitation procedure, you may be successful in having the penalties waived because you acted in a reasonable manner.... [If] you reported no TINs for employees on ACA forms, you should make the first annual solicitation by October 12, 2016. If you do not receive a TIN after that solicitation, you have to solicit the TIN again by December 31, 2017 to show reasonable cause."
Narrowing Investment Offerings on DC Plan Menus: What's the Right Approach?
Manning & Napier
Aug. 31, 2016
"This paper seeks to explore the various approaches to menu design and identify how plan demographics and participant behavior can aid in determining what may be most appropriate for a specific plan."
The Fiduciary Rule Heads to Court
Miller & Chevalier
Aug. 31, 2016
"NAFA argued that FIAs are typically distributed through independent marketing organizations (IMOs), which are not considered to be 'financial institutions' under the BIC Exemption. According to NAFA, IMOs therefore cannot comply with the BIC Exemption, forcing IMOs out of business and cutting off individual investors from an important retirement product. At the hearing, the DOL proposed four solutions to assist IMOs in complying with the rule: [1] insurance carriers could affiliate with broker-dealers; [2] insurance carriers could establish a captive agent model; [3] insurance carriers could outsource some or all of their monitoring duties under the BIC Exemption to affiliated IMOs; and [4] IMOs may seek individual exemptions to become financial institutions under the BIC Exemption."
Private Pensions Mean Public Risks?
City Journal
[Opinion]
Aug. 31, 2016
"Taxpayers should be worried. State and local pension plans for public sector workers are already exempt from ERISA. Much of the debt they have accumulated is due to the weaker standards under which they operate. Indeed, the states that have gone furthest in studying private pension plans are among those with the most-indebted public-sector pension systems.... The new rules suggest that the Obama administration is shepherding a government takeover of the private retirement market."
California's Smart New Retirement Plan for the Private Sector, and the Industry That Opposes It
The Atlantic
[Opinion]
Aug. 31, 2016
"One would think that the asset-management industry would be ecstatic at the prospect of millions of new customers investing tens of billions of dollars. But mutual-fund companies are only happy to bring in new customers if it's on their terms. The Investment Company Institute ... is complaining that California's plan would cap administrative fees ... at 1 percent of the total funds invested. The ICI warns that the plan could be considerably more expensive to manage, and the state could be on the hook for the difference. This is an act of misdirection."
Tackling the Risks Faced by Retirees (PDF)
Bank of America Merrill Lynch
Aug. 31, 2016
"This paper addresses several key retirement risks that are due neither to poor planning nor to inadequate discipline, and can prove even tougher to address. The paper first describes four important risks that retirees face: longevity, health care, sequence of returns and inflation. It then examines four strategies that can help you mitigate these risks."
Proposed 2018 Notice of Benefit and Payment Parameters: Part 1
Timothy Jost, in Health Affairs
[Guidance Overview]
Aug. 31, 2016
"The proposed rule, preface, and analyses come in at under 300 pages ... Most of the proposals will not go into effect until 2018 or later years, but a few are intended to take effect already in 2017 and a number build on initiatives already underway. The clear focus of the proposed rule is to strengthen and improve the marketplaces."
Interesting Angles on the DOL's Fiduciary Rule, Part 17
FredReish.com
Aug. 31, 2016
"While there could be a number of ways of satisfying the requirements, ... one way -- and probably a good way -- is to have procedures, forms and services for gathering and evaluating the information and for documenting why the analysis of that information results in a recommendation that the transfer (or not transferring) is in the best interest of the IRA owner. Also, while BICE does not specifically discuss the analysis that needs to be made if the adviser will not be providing 'Level Fee Fiduciary' advice to the IRA, the logical conclusion would be that the requirements are the same[.]"
Ohio Association to Offer Self-Funded Health Plan as MEWA for Small Businesses
Crain's Cleveland Business
Aug. 31, 2016
"The Council of Smaller Enterprises (COSE) soon will offer a self-funded, multiple-employer health plan for small businesses through a contract with Medical Mutual of Ohio. COSE received approval from the Ohio Department of Insurance to sponsor the new option. COSE's current fully-insured plans through Medical Mutual are still available. The COSE Health and Wellness Trust ... is a Multiple Employer Welfare Arrangement (MEWA) that brings together businesses with 50 or fewer employees, including sole proprietors, to self-fund their health plans."
Recent SEC Enforcement Actions Prompt Consideration of Whistleblower Carve-Outs
Dodd-Frank.com, a blog by Stinson Leonard Street
Aug. 31, 2016
"The terms of recent settlements should serve as reminder to any company that falls within the SEC's enforcement jurisdiction (a significantly broader group that just public companies) to consider including provisions in severance and confidentiality agreements to explicitly provide that an employee may communicate with the SEC (and other federal agencies) about potential securities law violations without company approval (notwithstanding other confidentiality and disclosure obligations in the agreement)."
The New DOL Fiduciary Rule: Impact on Mutual Fund Distribution (PDF)
Dechert LLP
[Guidance Overview]
Aug. 31, 2016
15 pages. "This [article] addresses the potential impact of the Final Rule on the most common fund distribution channels, including: [1] direct sales; [2] unaffiliated broker-dealers; [3] affiliated broker-dealers; and [4] 401(k) plans and other defined contribution retirement plans."
District Court Dismisses 401(k) Fiduciary Breach Lawsuit Against Chevron
InvestmentNews
Aug. 31, 2016
"The plaintiffs argued that Chevron and members of the 401(k) plan's investment committee breached their fiduciary duties by offering high-cost and underperforming funds, providing a money market fund instead of a stable value fund and paying excessive record-keeping fees to Vanguard Group ... [The judge ruled] that plaintiffs did not raise a 'plausible inference that defendants breached their fiduciary duties and/or duties of loyalty and prudence,' and have until Sept. 30 to file an amended complaint." [White v. Chevron, No. 16-0793 (N.D. Ca. Aug. 29, 2016)]
Safeway Sued by 401(k) Participants Over Target Date Fund Fees
Pensions & Investments
Aug. 31, 2016
"[T]he plaintiffs said Safeway and Empower Retirement breached their fiduciary duties by selecting a target-date fund lineup managed by J.P. Morgan Asset Management (JPMAM) that 'charged excessive fees as compared to readily available alternatives,' the filing said. JPMAM is not a defendant in the lawsuit.... As of Dec. 31, 2014, the Safeway 401(k) Plan had $1.9 billion in assets, according to the company's most recent Form 5500 filing"

<< Older News   |  August 31, 2016


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