Retirement Plans Newsletter

September 22, 2014

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United Retirement Plan Consultants
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Webcasts and Conferences

Industry Update
September 24, 2014 WEBCAST
(Health Partners America)

Pension Plan Funding Strategy in Light of Extended Funding Relief (HATFA)
October 8, 2014 WEBCAST
(Findley Davies, Inc.)

Benchmarking Service Provider Fees and Services
October 16, 2014 in CA
(Western Pension & Benefits Council - Orange County Chapter)

Understanding the Actuaries: Pension Funding Overview for Attorneys and HR Professionals
October 16, 2014 in NY
(Worldwide Employee Benefits Network [WEB] - New York Chapter)

Public and Private Exchanges 2015: Enrollment Trends and Outlook
November 5, 2014 WEBCAST
(Healthcare Web Summit)

Exchanges: Fact or Fiction?
November 12, 2014 WEBCAST
(Conference of Consulting Actuaries)

View All Webcasts and Conferences



[Official Guidance]

Text of PBGC Request for Comments on Proposed Changes to Reporting Procedures for 2015
"PBGC intends to revise the 2015 filing procedures and instructions to: [1] Require reporting of certain undertakings to cash out or annuitize benefits for a specified group of former employees; [2] Change certain premium declaration certification procedures, resulting in greater uniformity among the procedures applicable to different filing methods, and [3] Offer the option for a plan to provide a telephone number specifically for inclusion in PBGC's Search Plan List on PBGC's web site, instead of the number provided for PBGC to contact the plan administrator. PBGC is also intending to update the premium rates and make conforming, clarifying, and editorial changes." (Pension Benefit Guaranty Corporation [PBGC])  


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[Guidance Overview]

IRS Employee Plans News, Issue 2014-15, September 22, 2014 (PDF)
Topics include: [1] Form 5498 -- errors by IRA trustees, issuers and custodians may cause tax trouble for IRA owners; [2] Finding missing plan participants: steps plan sponsors may take to locate missing participants; [3] DOL corner: Updates on brokerage windows and missing participants; and [4] IRS and DOL guide for retirement plan reporting and disclosure issues (chart summarizes plan sponsors responsibilities on Form 5500 annual reports, participant notices and other items). (Internal Revenue Service [IRS])  

[Guidance Overview]

Prohibited Transactions with Parties-in-Interest: Implementing Controls and Procedures
"[T]hree areas related to party in interest transactions ... are subject to regular evaluation by the DOL upon examination.... [1] the timeliness of deposit of employee salary deferrals or loan payments; [2] participant loan programs; and [3] the reasonableness of service provider fees.... [T]his article examines in depth the types of processes and procedures that should be in place in each of those common areas." (McGladrey)  

[Guidance Overview]

Changes Proposed to Allocation Rules for Rollovers
"Under the new rules, all disbursements of benefits from the [section 401, 403(b) or 457(b)] plan to the recipient that are scheduled to be made at the same time are treated as a single distribution no matter whether the recipient has directed that the disbursements be made to a single destination or multiple destinations. If the pretax amount of the aggregated disbursements that are treated as a single distribution is less than the amount of the distribution that is directly rolled over to one or more eligible retirement plans, the entire pretax amount is assigned to the amount of the distribution that is directly rolled over. If the rollover is to two or more plans, then the recipient can select how the pretax amount is allocated among these plans." (Journal of Accountancy)  

[Guidance Overview]

Multiple Retirement Accounts: Can I Take the Total Required Minimum Distribution from Just One?
"You cannot take the RMD for one type of account from a different type of account. You cannot take an employer plan RMD from an IRA or vice versa.... An RMD must be taken from each employer plan that you might have.... If you have more than one 403(b), you can calculate each RMD and then combine them and take them from any 403(b) account you have." (Slott Report)  


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[Guidance Overview]

CalPERS Fact Sheet: Pensionable Compensation Rules (PDF)
"How was pensionable compensation impacted by the Public Employees' Pension Reform Act (PEPRA) of 2013? ... Did PEPRA limit pensionable compensation only to base pay? ... Did the recent action by the CalPERS board add 99 items to pensionable compensation? No.... Is Governor Brown opposed to CalPERS regulations dealing with pensionable compensation? ... Will CalPERS regulations undermine the anti-spiking provisions of PEPRA? No.... Did CalPERS include pensionable compensation in its cost analysis? Yes." (CalPERS)  

Managed Accounts Emerging on the 401(k) Scene for Plan Sponsors
"[P]opularity of managed accounts -- which enable plan sponsors to use portfolio customization in an effort to improve employees" retirement savings -- is on the rise. An alternative to 'set it and forget it' target-date funds -- a mainstay of many plan fund menus -- a number of firms are creating customized portfolios for retirement plan participants based on the standalone funds already available in a 401(k)'s menu and savings data gleaned from a plan's record keeper, or from employees who are interested in signing up." (InvestmentNews)  

Senate Passes Legislation on ERISA 4062(e); Bill May See Action in Lame Duck Session (PDF)
"A bill unanimously passed by the Senate that would clarify what constitutes a 'substantial cessation of operations' under ERISA Section 4062(e) may see action in the House during Congress's lame duck session. Under S. 2511, passed by senators Sept. 16, a substantial cessation of operations would be clarified to ... change the liability trigger from 20 percent of plan participants to 15 percent of all employees of the employer. They also specify that a cessation of operations must be 'permanent.' These clarifications are supported by the business community, which say the regulations proposed to implement this law have been too broad, too expensive and make business planning difficult." (Bloomberg BNA Pension & Benefits Daily, via Keightley & Ashner LLP)  

CalPERS Earnings No Longer Last Among Big Public Pension Funds
"But CalPERS is still underfunded.... With a change in actuarial method, CalPERS is no longer keeping employer contribution rates low by spreading investment gains and losses over 15 years and refinancing debt each year. The goal now is to get to full funding in 30 years. A series of rate increases, one expecting longer lives, will have boosted annual employer contributions to CalPERS roughly 50 percent when phased in over the next few years." (Calpensions)  

Long Live Longevity Annuities
"[In] reality, participants may face an all-or-nothing decision to either buy an annuity or draw retirement income directly from their portfolio (while bearing longevity risk). But prior to retirement the implementation of the [retirement-driven investing] strategy was largely unaffected by that decision. Once longevity annuities enter the picture, however, participants have a third option that has implications both prior to and during retirement. A participant may structure their retirement income by bundling two components: [1] a bond portfolio to fund spending during the first phase of retirement and [2] a longevity annuity to cover spending in the second phase." (NISA Investment Advisors; free registration required)  

Advocates Losing Ground in Broker-Dealer Fiduciary Standard, User Fee Battle
"Advocates of a uniform fiduciary standard have been frustrated by the slow movement on the issue at the SEC, where Chairman Mary Jo White has directed staffers to develop a menu of options for how to address the investor confusion associated with the uneven regulatory models that govern advisors and brokers.... Marilyn Mohrman-Gillis, managing director of public policy and communications at the CFP Board, credits the brokerage lobby for its work in effectively 'communicating that the sky will fall if the fiduciary standard is imposed on broker-dealers.'" (On Wall Street)  

Benefits in General; Executive Compensation

ERISA Did Not Preempt Misclassified FedEx Workers' State-Law Claims for Value of Benefits They Should Have Received
"While ERISA's preemptive reach is fairly broad, cases like this one remind us that not every claim that has some association with an ERISA plan will be found to 'relate to' an ERISA plan in a manner that triggers preemption." [Gray v. FedEx, No. 4:06-CV-00422 (E.D. Mo. Sept. 5, 2014)] (Thomson Reuters / EBIA)  

Final Regs Under Section 162(m)(6) Address Deduction Limit on Compensation Paid by Health Insurance Providers
"Although the final regulations generally adopted the regulations as proposed, they also contained some modifications suggested by commenters, including providing: [1] Additional clarification for the aggregated group rules ... [2] Additional clarification for the types of amounts that will be considered premiums for providing health insurance coverage. [3] Revised approaches to the attribution of deferred compensation payments from account balance plans and nonaccount balance plans. [4] An alternative method for attributing remuneration resulting from the exercise of stock options and stock appreciation rights that are subject to a substantial risk of forfeiture. [5] A flexible approach to the application of the attribution consistency rules after a corporate transaction." (Practical Law Company)  

Press Releases

PSCA Announces the Winners of the 2014 Signature Awards
PSCA [Plan Sponsor Council of America]

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