Retirement Plans Newsletter

November 21, 2014

BenefitsLink.com logo EmployeeBenefitsJobs.com logo LinkedIn logo Twitter logo Facebook logo
Get Health & Welfare News  |  Advertise  |  Previous Issues  |  Search

Employee Benefits Jobs


Webcasts and Conferences



[Guidance Overview]

Section 408(b)(2) Disclosures: Dropping a Dime on Delinquent Covered Service Providers
"[T]he threat of reporting [a delinquent Covered Service Provider (CSP) to EBSA] provides leverage to obtain accurate disclosures ... [A Responsible Plan Fiduciary (RPF)] that continues to utilize the services of a delinquent CSP after the 90-day grace period, loses the relief available under the special class exemption, and the ongoing relationships would almost certainly constitute a prohibited transaction.... [It's] clear the EBSA has launched an initiative to examine plan providers and this reporting requirement supports that initiative." (ERISA Fiduciary Administrators LLC)  


[Advert.]

ASPPA's New Business Executives and Managers Conference -- January 2015

Sponsored by ASPPA

The Business Executives and Managers Conference (BEAM), is a must attend for small business TPA owners, executives, managers, and decision makers. This event offers valuable knowledge and ideas in best practices; register today!



[Guidance Overview]

Notes from Intersector Meeting with IRS/Treasury, October 15, 2014 (PDF)
12 pages. Topics discussed: [1] Update from IRS/Treasury; [2] HATFA and IRS Notice 2014-53; [3] Automatic approval for change in actuary; [4] Longevity annuities in defined benefit plans; [5] Update on closed plan nondiscrimination; [6] Multiple Employer Plan Funding; [7] Possible partial sunset of IRC 432 multiemployer zone rules; [8] Notice of funding waiver request; and [9] Hybrid plan final and proposed regulations. (American Academy of Actuaries, Society of Actuaries, Conference of Consulting Actuaries, and ASPPA College of Pension Actuaries)  

[Guidance Overview]

Notes from Intersector Meeting With PBGC, October 15, 2014 (PDF)
7 pages. Topics discussed include: [1] Update from PBGC; [2] Post termination audit; [3] Premium increase; [4] Multiemployer system; [5] Single and multiemployer benefit guarantee; [6] Actuarial assumptions review; [7] Proposed RP-2014/MP-2014 mortality table; [8] Risk-transfer data; [9] HATFA guidance. Also includes PBGC handout: Draft Risk-Transfer Questions for 2015 Premium Filings. (American Academy of Actuaries, Society of Actuaries, Conference of Consulting Actuaries, and ASPPA College of Pension Actuaries)  

[Guidance Overview]

Annuities Make Their Way Into Defined Contribution Plans
"Concerns [had been] raised regarding potential discrimination if a TDF is made available only to a select group of participants within a certain number of years before retirement ... [IRS Notice 2014-66] concludes that a series of TDFs offered in a DC plan in which participation in some TDFs is restricted to participants of certain ages can be treated as a single [benefit, right or feature within the meaning of the regulations under Code section 401(a)(4)], provided that a number of conditions are met[.]" (Thompson SmartHR Manager)  

Recent Developments Suggest Plan Changes That Benefit Both Employers and Employees
"[R]ecent changes in tax law and court decisions in the ERISA area encourage employers to revisit their retirement plans and consider pocketbook and non-pocketbook improvements for the employer and employee alike. [1] Tax aspects of qualified retirement plans can save money for both employers and employees; [2] The benefits of a contractual claims limitation period; [3] The benefits of a contractual venue selection clause; [4] The standard of judicial review in the context of top hat plan benefit disputes; and [5] Fiduciary exception to the attorney-client privilege in plan administration." (Epstein Becker Green)  


[Advert.]

Ready for 2014 year-end retirement plan amendment deadlines?

Sponsored by Mercer Select

Mercer Select members are! With a user-friendly website and daily emails, Mercer Select members stay informed about retirement and other key benefit, comp and HR issues. Sign up for a free demo or guest membership.



Do Tax Incentives Increase 401(k) Retirement Saving? Evidence from the Adoption of Catch-Up Contributions
"Compared with similar workers under age 50, the study finds that contributions increased by $540 more among age-50-plus individuals who had approached the 401(k) tax-deferral limits prior to turning 50, suggesting that the older individuals respond to the expanded tax incentives. For this group, the elasticity of retirement savings to the tax incentive is quite high: a one-dollar increase in the tax-deferred limit leads to an immediate 49-cent increase in 401(k) contributions." (Center for Retirement Research at Boston College)  

Reforming Roth Provisions May Be Key to Improving Retirement Saving Rates for Millennials
"[The author proposes] the following two changes to the Roth provision, effective for all 401k plans: [1] Roth accounts should be required for all sponsors offering a 401k plan.... [2] Roth contributions should be tax deductible up to a $10,000 per year limit, and a lifetime limit of $100,000.... Younger workers would benefit the most, as they would have the longest investment horizon. With these changes, the new objective in retirement saving would be maxing out the $100K as soon as possible in an employee's working life." (Employee Fiduciary)  

The Changing Face of Retirement for Women: Balancing Family, Career and Financial Security (PDF)
48 pages. "Only one-fifth (20%) of women overall feel they are on course to achieve the income in retirement they anticipate they will need. Furthermore, twice this amount (40%) simply don't know whether they are on course or not.... Half (49%) of women in work are not confident they will be able to retire with a lifestyle that they consider comfortable.... Women are most confident about retirement in emerging economies, notably in China, India and Brazil." (AEGON)  

For Women, the Path to a Financially Secure Retirement Is Filled with Many Obstacles
"Asked what words they associate most with retirement, survey respondents used positive words most often, such as 'leisure' (45%) and 'freedom' (39%). However, one-quarter (24%) of women associated retirement with 'insecurity' and almost one-fifth (18%) with 'poverty.' Only 20% of women overall feel they are on course with saving for a secure retirement, but twice this number (40%) simply do not know whether they are on course or not." (PLANSPONSOR)  

The Right Fit: Global Bonds and Defined Contribution Plans
"At a time when US defined contribution plans are seeking to control risk and enhance returns, hedged global bonds can improve outcomes for participants and sponsors.... Many smaller plan sponsors now have the ability to add a global bond offering as a complement to their US bond offering, and to guide participants toward increased allocations to it. Even better, larger plan sponsors have the flexibility to incorporate global bonds directly into their core bond option." (Alliance Bernstein)  

How One Executive Ended Up With $196 Million in an IRA
"Wealthy individuals can get around the annual IRA contribution limit of $5,500 for 2014 ... Company founders can fill retirement accounts with stock that isn't publicly traded. They use low values to stay technically under the contribution limit. After the stock rises in value, they can convert it into something more liquid. The GAO report said IRAs were designed as a retirement savings vehicle, not as a way to shield wealth." (Bloomberg)  

Testimony at Connecticut Hearing on Proposed State-Sponsored Retirement Plan for Private-Sector Employees, November 19, 2014
Page includes links to testimony and presentation slides by Prof. Jacob Hacker, Yale University; Prof. Ian Ayres, Yale Law School; Teresa Ghilarducci, Director of the Schwartz Center on Economic Policy Analysis at the New School; Aaron Friedman, National Practice Leader, Principal Financial, on behalf of the Securities Industry and Financial Markets Association (SIFMA); and a combined presentation on "EZ IRA" by Mark Agustin, Chief Operating Officer, Aspire Financial; Steven Dimitriou, Managing Partner, Mayflower Advisors; and Andy S. Aziz, Managing Director, True Payroll Integration. (State of Connecticut Retirement Security Board)  

[Opinion]

Text of Comments by Investment Company Institute to EBSA on Standards for Brokerage Windows in Participant-Directed Individual Account Plans (PDF)
"We believe the Department's existing guidance pertaining to brokerage windows provides a clear road-map for plan fiduciaries ... We are not aware of any gaps or areas where further guidance from the Department is desired. Nor are we aware of any problems associated with the inclusion of brokerage windows in plans that would necessitate additional guidance or rulemaking by the Department. Before proposing any changes to the existing framework surrounding brokerage windows, it is imperative that the Department first identify a problem in need of a solution." (Investment Company Institute [ICI])  

[Opinion]

Text of Comments by U.S. Chamber of Commerce to PBGC on Proposed Reporting of Distribution Methods, Payment of Premiums (PDF)
"[T]he PBGC intends to revise the 2015 premium filing procedures and instructions to require reporting of certain undertakings to cash out or annuitize benefits for a specified group of former employees. We strongly discourage collection of this information as we see no benefit to it and also because no reason has been offered for it. In addition, it is not clear exactly what type of information will be sought." (U.S. Chamber of Commerce)  

Press Releases

Connect   LinkedIn   Twitter   Facebook

Additional useful links:

BenefitsLink.com, Inc.
1298 Minnesota Avenue, Suite H
Winter Park, Florida 32789
Phone (407) 644-4146
Fax (407) 644-2151

Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

Copyright 2014 BenefitsLink.com, Inc. — but feel free to forward this newsletter without further permission from us, if you do not modify the newsletter in any way (including this lower portion).

All materials contained in this newsletter are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of BenefitsLink.com, Inc., or in the case of third party materials, the owner of that content. You may not alter or remove any trademark, copyright or other notice from copies of the content.

Links to Web sites other than those owned by BenefitsLink.com, Inc. are offered as a service to readers. The editorial staff of BenefitsLink.com, Inc. was not involved in their production and is not responsible for their content.

We are proud of our Privacy Policy.

Thanks for reading this newsletter!