Retirement Plans Newsletter

January 9, 2017

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Webcasts and Conferences

Looking Ahead to 2017: What to Expect for Employee Benefits and Executive Compensation with a Trump Administration?
January 19, 2017 in GA
Worldwide Employee Benefits Network [WEB] - Atlanta Chapter

Reports from the Front Line: Success Stories and 2017 Challenges for Benefit Professionals
January 26, 2017 in IL
Worldwide Employee Benefits Network [WEB] - Chicago West Chapter

Specialty Drugs: Strategies You Should Know
January 26, 2017 in OH
Worldwide Employee Benefits Network [WEB] - Cleveland Chapter

Public Sector Benefits Institute
February 20, 2017 in FL
International Foundation of Employee Benefit Plans [IFEBP]

Advanced Trustees and Administrators Institute
February 20, 2017 in FL
International Foundation of Employee Benefit Plans [IFEBP]

Setting Up Risk Management Protocols, Defined Benefits Plans vs. Defined Contribution Plans
February 23, 2017 WEBCAST
PRMIA

Wellness Program Compliance Challenges: Rules Under ERISA, HIPAA, ADA, GINA, and the ACA Require New Attention to Design and Administration
February 28, 2017 WEBCAST
HRWebAdvisor

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Congressman Introduces Bill to Delay Fiduciary Rule
"Rep. Joe Wilson, R-S.C., [has introduced a bill] that would delay the [DOL's] fiduciary rule effective date by two years. Wilson's Protecting American Families' Retirement Advice Act calls the DOL rule 'one of the most costly, burdensome regulations to come from the Obama Administration.' ... Delay is one of the most immediate and simplest options available to Republicans while they work on long-range efforts to repeal the rule."
InsuranceNewsNet.com

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Join us as Ilene Ferenczy, JD and Tim McCutcheon, JD give an insider's perspective on how to find answers to your qualified plan compliance questions. Register here for this FREE webcast and earn 1 hour CE credit. Date: Thurs. Jan 26. Time: 2 pm (ET)


2017 Premium Filing Instructions Updated by PBGC
"The guidance outlines how plan sponsors must use the My Plan Administration Account portal to electronically submit premium filings in accordance with PBGC's regulations.... The PBGC document further provides instructions for each data element that must be reported.... According to PBGC, the filing requirements for 2017 are almost identical to the filing requirements for 2016."
PLANSPONSOR

Big Players Pan Proposed Modifications to Form 5500
"Industry participants say the proposed rules offer some improvements, but they add the DOL must perform a better cost-benefit analysis, hold public hearings and reconsider some recommendations.... Some organizations said the DOL proposals didn't go far enough.... However, many large organizations and companies didn't mince words in their criticism."
Pensions & Investments

Six Steps to a 401(k) Plan That's Ready for 2017
"[1] Think about whether you need to make any changes to your plan for 2017.... [2] [M]ake sure any amendments made in 2016 are signed properly and timely.... [3] Ensure your 2016 committee meeting minutes are organized and schedule your 2017 meetings.... [4] Consider whether an authority matrix or other delegation of authority to the right people would make things easier -- and more compliant.... [5] Decide whether you need to do an RFP in 2017 for any third-party provider.... [6] Make sure your payroll system is set up for the new compensation and contribution limits."
Warner Norcross & Judd LLP

Effective Retirement Plan Communications
"[M]ore should be done to put participants at ease and thereby motivate them to better prepare for life after work.... [1] Don't sugar coat the issue of risk but instead make it known that no product is free of uncertainty; [2] Emphasize that calculations are based on assumptions; [3] Hold 'educational sessions that explain to participants why arriving at the assumptions involves a lot of crystal ball gazing' ... and [4] Supply 'gap analyses that show participants how many years they can expect to receive their targeted inflation-adjusted incomes at their current contribution rates.' "
Pension Risk Matters

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Techniques to Enhance Your 401(k) Plans

Sponsored by Lorman and BenefitsLink

Jan. 31 webinar. Fiduciary process and techniques of automatic enrollment, auto escalation, re-enrollment, Qualified Default Investment Alternatives, hiring and monitoring of service providers, benchmarking, investment due diligence, regulatory issues.


J.C. Penney Agrees to Pay $4.5 Million to Settle 401(k) Suit
"The plaintiffs claimed plan fiduciaries knew the company stock ... was an imprudent investment because it was artificially inflated in value, and therefore breached the company's fiduciary duties. The plan held roughly $514 million in the J.C. Penney Common Stock Fund around December 2011, roughly 15% of the $3.5 billion in plan assets at that time ... In November 2011, the stock price was $31 per share, but declined to $9 per share as of September 2013."
InvestmentNews

Recordkeepers Gear Up for Advice Role
"Several large record keepers are expanding their fiduciary duties by providing more advice to defined contribution clients in response to the [DOL's] conflict-of-interest rule that is slated to take effect in April.... Record keepers have walked a tightrope between offering advice and providing education to sponsors and participants.... Company executives acknowledge that additional fiduciary responsibilities will carry additional risk, and they said they are prepared."
Pensions & Investments

IRS Mortality Tables -- Finally!
"Sponsors can expect a 3 to 5% increase in minimum funding liabilities. Depending on the Plan's funding level, this could cause a spike in required contributions.... Plans with AFTAPs just above 80% or 60% could fall below these levels and be subject to restrictions on lump sum distributions.... Underfunded plans that are below the variable cap will see their PBGC premiums increase."
P-Solve LLC

Implications of Recent Market Conditions for Pension Plan Sponsors (PDF)
"Plan sponsors now find themselves in a better position than they likely had expected, which may allow them to achieve their funding goals, or reduce risk, sooner than anticipated. They should consider some of the following strategies that might 'lock in' these gains to potentially avoid a repeat of the roller-coaster ride taken as recently as 2013/2014: Dynamic de-risking ... Annuity purchase ... Accelerated funding ... Non-cash contributions ... Offering a lump sum window to terminated vested participants."
Conduent

DOL Green Lights Retirement Programs Run by Cities and Counties (PDF)
"Recently issued guidance expands the DOL's state-based retirement safe harbor rule to political subdivisions under specified conditions. As such, cities and counties -- in addition to states -- now have the DOL's blessing to require private employers that do not sponsor a retirement savings plan for their entire employee population to facilitate employee participation in a government-run retirement program."
Conduent

A Second California Court Says Public Employee Pension Set at Hire Can Be Cut
"A second appeals court panel has unanimously ruled that the public pension offered at hire can be cut without an offsetting new benefit, broadening support for what pension reformers call a 'game changer' if the state Supreme Court agrees.... The two appeals court rulings are contrary to previous rulings known as the 'California rule': The pension offered at hire becomes a vested right, protected by contract law, that can only be cut if offset by a comparable new benefit, erasing any savings." [Cal Fire Local 2881 v. California Public Employees' Retirement System (CalPERS), No. A142793 (Cal. Ct. App. Dec. 30, 2016)]
Calpensions

Dallas Police and Fire Pension Members May Have to Pay Back Funds
"The city has agreed to put in an additional billion dollars over 30 years, but they're proposing a series of bitter pills to make up the rest of the nearly $4 billion shortfall. The bitterest pill: A proposal to take back all of the interest police and firefighters earned on Deferred Option Retirement accounts, or DROP. That would amount to an additional billion dollars saved."
WFAA

Four Keys to Winning the Financial Security Game
"As individuals get close to retirement or reach retirement, their financial priorities generally shift somewhat. While they still must grow their assets (generally by investing them), they must also protect their (now presumably much more significant) assets to make sure that they last for the rest of their lives.... In addition to possibly investing their assets more conservatively than younger individuals, retirees and near-retirees will generally select different forms of insurance than younger individuals to protect against relevant risks."
Ken Steiner, FSA Retired

[Opinion]

Fiduciary Standard vs. Suitability Standard: The 'Gotcha' That Won't Go Away
"While there are those that try to confuse the issues with regard to fiduciary prudence and/or suitability, ... two simple questions help to clarify the issues for both financial/investment advisers and securities attorneys. [1] Is an investment that has consistently failed to produce a positive incremental return for an investor a prudent investment and/or suitable for any investor, given the opportunity costs it produces relative to comparable investment options? [2] Is an investment whose incremental costs have consistently exceeded the investment's incremental returns a prudent investment and/or suitable for any investor, given the financial losses it produces relative to comparable investment options?"
The Prudent Investment Adviser Rules

Benefits in General

[Guidance Overview]

New ERISA Disability Rules Look to Level Playing Field for All
"Besides requiring an explanation for disagreement with treating doctor opinions, the regulations speak to situations where the Social Security Administration issues an award of disability benefits while the benefit plan reaches a contrary determination. Although no deference to a favorable Social Security determination is required, the regulations obligate benefit plans to provide "a more detailed justification [for reaching a different conclusion] ... in a case where the SSA definitions were functionally equivalent to those under the plan."
DeBofsky & Associates, P.C.

Text of Comment Letters to DOL on Proposed Revision of Form 5500 and Schedules
These letters were submitted in response to DOL's request for comments on proposed revisions to Form 5500 and its schedules, and to proposed changes to the regulations pertaining to them. Deadline for submission of comment letters was Dec. 5, 2016.
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

Executive Compensation and Nonqualified Plans

Top Priorities of New Administration for Executive Compensation Issues
"The initial blueprint for Republican Dodd-Frank Reform efforts is the Financial CHOICE Act, passed by the House Financial Services Committee in the fall of 2016, which is not a full repeal but a comprehensive revision of the massive financial reform law. Expect further efforts to pass the Corporate Governance Reform and Transparency Act, which would create a separate SEC-centered regulatory regime over proxy advisory firms, which includes an annual reporting requirement and conflict of interest disclosures."
HR Policy Association

Press Releases

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David Rhett Baker, J.D., Editor and Publisher  davebaker@benefitslink.com
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BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2017 BenefitsLink.com, Inc. 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 those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.

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