Retirement Plans Newsletter

February 10, 2017

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Webcasts and Conferences

What is Your Responsibility after Transmitting Your 1094-C Files to the IRS?
February 21, 2017 WEBCAST
UnifyHR

Proposed Section 457(f) Regulations and Their Impact on Compensation at Tax-Exempt Organizations
February 23, 2017 in DC
Worldwide Employee Benefits Network [WEB] - Washington Metropolitan Chapter

ACA Reporting: Lessons Learned & What the Future Holds!
February 28, 2017 in TX
Worldwide Employee Benefits Network [WEB] - Dallas Chapter

What Comes Next? Lessons Learned & Practical Implications of the Fiduciary Rule Under Review
March 1, 2017 WEBCAST
Trucker Huss

4th Annual Emerging Trends in Wellness Conference
April 5, 2017 in MA
Wellness Workdays

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DOL Request for Delay of Fiduciary Rule Has Been Sent to OMB
"[T]he notice to delay the fiduciary rule's April 10 applicability date [has been was filed with OMB].... [According to] Fred Reish, lawyer with the firm Drinker Biddle & Reath, ... the request is for a 180-day delay.... The notice to delay must include public notice and public comment steps before it becomes official ... One source indicated the request proposes a 15-day comment period."
InsuranceNewsNet.com

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The ERISA Industry Committee (ERIC) is the only national association that advocates exclusively for large employers on health, retirement and compensation public policies at the federal, state and local levels. Learn more about ERIC today.


DOL Fiduciary Rule Survives Challenge in Texas (PDF)
"In eighty-one pages of analysis, Judge Lynn methodically rejected each of the Plaintiffs' arguments, concluding that the Fiduciary Rule was validly promulgated. In several instances, Judge Lynn observed that the Fiduciary Rule appeared more consistent with the statutory text than its predecessor[.]" [Chamber of Commerce of the U.S. v. DOL, No. 16-1476 (N.D. Tex. Feb. 8, 2017)]
Groom Law Group

Accounting Treatment of Refund of Excess Contributions
"If a contribution is deposited to a retirement plan trust account, but is later treated as an excess contribution to be returned to a participant, is it still a contribution or did it never happen in the first place? It depends on each party's perspective.... Regardless of which method is used, financial statement auditors should disclose the accounting policy used for corrective distributions, as well as any differences between the reporting on Form 5500 and the financial statements."
Belfint Lyons & Shuman, CPAs

Alternative Pension Plan Designs (PDF)
"A composite plan combines the flexibility and certainty of a 401(k)-style DC plan with the lifetime income provided by a DB pension plan. The contribution is more of a certainty because the composite plan will never have employer withdrawal liability.... A cash balance plan is a DB plan that looks like a DC plan.... The advantages of a cash balance plan are that it involves a sharing of investment risk; it has less volatility than a traditional plan and is generally easy to understand."
United Actuarial Services, Inc.

Annotated List of National DC Plan Record-Keepers
"There are hundreds of companies that provide record keeping services to 401k plans but only 37 that provide service nationally. [This article provides a] complete and current list of national record keepers with the markets they serve by plan size as well as their distribution and service models.... There are hundreds of other regional record keepers that provide good service to their clients and no service model is right for all plans."
401kTV

[Advert.]

ERISA Audits: What We All Knew but Forgot

Sponsored by Lorman and BenefitsLink

Feb. 27 webinar. When the DOL or IRS comes knocking and looking to examine the benefits being offered to employees, it is important for an employer to be knowledgeable and ready.


How Will Pension Plans' New Approach to De-Risking Affect Markets?
"Since 2013 ... the typical plan has seen little if any improvement in funded status ... If and when the cycle turns and funded status improves, however, the way in which plans respond will be different than in the past because of the widespread adoption of de-risking glide paths. In place of a prolonged process of strategy reviews and implementation, the response can be expected to be relatively quick, and largely similar across many plans. This ... could mean that the impact on markets of pension plan de-risking is different than in the past."
Russell Investments

2017 Starts Optimistically with a Funded Status Improvement (PDF)
"The funded status of the 100 largest corporate defined benefit pension plans improved by $9 billion during January ... The funded status deficit narrowed to $316 billion from $325 billion at the end of December 2016 due to investment gains and relatively flat benchmark corporate bond interest rates used to value pension liabilities. As of January 31, the funded ratio rose to 81.6%, up from 81.1% at the end of December."
Milliman

IRA Annuities: Beware of Death Benefit Taxation
"When an immediate annuity is purchased inside an IRA, the contract and the account step out of the regular minimum distribution rules ... Instead, the IRA becomes subject to the special separate RMD regime that applies to defined benefit pension plans and 'annuitized' defined contribution plans."
Morningstar Advisor

House Lawmakers Oppose State-Run Retirement Plan Rule
"Their concerns are that small businesses will be discouraged from offering retirement plans to employees, and that employees put into state-run plans will not have the protections of [ERISA] and will have limited control over their retirement savings."
PLANSPONSOR

[Opinion]

Fiduciary Rule Now in Doubt, But Investors Will Never Be So Dumb Again
"Investors yanked $340 billion from actively managed funds last year, ... and poured $505 billion into index and exchange-traded funds ... 'Clients are savvier about hidden expense ratios and commissions than they were just a few years ago,' the research company Cerulli Associates warned the industry ... A wave of lawsuits forced large employers to seek lower-cost options for retirement plans, encouraging investment companies to improve their products.... A surprisingly broad public debate over the fiduciary rule, which was finalized in 2016, brought attention to how some advisers sell."
Bloomberg

[Opinion]

DOL Pending Fiduciary Rule Remains Flawed, Negatively Impacting the Marketplace
"The industry will endeavor to undertake what its regulators task it to do, but that doesn't mean the rule is without flaws (it isn't), or that the implementation timeline wasn't realistic (it wasn't), or that the implementation timetable demanded by the rule won't have consequences (it will).... The industry has publicly and robustly supported a best interest standard for brokers and dealers who provide personalized investment advice. We believe that when providing advice, regardless in what type of account, it should be in the client's best interest.... The DOL is not the agency to accomplish this task, and its rule will result in less choice for investors[.]"
Kenneth E. Bentsen, Jr., SIFMA President & CEO, in The Hill

Executive Compensation and Nonqualified Plans

Reconsider the Ratio: SEC Acting Chair Calls Pay Ratio Rule into Question
"[Dr. Piwowar] asked for companies to submit detailed comments to the SEC within the next 45 days [describing] challenges that they have faced when preparing to comply with the pay ratio rule, and he asked for suggestions as to how to remedy the situation.... Dr. Piwowar [also] directed the SEC staff to 'reconsider the implementation of the rule based on any comments submitted and to determine as promptly as possible whether additional guidance or relief may be appropriate.' "
Bradley Arant Boult Cummings LLP

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Lois Baker, J.D., President  loisbaker@benefitslink.com
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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