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Ret plans - admin

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Fiduciary Rule Update, August 2017
"The new FAQs state that it would not be 'fiduciary investment advice' to encourage additional contributions to a plan or IRA to 'maximize the value of employer matching contributions or ... to meet objective financial retirement milestones, goals, or parameters based upon the participant's age, time to retirement or other similar measures' provided no specific investment recommendations are made.... Some have suggested that the position being taken by DOL in this new FAQ guidance may conflict with earlier DOL guidance. In any case, the new guidance raises a question: does it extend to a recommendation that a participant not decrease her savings, e.g., not take a cash distribution on termination of employment?" (October Three Consulting)
Alight Solutions 401(k) Index: July 2017 Observations
"July was the lightest trading month for defined contribution plan investors in over five years. Just 0.11% of balances were traded in the month -- the lowest level since April 2012 and the second lowest month since 1997 when the Index was started.... On average, 0.012% of balances traded each day. There was one day of above normal trading." (Alight Solutions)
[Guidance Overview] IRS Finally Allows Use of Forfeitures to Fund QNECs, QMACs, and More
"[T]he IRS has finally accepted the view that ... nonforfeitability conferred by the plan sponsor when such contributions are allocated to accounts is what matters. The new right to use forfeitures for QNECs and QMACs also extends to 401(k) safe harbor matching or nonelective contributions, which must also be fully vested when allocated.... Lingering remaining questions, however, are whether forfeitures could be used for safe harbor 401(k) contributions made for the 2016 year or even whether forfeitures arising in 2016 could be used in 2017." (Jackson Lewis P.C.)
[Discussion] Am I Practicing Law When I Draft a QDRO?
"I don't know why I feel like drafting a QDRO goes over the line, but I think it's because a judge ends up signing the document." (BenefitsLink Message Boards)
[Opinion] American Academy of Actuaries Comments to ERISA Advisory Council on Annual Funding Notice for DB Plans (PDF)
"We have three suggestions for improving the notice: narrow the focus, encourage helpful narrative, and provide generic information on the internet. We have included a sample of the first two pages of the notice incorporating the key suggestions in the appendix to this letter." (Pension Committee, American Academy of Actuaries)
[Discussion] New Pricing for RecordKeeperDirect Platform: Suggestions for Alternatives?
"I understand that the RecordkeeperDirect platform, which was perfect for micro plans, is changing pricing from an average account balance basis to a total assets basis. A plan that was no cost with average assets of $5,000 is now going to be $500 setup for a startup and $750 + $20/participant per year. It's a punch in the gut for us as recordkeepers; it's tough to add those prices to our fees when selling a plan for a handful of people. So...what are the options? I really really hate using individual brokerage accounts and effectively recordkeeping in house, manually." (BenefitsLink Message Boards)
Is Your Retirement Plan Overlooking Required Beginning Dates? (PDF)
"Each retirement plan document defines [required beginning date (RBD)], and is not required to adopt [the] broad regulatory definition.... A plan designed to permit the delay of RBD for non-5% owners (until retirement after age 70-1/2) will find there are non-5% owner participants who work beyond age 70-1/2 that anticipated starting RMDs at age 70-1/2 to supplement their income.... Therefore, a plan designed to delay RBD should include an in-service distribution provision to allow the plan to calculate what a participant's RMD would have been and distribute it when requested, but as an in-service distribution rather than an RMD." (William Grossman, via PenChecks)
Practical Use of the Retirement Plan Reporting Service: Solving Oversight Issues in the Retirement Market
"Before the [Retirement Plan Reporting (RPR) solution provided by the Depository Trust & Clearing Corporation (DTCC)] was available, data gathering involved performing manual data entry from paper statements and custom data exchanges ... The RPR service, launched in 2013, provided the necessary infrastructure to get the data needed to solve for the supervisory challenge. The core data inputs needed to come from the retirement recordkeeping community: plan administrators, banks, trust companies, and custodians.... Over time, as the number of firms both on the advisory and retirement-plan provider side grows, the value extracted by using the service will continue to grow for all participants in the industry." (Investment Company Institute [ICI])
Top Misperceptions About Re-Enrollment
"If I conduct a re-enrollment, my participants will push back.... A re-enrollment is too much of a fiduciary risk.... My plan is well diversified at an aggregate level, so everything is fine.... I added target date funds to the plan's lineup, but there is nothing I can do about my participants not taking action." [Infographic] (J.P. Morgan Asset Management)
[Discussion] Use IRS Correction Procedure for Slightly Late Matching Contribution?
"I have an 5500 audit plan client; they they made one late discretionary matching deposit in 2016. It was 2 weeks late, due to a glitch in their payroll system. The plan document was amended to allow matching contribution made on an a payroll basis, effective 2/1/2016. All their 401(k) deferral deposits are fine. CPA wants the employer to go through SCP or VCP in case the plan ever gets audited by IRS. And he wants us to submit a letter saying this was not an operational failure. Do you agree?" (BenefitsLink Message Boards)
Not Saving More for Retirement? You Should Be Feeling Left Out
"23 percent of all U.S. adults say they've ramped up retirement saving during the past 12 months -- the best showing in six years of polling. And it's younger millennials between ages 18 and 26 who are the most likely (at 30 percent) to say they're saving more.... A strengthening job market and auto-enrollment into company retirement plans have helped millennials get a head start on retirement saving, while older generations have had help fortifying their nest eggs from a steady-as-she-goes economy." (Bankrate)
Economic and Regulatory Environment May Spur Pension Risk Transfers (PDF)
"Among DB plan sponsors who have not yet purchased an annuity, nearly half said they have discussed the strategy with an outside provider or advisor, and one in five said they expect to purchase a group annuity in the next two years.... Fifty-five percent of survey respondents said that if Washington enacts tax reforms that lower corporate tax rates, their companies will very likely use the tax savings to increase funding of their defined benefit pension plan, and execute either a full or partial liability transfer via a group annuity." (Prudential)
[Opinion] Feeding Frenzy Is Averted as DOL Throws Giant Bone to 225,000 Firms That Dabble in the 401(k) Business
"The [DOL's] new guidance on the fiduciary rule just brought the 90% of advisors who dabble in retirement services out of uncharted territory and onto a more rigorously ruled grid -- one that gives them a much better shot at expanding and elevating their 401(k) practices. The [recent] Conflict of Interest FAQs ... also postpone -- perhaps indefinitely -- the day when those 225,000 advisors become so handicapped by new DOL strictures that the 25,000 advisors who specialize in the 401(k) business will be able to feast on those accounts unchecked[.]" (RIABiz)
[Discussion] Former Participant Mistakenly Treated as Nonvested; Retroactively Entitled to Early Retirement Benefit?
"Our company's DB plan states that an employee becomes 100% vested upon termination of employment after age 55 if he has worked at least a year (which is an exception to the 5-year cliff vesting schedule that otherwise would apply). An individual met those requirements but the recordkeeping system did not record him as becoming vested when employment terminated. Now, at age 65 (the plan's normal retirement age), he has contacted the plan administrator and wants back payments as if he had elected early retirement at age 62. The plan responded that he should have applied for his early retirement benefit before he became 62. Is the plan required to make those back payments?" (BenefitsLink Message Boards)
Pension Plan Sponsors Would Reap Savings on Longevity Table Delay
"For plan sponsors, a delay could mean lower required plan contributions, reduced variable rate premiums owed to the [PBGC], and an expanded opportunity to offer cheaper lump-sum payouts to employees.... It's uncertain whether the tables will in fact be delayed from their original Jan 1, 2018, effective date. However, the odds that they will have increased after the federal Office of Management and Budget recently designated the IRS rule as 'economically significant.' " (Bloomberg BNA)
Many Defined Contribution Plan Sponsors Must Annually 'Notice' Their Participants (PDF)
"As the 2017 plan year is nearing its end, it is important to look ahead at the notices that may need to be provided before the start of the 2018 plan year. The chart [in this article] summarizes the annual notice requirements for each of these notices, including timing, recipients, contents, and method s of delivery. Some plan designs may require multiple notices and some of the notices may be combined or packaged together in one mailing." (Prudential)
[Discussion] 'Scrivener's Error' in Document Preparation
"Plan is new comparability design, 3 classes. Adoption Agreement allows allocation for each class to be: [1] a percentage of compensation; [2] a fixed dollar amount; [3] the greater of method 1 or 2. Plan design always was intended to be method 3 (greater of% or $) -- and plan always has used method 3 in operation. When preparing a PPA restatement effective Feb. 1, 2015, we mistakenly checked box 1 instead of box 3. This error was missed when doing the 1/31/2016 year-end valuation, but we've caught it now. Can we simply document the error and correct that page of the Adoption Agreement?" (BenefitsLink Message Boards)
[Discussion] Maximum Profit Sharing Plan Contribution for Sole Proprietor
"I am the TPA for a sole proprietor's plan with a small earned income amount. No other employees in the plan. Owner is over 50 and catch-up eligible. Net earned income after Sec. 164(f) deduction is $23,589.75. The 25% PS contribution is $4,717.95. Plan comp is now $18,871.80. What is he eligible to defer? I'm thinking it would be $18,871.80, but our testing software is reporting 402(g) and 415 limit excess amounts. What am I missing?" (BenefitsLink Message Boards)
Seventh Circuit Upholds ERISA Plan's Forum Selection Clause
"As the Seventh Circuit noted, ... only one other appellate court (the Sixth Circuit, covering Kentucky, Michigan, Ohio, and Tennessee) has ruled on this question ... Moreover, neither the Sixth Court's Smith decision nor this one were unanimous, and the DOL continues to challenge the validity of forum selection clauses.... As a result, employers in jurisdictions outside the Sixth and Seventh Circuits should bear in mind that there is less certainty regarding whether their plan venue provisions will be enforced." [In re Mathias, No. 16-3808 (7th Cir. Aug. 10, 2017)] (Thomson Reuters Practical Law)
[Official Guidance] Text of PBGC Interest Rate Update for Benefits Payable in Terminated Single-Employer Plans, September 2017
"The September 2017 interest assumptions under the benefit payments regulation will be 1.00 percent for the period during which a benefit is in pay status and 4.00 percent during any years preceding the benefit's placement in pay status. In comparison with the interest assumptions in effect for August 2017, these assumptions represent an increase of 0.25 percent in the immediate rate and are otherwise unchanged." (Pension Benefit Guaranty Corporation [PBGC])
Mitigate Qualified Domestic Relations Order Risk with Best Practices
"Major QDRO issues a plan administrator is sure to encounter include: [1] Information: What documents must be made available, to whom must they be given, and in what time frame? [2] Plan procedures: Are procedures necessary? If they are, what must they include? [3] Response disclosures and timeframes: What disclosures must be made and when? [4] Communication: What is the context and/or content when speaking with participants, alternate payees, or attorneys? Recognize that timing is everything." (Findley Davies | BPS&M)
Insurance Agents as Employees? Court Breaks Independent Contractor Precedent
"[The federal district court] held that insurance agents working under independent contractor agreements with an insurer were employees for purposes of pursuing pension and other employment benefits under [ERISA] ... [The decision] ... is notable for its departure from industry practice and prior legal precedent treating many insurance agents as independent contractors. It also notable in that many of the factors the court found convincing are customary, sensible and expected business practices for an insurer ensuring that its agents meet minimum standards for services conducted under its brand." [Jammal v. American Family Insurance Group, No. 13-437 (N.D. Oh. Aug. 1, 2017)] (Eversheds Sutherland (US) LLP, via Lexology)
[Discussion] What Are Consequences of SEP's Failure to Cover Two Eligible Employees?
"We have a client who established a regular SEP but failed to cover their two eligible employees for five years. We've advised the client how to correct using guidance from the IRS Fix-it Guide. What are the consequences if the client does not make the corrections?" (BenefitsLink Message Boards)
Seventh Circuit: Plan's Forum-Selection Clause Is Not Precluded by ERISA (PDF)
"With support from the Secretary of Labor, Mathias argues that forum-selection clauses in plan documents are categorically invalid because they deprive plan participants and beneficiaries of the right to select from the menu of venue options offered by Section 1132(e)(2).... [F]orum-selection clauses promote uniformity in plan administration and reduce administrative costs and in that sense are consistent with the broader statutory goals of ERISA.... The forum-selection clause in the Caterpillar plan chooses from among the venue options listed in Section 1132(e)(2), and nothing in the statute makes that choice invalid. Accordingly, we hold that the plan's forum-selection clause is enforceable." [In re Mathias, No. 16-3808 (7th Cir. Aug. 10, 2017)] (U.S. Court of Appeals for the Seventh Circuit)
[Official Guidance] Text of IRS Notice 2017-43: Weighted Average Interest Rates, Yield Curves, and Segment Rates Applicable for August 2017 (PDF)
"This notice provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates used under Section 417(e)(3), and the 24-month average segment rates under Section 430(h)(2) ... In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under Section 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate under Section 431(c)(6)(E)(ii)(I)." (Internal Revenue Service [IRS])
[Discussion] Estimated 2018 Qualified Plan Limits
"The July CPI was published on Friday, so ... It looks like we can lock in the 2018 limits as follows: DB $220,000; DC $55,000; Compensation $275,000; 401(k) $18,500; HCE $120,000; Key employee $175,000; Catch-ups $6,000; SIMPLE $13,000." (BenefitsLink Message Boards)
Text of 2017 Enrolled Actuary Program Booklet: Basic (EA-1) Examination, Pension EA-2 (Segments L and F) Examinations (PDF)
35 pages. "The EA-1 examination ... covers the mathematics of compound interest and practical financial analysis and the mathematics of life contingencies and practical demographic analysis. The pension (EA-2) examination consists of two segments: The EA-2 (Segment L) law examination ... covers relevant pension laws ... as they affect pension actuarial practice.... The EA-2 (Segment F) examination ... covers the selection of actuarial assumptions and calculation of minimum required and maximum tax-deductible contributions under current pension law, along with the related actuarial mathematics." [Issued July 2017, for Nov. 2017 and May 2018 exams. Rev. July 27, 2017] (Joint Board for the Enrollment of Actuaries [JBEA]; American Society of Pension Professionals & Actuaries [ASPPA]; Society of Actuaries)
Hardship Distributions: Source Documents vs. Documentation of Self-Certification by Participants
"If the third-party administrator is obtaining a summary of the information contained in the source documents, it should provide a report or other access to this data to the employer at least annually, describing the hardship distributions made during the plan year.... Hardship distributions issued in prior years should be reviewed to ensure that either the old rules or the new rules were followed." (Belfint Lyons & Shuman, CPAs)
[Discussion] Reservist Becomes Part-time Employee; USERRA Affects Premium Sharing Rate?
"A reservist has been repeatedly called up for 3- and 4-day/week assignments. He has ceased to satisfy the 'regularly works 30 hours/week' requirement for maintaining health plan coverage, i.e., has become a part-time employee. Must we treat each weekly notice as a new period of service and restart the 30-day clock for retaining the eligible employee premium sharing rate? Can we unilaterally classify this pattern of military service as a continuous period of part-time military service and then convert from the active employee rate to the 102% COBRA rate after the employee has lost the active employee coverage and received 30 days of coverage at the active employee rate?" (BenefitsLink Message Boards)
[Discussion] First Year Audit of a Plan: Handling the 'Comparative' Assets Statement
"When auditing a 401(k) plan for the first year for which an audit is required, how are the financials dated? The Statement of Net Assets Available for Benefit must be comparative, but this is the first year audited (limited scope). Should we include two years on both statements and mark the prior year as 'unaudited'?" (BenefitsLink Message Boards)
[Discussion] Using Electronic Signatures for Plan Documents?
"Is anyone using DocuSign to facilitate the signing of plan documents? Do you like it, did you try it and hate it, let me know!" (BenefitsLink Message Boards)
[Discussion] Are Employees of Excludable Class Part of ACP Test?
"Non-Safe Harbor 401(k) plan has (non-statutory) class exclusion for the employer.match. They are not excluded from salary deferrals. Must the employees of the excluded class be counted in ACP testing?" (BenefitsLink Message Boards)
[Guidance Overview] New Conflict of Interest FAQs Address ERISA Section 408(b)(2) (PDF)
"The 408(b)(2) FAQ will allow some service providers to avoid changing previously provided 408(b)(2) notices and give others additional time to adjust the content of those notices. The contribution FAQs should ease concerns that encouraging retirement savings could lead to fiduciary status.... [T]he guidance could signal the Department's willingness to take a more measured approach to the Fiduciary Rule[.]" (Groom Law Group)
Risk Transfers: The Other Side of De-Risking
"LDI allows the employer to greatly mitigate this risk by investing plan assets in bonds that mirror the securities underlying the discount rate used to value plan liabilities.... Other types of de-risking strategies [include] purchase by the plan of annuities from an insurance company.... [or] payment of a lump sum to participants in lieu of providing the plan's monthly lifetime retirement benefit.... If anecdotal information of bad decisions persist, and with the prodding of participant advocacy groups, it is likely that the DOL or Congress could intervene to restrict the payment of lump sums." (Findley Davies | BPS&M)
[Discussion] Delayed Receipt of QDRO Qualification
"Are there any impacts under ERISA if the QDRO qualification notice was sent to the Alternate Payee using an address on file and not the address on the QDRO, and the AP now says it took several weeks to receive it (because it needed to be forwarded to the new address)?" (BenefitsLink Message Boards)
[Discussion] Staffing of TPA Firms: What Duties Do Your Employees Perform?
"How are your firms structuring your staffing roles? Are you operating with administrators that correspond with their assigned clients and also perform all of the annual valuation work from census scrubbing, to contribution calculations, applicable testing and tax return filings? Or are you structuring your organization with staff assigned solely to client communication and others to day-to-day plan administration functions only? Do you operate with staff that only perform distribution and loan processing functions?" (BenefitsLink Message Boards)
[Discussion] Failure to Pay $5,000 Cash-Outs
"A plan sponsor's DB plan is under IRS audit. Like most plan documents, the plan has a small payment provision in which a single sum payment is made to the participant if the PV of the benefit is under $5,000 at the employment termination date. The plan sponsor failed to pay out several such participants, some as long as 5 years ago. The auditor is requiring interest to be paid, back to the time when payment should have been made. Has anyone heard of this coming up under an audit?" (BenefitsLink Message Boards)
[Guidance Overview] DOL Issues FAQ Addressing Key Concerns Over Fiduciary Rule
"[T]he DOL has clarified that it does not consider service providers to have been informed of a change in fiduciary status on June 9, 2017, the date the fiduciary rules became applicable. In addition, the DOL recognizes the uncertainty caused by its past decisions to delay the fiduciary rules and considers the current circumstances to be beyond the control of service providers. Therefore, service providers who must update their disclosures for the fiduciary element of the service provider disclosure must simply do so as soon as it is practicable. In addition, the DOL FAQ reminds service providers that such amendments may be provided to plans electronically. A chart summarizing these disclosure rules is provided[.]" (Ascensus)
DOL Announces Review of Regs on Disability Claims
"[T]hese rules also apply to ERISA-governed retirement plans that make disability determinations.... While nonqualified retirement plans are exempt from many ERISA requirements, the claims procedures requirement is not one of them.... These new disability claims procedure regulations do not apply to any plan (health and welfare plan or qualified/nonqualified retirement plan) that provides a benefit the availability of which is conditioned on a finding of disability made by a party other than the plan itself." (Porter Wright Morris & Arthur LLP)
[Discussion] Plan Document Gone, So Investment Firm Won't Pay Any Funds
"Client is a surviving spouse. We believe her to be the beneficiary of a large account held in a profit sharing plan. Her husband and his attorney are both deceased. Life insurance salesman who sold them on the nonstandardized plan created by life insurance company is senile. Only papers related to plan date back to 2000. Those include some 5500s. The insurance company can't produce the nonstandardized plan, let alone the adoption agreement. The small 3-person TPA is no longer in business, and no one can be found. The investment firm holding the account says, 'produce the plan document' before it will do anything. What to do?" (BenefitsLink Message Boards)
[Discussion] Participant Married at Date of Death? 'Wife' Says Yes, Kids Say No
"401(k) participant died in 2012, which (as you will see) is about all that's certain. He had named son and daughter as beneficiaries in 2007; the form states that he was not married. But the death certificate states he was married and shows the informant as having the relationship 'wife.' Son and daughter now want the $15,000 account balance. No probate estate has been opened, or is planned. Son says his parents divorced many years ago, that dad was not married when he died, and that mom had been trying to re-marry dad so she could get some of the money. The plan sponsor is trying to get some kind of proof of marriage from the 'surviving spouse,' or an amended death certificate (if the kids can get one) that says he wasn't married at the date of death. Decedent lived in California. We've learned the alleged remarriage might have taken place in another country (El Salvador). How should the TPA handle this situation?" (BenefitsLink Message Boards)
Video Communication: The Master of Employee Benefits Engagement
"[It's] important to remember that your employees are consumers, and their expectations are high. In most all other aspects of their lives, they have immediate access to the information they need to make a purchase, tutorials to help them solve an immediate need or expert advice to support their decision making. They want convenient guidance, and they find that in video.... In fact, 75 percent of people are more likely to watch a video than read." (Benefitfocus)
Seven Ways a Fiduciary Can Follow Procedural Prudence
"[1] Appoint an individual or committee as Plan Administrator.... [2] Prepare a Fiduciary Roster.... [3] Carefully review the principal policy provisions of fiduciary liability insurance you have/are considering.... [4] Be aware of the scope of indemnification coverage.... [5] Make sure investment responsibility has been properly delegated.... [6] Understand that selection of service providers is a fiduciary decision.... [7] Assume your plan will be audited." (The Retirement Plan Blog)
Evaluating Fees, Features and Service Providers for Your 401(k) Plan: Start Planning Soon for 2018
"Most plan sponsors who decide to make 401k plan changes like to have those new features in place by January 1 of the new plan year.... Fees have come down, so it is reasonable to expect a fee reduction for each piece of business you evaluate.... Investment advisers, trustees, custodians, recordkeepers and consultants are constantly adding new features to better serve their clients.... Make sure that you offer a balanced investment option, like target date funds.... Make sure that the investment adviser you work with has signed on to your plan as a fiduciary." (Lawton Retirement Plan Consultants)
[Discussion] Custody and Other Aspects of a 401(k) Plan's 'Outside Asset'
"Our client is merging a existing profit sharing plan into an existing 401(k) plan that uses American Funds [AF]. The 401(k) plan is pretty close to being open architecture although it's bundled. All work is completed and $25 million in assets have been liquidated and are ready to transfer. At the 11th hour we have discovered a small Wells Fargo stable value position that we cannot liquidate because this isn't a plan termination and is only a merger. AF will not hold or record keep but they say it can be held as an 'outside asset' until maturity in 2018. They will include the value in their reporting if provided. Who should be the custodian of this asset, etc.?" (BenefitsLink Message Boards)
FASB Update to Accounting Pension Expense Creates Opportunities (PDF)
"The new changes will bring about much needed simplicity and dampen some of the volatility often associated with these types of plans.... Under the new accounting treatment ... the expected rate of return is no longer an operating expense and thus is de-emphasized. Hence, there is one school of thought that this change will result in more plans moving to a more conservative investment approach." (Findley Davies | BPS&M)
[Official Guidance] Text of PBGC Disaster Relief Announcement 17-07 in Response to Severe Storms and Flooding in Michigan
"This Disaster Relief Announcement provides relief relating to PBGC deadlines ... to Designated Persons [in] Bay, Gladwin, Isabella, and Midland Counties, and the Saginaw Chippewa Tribe within Isabella County." (Pension Benefit Guaranty Corporation [PBGC])
The Board of Directors Responsibility in Addressing ESOP Repurchase Liability
"In order to plan for ESOP repurchase liability, the corporation must quantify the liability and implement a strategy to fund it. These functions are the responsibilities of the board of directors of the corporate sponsor of the ESOP. This article [summarizes] director duties in determining and funding ESOP repurchase liability." (Principal Financial Group)
Benefits Litigation Update, July 2017 (PDF)
Articles include: [1] The importance and difficulty of controlling venue in ERISA litigation; [2] What's with GICs? Is any plan investment reasonable? [3] Fourth Circuit finally finds in favor of 401(k) plans' fiduciaries; [4] The parameters of the church plan exemption under ERISA; [5] Is an SPD enough to enforce subrogation after a medical liability settlement? [6] Support for plan service providers and sponsors in setting plan costs. (Epstein Becker Green)
[Guidance Overview] Administration Looks to Delay or Amend Disability Claims Regs
"The [DOL's] regulatory agenda was updated on July 20 to include a project to 'delay or amend' the final regulations on disability claims procedures. The abstract included for this agenda item indicates that the DOL is reviewing the final regulations for 'questions of law and policy' and schedules a notice of proposed rulemaking for September 2017.... Although the DOL's updated agenda clouds the future of these regulations, it is possible they will take effect as scheduled in the same or similar form." (Willis Towers Watson)
Notes from Meeting of Actuaries 'Intersector Group' with PBGC, May 3, 2017 (PDF)
9 pages. Topics include: ... [1] How does the new administration affect the current priorities? ... [2] What is PBGC's plan with respect to mortality assumptions now that the IRS proposed regulations have been released? ... [3] Is PBGC moving forward with review of all other assumptions (e.g., ERISA Section 4044), and what can be expected on that front? ... [4] Are there any changes in the types of issues PBGC is seeing on audits of plan terminations or premium filings? ... PBGC provided a litany of errors it commonly discovers ... [5] Does PBGC expect to finalize the multiemployer plan merger regulation, and are any changes likely from the proposed regulation? (American Academy of Actuaries, Conference of Consulting Actuaries, Society of Actuaries, and ASPPA College of Pension Actuaries [ACOPA])
Notes from Meeting of Actuaries 'Intersector Group' with IRS, May 3, 2017 (PDF)
10 pages. Topics include: [1] Finalizing mortality table regulations ... [2] Change in funding methods ... [3] Relief for closed DB plans' nondiscrimination testing ... [4] Open issues related to variable annuity and hybrid plan designs ... [5] Adjusted Funding Target Attainment Percentage (AFTAP) certifications ... [6] Hybrid plans with interest credit choice based on age ... [7] Cash balance plans with market-based interest crediting rates. (American Academy of Actuaries, Conference of Consulting Actuaries, Society of Actuaries, and ASPPA College of Pension Actuaries [ACOPA])
[Official Guidance] Text of IRS Disaster Relief Announcement MI-2017-01, for Victims of Severe Storms and Flooding in Michigan
"Victims of the Severe Storms and Flooding that took place beginning on June 22, 2017 in parts of Michigan may qualify for tax relief from the [IRS].... Individuals who reside or have a business in Bay, Gladwin, Isabella, and Midland Counties, and the Saginaw Chippewa Tribe within Isabella County may qualify for tax relief." (Internal Revenue Service [IRS])
[Official Guidance] Text of DOL Conflict of Interest FAQs: 408(b)(2) Disclosure Transition Period, Recommendations to Increase Contributions and Plan Participation (PDF)
"[Three] FAQs provide information on [1] a 'fiduciary status disclosure' issue under the [DOL's] ERISA section 408(b)(2) service provider disclosure regulation ... [2] whether recommendations to plan participants and IRA owners to contribute to or increase contributions to a plan or IRA constitute fiduciary investment advice under the Fiduciary Rule, and [3] whether recommendations to employers and other plan fiduciaries on plan design changes intended to increase plan participation and contribution rates constitute fiduciary investment advice under the Fiduciary Rule." (Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL])
401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2015 (PDF)
60 pages. "On average, at year-end 2015, 66 percent of 401(k) participants' assets were invested in equity securities through equity funds, the equity portion of balanced funds, and company stock.... Nearly 65 percent of 401(k) plans, covering nearly three-quarters of 401(k) plan participants, included target-date funds in their investment lineup at year-end 2015.... A majority of new or recent hires invested their 401(k) assets in balanced funds, including target-date funds.... 401(k) participants' investment in company stock continued at historically low levels.... 401(k) participants were less likely to have loans outstanding at year-end 2015 than at year-end 2014." (Employee Benefit Research Institute [EBRI] and Investment Company Institute [ICI])
[Guidance Overview] The Hardship of Administering 401(k) Plan Hardship Withdrawals
"Many employers contract with a third-party administrator or platform vendor to administer the hardship application and approval process. But, even if outsourced, employers are the ones at risk of tax liabilities or plan disqualification ... In February 2017, the IRS indicated a softening of its views on the hardship paperwork burden; employers may now want to reconsider how they or their vendors process hardships as a result." (Frost Brown Todd LLC)
Could Accrual-Based Accounting Aid Your Company's Retirement Plan?
"Cash-basis accounting means no confirmation of receivables and no confirmation of receivables means no real ability to track contributions on a participant level. This is how errors ... go unnoticed ... Once receivables are properly included in your reporting you'll actually have accurate financial reporting for the year, you'll have more accurate participant counts listed on the Form 5500, and the contributions listed on the Form 5500 will finally tie to your W3 and your corporate Form 1120!" (Benefit Resources Inc.)
Exhaustion of Plan Administrative Remedies: Important Considerations for Plan Fiduciaries
"[T]he Sixth Circuit joined the majority of circuit courts in holding that claims alleging statutory violations of ERISA do not impose the same administrative exhaustion requirements that are applicable to claims seeking to enforce contractual rights under the terms of a plan. By deepening the current split on this issue among the circuit courts, the ruling could have a significant impact ... To address this concern, plan fiduciaries should consider taking several steps[.]" [Hitchcock v. Cumberland Univ. 403(b) DC Plan, No. 16-5942 (6th Cir. Mar. 14, 2017)] (Proskauer's ERISA Practice Center)
[Discussion] Phased Retirement: 'Definitely Determinable' Issue?
"Can a plan document permit the plan sponsor to exercise discretion as to whether an employee is able to participate in phased retirement, without violating the definitely determinable benefits rule?" (BenefitsLink Message Boards)
[Discussion] Can We Still Pay a Benefit That Is Supposed to Be Forfeited?
"Potential IRC Section 409A issue here. We have an employee who is leaving and his benefit will be forfeited because he is not due to vest for a couple years. Can we accelerate vesting for him? Or offer him the same (or modified, even) benefit in a second agreement that is fully vested, and let the current benefit forfeit? I know there are rules pertaining to replacement of one benefit for another, but that doesn't seem to be the case here." (BenefitsLink Message Boards)

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