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Another Question is Answered in the Who's the Employer Q&A Column
"Four doctors (obstetricians) jointly own a professional corporation that's a normal medical practice. It bills patients and pays a salary to the doctors and staff. But each doctor also gets paid by a local hospital solely for being on call for services at the hospital, getting an annual Form 1099 with respect to that income. If a doctor delivers a baby at the hospital while on call, the professional corporation bills the patient. Can an individual physician adopt a SEP based on his or her hospital income, and also participate in a 401(k) sponsored by the professional corporation?" (S. Derrin Watson, on BenefitsLink)
Public Pension Reporting and Disclosure: The Current State of Practice, and Examples of What Works Well
"[1] A majority of systems follow GFOA reporting standards in producing their Comprehensive Annual Financial Reports, with nearly half of the sample also developing a plain language annual financial report; [2] Virtually all of the systems develop an actuarial valuation (annually), an experience study (at an average of every five years), and have a funding policy produced by the system and/or established in state statute; [3] Active engagement with key stakeholders is a hallmark of systems with robust communications and reporting initiatives; [4] Leveraging social media and/or establishing advisory committees has helped systems garner detailed feedback from their stakeholders." (Center for State & Local Government Excellence)
Overall Public/Private Sector Compensation Gap Has Widened, CBO Finds
"The cost of providing benefits for federal civilian workers from 2011-2015 was estimated to be 47 percent higher on average than for comparable private sector employees. CBO said the biggest factor in the difference in the cost of benefits from was that much of the federal workforce still falls under systems that include a defined benefit pension, a concept that has largely disappeared in the private sector. And due to the uncertain nature of future costs of pension plans, cost differences in the realm of benefits are 'difficult to quantify,' analysts said[.]" (Government Executive)
401(k) Fiduciaries: Is It Time to Hone Your Processes? Part One
"The litigation has widened and deepened the scope of the threat. Processes, as good as they have been in the past, may not be good enough now. Something more may be required that requires plan sponsors to look at a hard look at their existing practices and to improve them if necessary." (Fiduciary Plan Governance, LLC)
[Official Guidance] PBGC Updates My PAA, for Online Premium Filing
"For each plan that is in your My PAA account, you can now view the following information via the Plan Page for all successfully submitted comprehensive premium filings for all e-filing methods: the filing receipt ... and the status of each submitted filing ... For in-process filings that were screen-prepared or imported ... Some of the data may be prepopulated on the screens for your review ... Additional validations and warnings may be displayed[.]" (Pension Benefit Guaranty Corporation [PBGC])
[Guidance Overview] 2017 ERISA Requirements Calendar
"The 2017 Expanded Reporting and Disclosure Requirements Calendar provides who, what, when and where reporting and disclosure information for single-employer pension plans under [ERISA]. Plan administrators can access concise instructions for filing reports with the [DOL], IRS and [PBGC], and for disclosing tax and benefit information to U.S. plan participants, beneficiaries and alternate payees." (Willis Towers Watson)
Reasons to Consider Unbundled Providers for Small 401(k) Plans
"[1] Data reliability.... [2] Costs may not be that much higher.... [3] Unbundled providers ... usually offer higher quality services in their area of expertise.... [4] Partnering with a best-in-class investment advisor who has good working relationships with recordkeepers and TPAs can allow you to find other providers who work well together on your behalf.... [5] An unbundled provider has a lot more flexibility with plan design and consulting to allow you to customize to your needs." (Buddy Horner, of Bronfman E.L. Rothschild, via 401kHelpCenter.com)
IRS Drops New Form 5500 Compliance Questions (For Now)
"[DOL recently filed with OMB] draft copies of the 2017 Form 5500, including the related schedules and instructions.... [T]he 2017 form does not include the new IRS 'compliance' questions.... [This] is a strong indication that the new questions will only be implemented in the future in conjunction with the Form 5500 modernization proposal.... Although slated to be effective for the 2019 plan year, it is quite likely that schedule will be slowed down." (American Society of Pension Professionals & Actuaries [ASPPA])
[Discussion] Handling 'Late' Matching Contributions Under the Terms of a Plan
"Under the terms of the 401(k) plan, the matching contributions should be made by the time for filing of the employer's tax returns, including extensions. And of course, under Code section 404(a)(6), they have to be made by then in order to be deductible on the prior year's tax return. In this case, the calculation of the matching contributions for 2016 got bogged down, and still hasn't happened. But over in finance, they got very efficient and actually filed the corporate return on March 15, without ever requesting an extension. So, it would appear we may have two problems." (BenefitsLink Message Boards)
Electronic Distribution Rules for Benefit Plan Notices (PDF)
"The government does not have one set of electronic delivery rules for all required benefit plan notices.... For some notices, it is fairly easy to meet the electronic delivery requirements. For others, it is easier to just send paper copies. This [article] will recap various required notices. It details the general delivery requirements and spells out electronic delivery rules." (Marsh & McLennan Agency LLC)
Financial Adviser Alert: Pension Insurer Wants Your Expertise (PDF)
"[PBGC] says it's likely to need outside help to tackle large and complex cases, and it's looking for financial advisers to step up. To find qualified advisory firms -- those with specialized knowledge but without conflicts of interest -- the federal pension insurer says it's renewing a program in which it constructs a list of pre-vetted, go-to financial firms for bids on future contracts." (Bloomberg BNA Pension & Benefits Daily)
Considering Roth Elective Deferrals for Your Company's 401(k) Plan?
"Before an employer decides to offer Roth deferrals in their 401(k) or 403(b) plan, careful consideration should be given to what is needed to properly administer the participant accounts.... Who should make Roth 401(k) contributions? ... How does a plan implement Roth elective deferrals?" (Retirement Management Services)
Withholding Requirements for 401(k) Plan Distributions
"Normally, any taxable distribution is subject to a mandatory federal income tax withholding of 20%. However, there are certain circumstances when a participant can choose not to have the 20% federal income tax withholding from their distribution.... Periodic payments ... Nonperiodic payments ... Distributions sent outside the United States to nonresident aliens ... Eligible rollover distributions." (WithumSmith+Brown, PC)
[Official Guidance] Text of IRS Memo for EP Employees on Computation of Maximum Loan Amount Under Section 72(p)(2)(A) (PDF)
"If during an examination you determine that a qualified plan made two or more loans to the same participant during a 1-year period ... Determine if the plan has computed 'the highest outstanding balance' in one of the two ways described in [this memo]. If it has, the requirement under section IRC Section 72(p)(2)(A) is met and no further inquiry need be done." [TE/GE-04-0417-0016, Apr. 20, 2017] (Internal Revenue Service [IRS])
The Annual Retirement Plan Checkup: An Exercise in Preventive Medicine (PDF)
"An annual review may be performed by internal resources, by engaging an independent third party, with the help of your current vendor(s), or by some combination of the three.... [A] thorough plan checkup should include ... [1] Plan design; [2] Plan documentation and operations; [3] Fiduciary appointments and procedures; [4] Investment menu; [5] Participant services; [6] Plan fees." (The PNC Financial Services Group, Inc.)
[Official Guidance] Text of IRS Notice 2017-28: Public Comment Invited on Recommendations for 2017-2018 Priority Guidance Plan (PDF)
"The Treasury Department's Office of Tax Policy and the [IRS] use the Priority Guidance Plan each year to identify and prioritize the tax issues that should be addressed through regulations, revenue rulings, revenue procedures, notices, and other published administrative guidance. The 2017-2018 Priority Guidance Plan will identify guidance projects that the Treasury Department and the Service intend to work on as priorities during the period from July 1, 2017, through June 30, 2018.... Please submit recommendations by June 1, 2017, for possible inclusion on the original 2017-2018 Priority Guidance Plan." (Internal Revenue Service [IRS])
[Discussion] Are Participant Loans Really Taxed Twice?
"The author of the article purports that merely because the loan repayments are made with after-tax dollars, the compensation needed to repay the loan represents a double taxation (i.e., because every dollar of loan payments = $1.33 of comp). But the analysis does not take into account that the $10,000 of pre-tax money was received without paying any taxes." (BenefitsLink Message Boards)
[Discussion] Why Make a Plan-to-Plan Transfer?
"An employee terminates from Employer A and starts working for Employer B. They are unrelated employers. Both plans allow Plan-to-Plan transfers into and out of the plans. What is the benefit of this participant doing such transfer instead of a rollover?" (BenefitsLink Message Boards)
[Discussion] When Does a TPA Need a Form 2848 to Represent a Taxpayer Before the IRS?
"As a former IRS agent I was told only two things could get you fired: [1] Blowing a statute of limitations; and [2] Unauthorized release of taxpayer information. Because of #2 we were taught you don't talk to anyone other then the taxpayer or a person with a valid Form 2848." (BenefitsLink Message Boards)
Another Question is Answered in the Who's the Employer Q&A Column
"Doctor X owns 100% of Corporation A and 100% of a professional corporation (Corporation B). A and B are in a controlled group. A pays compensation to Doctor X, and sponsors a DC plan in which Doctor X participates. B is a 25% partner in Partnership P that provides medical imaging services. Other partners in P are individual doctors or their professional corporations. Assume that an affiliated service group (ASG) exists (consisting of P, B, and the other professional corporations that are partners). A is not part of the ASG. B pays compensation to Doctor X (its sole employee). P sponsors a separate DC plan. B has signed P's plan as a 'participating employer.' The question: must annual additions for Doctor X under the two plans be aggregated to apply the Code 415 limit?" (S. Derrin Watson, on BenefitsLink)
Avoid Costly Litigation Over Beneficiary Designations
"Language in plan documents, employee communications, and Summary Plan Descriptions should be clear and consistent. Plan administrators may also want to regularly (i.e. annually) remind participants on how to update their beneficiaries in light of life-changing events and provide them with the necessary beneficiary designation forms to do so." (Butterfield Schechter LLP)
California Law Barring Enforcement of Discretionary Clauses Not Preempted as to Insured Plan
"Many state insurance laws -- like the California law at issue in this case -- prohibit or restrict discretionary clauses because they make it more difficult for courts to fully address potentially problematic claims practices. The application of these laws to insured plans is relatively clear, but their applicability to self-insured plans is less settled[.]" (Thomson Reuters / EBIA)
Get Your ROI on Employee Benefits Spending
"[M]ost companies hand their new hires a 20-page benefit guide with countless details, benefit jargon, and acronyms, and expect employees to figure it out.... Employees want more communication. They want more information, they want it more frequently, and they want it to be personalized. They expect to receive information through multiple channels, including video, online, mobile, and print.... [T]hey want to be educated consumers who have the information they need to make smarter decisions." (Ron Shah of Hodges-Mace, via CFO)
Managing PBGC Premiums: There Is More Than One Lever
"[T]wo effective levers for reducing headcounts and PBGC premiums that a plan sponsor should strongly consider: [1] Annuity Purchases ... [2] Lump Sum Windows ... [H]owever, these de-risking techniques can cause additional required cash contributions, often much larger than PBGC premium savings." (Findley Davies | BPS&M)
[Opinion] Appleby Retirement Consulting Comment Letter to IRS on Form 5498, IRA Contribution Information (PDF)
"[M]any IRA custodians refuse to report indirect Roth IRA conversions in Box 3 ... of Form 5498, and instead, report such amounts as rollover contributions in Box 2 ... IRA custodians are hesitant to apply the self-certification procedure to indirect Roth IRA conversions that miss the 60- day deadline. Even for those that are inclined to apply the self-certification procedure to indirect Roth IRA conversions that miss the 60-day deadline, they are unsure of whether such amounts should be reported in Boxes 13a, 13b and 13c." (Appleby Retirement Consulting, Inc.)
Text of ERISA Advisory Council Issue Statement: Mandated Disclosure for Retirement Plans -- Enhancing Effectiveness for Participants and Sponsors (PDF)
"The Council ... study will include the following: [1] Are there duplicative disclosure requirements and/or specific disclosures that could be eliminated or combined to relieve the burden on the plan sponsor and/or the participants/beneficiaries? [2] Is the content of the disclosures understandable and are there specific recommendations and examples that can be provided to improve [them]? [3] Are disclosures readable in accordance with federal plain language guidelines? [4] Are the disclosures valuable to users and are the disclosures material to a participant's understanding of the plan and their decision making? [5] When should disclosures be made to participants to optimize the objective of the specific disclosures? [6] Should the disclosures indicate 'Action Required'; 'Action Requested'; 'No Current Action Required'; 'For Information Purposes Only' or other introductory comments to inform participants of their purpose? [7] Would a 'Summary'/Quick Start Guide' to disclosures help achieve the above objectives? [8] What is/are the most effective and efficient methods of design and distribution? [9] How do the above considerations differ between small, medium and large single and multiemployer plans?" (Advisory Council on Employee Welfare and Pension Benefit Plans, Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL])
Cybersecurity: ERISA Advisory Council Provides Tips for Pension and Welfare Plan Sponsors (PDF)
"Every ERISA-governed employee benefit plan has confidential participant data it is required to protect. From the largest pension plan to the smallest vacation fund, employee benefit plans contain sensitive, personal, participant data which needs to be protected from unauthorized breaches. In developing a robust cybersecurity program, trustees will want to work closely with their IT vendor and other plan professionals." (United Actuarial Services, Inc.)
Six Questions to Ask Your Benefits Tech Vendor
"[1] How is your customer support model organized? ... [2] How are upgrades and updates made to the platform? ... [3] Do you offer ongoing training and learning opportunities? ... [4] To what extent do customers have influence over product development? ... [5] How do you measure customer satisfaction? ... [6] Do you have a customer engagement portal?" (Benefitfocus)
Effective Employee Communication: The Benefits of Best Practices
"[M]any employers who spend millions of dollars to offer a benefit or workplace style only spend a surprisingly small amount to ensure that employees understand and appreciate it. Communications -- what you say, how you say it, when you say it, who you say it to -- is vital to inform and influence how employees think about their benefits, workplace, and employer.... Five best practices: [1] Plan before you launch.... [2] Don't sugarcoat bad news.... [3] Stick to your message.... [4] Make sure the managers and supervisors are on board.... [5] Rinse and repeat." (Milliman)
The Challenges of Forgotten Retirement Accounts
"To help prevent lost retirement accounts, employers should adopt a 'You matter to us' approach with all new employees. Within the first few days, have human resources ask the employee if they left behind a retirement account.... To avoid the problems with uncashed checks, employers can take a proactive role by requesting an annual accounting of all uncashed checks from the plan." (PenChecks)
[Discussion] How Does a Last-Day Employment Requirement Apply to a Participant Whose Last Day at Work Was December 30 (not 31)?
"Calendar year plan requires employment on the last day of the plan year in order to share in the allocation of the employer's contribution. The employee's last day at work was December 30, 2016 -- a Friday. Does the participant get an allocation?" (BenefitsLink Message Boards)
[Discussion] Hardship Distribution OK in Order to Prevent Prospective Foreclosure?
"Participant wants a hardship distribution. He's past due on his mortgage. Although it's not yet in foreclosure, he's sure it will be. He wants an amount equal to 6 months of mortgage payments to prevent a foreclosure. Would this be allowed? Or should he request a distribution each month?" (BenefitsLink Message Boards)
Are 401(k) Loans Double Taxed?
"Many financial experts believe that 401k loans are not double taxed. They say that the overall tax treatment of the individual is the same whether he/she takes a 401k plan loan or a loan from somewhere else. An equivalent amount of taxes would be required to pay back a loan from any other lender.... However, that does not change the fact that a participant appears to experience a tax on the principal portion of 401k loans that is more than double his/her incremental tax rate." (Lawton Retirement Plan Consultants)
DOL Continues to Investigate DB Plan Procedures for Locating Participants and Paying Benefits at Mandatory Retirement Age
"The challenges and costs of meeting ERISA and Code compliance and reporting requirements for missing terminated vested participants and retirees entitled to benefits can be significant and difficult ... Defined benefit plans increasingly include an older participant population approaching retirement age, and maintaining effective procedures for communicating with these participants as they approach retirement age is both good fiduciary practice and provides protection in the event of a government agency audit." (Jackson Lewis P.C.)
How to Refinance Participant Loans
"Every so often, a sympathetic plan sponsor who wants to help with its employees who need financing for reasons that don't meet the hardship distribution requirements, endeavors to tackle the complexities of allowing two participant loans and/or offering participant loan refinancing. The rules can be tricky, but they are not difficult for those unafraid to take a couple of extra steps." (Belfint Lyons & Shuman, CPAs)
[Official Guidance] Adopters of Pre-Approved Defined Contribution Plans Get One-Day Deadline Extension
"The IRS has extended the deadline from Sunday, April 30, 2017, to Monday, May 1, 2017, for certain employers to adopt a defined contribution pre-approved plan and apply for a determination letter, if permissible. Notice 2016-03 previously extended the deadline from April 30, 2016, to April 30, 2017, to help employers who wanted to convert their existing individually designed plan into a current defined contribution pre-approved plan based on the 2010 Cumulative List." (Internal Revenue Service [IRS])
[Opinion] Morningstar Comment Letter to DOL on Fiduciary Rule
16 pages. "[Morningstar has] estimated ... possible expenses from class action lawsuits stemming from [BICE[ ranging from approximately $70 million to $150 million annually.... One potential alternative would be for financial institutions to agree to operate under certain uniform prudence standards, including submitting certain data elements to demonstrate compliance with the prudence standard.... [An] auditable big-data system provided by a neutral third party for reviewing individual portfolios across a firm, as well as the reasons advisors recommended rollovers to IRAs and in support of advice within IRAs, could substitute for [BICE] while still protecting investors.... [S]uch a uniform prudence standard and data assembly system will likely be developed in any case to help firms defend against lawsuits." (Morningstar)
Reporting Lifetime Retirement Income for DC Plan Participants Can Be Simple and Effective
"[W]hat [Bob Collie has] long argued for is the addition of a lifetime income equivalent alongside the existing account balance.... A simple and objective way to calculate this lifetime income equivalent is by providing an estimate of how much income an individual's current account balance would buy in the immediate annuity market at today's interest rates for an older version of themselves who has reached retirement.... Legislation reintroduced recently in Congress is the latest attempt to push forward the reporting of lifetime retirement income in 401(k) plans and other defined contribution arrangements." (Russell Investments)
Proposed Form 5500 Package for 2017: Links to Forms, Schedules and Instructions as Submitted for OMB Approval
"The forms and instructions have been updated to reflect the new form year (2017). As noted in the 'Changes to Note' section on the first page of the instructions, revisions include the removal of IRS-only questions, updates to the Authorized Service Provider Signatures to reflect the ability for service providers to sign electronic filings on the plan sponsor and DFE lines, where applicable, in addition to signing on behalf of plan administrators on the plan administrator line, updates to the administrative penalty amounts, clarifications regarding plan name changes, updates to mortality codes in Schedule MB, and a clarification regarding PBGC insurance coverage." [Editor's note: be sure the "All" checkbox is clicked on the target page, in order to see a table with clickable names of the forms, schedules and instructions.] (Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL])
Another Question is Answered in the Who's the Employer Q&A Column
"An employer wants to move out of the 401(k) plan operated by their current PEO and establish a 401(k) plan with more flexibility in design. The plan with the PEO (which is co-sponsored by the employer) is not a safe harbor plan. Would the new plan be a 'successor' plan? Could it be a safe harbor plan?" (S. Derrin Watson, on BenefitsLink)
[Guidance Overview] (Mild) Relief for Safe-Harbor Hardship Administration
"The [memorandum to IRS EP employees] provides for some flexibility to employers and TPAs by allowing them to rely on summaries of information from participants. Employers and TPAs that currently require source documents to substantiate hardship distributions do not need to make any changes to their procedures. While they may want to consider whether collecting summaries might streamline their practices, their current practices assure that documentation is available upon an audit without having to rely on participants' recordkeeping abilities to satisfy any substantiation requests by the IRS." (Trucker Huss)
Communicating with Video
"Are you using video to educate your workforce about their benefits? ... [As] technology evolves, the cost of professionally produced videos is decreasing, making them an affordable communication solution for employers.... More employers have realized that investing in video can save time and money, and keep managers at their desks instead of traveling to deliver the same presentation multiple times." (Willis Towers Watson)
[Guidance Overview] Interesting Angles on the DOL's Fiduciary Rule, Part 42
"The only clear guidance from the DOL about what information needs to be gathered and evaluated is found in Q14 in the DOL's Conflict of Interest FAQs ... Basically, the information includes the investments, expenses and services in the plan and the proposed IRA. But at the end of the FAQ, the DOL explains that those considerations must be evaluated even if the adviser is using regular BIC (as opposed to the Level Fee Fiduciary provision). Accordingly, any fiduciary seeking to meet the best interest standard (in order to satisfy transition BIC) would engage in a prudent analysis of this information before recommending that an investor roll over plan assets to an IRA, regardless of whether the fiduciary was a 'level fee' fiduciary or a fiduciary complying with BIC." (FredReish.com)
[Guidance Overview] New IRS TE/GE Audit Information Document Request Procedures
"The new process will involve more direct communication between the taxpayer and the IRS and, hopefully, more targeted document production requests. The new enforcement procedures, however, will require taxpayers to fully respond to an [information document requests (IDR)] within the stated timeframe or face specific follow-up actions--including proposed adjustments (i.e., taxes), issuance of a summons, or proposed revocation of tax-exempt status." (Morgan Lewis)
Avoiding Beneficiary Befuddlement
"The 11th Circuit decision should be helpful to plan administrators ... [who] may wish to consider some of the following practices and additions to plan language in anticipation of these situations: [1] Giving frequent written reminders to participants about their beneficiary designations; [2] Resoliciting updated beneficiary designations from participants on a periodic basis; [3] Adopting a rule providing for the revocation of spousal designations upon divorce; [4] Adopting a rule specifying a presumption of survival in the event of the simultaneous death of a participant and beneficiary; [5] Adopting a rule that voids a beneficiary designation naming a person who is convicted of the murder of the participant." [Ruiz v. Publix Super Markets, Inc., No. 16-735 (M.D. Fla. Mar. 30, 2017)] (Benefits Bryan Cave)
ERISA Preempts Common-Law Fraud Claims Against Employer for Enrollment Dispute
"Plaintiff's wife died in 2014, and the insurer denied benefits, asserting that no evidence of insurability questionnaire had been submitted for her.... Plaintiff sued Sears, alleging constructive fraud, negligent misrepresentation, and intentional infliction of emotional distress.... The court noted that plaintiff was entitled to life insurance benefits 'only if the ERISA plan provided them.' Because plaintiff's entitlement to coverage would exist only because of the plan, and because Sears had no independent duty to him, ERISA preempted his claims." [Prince v. Sears Holdings Corp., No. 16-1075 (4th Cir. Jan. 27, 2017)] (Robinson & Cole LLP)
[Official Guidance] Text of PBGC Interest Rate Update for Benefits Payable in Terminated Single-Employer Plans, May 2017
"The May 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 April 2017, these interest assumptions are unchanged." (Pension Benefit Guaranty Corporation [PBGC])
Another Question is Answered in the Who's the Employer Q&A Column
"What are the implications of being a statutory employee for unemployment benefit purposes, since the employer is not required to pay into the unemployment fund for these employees?" (S. Derrin Watson, on BenefitsLink)
You Are (or Are Not) a Professional -- and You Are (or Are Not) Covered by the PBGC
"[D]eduction rules for PBGC-covered and non-covered plans are different.... The IRS averred in our client's situation that a financial advisor is a professional, so his plan is exempt from PBGC coverage.... A coverage ruling was requested and ... the PBGC ruled that the financial advisor was a professional.... [T]he PBGC considered significant objective and subjective elements.... [A] search of a Form 5500 database ... found that 68% of the 650 plans in that category had been coded as being PBGC-covered. That is a lot of surprised folks who have been paying premiums, calculating contributions, and operating as if they were PBGC-covered." (Ferenczy Benefits Law Center LLP)
[Official Guidance] Text of IRS Notice 2017-27: Weighted Average Interest Rates, Yield Curves, and Segment Rates Applicable for April 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). The rates in this notice reflect the application of Section 430(h)(2)(C)(iv), which was added by [MAP-21] and amended by section 2003 of [HATFA]." (Internal Revenue Service [IRS])
2016 NAPA Black Book
"A TPA can be a plan advisor's best friend. But it's important to understand the various types of TPAs and how to best leverage them depending on the plan profile and size." [Chart lists 36 TPAs, with number of plans and participants, total assets, and other metrics.] (National Association of Plan Advisors [NAPA])
A Few Considerations During Form 5500 Season (PDF)
"Both the IRS and DOL comment that improperly completed Form 5500s will increase the probability that they may take a closer look at plan matters. [This article includes] a short list of considerations and questions aimed at helping plan sponsor employers avoid government investigation otherwise prompted by a 'wrong' answer on the Form 5500." (The ERISA Law Group)
Data Security: Nine Questions to Ask Your Current or Prospective Benefits Technology Provider
"[1] What is your company's security philosophy? ... [2] Do you have a security audit or attestation report on your company itself (not just a leased data center)? ... [3] Has the system been properly hardened? ... [4] Is all data stored in your database encrypted at rest? ... [5] Is all data in motion inside the network encrypted in transit? ... [6] Does your network provide warm failover as opposed to antiquated tape backups? ... [7] Is multi-factor authentication required for remote users to the internal network? ... [8] Do you have a team of security employees and a different team of compliance employees that concentrate only on those activities? ... [9] How often are your security and compliance systems audited, and by whom?" (Benefitfocus)
[Discussion] OK to Amend Plan to Fully Vest Active Employees But Not Former Employees?
"Can an employer amend its 401(k) plan to fully vest matching contribution account balances for all active employees, while maintaining the existing tiered vesting schedule for terminated participant accounts?" (BenefitsLink Message Boards)
Ninth Circuit Says Violation of DOL Claim Regulations Can Result in a Loss of Deferential Standard of Review
"The appeals court stated that, while Reliance's failure to comply with ERISA's procedural requirements could not on its own justify an award of benefits under the LTD policy, it might alter the standard of review... The Ninth Circuit thus directed the district court on remand to determine whether the procedural violation caused Smith substantive harm such that de novo review of Reliance's decision would be appropriate. Absent a finding of substantive harm, the district court should apply an abuse of discretion standard, while according the procedural violation appropriate weight." [Haber v. Reliance Standard Life Ins. Co., No. 14-9566 (C.D. Cal. Aug. 4, 2016)] (Robinson & Cole LLP)
When Close Is Not Close Enough: A Shift Towards Strict Compliance for ERISA Claim Procedures
"A string of cases in the Second Circuit Court of Appeals is putting ERISA claims administrators on notice that falling short of strict compliance with the [DOL's] claims and appeal regulations may cost administrators a deferential standard of review.... Under the DOL's final regulations governing disability benefit claims, if a plan fails to strictly comply with the new disability claims regulations, a claimant may file a civil suit under ERISA Section 502(a) immediately without exhausting the plan's administrative remedies and the plan administrator's benefit determination will be subject to de novo review.... [T]he recent cases offer some lessons about the types of violations that may cause a plan administrator to lose its deferential standard of review." (Trucker Huss)
How to Save a Bundle on PBGC Premiums
"Company 1 records the contributions as being for the 2017 plan year, while Company 2 records them as being for the 2016 plan year (which is often permissible for contributions made within eight and a half months after the end of the plan year). This simple difference in attribution has reduced Company 2's 2017 variable rate PBGC premiums by $6.8 million.... Suppose that instead of making its $100 million third-quarter contribution on Oct. 15, it accelerates the payment to Sept. 15. Then, it generally can be counted in plan assets as of Jan. 1, 2017, saving an additional $3.4 million in PBGC premiums." (October Three, via CFO)
How to Create an Effective 401(k) Education Program
"Incentivize attendance.... Have a live presenter.... Cover basic investment concepts.... Explain the current investment menu choices.... Use interactive materials.... Use powerful visuals.... Ask participants to anonymously evaluate the presenter.... Sit in on a session.... Offer different sessions for different target groups.... Make individual consultations available after the session.... Develop an education policy statement.... Supplement education with investment advice." (PenChecks)
Lump-Sum Windows: Administrative Tips to Consider (PDF)
"Plan sponsors should consider some helpful administrative tips before launching a lump-sum window project: [1] Identify the eligible population; [2] Clean up the data; [3] Seek legal counsel assistance; [4] Determine the duration of your window; [5] Set a manageable deadline; [6] Deliver an announcement mailing; [6] Anticipate participant inquiries; [7] Create the ultimate lump-sum window packet; [8] Prepare for special circumstances." (Milliman)
Text of District Court Opinion Finding PBGC's Rejection of Revised QDRO to Be Arbitrary and Capricious (PDF)
"[T]he PBGC does not consider 'actuarial value' when assessing whether a new form of benefit will result in increased payments relative to a prior one, as Congress instructed; rather, it ignores that factor altogether and simply assumes that the mere potential for increased benefits is enough to keep a domestic relations order from being qualified. Because that policy, and thus the Appeals Board decision, disregards a basis of comparison required by Congress, it is both arbitrary and capricious, and contrary to the agency's statutory mandate." [Dullea v. PBGC, No. 16-147 (D.D.C. Mar. 20, 2017)] (U.S. District Court for the District of Columbia)

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