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Ret plans - design


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[Discussion]Mid Year Change from a Safe Harbor Qnec to a Safe Harbor Match
"We have a plan that currently is a safe harbor 401(k) using a QNEC. The plan now wants to change mid year to a safe harbor using a match. I do not believe this is possible, since it reduces the amount of the required QNEC. Notice 2016-16 indicates that changing types of safe harbor plans mid-year is prohibited and uses the example going from a tradition 401(k) to a QACA 401(k). Most literature out there cites this as the only prohibition, but the IRS Notice indicates that this is an example, which would seem to indicate that there are other prohibited changes. Is there anyone out there that has dealt with this question?" (BenefitsLink Message Boards)
Assessing Multiemployer Plans' Capacity for Self-Stabilization (PDF)
12 pages. "Three main options are available to prevent the exhaustion of the [PBGC's] guarantee fund : [1] empower plans to take stronger actions to avoid or delay insolvency; [2] reduce the level of the PBGC's benefit guarantee, and/or [3] increase the revenue flowing into the fund, either through premium increases or by securing additional revenue sources. [This paper focuses on Option One.]" (The Pension Analytics Group)
[Discussion]New Partner Eligibility to 401(k)
"A law firm with one owner currently has a 401(k) with a service eligibility requirement of the next entry date following three months of service, with the entry dates being January 1 and July [1] The law firm will be bringing in two partners who have not been employed before by the law firm, but will become partners immediately. The firm is interested in allowing these two partners to participate in the 401(k) plan immediately, or at least the beginning of the calendar quarter following their employment. It would require a plan amendment and they don't want this change to apply to non partner employees. There is a chance that employees who had worked for the new partners in another law firm could also become employees in this existing law firm who would not be partners, so it opens up a can of worms. The 401(k) plan has no match, so other than administrative fees, there would be no downside to adding employees with a more liberal entry requirement." (BenefitsLink Message Boards)
[Discussion]FICA Replacement Vesting
"We recently took over a FICA Replacement plan. The plan has a 7% employee contribution and a 13% employer contribution. The employer contribution account has a vesting schedule that begins at year 5 with 50% vesting. I was under the impression that at least 7.5% had to be 100% vested. Can you have a vesting schedule?" (BenefitsLink Message Boards)
[Discussion]School District Mergers
"let's say you have school districts A and B. Both sponsor cafeteria plans, which are calendar year plans. The plans have different provisions. Let's further say that the school districts are legally merging on July 1, 2018, into one new unified school district. This merger date is a legal agreement and is set in stone. I don't know what they WANT to have happen -- at this point, only trying to determine what options might be available. What happens to the plans once the merger takes place? Can the plans merge into one plan, but maintain the same provisions for the separate employee populations for the balance of 2018? Alternatively, possibly thinking outside the box, can the elections made for 2018 in Plan A and Plan B specifically state that they are for 6 months only? And then they make new elections, under a new plan sponsored by the new entity? Somewhere in the back of my head, for no reason I can discern, it seems like there is some prohibition against consecutive short plan years in cafeteria plans. But even if true, since as of 7/1/18 there is a new entity, then perhaps this wouldn't apply? Perhaps Revenue Ruling 2002-32 can be relied upon to prohibit any CHANGE in employee elections for the second half of 2018?" (BenefitsLink Message Boards)
California Pension Reform: The San Jose Model
"[In] August 2015, the San Jose city council passed a compromise resolution that replaced Measure B with a scaled down reform; this was approved by voters in November 2016. The provisions of this new pension reform measure should be of keen interest to local reformers everywhere in California, because they survived relentless attacks in court.... San Jose's current unfunded pension liability now stands at just over $3.0 billion. These reforms are estimated to save $1.7 billion over the next ten years." (PensionTsunami)
[Discussion]Control Group with Non-Profit
"Hello, we have a non-profit establishing a safe harbor 401(k) plan. The main director of the non-profit also owns 100% of two other for profit corporations with employees.... Since the director of the non-profit is also a representative of the other organizations by virtue of owning them / being President, etc., I interpret this to be a control group situation between the three organizations. The for profit companies do not have any direct control over or involvement with the non-profit so the client disagrees with my interpretation. Thoughts?" (BenefitsLink Message Boards)
Are 403(b) Plans Evolving Fast Enough?
"403(b) plans are showing improvements in automated plan features ... More than 1 in 5 (21 percent) now offer auto-enrollment, up from just 19 per cent last year. Default deferral percentages at 4, 5 and 6 percent are all higher than last year. And default percentages at 1, 2 or 3 percent all declined. The number of plans offering automatic enrollment at 6 percent more than doubled to now more than 1 in 10 (11.7 percent)." (The Principal Blog)
Assessing Americans' Financial and Retirement Security
16 pages. "45 percent of U.S. households are financially secure and on track for a secure retirement. 20 percent need to take some modest actions to be financially secure. 35 percent of Americans need to significantly improve their financial security.... [S]mall, consistent actions by households can dramatically improve their financial and retirement security in a matter of years." (American Council of Life Insurers [ACLI])
[Guidance Overview] Hurricane Irma Relief; Harvey Relief Expanded
"The IRS has provided the same relief to those affected by Irma as it gave to Harvey's victims, and has announced new defined benefit funding relief for the victims of both disasters. This article ... explain[s] the new announcements, and [notes] that the deadline to contribute 401(k) safe harbor employer contributions is not extended." (S. Derrin Watson, via FIS Relius)
Participants Are Driving a New Era of Menu Design
"For those impending retirement participants there is an increase in certain trends, offering insight into how plan sponsors can prepare investment menus to provide the value and options needed to act in participants' best interest. [1] Participants are more engaged.... [2] Participants' needs have changed.... [3] Participants can take legal action." (Manning & Napier)
Planning for Retirement: Financial Areas of Focus for Empty Nesters
"There are some key steps parents should consider that may help to improve retirement readiness when children leave home. [1] Increase contributions to retirement accounts.... [2] Convert IRA and 401(k) dollars into Roth dollars.... [3] Save more in Health Savings Accounts (HSAs).... [4] Convert IRA assets to HSA assets.... [5] Start planning to maximize Social Security benefits.... [6] Consider the role permanent life insurance can play to reduce risk.... [7] Pay down housing debt.... [8] Engage a financial advisor." (Prudential)
[Discussion] Encouraging Deferred Vested Participants Who Are Past Normal Retirement Date to Start Receiving Payments
"We have a non-trivial amount of deferred vested participants who are well past their NRD. The terms of the plan technically require commencement at NRD (at least as has been explained to me, but that's not really the issue at hand). Ignoring any ramifications of RMDs, have you seen any creative ways to encourage these participants to begin their pension and move into pay status? Letters reminding them of their pension, mailing unsolicited election kits, something else? This is attractive from a potential annuitization/termination perspective because deferred lives are more costly to place with an insurance carrier than an in-pay life. We have made multiple lump sum window offerings without much luck and we have good addresses for substantially all of them." (BenefitsLink Message Boards)
[Discussion] Matching Contributions Made to Separate Plan; Destroys ERISA Exemption?
"If a 501(c)(3) organization sponsors a 403(b) deferrals-only program plus a separate Code section 401(a) qualified plan to which it makes matching and non-elective contributions, is there any defensible argument that the deferrals-only program is exempt from ERISA (and exempt from 5500 and plan audit)?" (BenefitsLink Message Boards)
[Discussion] Effect of Rollover Contributions on 403(b) Plan's Non-ERISA Status
"A 501(c)(3) organization has a non-ERISA deferral-only plan and meets the DOL safe harbor rules. If the plan/investment arrangement permits rollover contributions, will the plan be subject to ERISA?" (BenefitsLink Message Boards)
[Guidance Overview] 403(b) Plans Must Be Universally Available: Is Yours?
"A frequent error occurs when plan sponsors automatically exclude employees working less than full-time from making elective deferral contributions under a 403(b) plan. A 403(b) plan that wants to apply the statutory exclusion for part-time employment must determine the employee's eligibility for the 403(b) elective deferral contributions based on whether the employee is reasonably expected to normally work less than 20 hours per week and has actually never worked more than 1,000 hours in the applicable 12-month period." (EisnerAmper)
[Guidance Overview] IRS Extends Frozen Defined Benefit Plan Relief Through 2018
"Under the extended relief, if the defined benefit plan cannot pass Code Section 410(b) coverage testing on its own, it can be aggregated with nonelective contributions provided under defined contribution plan(s) maintained by the plan sponsor. Plans that are aggregated for coverage testing must also be aggregated for nondiscrimination testing under Code Section 401(a)(4) with respect to the benefits provided to participants covered by the aggregated plans." (Morgan Lewis)
Employee Engagement a Better Measure of Financial Wellness Program ROI
"Maximizing ROI starts with knowing the employee base -- age, career stage and income ranges.... It requires a deeper understanding of workforce psychographics -- how employees think and feel about money ... Employers should ask: What are employees' money habits? How satisfied are they with their current personal financial situation? Do financial concerns affect their family relationships? How much time do they spend worrying about their personal financial situation?" (PLANSPONSOR)
The Impact of Raising Children on Retirement Security
"The cost of raising children could make it harder for parents to save for retirement. On the other hand, if parents offset child-rearing expenses by spending less on themselves, they could still end up well prepared in retirement. The analysis uses the National Retirement Risk Index to look at what impact children actually have on retirement preparedness. The results show that children reduce household wealth and moderately increase the likelihood of retirement risk for older working households." (Center for Retirement Research at Boston College)
Proposed Legislation Would Allow Penalty-Free 401(k) Withdrawals for Victims of Hurricanes Harvey and Irma
"Federal lawmakers are considering a proposal to allow victims of Tropical Storms Irma and Harvey to withdraw money from their retirement accounts to rebuild their homes and lives without incurring penalties. Rep. Kevin Brady, R-Texas, is one of several lawmakers reportedly considering introducing a bill that would tweak the current tax code to aid victims." (USA TODAY)
The State of Consumer Retirement Advice (PDF)
"Respondents reported preferences for receiving advice through email and 1:1 sessions. Least preferred channels included snail mail and annual info sessions.... The majority of respondents (53%) report receiving absolutely no advice on their retirement investments.... Less than half of respondents correctly identified the definition of a fiduciary." (Betterment For Business)
How to Optimize Your Small Business Retirement Plan
"[1] Stay up to date on compliance ... [2] Increase plan effectiveness by lowering fees.... [3] Improve the monitoring of investment options ... [4] Drive better employee participation and engagement ... [5] Make your plan even more tax efficient." (ForUsAll)
[Official Guidance] Text of Federal Retirement Thrift Investment Board Proposed Regs: Blended Retirement System
"The National Defense Authorization Act for Fiscal Year 2016 (NDAA) ... changed the uniformed services' retirement plan from one that relied primarily on a cliff-vested defined benefit to one that blends a reduced defined benefit with enhanced TSP benefits, continuation pay, and lump-sum options. The new retirement system is known as the Blended Retirement System (BRS). This proposed rule implements the enhanced TSP benefits provided by the NDAA." (Federal Retirement Thrift Investment Board [FTIB])
Voluntary Pensions in Emerging Markets
"In pay-as-you-go pension systems, governments are being forced to make reductions in future retirement benefits due to declining birthrates coupled with rising life expectancy rates. Funded state pension systems ... are seeing that current contribution rates are too low to generate adequate income replacement.... [R]apid development and rapid demographic change are putting increasing pressure on alternative sources of retirement income ... Without reform, a large share of the workforce in most emerging markets will reach old age over the next few decades without adequate pensions, personal savings, or children to support them." (Principal Financial Group)
Mid-Year 401(k) Testing -- How to 'Use' and 'Misuse' Projected 401(k) Test Results
"If the sole purpose for running a mid-year test is to use it as a tool to limit your HCEs so that they can scale back their contributions, ... think again. The only thing that this accomplishes is having these employees fail to maximize their contributions. If you don't fail or generate refunds, you're simply not maximizing benefits and you will almost always shortchange the HCEs and they will leave money on the table that could have been in the plan." (Pentegra Retirement Services)
[Opinion] Did the 401(k) Really Kill DB Plans?
"Retiree longevity provided the actuarial math that ultimately doomed the existence of pension plans ... Within the last generation we've seen a new economy emerge -- the Content Economy. This new economy allows workers to quickly more from one project to the next and, likewise, from one company to the next.... Simultaneous to [these] two trends has been the streamlining of American equity markets.... [T]he idea of 'owning your own personal account' seems more approachable to the average employee than the concepts of 'workforce demographics' and 'actuarial assumptions' that underlie the foundation of pension plans." (Fiduciary News)
This Missouri City Just Switched Employees from a 401(k) to a Defined Benefit Plan
"The city of Webster Groves switched from a defined contribution 401(k) plan to a defined benefit pension through the Local Government Employees Retirement System (LAGERS) ... [which is] a statewide public pension system for local government employees in Missouri.... The system is also 95% funded, a clear sign of the strength of the system." (National Public Pension Coalition)
Low Returns and Optimal Retirement Savings (PDF)
32 pages; a working paper. "[The authors] provide a more complex analysis of optimal savings rates that incorporates Social Security, tax rates before and after retirement, actual retirement spending patterns, and differences in expected longevity by income. [L]ower-income workers will need to save about 50 percent more if low rates of return persist in the future, and higher-income workers will need to save nearly twice as much in a low return environment compared to the optimal savings using historical returns." (Pension Research Council, The Wharton School of The University of Pennsylvania)
Investing for Retirement in a Low Returns Environment: Making the Right Decisions to Make the Money Last (PDF)
35 pages; a working paper. "[Y]ounger generations do face substantial challenges, but there are plausible courses of action involving increased contributions and delayed or partial retirement that can provide reasonable income replacement rates in retirement. [The authors] map out the steps that the retirement industry (government, employers, financial services providers) needs to take to support people in following these courses of action, such as providing more flexibility over Social Security." (Pension Research Council, The Wharton School of The University of Pennsylvania)
How Persistent Low Expected Returns Alter Optimal Life Cycle Saving, Investment, and Retirement Behavior (PDF)
22 pages; a working paper. "In the context of a zero return environment, ... workers will optimally devote more of their savings to non-retirement accounts and less to 401(k) accounts, since the relative appeal of investing in taxable versus tax-qualified retirement accounts is lower in a low return setting. Finally, ... people claim Social Security benefits later in a low interest rate environment." (Pension Research Council, The Wharton School of The University of Pennsylvania)
Addressing Disasters and Emergencies, Widespread to Individual (PDF)
"While many plan sponsors will focus on the immediate impact of Hurricane Harvey, plan sponsors might also take this time to plan for the future or to refine existing policies designed to assist employees year-round.... [C]onsider changes that will position your plans and human resources policies to meet workers' everyday needs.... [C]onsider the precedent-setting nature of any extraordinary actions you take today to respond to Harvey -- will you be in position to take similar action in the future?" (Plan Sponsor Council fo America [PSCA])
State-Sponsored Retirement Savings Plans: New Approaches to Boost Retirement Plan Coverage (PDF)
37 pages; a working paper. "This paper describes and evaluates models and features used in emerging state-sponsored retirement saving plans such as Auto IRAs, open Multiple Employer Plans and Marketplaces.... [P]lans that boost coverage most will feature two characteristics: required provision of retirement saving plans by firms and automatic enrollment of eligible workers.... [U]nder current legal and regulatory conditions, Secure Choice is the only model that enables states to require that employers provide a plan." (Pension Research Council, The Wharton School of The University of Pennsylvania)
Basics of Small-Employer Retirement Plan Design (PDF)
"What is the single largest advantage of an employer sponsored, self-administered retirement plan that avoids the retail market? ... Can we have a tax qualified retirement plan without the support of an insurance company or investment broker? ... What about annual administration? ... Can we transfer our Simple IRA accounts to the new plan?" (H.C. Foster & Company)
[Discussion] Proper Testing Age When Aggregating Two Plans?
"DC Plan's NRA = 65; Cash Balance Plan's NRA = 65 + 5. When combining these two plans for testing, is the testing age 65 because there is no uniform normal retirement age, in which case one uses 65? Or is it 65 + 5 because there are different uniform normal retirement ages provided, in which case one uses the latest NRA?" (BenefitsLink Message Boards)
[Discussion] OK to Limit an Alternate Payee's Permitted Forms of Benefit?
"I am looking at a DB plan with a very recent favorable determination letter; by its terms, the plan limits an alternate payee's distribution options under a separate share QDRO to less than what's available to a participant (e.g., the AP can't elect any of the joint and survivor options available to participants). Putting aside the fact that there is a favorable DL, is that permissible?" (BenefitsLink Message Boards)
[Discussion] Plan Document vs. Collective Bargaining Agreement
"We have taken over a plan under which some, but not all participants are covered by collective bargaining agreements. Some, but not all, of the bargained benefit changes have been incorporated into the document, either by amendment or as part of a restatement. For example, a benefit increase for one union and a benefit freeze for another union are nowhere to be found in any version of the document or amendment. Nowhere does the plan document incorporate by reference any of the CBAs. We think this is a problem while an in-house attorney for the former actuary/document provider says it's not a big deal because the CBAs 'trump the plan document.' We think the IRS would disagree with that assertion. Does anyone have direct experience with IRS looking at a plan where the document and CBA do not jibe?" (BenefitsLink Message Boards)
[Discussion] Excluding a Division of Employees from Participation
"Employer (traditional 401(k) plan sponsor) wishes to exclude a division of employees who would be working under a new customer contract, to reduce its costs and submit a low bid in order to win the contract. This would include mostly new employees but also some current employees who already participate in the plan. Could the plan exclude the NEW HIRES from participating? How about amending the plan to prevent the CURRENT employees in this division from accruing additional hours of service? Or require 3 years of service for employees in this division in order to become eligible to participate (currently the plan document requires only 1 month)? Or providing employees in this division with a matching contribution that is lower than the matching contribution being made for other employees?" (BenefitsLink Message Boards)
[Discussion] Can Mortality Table Be Protected?
"A plan is amended to adopt standard PPA lump sum rates and remove an enhanced lump sum basis equal to the 30-Year Treasury Rate minus x% on benefits earned through 12/31/2008. The enhanced lump sum basis is being protected on the 12/31/2008 benefit, including the Mortality Basis which is the Applicable Table incorporated by reference, including any subsequent pronouncements. Can this plan now amend the enhanced lump sum basis in 2017 to state that the mortality table for the enhanced lump sum protection is and will be going forward the 2017 Unisex table? Would an ERISA Section 204(h) Notice be required?" (BenefitsLink Message Boards)
[Opinion] The Rise and Demise of Corporate Pension Plans
"To read the headlines today gives the appearance there's a consensus among retirement policy pundits that 'things would be better if only we had our old pensions back.' Despite these rosy memories, actual history shows, with a few notable exceptions, pensions were never as universal or as lucrative as imagined.... In theory, the traditional corporate pension plan remains as originally advertised. Unfortunately, in practice, today's work environment just can't meet the assumptions of that theory." (Fiduciary News)
The Problem with Using a Funded Ratio to Track Progress Toward Retirement
"The virtue of the funded ratio is that it takes an abstract account balance and relates it directly to a goal or outcome, and can give savers a sense of accomplishment as the percentage slowly and steadily climbs towards 100%. The bad news, though, is that once account balances grow large, the funded ratio itself can become highly volatile as markets move up and down, and the discount rate used to calculate the funded ratio can unwittingly turn into an indirect absolute return benchmark that is difficult to keep up with." (Nerd's Eye View)
[Discussion] Retirement Plan Design for Law Firms
"A number of law firms seem to have 2 separate plans: one for partners and for associates. Why? Isn't it more efficient and less expensive to have all levels of attorneys in one plan?" (BenefitsLink Message Boards)
Impact of Proposed Rule Amendments on the Teacher Retirement System of Texas (PDF)
50 presentation slides. "While TRS does not recommend 403(b) providers or investments, the certification and registration process gives the appearance of TRS endorsement.... [Proposed amendments include:] Require certification application disclosures. Adjust allowable maximum fees, costs, and penalties. Increase company certification and product registration fee from $3,000 to $5,000 and from $3,000 to $10,000 respectively ... Formalize the closed and restricted product list." (Teacher Retirement System of Texas [TRS], via National Tax-Deferred Savings Association [NTSA])
Retirement Plan Participation: The More Things Change, the More Things Stay the Same
"[P]lan participation rates have improved from 65% in 2000 to 79% in 2016. That's a rise of more than 20%.... [M]ore than 20% additional people are saving for retirement in these plans today than were saving just 15 years ago.... In 2016 nearly half of plan sponsors defaulted participants at 4% or more -- double what it was 10 years ago. And 20% of plan sponsors defaulted participants at 6% or more -- three times what it was 10 years ago.... [But it's] striking ... that participation rates for people in plans with voluntary enrollment are pretty much the same today as they were back in 2000." (Vanguard)
Will You Still Need Me When I'm 104? The Challenge of Longer Lifespans
"Life expectancy has been increasing by about one year every five years. A child born in the United States now is projected to live to age 104. Most retirement systems were designed to provide financial support for 10 to 15 years of retirement, and the age thresholds of those systems have not increased nearly enough to account for rising life expectancies. Meanwhile, multiple factors are also making the traditional retirement-plan vehicles less dependable for the future." (InvestmentNews)
Educate Your Employees on Using HSAs In Retirement Planning
"With healthcare open enrollment season quickly approaching, 401k plan sponsors may want to spend some time educating participants on the use of Health Savings Accounts (HSAs). If you offer a High-Deductible Health Plan (HDHP) to your employees, they probably have the ability to contribute to HSAs.... [N]early everyone eligible to contribute to an HSA should max out their HSA contributions each year. Here's why." (Lawton Retirement Plan Consultants)
Generation Z on Track Toward Retirement Success (PDF)
"[S]tandard 401(k) plan practices create obstacles to the retirement success of workforce entrants. Employers eager to attract enterprising workers should consider plan features and communication methods that appeal to an eager Generation Z... On average, Gen Z members believe young workers should save 28% of income for future use. 83% say it's important to save, and 76% want to be more financially educated.... 50% believe it's right to save for retirement in a 401(k) when they have a job, 12% of 22-23-year-olds are already enrolled in a retirement savings plan." (EACH Enterprise)
The World's 300 Largest Pension Funds in 2016
"North America showed the most noticeable annualised growth rate over the last five years, growing by 6.7% during the period. Europe and Asia-Pacific regions showed annualised growth rates of 3.1% and 2.8% respectively. The U.S. continues to hold its position as the country with the largest share of pension assets across the top 300 funds, representing 38.6% spread across 134 funds." (Willis Towers Watson)
[Discussion] 401(k) Plan Entry Date for Employees of Newly Acquired Employer
"Company B, which did not maintain a 401(k) plan, became a wholly owned subsidiary of Company A per an acquisition effective 4/1/16. Company B will adopt Company A's 401(k) plan, and they want to use the coverage transitional rule. So the plan does not have to cover Company B's employees until 7/1/17 -- correct? Plan does not count years of service for eligibility with Company B prior to the acquisition date." (BenefitsLink Message Boards)
[Discussion] Mid-Year Change to Safe Harbor Plan
"Can I do an amendment today to make eligibility in a safe harbor plan immediate, and avoid the need to provide 30 days advance notice? I say yes, because IRS Notice 2016-16 says the new notice period does not apply unless we are changing information in the required content of the safe harbor notice, and eligibility is not required content." (BenefitsLink Message Boards)
[Opinion] Joint Letter to Office of Information and Regulatory Affairs on Proposed Update to Mortality Tables
16 pages. "A thorough economic analysis is needed, with a focus on at least these four major issues: [1] The need for an 18-month deferred effective date. [2] A review of the speculative assumption that mortality will improve on average 1% indefinitely. [3] The introduction of unprecedented volatility into the mortality tables. [4] The erroneous assumption that Treasury must rely on tables prepared by the Society of Actuaries given that an expanded reliance on other sources is statutorily permitted and very much warranted from a practical perspective. There is a need for an announcement immediately that the new mortality tables will not apply for plan years beginning in 2018." (American Benefits Council and Committee on Investment of Employee Benefit Assets [CIEBA])
[Discussion] Automatic Enrollment Date Later Than Participation Date?
"Client has approx. 5,000 employees. Very high turnover within the first 90 days of employment (about 40%). Client permits date of hire enrollment so 401(k) sign-up happens during completion of new hire paperwork. Can automatic enrollment be added to the plan that such that participants become automatically enrolled on the first of the month after their 90th day of employment? Anyone who has made it through the first 90 days and hasn't completed a 401(k) election would be automatically enrolled." (BenefitsLink Message Boards)
[Official Guidance] Text of IRS Notice 2017-45: Extension of Temporary Nondiscrimination Relief for Closed Defined Benefit Plans (PDF)
"This notice extends the temporary nondiscrimination relief for closed defined benefit plans that is provided in Notice 2014-5 ... by making that relief available for plan years beginning before 2019 if the conditions of Notice 2014-5 are satisfied." (Internal Revenue Service [IRS])
Oregon Treasury Seeks to Modify State-Run Retirement Program
"The proposal would create new rules and modify existing rules for the ORSP. Specifically, the rules: [1] clarify the definitions in certain joint employment relationships; [2] allow for non-payroll contributions from participating employees; [3] clarify timing related to contributions; [4] allow for dollar-based contributions; and [5] provide a delegation of authority to the executive director.... The Treasury ... plans to finalize the rules in October." (National Association of Plan Advisors [NAPA])
Commonwealth of Kentucky Pension Performance and Best Practices Analysis: Recommended Options (PDF)
113 pages. "In the aggregate, the Commonwealth of Kentucky's pension plans are among the worst funded in the nation. Without corrective action, the large and growing unfunded liabilities associated with these pension benefits not only threaten the retirement security of plan participants, but they are also eroding the fiscal stability of the state ... [This report presents] ideas and alternatives for improving the long-term security, reliability, and affordability of these benefit programs. These recommended options build on [an] analysis of factors that have led to the current conditions ... Actuarial assumptions; Benefit levels and risk exposure; Funding; Investment practices and approach." (pfm)
Oregon's State-Run Retirement Program Requires Employer Action (PDF)
"Employees of participating employers are automatically enrolled in the Roth IRA through payroll deduction, unless they elect to opt out. Employers who currently offer an employer-sponsored retirement plan to their employees are not required to participate in the OregonSaves program. However, these employers are required to file for a Certificate of Exemption. Action is required by all employers with employees based in Oregon, regardless of the employee's state of residence." (Prudential)
Seventh Circuit: Forum Selection Clause Enforceable Under ERISA
"Inclusion of a forum selection clause in an ERISA plan document is consistent with best practices, and, as the Appeals Court noted in its decision, may reduce plan administrative costs and promote uniformity in plan administration. While a minority of district courts have ruled in favor of participants as it relates to the enforceability of forum selection clauses, the only two Circuit Courts of Appeals to rule on the matter (and the majority of district court cases) have held that these clauses will be enforced by a court of law." [In re Mathias, No. 16-3808 (7th Cir. Aug. 10, 2017)] (King & Spalding)
Most Plan Sponsors Remain Highly Satisfied with Their Plan Advisors, But About One-Third May Be at Risk
"Reducing business costs related to having a plan is the top concern for plan sponsors, with 31 percent citing it as an area of focus. Other important themes for plan sponsors include managing their fiduciary responsibility (23 percent), preparing employees for retirement (22 percent) and the risk of litigation and liability (18 percent).... Plan design activity continues to increase and reached a new high at 92 percent, with plan advisors seen as the primary influencer of these changes. Importantly, 79 percent of plan sponsors reported that participants were satisfied with the changes." (Fidelity)
OregonSaves and Other State-Run Retirement Programs May Require Employer Action (PDF)
"For employers, the state- or municipality-run programs ... may raise several key issues, including: [1] application to an employer that excludes certain workers from the plan ... [2] administrative difficulties for employers that operate in multiple states... [3] coverage of an individual who may be eligible for overlapping or multiple programs ... and [4] the procedures to follow for payroll deduction [IRAs] that include an automatic enrollment or automatic contribution escalation feature, e.g., the date changes occur or become effective." (Milliman)
[Opinion] Small 401(k) Plans in 2021: What's in Store for the Marketplace
"[It's] simply a matter of time before the expanded Multiple Employer Plan features -- soon to be referred to as Pooled Employer Plans -- become a reality. We expect this to happen as early as this year under the new tax bill that is moving through Congress.... Where does that leave advisers and investment providers? Potentially in a great position to dominate the marketplace if they understand the opportunity." (The Platinum 401k, Inc., via LinkedIn)

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