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<< Older News   |  December 12, 2017

Benefits in the News

CRS Report: Resources for Frequently Asked Questions on the Affordable Care Act (PDF)
Congressional Research Service [CRS]
[Guidance Overview]
Dec. 11, 2017
40 pages. "This report provides resources to help congressional staff respond to constituents' frequently asked questions about the law. The report lists selected resources regarding consumers, employers, and other stakeholders, with a focus on federal sources. It also lists CRS reports that summarize the ACA's provisions." [Report R43215, updated Dec. 1, 2017]
EU Launches New Association to Encourage Cross-Border Pension Arrangements (PDF)
Groom Law Group
Dec. 11, 2017
"It has been a long-term goal of many at the European Commission (EC) and its agencies to promote cross-border pension arrangements within the EU, to promote the mobility of the European Union (EU) labor market, reduce costs and encourage savings.... For those employers who are interested in rationalizing their pension plans within the EU, some recent developments, including a new alliance to support cross -border pensions, may make such efforts more possible."
Retirement's Revolving Door: Why Some Workers Can't Call It Quits
Kaiser Health News
Dec. 11, 2017
"39 percent of Americans 65 and older who are currently employed had previously retired. And more than half of those 50 and older who are not working and not searching for work said they would work if the 'right opportunity came along' ... This isn't about older folks returning to work because they need the dough. This is about older folks returning to work because they miss the challenges, the accomplishments and, most important, the collegiality."
Buy Bitcoin in Your Retirement Fund? Only If You Think Riding a Rollercoaster Without a Safety Harness Is a Good Idea
The Washington Post; subscription may be required
Dec. 11, 2017
"Jack Bogle: 'Did I make myself clear? Bitcoin has no underlying rate of return. You know bonds have an interest coupon, stocks have earnings and dividends. There is nothing to support Bitcoin except the hope that you will sell it to someone for more than you paid for it. Bitcoin may well go to $20,000, but that won't prove I'm wrong. When it gets back to $100, we'll talk.' "
Judge Rules Prudential Violated ERISA with Interest-Bearing Life Insurance Accounts
The Legal Intelligencer
Dec. 11, 2017
"A federal judge overseeing a putative class action against Prudential Insurance Co. has ruled that the company violated ERISA by using interest-bearing bank accounts to hold life insurance money instead of paying beneficiaries directly.... The plaintiffs were beneficiaries of deceased workers employed by JPMorgan and Con-way Inc." [Huffman v. The Prudential Ins. Co. of America, No. 10-5135 (E.D. Penn. Dec. 7, 2017)]
Excessive Fee Suit Targeting Fujitsu Results in $14 Million Settlement
Dec. 11, 2017
"The lawsuit contended that among defined contribution plans with more than $1 billion in assets, the average plan has costs equal to 0.33% of the plan's assets per year. However, in 2013, total fees for the Fujitsu plan amounted to approximately 0.88% of plan assets, or about $11,400,000. In 2014, total fees amounted to approximately 0.90% of Plan assets, or about $11,900,000."
'Tis the Season for ACA Penalties
Polsinelli PC
[Guidance Overview]
Dec. 11, 2017
"ALEs should consider gathering all 2015 reporting information or at least understanding where such information can be located. In the event an ALE engaged a third-party vendor for ACA reporting, the employer may want to contact their service providers prior to receiving Letter 226J to make sure that the employer and the service provider are aligned, and the service provider is able to assist with responding to the IRS should a penalty notice be received."
Courts Weigh in on Challenges to University Retirement Plans
Steptoe & Johnson LLP, via Lexology
Dec. 11, 2017
"These rulings, most of which allowed claims to proceed past the motion to dismiss stage, highlight the variation in standards courts apply when weighing ERISA fiduciary suits. Moreover, they underline the need for plan fiduciaries to review the performance and fees of their plans' service and investment providers on a regular basis to determine whether the providers' fees are reasonable and their continued retention is appropriate."
10 Tips for Preparing Your Response to IRS Letter 226J
HUB International
Dec. 11, 2017
"[1] This is not an assessment (yet).... [2] Read the letter and forms closely.... [3] Mind the deadlines.... [4] Gather your records.... [5] Contact vendors.... [6] Be organized and explain your response.... [7] Don't forget about transition relief.... [8] Consider contacting an experienced attorney, accountant, or other tax advisor.... [9] Tap other resources.... [10] Pay attention to the IRS's comments."
The Prescription Drug Supply Chain 'Black Box': How It Works and Why You Should Care (PDF)
The Terry Group, for the American Health Policy Institute
Dec. 11, 2017
23 pages. "[This paper outlines] an approach specifically tailored to addressing the challenges inherent in managing the prescription drug supply chain ... [T]his new model disaggregates the traditional 'Pharmacy Benefit Manager' (PBM) supply chain. This allows for better alignment of incentives among the various stakeholders involved in the process."
401(k) and 403(b) Education: How to Set Up Employees for Success
Dec. 11, 2017
"When ... employees [were asked] why they had not joined the retirement plan, only a minority blamed stretched finances for their decision. About 40% said they were 'too busy' and 19% said signing up was 'too much hassle.' That means there's room for better, participant-focused 401(k) education efforts to move the needle."
Text of Enrolled Actuaries Pension Examination EA-2, Segment F, Fall 2017 (PDF)
American Society of Pension Professionals & Actuaries [ASPPA]; Joint Board for the Enrollment of Actuaries [JBEA]; Society of Actuaries
Dec. 11, 2017
111 pages. Full text of Nov. 7, 2017 exam with answers, published online by IRS.
Prescription Drugs May Cost More with Insurance Than Without It
The New York Times; subscription may be required
Dec. 11, 2017
"In an era when drug prices have ignited public outrage and insurers are requiring consumers to shoulder more of the costs, people are shocked to discover they can sometimes get better deals than their own insurers. Behind the seemingly simple act of buying a bottle of pills, a host of players -- drug companies, pharmacies, insurers and pharmacy benefit managers -- are taking a cut of the profits, even as consumers are left to fend for themselves[.]"
Using Employer Leave Programs to Attract and Keep Top Talent
Findley Davies | BPS&M
Dec. 11, 2017
"[1] Analyze data to determine where leaves are currently taken to understand where cost and staffing burdens may exist. [2] Work closely with managers to help them ... define options for managing staffing levels during leaves. [3] Coach managers to ensure communications are consistent ... [4] Develop communications that focus on the employee experience[.]"
Why IRA Holders Need to Scrutinize IRS Form 5498
Dec. 11, 2017
"The major of piece of information to review on Form 5498 is the prior year-end 'fair market value' of the account (Box 5). If you are subject to taking required minimum distributions ... this is the value the IRS would look at first to figure out whether you took your full RMD.... The trouble is, Form 5498 may not arrive until after you've already filed your tax return."
SEC Offers Free Financial Planning Tools for Retirement Savers and Investors
U.S. Securities and Exchange Commission
Dec. 11, 2017
This page provides links to the following tools, developed by the SEC: [1] 401(k) and IRA Required Minimum Distribution Calculator ... [2] Compound Interest Calculator and Savings Goal Calculator ... [3] Social Security Retirement Estimator ... [4] Retirement Ballpark Estimator ... [5] Mutual Fund Analyzer ... [6] 529 Expense Analyzer.
Staying in the Market vs. Annuitizing: What Return Would You Need?
The Retirement Cafe
Dec. 11, 2017
"Two recent comments effectively asked what market return would be needed to make buying an immediate annuity (SPIA) in the future a better deal than buying a deferred income annuity (DIA) today.... Both questions are posed as the rate of stock returns these strategies will 'need' to provide outcomes identical to buying a DIA now or postponing Social Security benefits. The needed rates of return, however, aren't the key to this analysis[.]"
Paid FMLA Tax Credit Included in Senate Reform Bill As House Holds Hearing on Paid Leave
HR Policy Association
Dec. 11, 2017
"The Senate-passed tax reform bill includes a two-year tax credit for companies that provide paid family leave benefits, while the House Education and Workforce Committee held a hearing highlighting an HR Policy-supported bill providing a voluntary federal standard for employers. The tax credit ... would allow employers to receive a 25 percent nonrefundable tax credit for each hour of paid leave up to $4,000 per year for each qualified employee."
CMS Threatens New York Basic Health Program with Big Cut
Health Affairs
Dec. 11, 2017
"CMS's position is apparently that if the Congress does not fund the cost-sharing reductions (CSRs), New York is not due 95 percent of CSR payments. It would seem that New York and its [Basic Health Plan (BHP)] insurers could do in response what most other states have done -- simply increase premiums to cover the lost CSR payments, thus increasing the premium tax credit pass-through payments. It may be too late to do this for 2018, however, if rates are already set and cannot be changed."
NCPA Comments to FTC Shine Spotlight on PBMs
National Community Pharmacists Association [NCPA]
Dec. 11, 2017
"NCPA's ... policy recommendations ... include: [1] Support for the [DOL's] recommendation to require PBMs to disclose all direct and indirect compensation to ERISA plans, to evaluate whether compensation to PBMs, pharmacies (including those owned by PBMs) and subcontractors are 'reasonable.' [2] Collaboration with DOL to create a standardized definition of what constitutes 'brand,' 'generic,' 'specialty,' and 'rebate' for the purposes of eliminating confusion in ERISA drug plan designs. [3] Endorsement of federal and state transparency efforts surrounding PBM 'maximum allowable cost' lists for generic prescription drugs. [4] Increased scrutiny of the conflicts of interest that can be attributed to PBMs operating as both a reimburser and competitor in the pharmacy marketplace."
Tax Reform: Comparison of House and Senate Tax Cuts and Jobs Act Versions (PDF)
Dec. 11, 2017
7-page chart provides side-by-side comparison summary of current law and the provisions of each bill that pertain to retirement and individual savings arrangements.
Strengthen Retirement Security by Focusing on Lifetime Income Strategies
Georgetown University Center for Retirement Initiatives
Dec. 11, 2017
"[S]upplemental DC plans were not designed to provide retirement security.... Demographic and economic trends demand the consideration of lifetime income strategies ... Account balance is not the proper measure of retirement security ... Effectively managing income in retirement is more important ... Policymakers and plan sponsors must give participants greater options for lifetime income."
Short-Term Delay in Disability Claims Procedures Includes Very Short Fuse
HUB International
Dec. 11, 2017
"Some carriers or other providers may have already changed their systems to comply with these new rules and therefore will not see a point in changing their processes at this point. If the delayed effective date will apply, then employers need to make sure to get any necessary plan amendments in place before January 1, 2018 and be prepared to communicate this change to participants."
The Tax Cuts and Jobs Act: Executive Compensation Action Items
Winston & Strawn LLP
Dec. 11, 2017
"[1] Companies should determine the extent to which their currently outstanding performance-based awards will satisfy the transition rule. [2] Companies should consider accelerating into 2017 payments that would be made [to] individuals who would have been NEOs for 2017, except that they terminated employment in 2017, ... to the extent that such payments would not satisfy the transition rule and are permissible under Section 409A. [3] Companies and compensation committees should consider how they can reduce the impact of the lost deduction for performance-based compensation for future cash and equity awards.... [4] Compensation committees should begin to plan for the reporting of non-deductible compensation in their 2019 proxy statements."
Text of IRS Notice 2017-75: Guidance Under Section 409A for Pre-2009 Section 457A Deferrals (PDF)
Internal Revenue Service [IRS]
[Official Guidance]
Dec. 8, 2017
"This notice provides guidance on the application of Internal Revenue Code section 409A with respect to amounts that are includible in income pursuant to section 801(d)(2) of the Tax Extenders and Alternative Minimum Tax Relief Act of 2008 ... Section 801(a) of TEAMTRA added section 457A to the Code. Section 457A generally applies to deferred amounts that are attributable to services performed after December 31, 2008. However, if section 457A does not apply to a deferred amount solely because the amount is attributable to services performed before 2009, section 801(d)(2) of TEAMTRA provides that the amount is includible in gross income in the later of the last taxable year beginning before 2018 or the taxable year of vesting. This guidance provides that a nonqualified deferred compensation plan that is subject to the provisions of Code section 409A will not fail to meet the requirements of section 409A solely because payments of deferred amounts under the plan are accelerated to pay income taxes on the amounts includible in income pursuant to section 801(d)(2) of TEAMTRA."

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