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<< Older News Items   |  July 17, 2018

News Items

Editor's Note: This page is an archive of news items that appear in our daily email newsletters. To automatically receive the latest news items -- plus links to the latest jobs, press releases, webcasts and events -- subscribe to our daily email newsletters.

Lessons Learned from Recent Litigation Involving ESOP-Owned Companies (PDF)
McDermott Will & Emery
July 17, 2018
28 presentation slides. "Recent litigation and audit activity is focusing on the process undertaken by fiduciaries in connection with a transaction involving an ESOP."
Importance of Corporate Structure for Employee Stock Ownership Plans
RSM US
July 17, 2018
"The parent company sought a ruling that its stock held by the ESOP will constitute qualifying employer securities with respect to the subsidiary, and that the application of sections 409(h), 409(p), 512(e)(3) and 4975(e)(7) would not be affected by the C corporation subsidiary's adoption of the plan.... Ultimately, the IRS concluded [in PLR 201828007] that the C corporation's adoption of its parent company's ESOP will not affect its status and the rules will continue to apply based upon the S corporation parent, as the ESOP held employer securities consisting of stock in an S corporation."
Cybersecurity Hot Topics for Closely Held Businesses (PDF)
Journal of Pension Benefits
July 17, 2018
"Cyberattacks are not exclusively a threat to companies of a particular size.... [1] Users can be your greatest risk or your best security ... [2] Multifactor authentication and a password management solution can help keep you secure ... [3] Use security software and create access barrier ... [4] Image-based backups with an offsite copy ... [5] Consider cyber liability insurance."
De-Risking: Options Available to Reduce Your Pension Plan Footprint
Milliman
July 17, 2018
"The least costly de-risking solutions generally start with risk retention options where the focus is more on plan design modifications. Costs escalate as one moves along the de-risking spectrum away from risk retention. A lump-sum window would generally be more costly relative to making a one-time plan design change. A third-party risk transfer such as an annuity purchase would generally require the largest cash commitment from a plan sponsor."
Text of IRS Instructions for 2018 Forms 1099-R and 5498: Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. (PDF)
Internal Revenue Service [IRS]
[Official Guidance]
July 17, 2018
25 pages. "What's New: ... [1] A conversion of a traditional IRA to a Roth IRA, and a rollover from any other eligible retirement plan to a Roth IRA, made after December 31, 2017, cannot be recharacterized as having been made to a traditional IRA.... [2] Special rules apply to retirement plan distributions made to employees affected by certain natural disasters that occurred in 2016 and 2017."
'Hibernation' Approach Recommended to Wait Out High Demand for DB Plan Derisking Transfers
HR Daily Advisor
July 17, 2018
"[G]rowing pressure on insurers' capacity to absorb more pension risk transfers (PRT) from an upswing in plan terminations is expected ... to continue and be 'more widespread in the near future.' ... So how should DB plans proceed that are still seeking to remove PBOs from their balance sheets -- or are still responsible for reduced pension plans remaining with non-standard features after partial derisking?"
Retirement Bills in Congress Could Alter 401(k) Plans
The Wall Street Journal; subscription may be required
July 17, 2018
"Lawmakers are starting with a bipartisan bill that would encourage more small employers to offer retirement savings plans and make it easier for companies to offer annuities that turn workers' savings into a guaranteed annual income. If passed, the measures would comprise the most significant alterations to 401(k) plans since 2006"[.]
Inspiring Trip to Columbus Brings Hope for Multiemployer Solution
Pension Rights Center
[Opinion]
July 17, 2018
"[H]undreds of activists headed to the Joint Select Committee on the Solvency of Multiemployer Pension Plans' hearing ... The hearing was held in Ohio because thousands of workers and retirees in the state would be devastated by reduced pensions, and hundreds of employers could be forced into bankruptcy."
How to Keep HSAs From Cannibalizing Retirement Savings
Fiduciary News
[Opinion]
July 17, 2018
"Anytime we can help a participant understand how to prioritize and spend their 'next best dollar' we should jump on that opportunity. It makes sense that the HSA should be integrated with any retirement discussions. Most health brokers are not licensed to talk about investments and retirement savings ... [As] long as the retirement industry leads the discussion and not the health broker, we should be in good shape. This just adds to the need of better communication and education. Which now points back to more resources are needed from adviser teams to provide this type of education."
Health Savings Account Participants Are Healthcare's Savviest Consumers
Alegeus Technologies
July 17, 2018
"HSA participants are: ... [1] 38 percent more confident they understand their health insurance coverage and 54 percent more confident in forecasting out-of-pocket healthcare costs.... [2] 23 percent more likely to make cost/value-based decisions than the general population....[3] 46 percent more likely to research and compare costs and 37 percent more likely to seek out alternatives.... [4] 68 percent more likely to have a savings goal and 80 percent more likely to be saving aggressively for future healthcare savings."
Text of CMS Medical Loss Ratio (MLR) Annual Reporting Form Filing Instructions for the 2017 MLR Reporting Year (PDF)
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]
[Official Guidance]
July 17, 2018
55 pages. "These are the filing instructions for the report to the Secretary required by section 2718 of the Public Health Service Act (PHSA), which includes elements that make up the medical loss ratio (MLR) and the calculation and provision of rebates to enrollees. The data included in the MLR Annual Reporting Form (MLR Form) are the exact data that will be used to calculate an issuer's MLR and rebates, if any ... The MLR Form has been updated to incorporate provisions in 45 CFR Part 158 that are effective for the 2017 MLR reporting year."
System Validations for the 2017 MLR Reporting Year (PDF)
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]
[Official Guidance]
July 17, 2018
"When an issuer uploads the annual MLR reporting form into the Health Insurance Oversight System (HIOS), the submission undergoes several automated validations. Some of the validations result in an error message and the issuer must resolve the problem before they can attest to their submission."
Health Plan Trends (PDF)
Marsh & McLennan Agency LLC
July 17, 2018
11 pages. "[E]mployers are increasingly focused on cost control options that don't involve automatically shifting costs to employees. These options include encouraging cost-effective treatment venues, narrow networks, reference-based pricing and centers of excellence.... [This article reviews] ... [1] Issues affecting medical care and costs; [2] Strategies employers use to control health plan costs."
How America Saves, 2018: Small Business Edition (PDF)
Vanguard
July 17, 2018
36 pages. "[S]mall businesses represent 99.7% of all employer firms, and they employ half of all private-sector employees.... On average, [the plans in this study] plans had 42 participants and plan assets of $2.6 million.... Slightly more than half of these plans automatically enroll participants at a 3% contribution rate.... Nearly all of these plans use a target-date or other balanced investment strategy as the default fund, with 97% choosing a target-date fund as the default."
Interesting Angles on the DOL's Fiduciary Rule, Part 98
FredReish.com
July 17, 2018
"[A] broker-dealer will need to justify recommending a higher-cost investment (over another reasonably available, but lower-cost alternative). However, if there are two similar investments (including costs), but one pays the broker-dealer (and the financial advisor), more than the other, and it is better for the investor, then it could be recommended under the best interest standard. The inverse of that, though, is that the higher cost (and higher compensating) alternative cannot be recommended unless there are different characteristics and features that justify the cost."
IRS Doubles Down on Employer Mandate Enforcement (PDF)
Conduent
July 17, 2018
"In addition to assessment notices in connection with an employer's failure to offer minimum essential coverage to at least 70% of its full-time employees and their dependents, the IRS is now sending assessments for 2015 coverage that was 'unaffordable' or failed to provide minimum value. If timing is like last year, IRS will start releasing assessment notices for the 2016 calendar year later this year."
New Business Credit for Paid Family and Medical Leave
EisnerAmper
July 17, 2018
"To qualify, employers must have a written policy granting at least two weeks annual paid family and medical leave to employees at 50% or more of the employee's normal salary. The policy must grant leave to all qualifying employees who work full-time and be pro-rated for part-time employees. Vacation leave, personal leave, or other medical or sick leave does not meet the criteria and the credit does not apply if state or local laws mandate paid leave."
One Sure-Fire Way to Engage Employees in Voluntary Benefits
Voya
July 17, 2018
"One way is to understand what employees might need given their life stage, family situation or other variables. To help employees sort this out, here are few scenarios of how voluntary benefits could help employees[.]"
CBO Preliminary Analysis of S.2147, the Butch-Lewis Act of 2017, as Introduced
Congressional Budget Office [CBO]
July 17, 2018
"The estimated budgetary effects are highly uncertain because several key aspects of the legislation are broadly described ... CBO [previously] provided a preliminary and partial analysis ... that the bill would probably increase deficits by more than $100 billion over the 2019-2028 period. Under some interpretations of the bill language, however, few plans would qualify for loans and assistance, resulting in federal costs that would be substantially less than $100 billion."
What To Do With Your Previous Employer's Retirement Plan
Financial Finesse
July 17, 2018
"As long as you have at least $5k in the account, most plans will allow you to keep the money there. If you have company stock or any unique investment options that you'd like to keep, this may be the best option for you. It also gives you time to decide during what is likely to be a hectic time in your life."
Tracking Section 1332 State Innovation Waivers
Henry J. Kaiser Family Foundation
July 17, 2018
"The current statutory language requires that state waiver applications must demonstrate that the innovation plan will provide coverage that is at least as comprehensive in covered benefits; at least as affordable (taking into account premiums and excessive cost sharing); cover at least a comparable number of state residents; and not increase the federal deficit.... Additional details on [specific] state waivers are provided [in this article]."
Judge Kavanaugh's Health Care Opinions
The Commonwealth Fund
July 17, 2018
"In two [ACA] cases, Kavanaugh dissented from the majority opinion that had rejected a challenge to the ACA. In both, however, he objected only to the reasoning of the court; he agreed with the majority that the complaint against the ACA should have been rejected.... In none of these cases did Kavanaugh stake out a strong ideological position ... In several of the cases he made a point of following existing precedent and in none would he have radically changed the law."
Paid Family Leave Should Not Come at the Expense of Retirement
The Century Foundation
[Opinion]
July 17, 2018
"That there is a commitment from both parties on this issue is certainly a step forward. But the parties have different approaches to providing paid leave to their constituents -- and the GOP's proposal poses serious risks for Americans."
National Health Law Program Comments on HHS Plan to Lower Drug Prices
National Health Law Program [NHeLP]
[Opinion]
July 17, 2018
"[National Health Law Program (NHeLP)] outlines steps HHS can take to lower consumer out-of-pocket expenses, such as barring the use of co-insurance whereby insurers require consumers to pay a percentage of the costs for prescription drugs ... And [NHeLP's] comments describe a number of measures to curb pharmaceutical company profiteering on the backs of health care consumers and tax payers."
Present Consequences of Unfunded State Government Pension Liabilities and Ways Forward
The Brookings Institution
July 16, 2018
"State governments with large unfunded pension liabilities are paying more to borrow from capital markets than are other states, according to [a paper by] Chuck Boyer of the University of Chicago Booth School of Business.... He asks two questions: [1] how are state governments' borrowing costs affected by unfunded pension obligations? and [2] do states with political constraints face higher borrowing costs?"

<< Older News Items   |  July 17, 2018


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