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Leading Northern NJ Actuarial Firm
in NJ

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Nationwide Insurance
in AZ, CA, CO, OR, TX, UT, WA

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Voluntary Fiduciary Correction Program
March 13, 2014 WEBCAST
(Employee Benefits Security Administration (EBSA), U.S. Department of Labor)

Fiduciary by the Numbers
March 18, 2014 in KY
(ASPPA Benefits Council of Greater Cincinnati)

Retirement Plans Trifecta! Keep Up, Keep Safe and Keep Clean!
March 24, 2014 in MA
(ASPPA Benefits Council of New England)

401(k) Investment Lineup Summit - Chicago
April 8, 2014 in IL
(Pensions & Investments)

How to Avoid Narrow-Network Landmines and Set Rates for Out-of-Network Providers
April 24, 2014 WEBCAST
(Atlantic Information Services, Inc)

Wellness Programs: Impact of the New HIPAA Regulations, Federal Laws, and Guidance
April 30, 2014 WEBCAST
(Lorman Education Services)

What Employers Need to Know About the Pay or Play Mandate in 2014
May 14, 2014 WEBCAST
(Lorman Education Services)

ERISA Compliance for Health & Welfare Plans
June 4, 2014 in OH
(Thomson Reuters / EBIA)

Health Care Reform
June 5, 2014 in OH
(Thomson Reuters / EBIA)

2014 Fall Forum
September 22, 2014 in IL
(Ascensus)

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2014NAFE (2014 NIPA Annual Forum & Expo)

[Guidance Overview]

IRS Employee Plans News, March 4, 2014 (PDF)
12 pages. Topics include: [1] Deadline extended for pre-approved defined benefit plans; [2] Form 8905 deadline extended for individually designed Cycle C plans; [3] 457(b) plan submissions to voluntary compliance; [4] Annual multiemployer actuarial certification can now be emailed or e-faxed; [5] Wrong pension feature codes on 401(k) plans; [6] EPCU project finds plan sponsors don't complete all steps in termination process; [7] SIMPLE IRA Tips for the sole proprietor; and [8] PBGC Insights. (Internal Revenue Service)  

[Advert.]

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Sign-up for our 3rd Annual ftwilliam.com Customer Conference, August 3-5 in downtown Chicago! Earn CE credits while learning about the latest industry news and trends, interacting with your peers, and learning more about your ftwilliam.com software tools.

[Guidance Overview]

Foreign Account Tax Compliance Act for Non-U.S. Retirement Plans (PDF)
"FATCA generally does not impose compliance obligations on US-based retirement plans.... At this time, Form W8-BEN-E is understood to be a self-certifying form. Plans need not submit along with the form evidence to support eligibility for an exemption. However, it is possible that the final form and/or individual withholding agents may require additional documentation.... If not covered by an exemption, plan representatives should put in place communication strategies to explain to their US taxpayer participants that the plan will require their consent to provide the IRS with identification and account information." (Buck Consultants)  

Handout for March 13 IRS Phone Forum: Overview of the 2013 Cumulative List of Changes in Plan Qualification (PDF)
27 presentation slides. Topics include: Current determination letter program; Pre-approved plan program; Future possible changes/program guidance; and Cumulative List change items -- Notice 2013-84. (Internal Revenue Service)  

General Explanation of Certain Retirement-Related Provisions in the Administration's FY2015 Budget Proposal (PDF)
16 pages covering various provisions affecting retirement plans (extracted from the full 297-page summary prepared by the Treasury Department). (U.S. Department of the Treasury, via The SPARK Institute)  

Impact of a Merger or Acquisition on Company Retirement Plans
"Let's outline some of the options available in a merger or acquisition strategy utilizing a case study.... There are two basic types of corporate transactions: Stock sale [and] Asset sale.... There are many nuances to both of these types of sales, and this is not a treatise on which type is better than the other, but merely lays the groundwork for how the retirement plan may be impacted under one option or the other." (Benefit Resources, Inc.)  

[Advert.]

Retirement Education, Plan Documents, and more.

McKay Hochman provides a comprehensive retirement plan resource for financial institutions and TPAs. We offer live and online continuing education, online resource library, plan documents, compliance support services, and more. Visit www.mhco.com for details.

401(k) Participant's Claim in Proprietary Mutual Funds Lawsuit Was Barred by Statute of Limitations, Says Eleventh Circuit
"Because the plaintiff's allegations concerning the defendant's failure to remove the mutual funds are in all relevant respects identical to the allegations concerning the selection process, the Court concluded that Fuller's complaint contains no factual allegation that would allow it to distinguish between the alleged imprudent acts occurring at selection from the alleged imprudent acts occurring thereafter. Thus, Fuller's claims, at their core, are a challenge to the initial selection of the mutual funds, and the failure to remove them is not a separate breach." [Fuller v. SunTrust, No. 12-16217 (11th Cir. Feb. 26, 2014)] (Cary Kane ERISA Lawyer Blog)  

Text of Brief of Respondents in Fifth Third Bancorp Stock Drop Case (PDF)
"[B]ecause Congress already has specified ERISA's accommodation of the interest of pension plans investing in employer stock, there is no occasion for this Court to erect a judicial superstructure of additional accommodations for those plans.... At bottom, petitioners' argument reduces to the idea that the interests in employee stock ownership justify a bright-line exception from ERISA's fiduciary duties.... The language, structure, and context of ERISA preclude the judicial articulation of any such exception." [Fifth Third Bancorp v. Dudenhoeffer, petition for certiorari filed Dec. 2012; oral argument scheduled for April 2, 2014] (John Dudenhoffer and Other Plaintiff-Respondents)  

Is It Dangerous to Combine Your Retirement Plan's SPD and Prospectus?
"While there is no clear and consistent answer on the issue at this point, the Dudenhoefer and Harris cases should serve as a reminder to carefully consider whether it is prudent for you to combine your SPD and your plan prospectus into one document. Given the increased risk of potential ERISA liability and the fact that plan fiduciaries (who are typically officers of the company) could face personal liability for the breach, it is much safer to separate the SPD and the prospectus into two documents." (McKenna Long & Aldridge LLP)  

In-Plan Roth Rollovers: Do They Make Sense for Your 401(k) Plan?
"Participants may want to convert pre-tax accounts to Roth accounts if they believe that their tax rate during retirement will be lower than their current tax rate. Plan sponsors with employee populations that include particularly sophisticated investors with large 401(k) account balances may wish to add this feature to their plans to satisfy participant demand." (Practical Law Company)  

Are ESOPs Too Risky to Be Good Retirement Plans?
"The diversification argument assumes that companies with ESOPs are substituting the ESOP for a diversified retirement plan. That turns out not to be true. ESOP companies are slightly more likely to have a secondary retirement plan (even defined benefit plans), than non-ESOP companies are to have even just one plan. Moreover, many mature ESOPs begin to diversify some of the assets in the plan over time. So for the very large majority of cases, the real choice is between non-ESOP participants, who have $X in diversified assets, versus ESOP participants who also have $X in diversified assets, but who have, in addition, $Y in company stock." (National Center for Employee Ownership [NCEO])  

Funded Status of U.S. Corporate Pensions Rises to 92.6 Percent
"The funded status of the typical U.S. corporate pension plan improved 1.7 percentage points in February 2014 to 92.6 percent as most asset classes gained during the month.... For U.S. corporate plans, assets increased 3.3 percent and liabilities increased 1.4 percent during the month ... On the public side, assets at the typical defined benefit plan in February rose 3.5 percent, producing excess return of 2.9 percent above the monthly goal of positive 0.6 percent returns[.]" (BNY Mellon)  

Obama's 2015 Budget Limits Retirement Tax Deductions, Increases PBGC Premiums
"President Barack Obama's 2015 federal budget ... calls for a 28% limit on retirement-related tax deductions and an overall cap on all retirement accounts, including pensions, that could bring in $1 billion per year in new tax revenue.... Mr. Obama also called for $20 billion from increased [PBGC] premiums, although it was not clear whether that would come from single employer or multiemployer plans." (Pensions & Investments)  

Senator Harkin's USA Retirement Funds Proposal
"From the sponsor's point of view, the key feature of a USARF arrangement is that generally the sponsor would have no fiduciary responsibility with respect to the USARF. The sponsor's responsibility would generally be limited to 'meeting the enrollment requirements and transmitting contributions.' It also appears that the USARF would handle most required reporting and disclosure. Some believe that these features of the USARF -- relieving employers of much of the headache that comes with sponsoring a qualified ERISA retirement plan -- are so appealing that some sponsors may terminate their DB or DC plans and set up a USARF arrangement." (October Three Consulting)  

Are the Tax Deferral Benefits of Low Turnover Investment Strategies Overstated?
"An investment that changes just once a decade actually forfeits more than half of the tax deferral benefits over the span of 30 years, and for a portfolio with dividends as well, a mere 10% turnover forfeits more than 2/3rds of the tax deferral value. In a lower return environment, the true tax deferral benefit of extending the average holding period of an investment from 2 years to 5 years -- chopping the portfolio turnover rate from 50% down to 20% -- is actually less than 5 basis points ... [I]nvestors may be grossly underestimating the damage that's done by having any portfolio turnover, and grossly overestimating the value of trying to add several years to the average holding period of an investment[.]" (Michael Kitces in Nerd's Eye View)  

Financial Security Scorecard: A State-by-State Analysis of Economic Pressures Facing Future Retirees (PDF)
"There is room for improvement in all states in one or more measure of financial security for future retirees.... All three potential sources of economic insecurity for future retirees deserve policy attention.... Improving the future financial security of an aging workforce requires ensuring good employment options for older workers.... States must remain vigilant over time." [Includes illustrative charts.] (National Institute on Retirement Security)  

Supreme Court Declines to Intervene in Sun Capital Pension Liability Case
"Sun Capital's bid to have the Supreme Court resolve the issue was supported by the Private Equity Growth Capital Council in Washington, which filed an amicus brief saying the case has 'the potential to effect a major shift in liabilities' for private equity funds whose portfolio companies have pension shortfalls." (Pensions & Investments)  

[Opinion]

Yale Law Professor Again Hammers High Fees and Revenue Sharing, 401(k) Plans
"Industry groups have already criticized the ... work [by Yale law professor Ian Ayres and Professor Quinn Curtis of the University of Virginia School of Law], citing outdated information.... [T]hat criticism misses the larger points made by the authors[:] ... Fees matter.... Revenue sharing distorts incentives for financial advisors and shifts costs to less sophisticated investors.... What Ayres and Curtis get wrong is that smaller plans have higher fees." (Employee Fiduciary)  

[Opinion]

Too Many Retirement Plans, Too Little Savings
"The retirement-savings deficit has grown so large partly because U.S. employers have stopped providing adequate pensions. Between 1980 and 2006, the share of U.S. private-sector workers covered by an employer's defined-benefit plan fell from an already low 40 percent to just 15 percent. A savings vehicle intended to supplement traditional pensions -- the defined-contribution 401(k) retirement plan -- has instead replaced them. This diminished the stock of retirement savings in itself; now, many companies are scaling back their contributions to 401(k) plans, too. Roughly half of all Americans have no private retirement savings at all." (BloombergView)  

[Opinion]

Text of ASPPA Comments to IRS on Additional Alternatives for Satisfying Nondiscrimination Testing on a Benefits Basis for a DB/DC Plan
"In situations where the 'primarily DB' or 'broadly available' criteria of 1.401(a)(4)-9(b)(2)(v)(B) or (C) are not met, the current gateway structure of 1.401(a)(4)-9(b)(2)(v)(D) has allowed for flexibility in design, while providing meaningful benefits for non-highly compensated employees (NHCEs). The gateway regulations have served the purpose they were intended to serve, and the gateway structure should be preserved. However, permitting more flexibility in meeting the gateways could be helpful in improving plan design and retirement security for NHCEs through incenting employers to maintain defined benefit plans." (American Society of Pension Professionals & Actuaries [ASPPA])  

[Opinion]

The Retirement Savings Crisis and the Limits of Soft Paternalism
"[S]oft interventions are undermined by particular aspects of the retirement-allocation decision -- including pervasive conflicts of interest in the mutual fund and retirement advisory industry, inherent difficulty, and legitimate uncertainty.... Those who opt out of the nudges are likely to include those who most need policy intervention. Those who accept the nudges are being pushed into a category of funds of dubious merit, and which appear to be worsening as institutions seek to exploit the default.... When fields are rife with conflicts of interest, soft-touch strategies will fare poorly. Since our tax-incentivized retirement system has paternalistic roots, we should more readily consider direct regulation of retirement account investments." (Rock Center for Corporate Governance at Stanford Law School, via SSRN)  

Employers Must Treat Employees on Military Leave Like Those on Comparable Leaves, Eighth Circuit Rules
"USERRA's protection of service members' benefits is sometimes overlooked by employers, including employers that provide benefits beyond those required by statute. Employers should review the benefits available to employees on comparable leaves of absence to ensure those on military leave are receiving comparable benefits. Determining when a leave of absence is comparable can be problematic." [Dorris v. TXD Services, LP, No. 12-3096 (8th Cir. Feb. 27, 2014)] (Jackson Lewis LLP)  

myStockOptions.com Expands Tax-Return Guidance To Help With IRS Forms & Reporting For Stock Sales from Stock Compensation
myStockPlan.com, Inc

Blue Ridge ESOP Associates Welcomes Kevin T. Rusch
Blue Ridge ESOP Associates

Lockton Adds Risk Management and Employee Benefits Expert
Lockton

MassMutual Retirement Services Data Shows Gen X and Gen Y Expressing the Right Retirement Savings Chromosomes
MassMutual Retirement Services

John Hancock Retirement Plan Services Leads Industry By Changing How 401(k) Plans Are Priced
John Hancock Retirement Plan Services

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