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March 19, 2014          Get Health & Welfare News  |  Advertise
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Senior Consultant, Business Project Management
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National Automobile Dealers Association (NADA)
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Webcasts and Conferences

How to Improve Drug-Related Star Ratings: Winning Strategies for MA-PD and PDP Plans
April 29, 2014 WEBCAST
(Atlantic Information Services, Inc)

How to Comply With CMS’s Two-Midnight Rule: Tackling the Operational Challenges
April 30, 2014 WEBCAST
(Atlantic Information Services, Inc)

2014 Regional Conference: Boston
July 10, 2014 in MA
(American Society of Pension Professionals & Actuaries (ASPPA))

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

View All Webcasts and Conferences


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[Guidance Overview]

PBGC Adopts Uniform Premium Due Date
"This change, which eliminates the system under which premium due dates varied based on the type of premium and the size of the plan, will accelerate the premium due date for small plans, which has been four months after the end of the premium payment year, by 6-1/2 months. While the final rule is applicable for 2014 and later plan years, a transition rule provides a four month delay in the new due date for small plans for the first plan year beginning after 2013 in order to ease potential cash flow problems raised by commentators." (Benefits Bryan Cave)  


[Advert.]

Ready or Not: Your Retirement Planning Guide, 41st Edition

Sponsored by International Foundation of Employee Benefit Plans (IFEBP)

This practical guide will help your employees prepare for a satisfying and comfortable retirement. Besides encouraging workers to save, this book will help them make the difficult choices concerning when, where and how to retire. Order Now!



[Guidance Overview]

DOL Proposes 408(b)(2) Fee Disclosure Guide (PDF)
"While not entirely clear from the language of the proposal, it is conceivable that [covered service providers (CSPs)] who developed a separate document for purposes of discharging their initial disclosure obligations under the Regulation, could nonetheless be deemed to have delivered that information through multiple documents where the stand-alone document contained references to disclosures made in separate documents, such as fund prospectuses. The proposal is also not clear on whether DOL proposes to grandfather or otherwise provide transition relief for 408(b)(2) disclosures previously made with respect to ongoing covered service relationships or whether CSPs might be under an obligation to refresh those previous disclosures through the delivery of guides." (Groom Law Group)  

Tussey v. ABB Affirmed, Reversed and Vacated in Part by Eighth Circuit
"The court affirmed the trial court's decision that the 401(k) plans sponsored by ABB paid excessive recordkeeping fees and that this was a breach of ERISA's fiduciary duties. The court rejected application of cases like Hecker v. Deere, and instead found that based on the facts and circumstances present and the testimony of plaintiffs' expert, that the recordkeeping fees were excessive. The court also rejected the argument by defendants that the plaintiffs were simply attacking bundled services and the use of revenue sharing.... Finally, the 8th Circuit found that despite the district court's failure to use an abuse of discretion standard, this was harmless error as the facts were so overwhelming in favor of finding a breach. " [Tussey v. ABB, Inc., No. 12-2056 (8th Cir. Mar. 19, 2014)] (FRA PlanTools, LLC)  

DOL Hopes Proposed Amendment to Fee Disclosure Rules Will Be Useful Roadmap in Difficult Terrain
"While this is a positive development for employers who have been trying to get a better handle on their plan's fees, some have argued that it doesn't do enough to simplify the maze of complicated financial jargon that employers must sift through, and that an easier solution to the problem would be to limit the entire disclosure document to a few pages." (Fox Rothschild LLP)  

Supreme Court Argument Preview: Scope of Protections for Retirement Funds in Bankruptcy Squarely at Issue
"The specific question in this case is whether those provisions exempt the $450,000 IRA that petitioner Heidi Clark inherited upon the death of her mother.... [Clark] contends that the inherited IRA remains retirement funds because they were set aside for retirement into the identified account and remain in that account.... [The trustee in Clark's bankruptcy] ... argues that funds held in an inherited IRA are not 'retirement funds' because an inherited IRA does not have the attributes of other tax-exempt retirement funds.... [T]here is no tax penalty if Ms. Clark withdraws all of the funds from the IRA immediately; all of the other funds would be subject to penalties if they were immediately liquidated.... The Justices easily could write an opinion favoring either party. So this well might be one of those cases in which the [oral] argument could tip the balance either way." [In re Clark, 714 F.3d 559 (7th Cir. 2013; cert. granted Nov. 26, 2013).] (SCOTUSblog)  


[Advert.]

Retirement Education, Plan Documents, and more.

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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.



Judge Denies Request for Immediate Appeal in Church Plan Case
"The judge in Rollins v. Dignity Health has denied the hospital's request to immediately appeal to the 9th Circuit Court of Appeals the issue of whether the pension plan qualifies for the church plan exemption to ERISA ... It should mean that the case now moves forward with discovery (i.e. exchange of documents, depositions, etc...) barring any other procedural moves by the defendants." [Rollins v. Dignity Health, No. 13-cv-01450-TEH (N.D. Cal. Mar. 17, 2014)] (FRA PlanTools, LLC)  

Impact on Participants Will Influence Correction of Late 401(k) Safe Harbor Notices (PDF)
"IRS' Retirement News for Employers explains that when a notice is not provided to a participant timely, there may be differing results. Some participants may have been deferring all along, and the fact that the notice was not provided may have no impact on their saving behavior. Others may actually fail to defer because there was no notice.... When safe harbor notices are not distributed or are not distributed timely, the plan administrator must determine if the error resulted in an employee not deferring, in which case the error is corrected in the same manner as if the employee was excluded from participation." (Buck Consultants)  

What Do Participants Really Want from a Bond Fund?
"An investment professional measures a core bond fund by how closely it matches its benchmark, typically the Barclays US Aggregate Bond Index. However, participants measure whether it has gained or lost value, or produced sufficient income. We need to put the participants' perspective... at the heart of building defined contribution plan menus. If participants are looking to a plan's core bond fund for safety, return, or retirement income, then we may need to rethink our fixed income options in order to help them meet their purpose." (PLANSPONSOR.com)  

Fine-Tuning the Life Expectancy Assumptions for Retirement Planning
"it may be time for planners to begin to adopt more nuanced life expectancy assumptions for clients, at a minimum making a distinction between individuals and married couples, and with reductions in the later years for married couples to acknowledge the fact that while it's likely one may be alive, it's very unlikely that both will live through the entire time horizon. Otherwise, simply choosing an arbitrarily long time horizon for clients, paired with a high standard of Monte Carlo success, may actually result in an unnecessarily constrained retirement lifestyle!" (Michael Kitces in Nerd's Eye View)  

The Three Most Important Things to Know About Roth IRAs
"[1] Tax-free Distributions in Retirement Come With an Upfront Cost ... [2] There are no Required Minimum Distributions During Your Lifetime ... [3] You Can Always Access Your Contributions Tax and Penalty Free." (The Slott Report)  

Most Find Monthly Retirement Income Estimates Helpful, Unsurprising
"The vast majority of respondents said the retirement income projection was useful; more than 1 in 3 (36 percent) of the respondents thought that it was very useful to hear an estimate of the monthly retirement income they might expect from their plan, and another 49 percent thought it was somewhat useful. A total of 17 percent of the respondents indicated that this information would lead them to increase the amount they were contributing. However, of those responding that their illustrated value was much less or somewhat less than expected, 35 percent indicated they would increase their contributions." (Employee Benefit Research Institute [EBRI])  

Proposed Lifetime Pension Limits: Less Than Meets the Eye
"Young and middle-aged workers already face stricter limits on retirement saving than older workers. Current compensation and contribution limits are already keeping most workers from accumulating excessive retirement balances. The limits could inflict significant damage on many workers whose retirement savings were not a concern in the first place." (Towers Watson)  

NTSAA Foiled (Again) in Iowa
"Third time was not the charm for the National Tax Sheltered Annuity Association (NTSAA) as it attempted again to alter Iowa's centralized 403(b) plan, which was adopted in 2009 to help conform with new IRS 403(b) regulations and to bring order to a state where some school districts had as many as 158 403(b) providers.... [T]he plan is often cited as a solution to the 'any willing provider' model in which, with few exceptions, any vendor can offer 403(b) product. Critics argue that the 'any willing provider' model fosters a commission-based sales environment that drives up administrative and plan costs. Reformers believe that by moving competition from the teachers' lounge to a competitive RFP as Iowa has done, states can get pricing breaks, end surrender charges, ease the administrative burden, and focus on investor education." [NTSAA recently changed its name to NTSA (National Tax-Deferred Savings Association).] (403bwise)  

Retirement Readiness Improves in 2014, But Varies by Income and 401(k) Access
"[E]ligibility for participation in an employer-sponsored 401(k)-type plan remains one of the most important factors for retirement income adequacy. Gen Xers in the lowest-income quartile with 20 or more years of future eligibility in a defined contribution plan are half as likely to run short of money as those with no years of future eligibility[.]" (Wolters Kluwer Law & Business)  

[Opinion]

If We Only Knew What 401(k) Participants Really Want
"Typically, participants don't like losses in their accounts. In fact, I would say that if you were to rank account balance events in order of importance, my guess would be that far more participants would say that they would like to avoid meaningful losses perhaps at the expense of a few big gains than the number who would say they would like to go for big gains at the potential expense of taking some very large losses. But, I'm just guessing. I don't really know." (Benefits and Compensation with John Lowell)  

Benefits in General; Executive Compensation

If an Appeal is Filed and Nobody Knows It, Is it an Appeal?
"The Court found that the course of communications between the insurer and the participant caused the participant to have essentially the same protections in the processing of his claim as he would have had if he had, in fact, filed an appeal, and that the participant therefore suffered no prejudice from the fact that his claim was treated as though appealed. The Court then proceeded to decide the case on its merits." [Morgan v. Reliance Standard Life Insurance Company, No. 12-12151-NMG (D. Mass. Mar. 3, 2014)] (Stephen Rosenberg of The McCormack Firm, LLC)  

With Spotlight on Director Pay, Caution Against Homogeneity
"ISS ... recently introduced several new director-focused criteria to its proprietary QuickScore evaluation, including one which ranks director compensation on a relative basis ... [T]his focus on relative ranking seems to treat directors similar to a commodity, where one director can easily be interchanged with another. The approach ignores many important factors that determine individual director pay levels, including the director's level of responsibility. It also lacks any consideration for the size of the board or its aggregate cost to the company." (Steven Hall & Partners)  

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