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Retirement Planning Consultant
Transamerica Retirement Solutions
in OK

Director Transition Services
OneAmerica Financial / AUL
in IN

Employee Benefits Associate
Akerman LLP
in FL

Client Service Manager
The Newport Group
in FL, NC

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Qualified Health Plan (QHP) Series -- Open Q&A
June 25, 2014 WEBCAST
(Centers for Medicare & Medicaid Services (CMS))

Federally-facilitated Small Business Health Options Program (FF-SHOP) Series III - Update and Issuer Q&A
July 15, 2014 WEBCAST
(Centers for Medicare & Medicaid Services (CMS))

ERISA Update
July 16, 2014 WEBCAST
(Ohio State Bar Association)

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[Guidance Overview]

IRS Retirement Plan News for Employers, June 13, 2014 (PDF)
Topics include: [1] Penalty relief: Form 5500-EZ and Forms 5500 and 5500-SF; [2] Simplified procedures to verify that rollovers are from a qualified plan or IRA; [3] New one-rollover rule for IRAs; [4] Updated rollover chart; [5] How to request a copy of a determination letter application file; [6] Avoiding mistakes: Internal controls, Policies, procedures and internal controls self-audit, and Monitoring plan service provider reports; [7] Correcting mistakes. (Internal Revenue Service [IRS])  

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[Guidance Overview]

Transcript of IRS Phone Forum, May 6, 2014: Retirement Plan Terminations (PDF)
18 pages. During the forum, IRS officials discussed items that must be considered by the plan sponsor when its defined contribution retirement plan is terminated, such as the date of termination, permanency requirement, the need to update the plan document, and accelerated vesting requirements. In addition, the IRS has released answers to questions submitted by participants, which are online. (Internal Revenue Service [IRS])  

[Guidance Overview]

IRS Releases Additional Rulings on Lump-Sum Windows
"Although the addition of the lump sum-option would result in an increased payment amount and shortened payment period, the IRS concluded that the election to cash out the remainder of the annuity would be permissible because the lump-sum option was being offered pursuant to a plan amendment and only during a limited window period. The IRS also noted ... that, as long as the portion of any lump-sum distribution attributable to that year's required minimum distribution is not treated as an eligible rollover distribution, the lump-sum option itself would not trigger the excise tax under IRC Section 4974 for failure to take a required minimum distribution." (Sutherland)  

[Guidance Overview]

Using the Retirement Plan Life Expectancy Tables
"There are three life expectancy tables used by IRA and employer plan account owners and beneficiaries. These tables were last updated by IRS for optional use in 2002 and were mandatory in 2003. You cannot choose which table you would like to use. Each one must be used in certain situations." (The Slott Report)  

Brokers Fight Rule to Favor Best Interests of Customers
"Amid fierce pushback from the financial services industry, the Labor Department, which oversees retirement plans, recently delayed releasing a revised proposal that would require a broader group of professionals to put their clients' interest ahead of their own when dealing with their retirement accounts.... 'There is a point at which delay equates to surrender,' said Mercer E. Bullard, an associate professor at the University of Mississippi School of Law and investor advocate. 'There is a real concern.'" (The New York Times; subscription may be required)  

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Estate as Beneficiary: IRA vs. Qualified Plan
"Even though the 'minimum distribution rules' are almost exactly the same for individual retirement accounts (IRAs) and for 'qualified plans' such as 401(k) plans, the practicalities can be quite different. The differences are especially significant when the participant's estate is beneficiary." (Natalie Choate, for Morningstar Advisor)  

Supreme Court Holds Inherited IRAs Do Not Qualify for 'Retirement Funds' Exemption under Federal Bankruptcy Law
"The Court rejected the debtor's argument that, because the account was originally a retirement account when the debtor's mother created it, it retained that character after it was inherited. According to the Court, the use of the term '"retirement funds" implies that the funds are currently in an account set aside for retirement, not that they were set aside for that purpose at some prior date by an entirely different person.'" [Clark v. Rameker Trustee, No. 13-299 (S. Ct. June 12, 2014)] (Journal of Accountancy)  

Supreme Court Allows Creditors to Tap Into Inherited IRA Money
"In an unanimous ruling written by Justice Sonia Sotomayor, the court said inherited IRA money not received from a spouse isn't protected in bankruptcy proceedings. Most types of retirement accounts can't be accessed by creditors in a bankruptcy case ... The ruling clarified instructions in the U.S. Bankruptcy Code, as millions of aging baby-boomers begin to leave behind unspent IRA money to others." [Clark v. Rameker Trustee, No. 13-299 (S. Ct. June 12, 2014)] (The Wall Street Journal; subscription may be required)  

IRS Announces Relaxed FATCA Enforcement Period
"The IRS will consider 2014 and 2015 as a transition period for enforcement of the Foreign Account Tax Compliance Act. The IRS will accept 'good faith' efforts from withholding agents, foreign financial institutions and other responsible entities to comply with FATCA. Retirement plan sponsors should monitor the Treasury website's list of countries with IGAs, as this may affect whether their plans are exempt." (Towers Watson)  

It's 'BEN-E' Time for FATCA Compliance
"The old IRS Form W-8BEN has been succeeded by two new forms ...[which] contain new FATCA certification provisions, and require a 'Global Intermediary Identification Number' (GIIN). While the old versions are still available for use with new accounts opened until the end of this year, it would be prudent to use the new forms now ... in order to avoid having to conduct FATCA due diligence and obtain new certifications later." (Herrick, Feinstein LLP)  

FATCA Timeline Relaxed; Non-U.S. Retirement Plans Unchanged
"Although enforcement has been relaxed during the transition period, the relevant compliance deadlines have not been extended.... [S]ponsors of non-U.S. retirement plans still need to determine whether such plans are exempt from FATCA under the regulations or an IGA, and if they are exempt, furnish a Form W-8BEN-E to their payors of otherwise withholdable income prior to July 1, 2014." (Towers Watson)  

Foreign Asset-Related Compliance Requirements for Retirement Plans (PDF)
"[This article provides] an overview of retirement plan compliance obligations under three separate regulatory schemes that address foreign assets held by retirement plans : the Foreign Account Tax Compliance Act (FATCA), the Report of Foreign Bank and Financial Accounts (FBAR), and regulations issued by Treasury's Office of Foreign Assets Control (OFAC). FATCA requirements apply to non-US retirement plans sponsored by multinational employers, whereas FBAR and OFAC requirements address US retirement plan compliance." (Buck Consultants)  

Marrying the Investment Opportunities for Retirement Plans with the Capital Needs of Society (PDF)
"Despite a perceived problem with violating prudence requirements under [ERISA], experts [at a symposium convened by the U.S. Chamber of Commerce in March] agreed that ERISA's fiduciary rules allow for investment by retirement funds in infrastructure and small business projects.... Investments in infrastructure and small business should be viewed like any other investment-the fiduciary must look at the risks, returns, and fees.... Investments in infrastructure could provide long-term income streams to match liabilities. They could protect against inflation and volatility and they could also provide diversification with other asset classes." (U.S. Chamber of Commerce)  

Terminated Vested Buyouts: Now Could Be the Time
"The interest rate environment is currently favorable for such an option.... [P]lans will be able to pay out this liability at a value much lower than they will be required to value the liabilities at year end if they didn't pay them out.... [Another reason] is the release of a new mortality table expected later this year ... [which] is generally expected to be required for lump sum distributions starting in 2016 and will result in increased lump sum amounts. This will make the buyout option less viable for plan sponsors in the future." (Findley Davies)  

Pro-ESOP Bill Introduced in House of Representatives
"H.R. 4837 is similar to S. 742, which was introduced in early 2013 by a bi-partisan group of Senators led by Senator Ben Cardin (D-MD). H.R. 4837 would amend the Internal Revenue Code of 1986 and the Small Business Act to expand the availability of employee stock ownership plans (ESOPs) in S corporations." (The ESOP Association)  

Roth IRAs: Who Is Contributing, and How Much? (PDF)
"3 percent of Roth owners ages 25-29 contributed to their Roth in 2012, compared with 21 percent of Roth owners ages 60-64. Just over a quarter (25.1 percent) of Roth IRA owners made a contribution to that account in 2012, compared with 6.6 percent of traditional IRA owners. Nearly half (49.0 percent) of Roth IRA owners contributed the maximum, compared with 57.9 percent of those contributing to a traditional IRA." (Employee Benefit Research Institute)  

[Opinion]

Text of Comments by Drinker Biddle and Reath Attorneys to DOL on Proposed Fee Disclosure Guide (PDF)
"We respectfully request further clarification on the following seven specific aspects of the rule: [1] Objective parameters for defining multiple or lengthy documents; [2] Objective parameters for defining a sufficiently specific locator; [3] The relationship between the Guide requirement and the change notices mandated under the 408b-2 regulation; [4] Whether the Guide requirement will apply only prospectively or also retroactively following the amendment's effective date; [5] Availability of relief for inadvertent errors or omissions within the Guide; [6] Clarification as to the requirement that the Guide be provided as a separate document; and [7] Clarification of the requirement to 'furnish' the Guide and 'disclose' changes to the Guide." (Drinker Biddle & Reath LLP)  

[Opinion]

Manufacturing a Retirement Funding Crisis
"Progressive activists are in the early stages of attempting to create a retirement security crisis. Using the health care playbook, they claim that people lack access to 'adequate retirement security.' ... Government must 'solve' the problem ... The basics of retirement security are simple.... Get a job. Save. Accumulate assets. And perhaps take steps to ensure future legislators understand they have no business mandating retirement savings[.]" (Linda Gorman of Independence Institute, for The Tribune)  

[Opinion]

About That DOL Fiduciary Survey ...
"[T]he DOL has been seeking to create clarity on the fiduciary issue so there is no further dodging of the fiduciary role by those who have creatively skirted ERISA while continuing to deliver advice. The industry apparently does not want to declare themselves fiduciaries to do what they have been doing for years under the guise of 'education.' ... In an ERISA plan, serving other interests beyond those of participants and beneficiaries is prohibited and always has been." (ThinkAdvisor)  

[Official Guidance]

Text of Final Regs Governing Practice Before the Internal Revenue Service, Amending Circular 230
"This document contains final regulations revising the regulations governing practice before the [IRS]. These final regulations affect individuals who practice before the IRS. These final regulations modify the standards governing written advice and update other related provisions of the regulations. These regulations are effective on June 12, 2014." (U.S. Department of the Treasury)  

Delayed Retirement Reduces Health Care Costs
"[C]ouples who decide to retire at 62 -- before they are eligible for Medicare -- are likely to spend an extra $17,000 per year for a total of $271,000 during retirement ... On the other hand, couples who can postpone retirement just a few years to age 67 could save about $10,000 per year, reducing their estimated costs for health care in retirement to $200,000." (InvestmentNews)  

Clawback Rules May Come Out in 2014, Go into Effect in Mid-2015
"Many open questions remain, including what compensation will be covered, to whom the clawback will apply, when the three-year look-back period will be triggered and whether companies will be allowed any discretion in determining whether certain employees or certain conduct or small amounts may be excluded from clawback requirements[.]" (Bloomberg BNA)  

Litigation Over Executive and Director Compensation Takes Another Turn for the Worse
"Last week ... lawyers filed an 'excessive compensation' lawsuit against the officers and directors of Facebook ... [In] addition to its obligatory and generalized claims of too much compensation, the lawsuit argues that the 'demand' requirement is excused... Since 1996, conventional wisdom, supported by economic efficiency, has led companies to provide stock awards to officers and directors under the same incentive plan. This lawsuit confirms our earlier warnings that companies need to rethink this approach." (Winston & Strawn LLP)  

CEO Pay Continues to Rise as Typical Workers Are Paid Less
"From 1978 to 2013, CEO compensation, inflation-adjusted, increased 937 percent, a rise more than double stock market growth and substantially greater than the painfully slow 10.2 percent growth in a typical worker's compensation over the same period. The CEO-to-worker compensation ratio was 20-to-1 in 1965 and 29.9-to-1 in 1978, grew to 122.6-to-1 in 1995, peaked at 383.4-to-1 in 2000, and was 295.9-to-1 in 2013, far higher than it was in the 1960s, 1970s, 1980s, or 1990s." (Economic Policy Institute)  

How to Trigger Liability Insurance Coverage for an ERISA Claim of Independent Contractor Misclassification
"[T]he ERISA claim itself did not require any type of intentional misconduct, which is basically true across the board with most types of ERISA claims, and [the Court] held that the insurer therefore could not deny coverage for the ERISA claim based on an exclusion for dishonest or malicious acts. The Court found that the ERISA claim could, in essence, simply be a claim for negligent conduct ... and thus the insurer could not deny a defense to the insured based on such an exclusion, which would not reach a claim of negligence." [Euchner-USA Inc. v. Hartford Casualty Ins. Co., No. 13-2021-cv (2d Cir. June 10, 2014)] (Stephen Rosenberg of The McCormack Firm, LLC)