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Craford Benefit Consultants
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Ohio National Financial Services
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Third Party Administrator, Knoxville, TN
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Hill Ward Henderson
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Proxy Season Recap – Trends and Lessons from 2014
June 24, 2014 WEBCAST
(Winston & Strawn)

Conversions and Recharacterizations
July 1, 2014 WEBCAST
(Ascensus)

Comparing Roth and Traditional IRAs
July 8, 2014 WEBCAST
(Ascensus)

Federally-facilitated Small Business Health Options Program (FF-SHOP) Series III - Update and Issuer Q&A
July 22, 2014 WEBCAST
(Centers for Medicare & Medicaid Services [CMS])

ERISA
July 23, 2014 in OH
(Ohio State Bar Association)

View All Webcasts and Conferences

[Guidance Overview]

IRS Employee Plans News 2014-9, June 17, 2014 (PDF)
Topics include: [1] Revised Voluntary Correction Program forms -- use new fill-in Forms 14568, and 14568-A [though] 14568-I; [2] Retirement plans after Windsor phone forum -- (live on June 26 at 2 p.m. EDT; rebroadcast on July 8 at 2 p.m. EDT); [3] How to request copies of plan documents in determination letter application files; and [4] Accepting rollover contributions -- use due diligence examples in new revenue ruling to verify rollovers are from a qualified plan or IRA. (Internal Revenue Service [IRS])  

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[Guidance Overview]

Avoiding Penalties for Late Form 5500s Becomes a Two-Step Process (PDF)
"Some plan sponsors that filed under the DFVCP may still find themselves with tasks to complete before Dec. 1. Bottom line: Avoiding Form 5500 penalties for late filing is now a two-step process -- one to satisfy DOL and another for the IRS." (Thompson Pension Plan Fix-It Handbook via ERISAdiagnostics, Inc.)  

[Guidance Overview]

IRS Spurs Form 5500 Compliance with Audits and Penalty Relief (PDF)
"Failure to properly mark the delinquent return or attach a Transmittal Schedule to each return may cause the IRS to treat the return as ineligible for the relief under this pilot program, and the IRS may assess all applicable penalties -- unless the plan administrator or plan sponsor can establish that the failure to timely file was attributable to reasonable cause." (Buck Consultants)  

Inherited IRAs Are Not Bankruptcy-Exempt as 'Retirement Funds'
"At least in some circumstances, the Clark decision will influence (i) IRA owners, in choosing whether to name a spouse, another person or, e.g., a spendthrift trust as beneficiary (a matter of some complexity), and (ii) spouses who inherit IRAs, in choosing whether to roll those funds to the spouse's own IRA (a choice which also involves tax and other considerations). In addition, IRA providers should update their procedures and, if applicable, written IRA materials to reflect this distinction between inherited IRAs and other IRAs." [Clark v. Rameker, Trustee, No. 13-299 (S. Ct. June 12, 2014)] (Sutherland)  

Ninth Circuit Limits Plaintiffs' Rights to Recover for ERISA Breach of Fiduciary Duty
"The court expressly stopped short of holding that [CIGNA v. Amara] required courts to impose 'make-whole' relief under the doctrine of surcharge, which would provide relief for damages suffered personally by beneficiaries. Instead, it focused exclusively on trust principles involving suits against fiduciaries.... [T]he court distinguished decisions from other circuits as merely recognizing the availability of surcharge claims after the [Amara] decision, but not stating that surcharge was available for make-whole relief for personal losses." [Gabriel v. Alaska Electrical Pension Fund, No. 12-35458 (9th Cir. June 6, 2014)] (Littler)  

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The Inadvertent Fiduciary: MassMutual Crosses the Line
"It would appear to be more logical to find that the person must first be determined to be a fiduciary based on other actions it took with respect to the plan, and then examine whether a breach of fiduciary duty occurred in setting the level of fiduciary compensation. If setting its own compensation level is what makes a vendor a fiduciary, then almost any plan record-keeper could be held to be a fiduciary under the reasoning adopted by the Golden Star court because most form contracts ... permit plan vendors to change at least some rates for service, by simply providing advance notice." [Golden Star v. Mass Mutual [sic] Life Insurance, No. 3:11-30235-PBS (D. Mass. May 20, 2014)] (Osler, Hoskin & Harcourt, LLP)  

For Big U.S. Retirement Consulting Firms, Fee-Only Investment Advisers Disrupt the Industry
"A seismic shift is happening across the wealth management industry, as more financial advisers move from commission-based businesses to ones that rely more heavily on fees. As advisers wade into the retirement world, more of them are taking on the role of fiduciary -- which requires advisers to put their clients' interests ahead of the financial firm that employs them." (Reuters)  

Retirees Suffer as Plan-to-IRA Rollover Boom Enriches Brokers
"Former employees shifted $321 billion from 401(k)-style plans to individual retirement accounts in 2012, up about 60 percent in a decade ... As a result, IRAs hold $6.5 trillion, more than the $5.9 trillion in 401(k)-style accounts. A three-month Bloomberg investigation found that former employees at major companies ... have complained that sales representatives lured them into rolling over their 401(k) nest eggs into unsuitable IRA investments. The investigation was based on interviews with retirees and brokers, confidential arbitration records and other documents." (Bloomberg)  

New Jersey's 'Millionaire Tax' to Close Pension Funding Gap Could Be Headed to Ballot in 2015
"With Gov. Chris Christie vowing to veto any tax increase, Democratic legislative leaders looking for pension-funding solutions may conclude that their best option is to bypass Christie by putting a millionaire's tax on the ballot as a constitutional amendment next year.... Christie has no veto power over constitutional amendments, and while it would take 17 months for the Democratic Legislature to get the millionaire's tax on the ballot, Democratic leaders realize that it is the only step they can take without Christie's support." (NJ Spotlight)  

MetLife Qualified Retirement Plan Barometer 2014: A Study of Retirement Income Culture Among the Fortune 1000 (PDF)
"Companies with broad coverage DB and DC plans have an average barometer score of 71, whereas companies with only a DC plan averaged a barometer score of 55. This suggests that companies sponsoring only a DC plan need to work much harder to replicate the retirement income security provided by traditional DB plans.... DC-only plan sponsors are more than twice as likely to believe that workers reach retirement age with inadequate savings to generate sufficient retirement income... Companies that offer broad coverage DB plans and DC plans appear to be more likely to communicate about retirement income during their employees' entire careers (72% vs. 52%)." (MetLife)  

Substantial Changes in Retirement Age and Lifestyle Are on the Horizon
"People expect to work longer, but a sizable number will do so by choice rather than necessity. Others -- and there are plenty of them -- aren't as fortunate and don't feel they'll have the luxury of choice. Among retirees: The average age they retired was 59; the large majority (72%) say they are completely retired from working. Among those still working: The average age they expect to work until is 68 (nearly a decade longer than the retirees in the study); nearly half (45%) say they will continue to work in retirement, not because they have to but because they want to." (Northwestern Mutual)  

Ron Surz Says Regulators Can't Solve Target Date Fund Problems
"Why are the fiduciary risks regarding TDFs so much greater today than they were in 2009? TDF assets have grown from $200 billion in 2009 to $1 trillion today, representing about 25% of all 401k assets.... As is customary in most products, and especially investments, fund companies are calling the shots. Investments are sold, not bought.... In a democracy, government can't dictate investment product, so nothing will change unless fiduciaries do their jobs, which will probably take lawsuits; that's the American way." (Fiduciary News)  

Are Your Service Providers Fiduciaries of Your 401(k) Plan? (PDF)
"It is important that plan sponsors understand the various ERISA fiduciary roles so they can properly structure their plan governance. This article explores these types of arrangements as well as the issues plan sponsors need to review when seeking this type of independent third- party contractual insulation. Absent appropriate contractual provisions, the fiduciary protection could prove more illusory than real." (Wilkins Finston Law Group LLP, in Benefits Magazine)  

New GAO Study Addresses Performance Audit Reports
"Courtesy of the [GAO], a new study looks at performance audits for different types of pension plans.... [SEC] Commissioner Daniel Gallagher recently decried what he believes is an under-reporting of 'trillions of dollars in liabilities.' ... [GASB] just published an update to its pension accounting standards and posted a pair of brand new proposals to 'improve financial reporting by state and local governments of other post-employment benefits, such as retiree health insurance.' ... The good news ... is that initiatives for heightened transparency are underway." (Pension Risk Matters)  

Depression Up After Pension Benefits Cut
"Sudden changes in older workers' financial expectations for retirement can cause depression, according to a 2011 study that may resonate today amid pension benefit cuts for state- and local-government workers from Stockton, California, to Providence, Rhode Island. The study, which came out of the Netherlands, suggests that cuts in Dutch pensions, announced on very short notice, produced feelings of differential treatment and a loss of control that increased the incidence of depression among the workers who were adversely affected." (Center for Retirement Research at Boston College)  

Talking to the Generations: Targeting Effective DC Plan Communication (PDF)
"This article demonstrates how effective communication may be tailored to age groups in terms of message, channel and framing. The authors discuss how various age groups prefer to receive [DC] plan information, what works and what doesn't across generations, and what the industry is doing -- or failing to do -- so that plan sponsors can implement a practical communication program that is targeted by generational category in a way that makes the most of their communication budget." (Benefits Quarterly, published by the International Society of Certified Employee Benefit Specialists [ISCEBS])  

GAO Report: Oversight of the National Railroad Retirement Investment Trust
"Based on our review of oversight models that apply to state plans and other information, GAO developed several options to enhance the Trust's performance audit practices, and stakeholders identified potential advantages and limitations pertaining to them.... The Trust's practice of commissioning periodic performance audits could be established as a formal requirement, either through a memorandum of agreement between the key parties, or through a statutory amendment, with external input on subject and scope of the audits. Trust and Board officials stated that this would be a reasonable option, and in early 2014 developed an initial proposal to implement such an agreement." (U.S. Government Accountability Office [GAO])  

How Long Will You Live in Retirement? Want to Bet on It?
"The [DOL] now offers a tool to help employees assess their paths toward providing for their retirements.... The tool makes a simplifying assumption that may cause employees to underestimate how much they will need at retirement. It assumes each employee will survive in retirement according to an average life expectancy (roughly age 85 to 90, depending on retirement age, gender, etc.).... Relying on any tool to calculate how much we can spend in retirement may cause our retirement account balances to run out sometime around our late 80s. What happens then?" (Milliman Retirement Town Hall)  

Are States Migrating from Traditional Pensions? A State-By-State Review (PDF)
"Those who sponsor a traditional DB plan should be aware of the continued shrinkage of the overall DB plan market, recognizing that states sponsor some of the largest DB plans in the U.S. On the flip side, continued expansion of the DC arena would likely increase competition among service providers to that market, further enhancing the service/fee equation for DC plan sponsors." (Cammack Retirement Group)  

[Guidance Overview]

GASB Approves Exposure Drafts for OPEB Accounting and Non-Trust Pension Benefits
"It appears that substantially all of the requirements established for pension plans in Statements No. 67 and 68 are being proposed for OPEB plans. These include: [1] Discount rate ... [2] Actuarial cost method... [3] Balance sheet liability ... [4] Annual Required Contribution ... [5] Disclosures[.]" (Cheiron)  

IRS Initiates Audits Under Section 409A: Now Is a Good Time for Closely Held Businesses to Review Potential Issues
"An employment agreement can serve as the plan document, but it must contain the necessary language and/or be designed to comply with section 409A.... for non-public companies there are specific requirements that must be met in order for the plan to be exempt from section 409A.... Unlike SARs, which may be structured to avoid falling under the parameters of section 409A, phantom stock is deferred compensation, subject to section 409A.... To comply with the short-term deferral rule under section 409A, it is advisable that the intent to settle the award within 2-1/2 months after the tax year of vesting be stated in the plan document." (EisnerAmper)  

Game-Changing Court Decision Shows Why You Must Watch for Noncompetes and Other Restrictive Covenants in Stock Grant Agreements
"The Delaware court agreed with the plaintiff that the defendant had assented to the restriction under the agreement by accepting the award through a third-party website. It reached this conclusion even though she merely clicked to indicate acceptance of the agreement as a whole and did not acknowledge/click on any specific provision confirming that she had read or agreed to the restrictive covenant." [Newell Rubbermaid v. Storm, No. 9398 -- VCN (Del. Ch. Mar. 27, 2014)] (myStockOptions.com)  

Mutual of Omaha Retirement Services Offers ERISA 3(16) Service to Simplify 401(k) Plan Administration
Mutual of Omaha

TriStar Pension Consulting Releases New Website
TriStar Pension Consulting

Council promotes communications director, hires new communications assistant, plans enhanced outreach to members, lawmakers, general public
American Benefits Council

AHIP's Time for Affordability Campaign Highlights Factors Impacting Premiums in 2015
America’s Health Insurance Plans [AHIP]

Prudential sees improved retirement savings with new digital tools
Prudential Retirement

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