Defined Contribution 401(k) Plan Administrator
Actuaries & Associates
in TX

Client Executive
Transamerica Life Insurance Company
in IA, IL, WI

Distribution Specialist
Scholz, Klein & Friends Enlightened Retirement Group, Inc.
in TX

Trainer
PenServ Plan Services, Inc.
in PA

Manager, Key Accounts
The National Association of Plan Advisors [NAPA], and the American Society of Pension Professionals & Actuaries [ASPPA]
in DC

DC Plan Administrator
Advantage Retirement Plan Solutions, LLC
in ANY STATE

Group Compliance Consulting Advisor
NRECA [National Rural Electric Cooperative Association]
in VA

Retirement Plan Administrative Assistant
Growing TPA Firm
in NY

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ECFC 2nd Wednesday Teleconference
July 8, 2014 WEBCAST
(ECFC [Employers Council on Flexible Compensation])

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[Official Guidance]

Text of IRS TAM 201425019: ESOP Loan Operation Created Prohibited Transaction, Regardless of Compliance of Plan Document (PDF)
"Here the Loan, in the amount of required monthly principal payments of only which either would have required 15 years, not 10, to pay off in its entirety, or would have resulted in a balloon payment thus violating the special rule's level annual payment requirement. Consequently, even if the language in the Plan and pledge agreement met the documentary requirement ... the Loan violates the regulation in operation and fails to be exempt.... Section 54.4975-7(b)(8) of the Regulations imposes both an operational and a documentary requirement." (Internal Revenue Service [IRS])  

[Advert.]

ASPPA Annual Conference on October 26-29 in Washington DC

We don't just set the bar, we're constantly raising the bar for America's Retirement. And we unleash that tenacity at every ASPPA Annual Conference.

ABB: Affirmed, Reversed, and Vacated (PDF)
"[It] is critical for the plan sponsor to understand and quantify the amount of revenue in connection with the investment selection. Since participants who were interested in investing in a balanced fund had the ability to select investment options other than the Fidelity fund, a more reasonable measure of damages, according to the Eighth Circuit, would be to compare the difference between the performance of the Fidelity fund and the minimum return of the subset of managed allocation funds the ABB fiduciaries could have chosen without breaching their fiduciary duties." [Tussey v. ABB, Inc., No. 12-2056 (8th Cir. Mar. 19, 2014)] (Marcia Wagner, via 401[k] Advisor)  

401(k) Plans Remain EP Exam Priority
"An Exam Project on defaulted 401(k) loans is under way ... which EP hopes to have completed early next fiscal year.... In addition, a 'nonqualified' 401(k) EPCU project was prompted by the final report indicating that a number of 401(k) plans were showing up as 'plans not intended to be qualified' based on Form 5500 filings." (Wolters Kluwer Law & Business)  

DOL Increases Scrutiny of Employee Stock Ownership Plans
"The [DOL] is the plaintiff in 15 lawsuits related to employee-stock-ownership plans, with 'virtually all' the cases alleging shoddy estimates of what a company's shares are worth, said Timothy Hauser, a deputy assistant secretary at [EBSA].... Overall, the agency has filed 28 suits tied to employee-stock-ownership plans since October 2009, double the total in the previous six years[.]" (The Wall Street Journal; subscription may be required)  

401(k) of the Future: Lifetime Income Solutions
"An 'In-Plan' [Lifetime Income Solution (LIS)]... allows Plan participants to accumulate lifetime income while their assets remain in the Plan. An 'Out-of-Plan' LIS ... requires a Plan participant take a distribution from their Plan to purchase lifetime income outside the Plan.... When an Out-of-Plan LIS is offered to participants, the burden to prudently select the option at the time of purchase remains. However, once the participant's assets are removed from the plan, the plan fiduciary no longer has a duty to monitor those assets, thus reducing fiduciary risk. When an In-Plan LIS is offered, plan fiduciaries must continue to monitor the service provider, and if necessary, terminate the relationship when prudence dictates." (Francis Investment Counsel LLC)  

[Advert.]

IRS Phone Forum Rebroadcast, July 8, 2014: Retirement Plans After Windsor

This program will discuss the qualified plan impact of the Supreme Court's decision in U.S. v. Windsor, Rev. Rul. 2013-17, Notice 2014-19 and the relevant IRS FAQs.

San Bernardino Cuts Deal to Pay CalPERS Debt
"Bankrupt San Bernardino announced an agreement with CalPERS last week to pay off an unprecedented pension debt owed for skipping payments to the pension fund for a year - $13.5 million, plus several million more in penalties and interest.... San Bernardino has not publicly proposed a pension cut. A sketchy plan for operating in bankruptcy only proposed a 'fresh start' that would 'reamortize CalPERS liability over 30 years,' perhaps cutting costs $1.3 million in the first year." (Calpensions)  

Pension Reform Takes Center Stage in Phoenix
"In 2013, voters passed a requirement that municipal workers hired after July 1 of last year split pension-fund contributions 50-50 with the city and work longer before retiring, moves expected to help save $596 million over 25 years, according to the city. But supporters of moving to a 401(k)-style plan say the city hasn't done enough to stop its soaring costs." (AZCentral)  

[Opinion]

Recordkeeper Consolidation Would Not Mean Falling Skies
"Conscientious recordkeepers will continue their commitment to offering the best product they can, at a price that generates a reasonable profit, but is also fair to plans and their participants. If they do less, someone will see the obvious opportunity and take their business. This dynamic will continue to govern the recordkeeping industry, as it has, whether the quality recordkeeper has many industry peers, or few." (Todd Berghuis, for Ascensus)  

[Opinion]

Text of Comments by ASPPA and ACOPA to IRS on Cash Balance Volume Submitter Provisions (PDF)
"ASPPA and ACOPA recommend that the flexibility contained in traditional defined benefit volume submitter plans should also be available in cash balance volume submitter documents. This flexibility pertains to definitions of classes, formulas based on percentage of compensation or flat dollar credit per year of service and the lesser of these or net self-employment income." (American Society of Pension Actuaries [ASPPA])  

[Opinion]

Text of Comments by Fiduciary Plan Governance, LLC to DOL on Proposed Fee Disclosure Guide (PDF)
"We think the best approach is to put the burden on the service provider to make the determination of whether it is subject to the guide requirement under consideration of the following factors: [1] Is the disclosure drafted in a manner understandable to the average person, and assuming the recipient has no knowledge or understanding of financial industry fee structures? [2] Is the disclosure only as long as is necessary to convey the required information consistent with the first factor? If the service provider cannot answer both questions in the affirmative, they would be subject to the guide requirement." (Fiduciary Plan Governance, LLC)  

Text of District Court Opinion: ERISA Provides No Statutory Penalty for Failure to Provide Plan Guidelines
"The disability durational and claims guidelines that plaintiff requested fall under the ERISA section 1133 regulations because, construing the facts in favor of plaintiff, they were 'relied upon' or at least 'considered ... in the course of making [plaintiff's] benefit determination.' Indeed, that is the very reason plaintiff seeks them.... Nothing in the text of the ERISA statute or regulations indicates that section 1132(c) penalties are available for violations of section 1133 or its regulations, and section 1133 does not provide for penalties." [Marcin v. Reliance Standard Life Insurance Company, No. 13-1308 (D.D.C. June 20, 2014)] (U.S. District Court for the District of Columbia)  

Sixth Circuit Finds All Anti-Retaliation Provisions Are Not Created Equal, But They Are Legal Landmines
"In enacting the anti-retaliation provision in ERISA, Congress included only a clause protecting people who give information or testify in inquiries or proceedings.... ERISA does not include the broader opposition protection for those employees who oppose, report or complain about unlawful practices.... Unlike some other forms of whistleblowing, almost any employee, regardless of seniority level, can assert an [ACA] whistleblowing claim." [Sexton v. Panel Processing, Inc., No. 13-1604 (6th Cir. May 9, 2014)] (Porter Wright Morris & Arthur LLP)  

FASB Updates Accounting for Stock Compensation
"Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the periods for which the service has already been rendered. If it becomes probable that the performance target will be achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period." (Journal of Accountancy)  

FICA Taxes and Nonqualified Deferred Compensation
"Although the special FICA timing rule does not defer the timing of FICA taxation, an employer's failure to properly withhold and pay FICA taxes on amounts deferred under a non-account balance (e.g., defined benefit) plan in accordance with the special rule likely results in significantly higher FICA tax burdens for the participant and the employer." (Fulcrum Partners, LLC)  

SSA Adjusts 2014 Fee for SSN Verification Transactions
"Currently, for 2014, users also pay a fee of $1.10 per SSN verification transaction in advance of services.... [T]he SSA will adjust the fiscal year 2014 fee to $3.10 per SSN verification transaction. New customers still will be responsible for the one-time $5,000 enrollment fee. This change is effective June 2, 2014." (Wolters Kluwer Law & Business)  

[Opinion]

ERISA: 40 and Counting
"Over the past 40 years, more and more of America's workers have switched from traditional pensions to 401(k)s and similar plans. With the rise of these defined contribution plans, America's workers have had to take on the responsibility and the risk of saving, investing and managing their own money. This means more options, more complexity and more responsibility for those workers, and makes it even more important for us to help ensure financial literacy for those workers." (Phyllis Borzi via Work in Progress, The Official Blog of the U.S. Department of Labor [DOL])  

SEC Charges Private Equity Firm With Pay-to-Play Violations Involving Compensation from Pennsylvania Public Pension Funds following Political Campaign Contributions
U.S. Securities and Exchange Commission

Aon Foresees Growth with Leadership Appointment to Executive Benefits and Aon Private Risk Management Groups
Aon Corporation

United States Conference Of Mayors Honors Rochester, MN, With Retirement Readiness Award At Annual Summer Conference
U.S. Conference of Mayors

FCRC Apps Announces the Launch of SkyBoks, a Document Upload Portal
FCRC Apps, LLC

Fisher & Phillips Releases Version 2 of FMLA Leave App
Fisher & Phillips LLP

HHS Announces $800,000 HIPAA Settlement in Medical Records Dumping Case
U.S. Department of Health & Human Services

Guardian Retirement Solutions Integrates LPL Financial’s Worksite Financial Solutions Platform into Its Retirement Plan Products
Guardian

Planning for Retirement and Education Takes a Backseat to Vacation Planning, Finds Edward Jones Survey
Edward Jones

Transamerica Helps Bridge the Retirement Plan "Coverage Gap" for Small Business Employees
Transamerica Retirement Solutions

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