DATAIR Employee Benefit Systems, Inc.

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Transamerica Retirement Solutions
in UT

Operations Team Lead
Verisight, Inc.
in CA

Conversion, Data Specialist
The Newport Group
in NC

Conversion Consultant
ASPire Financial Services LLC
in FL

Benefits Specialist
Saddle Creek Logistics Services
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IRS Answers Practical In-House Counsel and Real World Questions on Understanding an Employer’s Pay or Play Tax Responsibilities, Including Reporting on the New Forms
August 13, 2014 WEBCAST
(ABA Joint Committee on Employee Benefits)

Supreme Court’s Decision in Dudenhoeffer: If You Offer a Company Stock Fund Investment Option in your 401(k) Plan, You Will be Sued, Eventually
August 14, 2014 WEBCAST
(Winston & Strawn)

2014 Employee Benefits Fall Seminar
September 24, 2014 in KS
(Spencer Fane Britt & Browne LLP)

2014 Employee Benefits Fall Seminar
October 14, 2014 in MO
(Spencer Fane Britt & Browne LLP)

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[Official Guidance]

Text of OPM Final Regs on Phased Retirement for Federal Government Employees (PDF)
"The final rule informs agencies and employees about who may elect phased retirement, what benefits are provided during phased retirement, how OPM intends to compute the annuity payable during and after phased retirement, and how employees may fully retire after a period of phased retirement.... OPM will be issuing separate guidance to assist agencies and employees with administrative and procedural matters that do not need to be addressed in this rule. Employees may not enter phased retirement or submit applications for phased retirement to OPM until 90 days after publication of this final rule." (Office of Personnel Management [OPM])  

[Advert.]

New! ftwProposal Pro – The newest addition to the ftwilliam.com Product line!

ftwProposal Pro helps illustrate the best plan options from data that is entered or populated from the plan document or administration software. Contact us about the auto-solve tool, customized reports, how to maximize benefits and more!

[Guidance Overview]

HATFA Requires Immediate Action on 2013 Defined Benefit Plan Valuations
"Plan sponsors face a number of time-sensitive decisions and actions as a result of [the Highway and Transportation Funding Act's (HATFA's)] enactment.... [A]bsent an election to opt-out, the narrower 2013 plan year interest-rate corridor will require a revised actuarial valuation. Plan sponsors will also have to revise their disclosures to reflect the HATFA changes in the next Annual Funding Notices.... The HATFA provision does not affect multiemployer defined benefit pension plans nor PBGC premiums." (Milliman Retirement Town Hall)  

[Guidance Overview]

Highway and Transportation Funding Act Provides Pension Funding Relief in 2014 (PDF)
"The new rates appear to increase discount rates and decrease liabilities significantly, although not as much as with MAP-21. [The authors] expect the effective rates to increase approximately 35 bps for 2013 and approximately 65-70 bps for 2014 ... [F]or a $100 million plan with duration of 12, an increase in effective rates of 67 bps would lower the liability by approximately $8 million, reducing the deficit (shortfall) by this same amount. This $8 million translates to approximately $1.3 million reduction in contributions for the 2014 Plan Year." (SEI)  

[Guidance Overview]

IRS Final Regs Make TIN Masking Permanent for Payee Statements (PDF)
"The [IRS] recently issued final regulations that permit (but do not require) the use of truncated taxpayer identification numbers (TTINs) on certain payee statements, including Forms 1099-R and 5498.... This covers social security numbers, IRS individual taxpayer identification numbers, IRS adoption taxpayer identification numbers, and employer identification numbers ... The final rules clarify that use of the TTIN will not result in reporting penalties for failure to include the correct TIN on the payee statement/document." (Groom Law Group)  

Text of Actuarial Standards Board Request for Comments on ASOPs and Public Pension Plan Funding and Accounting (PDF)
"This document contains a request for comments concerning the application of the Actuarial Standards of Practice (ASOPs) in regards to actuarial valuations and other analyses used for determining public pens ion and other postemployment plan funding and accounting ('public plan actuarial valuations').... Deadline for receipt of comments in the ASB office: November 15, 2014." [Letter includes six specific questions on which the Board is requesting input.] (Actuarial Standards Board)  

[Advert.]

Attend the Best Meeting in the IRA Rollover Market - Sept. 15-16 - Boston

Hear directly from leading retirement executives on strategy and experiences in engaging a segmented market and partnering with plan sponsors. Mention FMP164 during registration for 10% discount.

Fourth Circuit Adopts More Demanding Test for Exercise of Objective Prudence by Retirement Plan Fiduciaries
"The Fourth Circuit majority held that in the face of 'overwhelming evidence' of a breach of the duty of prudence and Plaintiff's prima facie showing of a resulting loss to the [RJR Nabisco 401(k) plan], Defendants were required to show, by a preponderance of the evidence, that a prudent fiduciary would have made the same decision had the fiduciary undertaken a proper investigation. The court explained that the 'could have' versus 'would have' standards represented the difference between a decision that was merely possible versus one that was probable." [Tatum v. RJR Pension Investment Committee, No. 13-1360 (4th Cir., Aug. 4, 2014)] (Williams Mullen)  

Eighth Circuit Reverses Tax Court's Denial of Taxpayer's Partial Rollover Contribution
"The court determined that the fact that entitlement to the partial rollover was overlooked by the IRS before the Tax Court where the taxpayer represented himself pro se was enough to excuse the taxpayer from not raising the issue until represented by counsel on appeal. Though the appellate court generally does not consider issues not raised in the lower court, it makes an exception 'where injustice might otherwise result.' Accordingly, the Eighth Circuit reversed the Tax Court and allowed the taxpayer's belated partial rollover argument." [Haury v. Comm'r, No. 13-1780 (8th Cir. May 12, 2014)] (Wolters Kluwer Law & Business)  

The 'Gotchas' of Retirement Services Purchasing (PDF)
"The information gap that has existed between retirement services vendors and retirement plan sponsors has created fertile ground for 'gotchas' in vendor service arrangements that continue to waste millions of dollars of retirement plan savings annually. This article explores the most common 'gotchas' plan sponsors face, and offers real-world solutions for those organizations seeking to improve their fiduciary supply chain management approach." (Roland|Criss via Journal of Compensation and Benefits)  

New QLACs Establish Foundation for DC Annuitization
"Even though the establishment of the QLAC provides a good planning tool, and it does provide a modest tax benefit, that is not the real story here. The true impact of the QLAC regulation, and what makes it so very important, is that it establishes the foundation under tax law by which DC plans can simply annuitize." (Thompson SmartHR Manager)  

Is Plan Re-Enrollment the Wonder Drug for Your Company's Retirement Plan?
"What is a re-enrollment? ... What is a QDIA?... Why should I consider a re-enrollment for my plan?... Will my plan benefit from re-enrollment?... Implementing a Plan Re-enrollment." (Employee Fiduciary)  

401(k) Savers Are Interested in Auto Escalation
"While use of auto enrollment is rising among 401(k) plans, the adoption of auto escalation ... has been slower, even though plan participants indicate they would like to use it.... 70% of those eligible to participate in a 401(k) plan and expecting to retire in five or more years indicated they would be at least somewhat likely to sign up for an auto escalation feature if it was offered. The same study found the uptake of auto escalation had hardly advanced since 2013, with only 28% of those eligible for a 401(k) plan enrolled in auto escalation." (Putnam Investments)  

Pushing the Auto Escalation Envelope
"A recent survey suggests that employees may be more receptive to automatic defined-contribution increases than some employers think.... 55 percent of 7,545 retirement plan participants surveyed said they would favor automatic annual increases to their defined-contribution retirement plans.... [T]here are two ways to offer such a program: 'opt-in,' which means employees must actively sign up, or 'opt-out,' which automatically launches escalating deductions until an employee decides to quit.... [T]he opt-out feature has a high participation rate when compared to opt-in.... [P]eople typically learn to live with net incomes, so if employers can time the escalations with annual raises, that makes it even more attractive." (Human Resource Executive Online)  

Retirement Security: What's Working and What's Not?
The Bipartisan Policy Center hosted a discussion on the retirement system in the U.S. on July 30. Available online are videos of [1] a keynote address by Dr. James Poterba (National Bureau of Economic Research); [2] remarks by the cochairs of the Commission on Retirement Security and Personal Savings co-chairs, who are former Sen. Kent Conrad (D-N.D.; Former Chairman, Senate Budget Committee) and Jim Lockhart (former Deputy Commissioner and Chief Operating Officer, Social Security Administration, and former Executive Director, PBGC); and [3] a panel discussion featuring: Andrew Biggs (American Enterprise Institute), Lynn Dudley (American Benefits Council), Ben Harris (Brookings Institution) and Kristi Mitchem (State Street Global Advisors). Also available online are 17 presentation slides from the keynote address. (Bipartisan Policy Center)  

Target Date and Target Risk Funds Performing Well
"The average target-date fund (TDF) enjoyed nearly a 4% return for the second quarter of 2014 ... Although there are signs the industry is maturing, flows into target-date funds continued at a healthy clip ... Total assets in retail target-date funds were over $690 billion at the end of June, representing a 27% increase from a year ago." (planadviser)  

Unexpected Consequences of Early Retirement
"Even if you plan to retire at 45 ... you are still going to be working for two decades. And early retirees need to keep their living expenses lower and save significantly more of their paychecks than people planning to retire at a more traditional retirement age ... Working so hard could make you want to retire even sooner.... You might be afraid to quit.... It's scary to spend down your life savings.... There will be parts of work you will miss." (U.S. News & World Report)  

IRS Initiative Gathers Section 409A Data for Compliance Check
"[S]tandardized or model information document requests (IDRs) were created for the project with the intent that all taxpayers would receive substantially the same IDR, with some minor differences.... The IDRs focus on three issues: initial deferral elections, subsequent deferral elections and payouts of nonqualified deferred compensation. As part of the examination of the payout, the IRS is looking at compliance with the six-month delay rule for specified employees." (Bloomberg BNA)  

Financial Service Company's Nonqualified Plan Was Governed by ERISA
"[This Fifth Circuit case] makes another contribution to the not easily reconcilable body of case law that applies the definitional provisions of ERISA to nonqualified plans. Its distinctive characteristic may be its strict text-based analysis of both the statute and the plan.... The decision rests significantly on descriptions and defined terms in the plan document that conventionally are intended not to have analytic import." [Tolbert v. RBC Capital Markets Corporation, No. 13-20213 (5th Cir. July 14, 2014)] (Sutherland Asbill & Brennan LLP)  

Social Security: Calculation and History of Taxing Benefits (PDF)
18 pages. "According to the [CBO], 49% of Social Security beneficiaries (25.5 million people) will be affected by the income taxation of Social Security benefits this year. That share grows over time because the income thresholds used to determine the share of benefits that is taxable are not indexed for inflation or wage growth. As a result, income taxes on benefits will become an increasingly important source of income for Social Security and Medicare." (Congressional Research Service [CRS])  

CalPERS 2012-17 Strategic Plan: Annual Report July 2014 (PDF)
"As of June 30, 2014, [CalPERS] earned a preliminary 18.4 percent net rate of return ... exceeding [its] actuarial assumed rate of 7.5 percent. The funded status ... is estimated to be 76 percent as of June 30, 2014.... [CalPERS] negotiated health care premium rates for the new calendar year that reduce premiums for a majority of our members by approximately 3 percent." (CalPERS)  

Judge Orders Company President to Restore more than $143,000 to Retirement Plan of Attevo Inc. in Cleveland
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

New Insurance Option Helps Growing Businesses with Planning Needs
Principal Financial Group

John Hancock Retirement Plan Services' Ann Slotwinski Becomes President of National Institute of Pension Administrators (NIPA)
John Hancock Retirement Plan Services

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