WEB - Worldwide Employee Benefits Network

Retirement Plan Administrator
Retirement Planners
in VA

Defined Contribution Plan Administrator
Leon E. Werntz and Associates, Inc.
in LA

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ACA Shared Responsibility Reporting - The Key to IRS's Penalty Tax Assessment and Data Key to the Employer's Defense
September 30, 2014 WEBCAST
(Worldwide Employee Benefits Network [WEB] - Dallas Chapter)

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[Guidance Overview]

DOL Requests Comments on Brokerage Windows in 401(k) Plans
"The DOL's goal in issuing the request for information is to assist the DOL in determining whether, and to what extent, regulatory standards or other guidance concerning the use of brokerage windows may be necessary to protect plan participants. In addition, the DOL wants to ensure that plan fiduciaries properly understand the scope of their ongoing responsibilities with respect to brokerage windows. The request for information provides insight into the DOL's thinking in this area. Many of the requests may be of particular interest to fiduciaries of plans that offer, or are considering offering, brokerage windows[.]" (Winston & Strawn LLP)  

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[Guidance Overview]

PBGC Publishes Final Regs on Phase-In Period for Guarantee of Benefits for an Unpredictable Contingent Event
"[T]he regulations [provide] that determinations made by a plan, arbitrator or court regarding the date when participants become entitled to a UCEB may be important to the determination of when participants become entitled to the additional benefit, but are not controlling. The PBGC ultimately retains the authority to make the determination." (Thompson Coburn LLP)  

[Guidance Overview]

IRS Finalizes Guidance on Rev. Rul. 81-100 Group Trusts and Insurance Company Separate Accounts
"Note that Section 403(b)(1) annuities are not yet on the list of permissible plan investors. Even where allowed by the tax law, investment by IRAs or Section 403(b) accounts (other than Section 403(b)(9) retirement income accounts), for example, in certain group trusts may be precluded by securities law or other considerations, depending on the structure of the trust. There has been substantial prior practice of plans investing in 81-100 group trusts through insurance company separate accounts, which sometimes was expressly provided for in a group trust document approved in the IRS determination letter process. By positioning this point as a clarification, Rev. Rul. 2014-24 appears to endorse that past practice. Any existing arrangements should be reviewed for compliance with the conditions of the updated ruling." (Sutherland Asbill & Brennan LLP)  

DOL Inspector General Audits EBSA
"[T]he Inspector General recently began sending out letters to sponsors of small plans who claimed an audit waiver, requesting: [1] a copy of [the] plan's Summary Annual Report showing all qualifying investments and regulated financial institution certification(s) for the plan's investments, trust statements and associated detailed asset schedules; and [2] documentation used to calculate the number of participants at the beginning and end of the year on forms 5500-SF. The Inspector General will use the results to prepare a report on how well the EBSA is doing at monitoring the small plan audit exemption." (American Society of Pension Professionals & Actuaries [ASPPA])  

The Fiduciary Quicksand of Acquiring, Holding and Selling Employer Stock
"The Supreme Court's new plausibility standards allow trial courts to rely on Modern Portfolio Theory and the associated concept of efficient markets in considering claims that the fiduciaries imprudently paid too much for employer stock. As such, these new standards, which are themselves a daunting set of hurdles for plaintiffs to overcome, appear aimed at [Eligible Individual Account Plans (EIAPs)] holding publicly traded shares. The Court left the plausibility of imprudence claims against fiduciaries of EIAPs holding privately-held employer stock much more unclear." (ERISA Fiduciary Administrators LLC)  

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Fiduciary Guarantees -- There's Tinsel on the Tinsel!
"[What's a Plan Sponsor to do? Answer:] Read the provider's contracts for the precise meaning of the fiduciary warranty or guarantee that is being offered. Better yet, have your attorney read them. You will never be able to get rid of exposure to fiduciary liability entirely. So make sure (i) you understand what responsibilities remain with you after a responsibility is delegated and (ii) you are covered by fiduciary liability insurance or via other means. Remember that even a 'real' guarantee or warranty will not protect you from all liability." (Fiduciary Plan Governance, LLC)  

81% of Nevada 401(k) Plan Participants are in Low Scoring Plans
"Arkansas had the lowest rate of participants in low scoring plans, 15.0%. Nevada had the highest concentration of participants in low scoring plans, with 80.6% in plans receiving scores less than 50. No state had a majority of its participants in high scoring plans, though Delaware came closest with 43.3% of participants in high scoring plans, or plans with scores of 75 or higher. Among the five largest states by plan participants, Pennsylvania had the lowest concentration of participants in high scoring plans, 5.9%, and the second highest concentration of participants in low scoring plans, 40.1%. The other four largest states by plan participants were California, Illinois, New York and Texas." (Judy Diamond Associates)  

ERISA at 40: Does the Historic Overhaul of Benefits Remain Relevant Today? (PDF)
"ERISA helped the retirement plan industry evolve, but we have experienced great change since its enactment. Our demographics have shifted; our work environment has evolved from manufacturing to service-oriented businesses; our economy has suffered ups and downs; and business has truly gone global.... Did employers shift from traditional DB plans to DC plans because they could, or because they believed the increasingly complex regulatory and economic environment introduced by ERISA made it impossible to sustain the expenses of a pension plan? Did ERISA provisions enable employers to adapt to shifting employee demographics by adopting a 401(k) plan that would be accepted by employees and help stabilize employer costs?" (ERISAdiagnostics via Thompson Pension Plan Fix-It Handbook)  

The Rise and Fall of the American Pension
"Pension plans blossomed during the Depression and flourished when the American economy led the world. The precise features of the pension benefit became an important differentiator between companies competing for the best talent.... The most often mentioned 'killer' of the American pension is the 401k plan ... Rampant inflation, at the very least, was a very willing accomplice ... [V]arious demographic trends may have doomed them anyway.... [T]he push to win more benefits may have also shortened the life of the pension plan.... Part of this new reality includes changing priorities within today's job-hopping work force." (Fiduciary News)  

Professional Retirement Plan Advisors Have Significant Impact on Retirement Plan Performance
"Seventy-six percent of plan sponsors say more than half their participants are on course to achieve a successful retirement. More than 80 percent have experienced an improvement in participant deferral rates. Thirty-three percent reported a deferral increase of at least six percent in the last two years." (Transamerica Retirement Solutions)  

IRA Withdrawals Tied to RMD Requirements
"For those at or above the required minimum distribution (RMD) age of 70-1/2, the withdrawal rates at the median (mid-point) appeared close to the amount that is required to be withdrawn, though some were significantly more ... [A]mong individuals under age 60, 10% or fewer had a withdrawal.... 65.4% of the individuals taking a withdrawal were ages 65 or older, and just over half (51.1%) were ages 71 or older, while just 11.5% were younger than age 50." (Wolters Kluwer Law & Business)  

[Opinion]

Why There's No Benefit in Target Benefit Pensions
"Myth 1: 'Shared-risk' plans split the risk and rewards between employers and employees.... Myth 2: 'Shared-risk' plans strike a balance between worker-friendly DB plans and the defined-contribution (DC) plans that employers prefer.... Myth 3: If benefits are reduced in a 'shared-risk' plan, they will only be temporary reductions.... Myth 4: The 'shared-risk' plan is a hybrid, in which some benefits are guaranteed and some (like inflation protection) are conditional.... Myth 5: Unions have embraced the 'shared-risk' model." (Financial Post)  

[Opinion]

Why Your Baby Needs a Retirement Account
"How early should people start saving for retirement? [Answer:] When they're born.... There have been suggestions that for every time a child is born to contribute $1,000 to an account and they get it when they retire. They will see the compounding effect, and it will make them savers their whole lives.... [If] you can save at 10 or 10-plus percent, with Social Security you will have more than 100 percent income replacement in retirement. And 30-plus million Americans are on track to replace 100 percent of their income." (Robert Reynolds, in The Washington Post; subscription may be required)  

[Opinion]

California Cities, Counties Need Statewide Pension Reform Initiative
"California voters suffered another defeat at the hands of special interests this month when public employee unions judicially blocked a Ventura County pension reform initiative from the November ballot, further underscoring the need for strong statewide action to allow local governments to control pension costs.... A well-drafted constitutional amendment would ... remove the numerous government employee union roadblocks thwarting local pension reforms ... and provide much needed clarity to conflicting laws and regulations." (Chuck Reed, Mayor of San Jose, for Los Angeles Daily News)  

Executive Retirement Benefits in the Wake of Qualified Plan Changes
"Most Fortune 200 companies that closed or froze their qualified DB plans now provide DC-style retirement benefits to executives. The prevalence of SERPs declined by slightly more than one-third in the hybrid conversion group versus nearly two-thirds in the DC-only group. Most companies that closed or froze their plans used similar transition approaches for both executive and broad-based plans." (Towers Watson)  

Employers Make the Business Case for Benefits Through RFPs
"The request-for-proposal process is becoming more routine among benefit managers at private companies, according to the Disability Management Employer Coalition, an association focused on educating employers on disability insurance, absence management and return-to-work solutions. Terri L. Rhodes, DMEC's executive director, explains that those responsible for procurement may need educating in order to ensure that their companies are gaining the best vendor partner to offer these benefits. Meanwhile, she says, because so much has changed following the recession and subsequent financial recovery, RFPs are a good strategic move." (Employee Benefit News)  

SEC Rulemakings Expected as Proxy Advisor Guidance and Greater ISS Focus On Equity Plans Set Stage for 2015
"The [Center on Executive Compensation] made several suggestions to the SEC, including limiting the application of the pay ratio to U.S. full-time employees as well as providing companies with a more realistic compliance time frame through the use of a 'look-back' period.... The Center continues to encourage the SEC to use the forthcoming proposed rules implementing the Dodd-Frank pay for performance disclosure to promote greater consistency in the use of supplemental pay disclosures (i.e., realized and realizable pay), along the lines it has championed in its Conceptual Framework for Supplemental Pay Disclosures." (HR Policy Association)  

Summit Group Retirement Planners, Inc. is Certified for Fiduciary Excellence
Centre for Fiduciary Excellence [CEFEX]

Colonial Life Unveils Two New Life Insurance Plans
Colonial Life

Prudential Retirement Adds New $514 Million Plan Sponsor Client Questar
Prudential Retirement

Compass Financial Partners Expands Participant Financial Wellness Programs in Partnership with Financial Finesse
Compass Financial Partners, LLC

Florida's St. Lucie County Selects TIAA-CREF as Sole Recordkeeper
TIAA-CREF

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