Retirement Plans Newsletter

September 3, 2014

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401(k) Plan Consultant
The Pension Studio
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Huntington National Bank
in OH

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National Retirement Services, Inc.
in NC

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The Retirement Advantage, Inc.
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The Retirement Advantage, Inc.
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The Retirement Advantage, Inc.
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The Retirement Advantage, Inc.
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The Retirement Advantage, Inc.
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Webcasts and Conferences

Responding to EEOC Charges
September 11, 2014 WEBCAST
(Clear Law Institute)

Legality of Subsidies in Federal Insurance Exchanges: The Side Effects of Halbig and King
September 19, 2014 WEBCAST
(American Health Lawyers Association)

View All Webcasts and Conferences



[Guidance Overview]

Pension Funding Relief Extended
"The retroactive nature of HATFA 2014 relief creates an issue for those plans that, based on their funded status under current rules, were required to impose benefit restrictions in 2013. To address that issue, the legislation allows a plan to disregard the new MAP-21 extension, for 2013, for all purposes (e.g., funding and benefit restrictions) or just for purposes of benefit restrictions. Some plans may, however, have imposed restrictions for 2014 -- that possibility is not addressed in the legislation." (October Three Consulting)  


[Advert.]

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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]

SEC Adopts Amendments to Address Runs on Money Market Funds and Increase Transparency of Money Market Fund Risks
"Institutional prime money market funds and institutional municipal money market funds will be required to 'float' their net asset value (NAV) and sell and redeem shares based on the current market value of the securities in their underlying portfolios, similar to other open-end funds.... The Rule Amendments also adopt, largely as proposed, new disclosure requirements for money market funds and other similar funds, changes to Form N-MFP, the introduction of new Form N-CR, tightening of existing diversification requirements under the Rule, new stress testing requirements and certain 'clarifying' amendments to the Rule's existing requirements." (Sidley Austin LLP)  

What Tatum v. RJR Teaches About Fiduciary Obligations
"The working group felt obliged to eliminate the investment option because of questions related to the liability issues of holding a non-diversified single company stock fund, but that is not the same question as whether it was in the best interests of the plan participants to hold, or to instead eliminate, that fund. It is the latter question ... which is primarily one that concerns the risks to the plan sponsor and those charged with running the plan ... Here, the defendants' fiduciary breach occurred because ... they did not investigate or analyze the issue from the perspective of what was best for the participants but instead from the perspective of the risks to the plan sponsor and its designees (i.e., the fiduciaries)." [Tatum v. RJR Pension Investment Committee, No. 13-1360 (4th Cir. Aug. 4, 2014)] (Stephen Rosenberg of The Wagner Law Group)  

These Four Quick Fixes for ERISA Can Reduce 401(k) Fiduciary Stress
"The sometimes Byzantine labyrinth of rules and regulations have often left the plan sponsor bewildered, wondering if, in the end, it's worth the personal risk to continue offering these lucrative retirement plans.... [T]here are opportunities to address some issues sooner rather than later.... [1] Make it Easier for Smaller Employers ... [2] Establish a Strong Across-the-Board Fiduciary Rule ... [3] Streamline Disclosure ... [4] Prohibit Revenue-Sharing." (Fiduciary News)  

White-Labeling DC Plan Investments May Offer Advantages
"Among approximately 75 large employers, nearly one-quarter (24%) are currently using a white label approach to naming defined contribution (DC) plan investment options ... Nearly half (46%) are using this approach for their entire fund lineup, while the remainder white label only some of their funds.... [T]here are two main strategies for white labeling. The first is to take a singular fund and make the name generic.... The second strategy is like a fund-of-funds approach, when a plan sponsor offers a single fund option to participants called the Large-Cap Equity fund, for example, but assets in the fund are directed to several underlying funds." (planadviser)  


[Advert.]

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Sponsored by SPARK

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Five Retirement Account Creditor Protection Myths ... And the Real Facts
"Myth #1: Retirement money is universally protected from creditors ... Myth #2: Plan money is always creditor protected ... Myth #3: General creditor protection and bankruptcy protection are the same ... Myth #4: Retirement account beneficiaries have the same levels of protection as owners ... Myth #5: Plan money retains its creditor protection when it's rolled over to an IRA." (The Slott Report)  

In Retirement Planning, One Size Does Not Fit All
"Rather than assume that all 40-year-olds have the same savings goals and needs, 401(k) plan providers can address this issue through a much more personalized approach. In practice, this means offering and educating participants about the potential benefits of professional 401(k) advice that accounts for much more than just age when it comes to the particulars of each saver's situation. As a participant, you can take an active role in tailoring your 401(k) account by availing yourself of any such advice that is part of your 401(k) plan." (Charles Schwab)  

Pension Finance Update as of August 31, 2014 (PDF)
"Stocks bounced back in August, but lower interest rates offset these gains for pension sponsors, who treaded water during the month. For the year, our traditional 'Plan A' 1 remains down 5%, while the more conservative 'Plan B' remains down 2%." (October Three Consulting)  

Economic Impact of Defined Benefit Pension Expenditures
"Public and private pension plans provided about $477.0 billion in benefits to nearly 24.0 million retirees and beneficiaries. Of this amount, $228.5 billion was paid to 9.0 million state and local government retirees and beneficiaries; $70.7 billion was paid to 2.5 million federal government beneficiaries; and $175.6 billion was paid to 12.7 million private sector beneficiaries[.]" (Gabriel, Roeder, Smith & Company)  


[Advert.]

PSCA's 67th Annual National Conference, Sept 15-18,Turnberry Isle, Miami

Sponsored by PSCA [Plan Sponsor Council of America]

Attend PSCA's 67th Annual National Conference, Expanding Perspectives - Adapting to your changing landscape September 15-18, at Turnberry Isle, Miami. Join plans sponsors and industry leaders in General Sessions, Workshops and Roundtables centered around you and your plan. Register NOW!



New Jersey Governor Asks Judge to Dismiss Case on Pension Funding Cuts
"Gov. Chris Christie is asking a state judge to dismiss a flurry of lawsuits challenging a budget veto that reduced funding for public worker pensions from a once-promised $2.25 billion to $681 million.... In an ironic twist, the Christie administration's 77-page legal brief repeatedly disavows a pension overhaul the governor helped design and signed into law during his first term -- what Christie once hailed as the cornerstone of his plan to repair New Jersey's crumbling pension system." (NJ.com)  

Benefits in General; Executive Compensation

Thanks, ERISA, and Happy 40th!
"Most of us would agree that the policies ERISA attempts to address necessarily give rise to its complexity. The web of ERISA coverage is vast and sometimes contradictory since the policy issues themselves are so complex. But overall, the construct of ERISA presents one of the most exceptional pieces of federal legislation ever enacted." (Benefits Bryan Cave)  

Press Releases

PBGC to Pay Benefits for Employees at Los Angeles Urban League Inc.
PBGC [Pension Benefit Guaranty Corporation]

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