DATAIR Employee Benefit Systems, Inc.

Benefits Project Manager
Northrop Grumman Corporation
in CA, VA

Benefits Analyst 4 (Pension Administration)
Northrop Grumman Corporation
in CA, VA

Client Service Manager
CBIZ
in OH

Vice President of Retirement Planning Services
USI Consulting Group
in IL

Financial Services Sales Manager
Retirement Plan Consultants LLC
in CO, IA, KS, MN, NE, SD

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ACA Information Reporting of Minimum Essential Coverage under IRC Section 6055
September 9, 2014 WEBCAST
(IRS [Internal Revenue Service])

19th Annual Conference
November 10, 2014 in DC
(National Business Coalition on Health)

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[Official Guidance]

Text of IRS Draft Instructions for 2014 Form 5500-EZ (PDF)
"Form 5500-EZ is used by one-participant plans and foreign plans that are not subject to the requirements of section 104(a) of the Employee Retirement Income Security Act of 1974 (ERISA) and that do not choose to file Form 5500-SF electronically to satisfy certain annual reporting and filing obligations imposed by the Code." [Draft instructions dated September 3, 2014.] (Internal Revenue Service [IRS])  

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[Guidance Overview]

Limitations on Mid-Plan Year Amendments to Safe Harbor 401(k) Plans
"[T]he IRS takes a very restrictive position on the acceptability of mid-plan year amendments to 'safe harbor' 401(k) plans.... [T]here are currently very few amendments that can confidently be made to a safe harbor 401(k) without potentially running afoul of this restrictive IRS position.... [T]his article briefly discusses the limited, formally documented exceptions to the general 'do not amend' rule otherwise espoused by the IRS." (Legacy Retirement Solutions)  

[Guidance Overview]

DOL Updates Guidance on Terminated Plan Missing Participants (PDF)
"Participants typically do not go missing overnight. In many cases, plan sponsors will be aware of a lost participant prior to plan termination -- via returned statements or notices. That is the time to attempt to find participants, when the likelihood of finding them is highest." (Buck Consultants at Xerox)  

[Guidance Overview]

ESOP Diversification Requirements (PDF)
19 pages. "Using a question-and-answer format, this article attempts to clarify the sometimes complex and confusing diversification requirements and provide examples and sample forms that will help plan sponsors meet those requirements." (The Principal Financial Group)  

Using Re-Enrollment to Improve Participant Investing and Provide Fiduciary Protections (PDF)
22 pages. "In light of the benefit to participants of using TDFs and the fiduciary protections offered by the QDIA rules, plan sponsors are well-advised to add TDFs to their investment lineups and to take steps to facilitate participant investment in those funds. The most effective way to do that is through the re-enrollment process ... One of the common misconceptions is that if participant assets are in a stable value fund, employer stock, brokerage account, or managed account, the plan cannot implement re-enrollment. This is not the case, but it does mean that re-enrollment needs to be done thoughtfully[.]" (Fred Reish & Bruce Ashton, for J.P. Morgan Asset Management)  

Automatic Features in Defined Contribution Plans
"Multiple studies consistently show that the majority of plans using automatic enrollment use a default rate of 3% savings. This rate mirrors the safe-harbor guidelines, but is required to be used only if adopting a safe-harbor plan, which most plans are not. The 3% rate also is generally believed to be the rate likely to reduce the level at which participants opt out of the program, although there is no empirical evidence suggesting this is the case. Several studies suggest default contribution rates could be increased significantly without a meaningful increase in opt-outs." (Strategic Benefit Services)  

Many Defined Contribution Plan Sponsors Must Annually 'Notice' Their Participants (PDF)
"As the 2014 plan year is nearing its end, it is important to look ahead at the notices that may need to be provided before the start of the 2015 plan year. This publication provides a summary of the annual notice requirements for those notices, including timing, recipients, contents, and method of delivery." (Prudential)  

Planning Proper Fee Payments (PDF)
"Every service provider to the plan that takes funds out of the plan automatically should have a written procedure (agreed to by the plan fiduciary) under which the plan fiduciary has time to review the bill, that the passage of that time without objection is deemed to be approval by the fiduciary of the bill for payment by the plan, and that an automatic transfer of funds occurs only after that time has expired without objection. A procedure for resolving disputes is also a good thing." (Ferenczy Benefits Law Center LLC)  

A Case Study in ERISA and Employee Classification Issues
"Plaintiffs' attorneys have worked to craft theories that combine compensation-based claims under employment laws like the FLSA with claims under ERISA's statutory provisions into a one-two class action punch.... If successful, this approach has the potential to increase damages for FLSA violations and graft ERISA's fiduciary requirements onto daily employment decision... [A federal District Court recently] concluded that there is no private right of action specifically to enforce ERISA's record-keeping requirement, and that [the employee's] attempt to characterize the claim as one for 'catch-all' relief under ERISA Section 502(a)(3) failed because she was seeking monetary, rather than equitable, relief." [Lytle v. Lowes Home Centers, Inc., No. 8:12-cv-1848 (M.D. Fl. April 29, 2014)] (Jenner & Block, via Employee Relations Law Journal)  

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Retirement in Transition for the Fortune 500: 1998 to 2013
"By year-end 2013, only 24% of Fortune 500 companies offered any type of DB plan to new hires, down from 60% for the same selection of employers back in 1998.... Half the pension sponsors in this analysis have adopted a hybrid plan and 57% were still offering it to new hires at the end of 2013. Certain industry sectors, as well as employers whose pensions are relatively small ... and/or well-funded, are more likely to continue offering pension plans to new hires. While the end of pension accruals represents a substantial loss for employees, most employers then contribute more to the DC plan to at least partially make up for it." (Towers Watson)  

Funded Status of U.S. Corporate Pensions Falls to 90.1 Percent
"Falling interest rates precipitated by geopolitical tensions led to higher liabilities and a lower funded status for the typical U.S. corporate pension plan in August, while rising asset values benefited public plans, foundations and endowments ... The funded status of the typical U.S. corporate pension plan in August fell 0.7 percentage points to 90.1 percent, as liabilities rose 3.3 percent, outpacing the 2.6 percent return for asset... This funded status is now down 5.1 percent from the December 2013 high of 95.2 percent[.]" (BNY Mellon)  

[Opinion]

Redefining 'Choice' in Retirement Plans
"[T]he definition of choice should not be based on selecting from among some multiple of the same kind of fund. Rather, it should be about selecting from different kinds of funds ... which will allow plan participants the ability to create a well-diversified portfolio.... Non-fiduciary plan providers care little about what any given participant invests in, because they just want to sell product ... Which is why they give plan participants lots of choices. Defining choice in that way, however, means that plan participants have a much greater risk of investing in portfolios that are sub-optimal in diversification." (W. Scott Simon, for Morningstar Advisor)  

[Opinion]

These Six Structural Changes to ERISA Can Improve Employee Retirement Readiness
"[1] Require a ROTH Option.... [2] Require both Auto-Enrollment and Auto-Escalation Features.... [3] Eliminate the Required Minimum Distribution (RMD).... [4] Change Non-Discrimination Rules.... [5] Convert All 403(b) Plans to 401k Plans.... [6] Create Additional Fiduciary Safe Harbors." (Fiduciary News)  

[Opinion]

Text of Testimony on Behalf of Pension Right Center to ERISA Advisory Council: Outsourcing Employee Benefit Plan Services (PDF)
8 pages. "[There exist] some gaps in the current regulatory framework -- which ... date back to a part of 1975 interpretative bulletins -- that could be filled by new Department of Labor guidance updating those early bulletins. [Of particular concern are] outsourcing arrangements that many people today think eliminate or at least reduce the fiduciary protections that the statute nominally purports to extend to participants. It revisits first regulatory principles for ERISA, which is appropriate as retirement and other employee benefit plans have evolved since ERISA's first decade." (Prof. Norman Stein, on behalf of Pension Rights Center)  

[Opinion]

Text of Testimony on Behalf of Pension Right Center to ERISA Advisory Council: Issues and Considerations Around Facilitating Lifetime Plan Participation (PDF)
"[1] Why do plan participants withdraw money? ... [2] Factors that Participants Should Consider in Deciding Whether to Rollover ... [3] Employer Attitudes Toward Plan Withdrawals ... [4] Steps employers can take to discourage pre-retirement consumption of plan assets and to encourage good financial decision making in deciding between a rollover or keeping assets in a plan (without incurring potential fiduciary exposure) ... [5] Possible Department of Labor Actions." (Prof. Norman Stein, on behalf of Pension Rights Center)  

Limit on Compensation Deduction for Health Insurers Saved Taxpayers Over $72 Million in 2013
"The $72 million in savings from the deduction limitation imposed on compensation paid to the 57 executives is equivalent to the cost of dental insurance for 262,000 Americans or enough to cover the cost of the average deductible under the ACA's 'silver' plan for 28,000 people. The 10 companies paid their top executives nearly $300 million in taxable compensation in 2013. Without the ACA, as much as 96 percent of that amount, or $289 million, could have been claimed as deductible performance-based pay, compared with the 27 percent that actually was." (Bloomberg BNA)  

Sibson Consulting Expands Retirement Practice
Sibson Consulting

United Benefit Advisors Welcomes New Partner Firm Avery Hall Benefit Solutions
United Benefit Advisors

Prudential Group Insurance names Bob Love Vice President of Middle Market Segment
Prudential Financial, Inc.

John Hancock Retirement Plan Services Launches Online Tool To Help Advisors with Plan Management
John Hancock Retirement Plan Services

Target Date Solutions Announces New Target Date Fund Index Offering
Target Date Solutions

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