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Employee Benefits Jobs
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Webcasts and Conferences
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[Official Guidance]
Text of Rev. Proc. 2014-55: Election Procedures and Information Reporting with Respect to Interests in Certain Canadian Retirement Plans (PDF)
"Subject to any future guidance that may be issued by the Treasury Department and the IRS, beneficiaries ... and annuitants are not required to report contributions to, distributions from, and ownership of a Canadian retirement plan under the simplified reporting regime established by Notice 2003-75 (Form 8891) or pursuant to the reporting obligations imposed by section 6048 (Form 3520). In addition, custodians are not required to file Form 3520-A with respect to a Canadian retirement plan.... This revenue procedure obsoletes Form 8891 as of December 31, 2014."
(Internal Revenue Service [IRS])
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[Guidance Overview]
IRS Guidance Relaxes Allocation Rules Making After-Tax Rollovers Easier
"The new guidance applies only to eligible rollover distributions and does not change the requirement for allocation of the investment in the contract between a lump sum and an annuity when a participant is receiving both.... While the new rules provide that multiple disbursements to different destinations are treated as a single distribution, each disbursement may still be required to be reported on a separate Form 1099-R.... Plan sponsors should consider reviewing and updating their 402(f) safe harbor notices[.]"
(Ice Miller LLP)
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[Guidance Overview]
Changes to Allocation Rules for Distributions Including After-Tax Amounts (PDF)
"Although the participant now has flexibility to determine the amounts to be rolled over and the destinations, the requirement that the first dollars rolled must be pretax is unchanged. A participant can effectively roll all the non-Roth, non-taxable money to a Roth IRA, but only if all pretax dollars are rolled over to an eligible retirement plan; it is not possible to roll over only the non-taxable money and take the taxable amount as a distribution."
(Buck Consultants at Xerox)
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[Guidance Overview]
New Allocation Rules for Roth Account Rollovers
"A major benefit of the new rules will be the ability to choose one rollover target for pre-tax money and a different rollover target for Roth money. For example, an employee changing jobs could send the pre-tax money to the new employer's plan and set up a new Roth IRA for the Roth money. Plan administrators will need to be aware of these rules for purposes of reporting on Form 1099-R distributions of pre-tax and after-tax amounts that will be separately rolled over."
(McGuireWoods LLP)
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[Guidance Overview]
Locating Missing Participants, or at Least Trying To
"It might be worthwhile for a plan to consider adopting certain administrative guidelines for dealing with participants that cannot be located. For example, if participant consent is required to change administrators (such as in an employee stock plan or some other retirement plan), consider inserting a provision in the plan that provides that if consent is not denied within 30 days from the notice date, it will be deemed accepted. Or perhaps inserting specific language that obligates the participant to provide the plan with current contact information with the understanding that the plan will rely on that information as current unless told otherwise."
(Fox Rothschild LLP)
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[Advert.]
Register for P&I's West Coast Defined Contribution Conference
Learn how to provide an adequate retirement income for your participants at our annual DC West conference, where you will meet and hear from experts on the most pressing investment, legislative, plan design and education and communication issues.
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Qualifying a 'See-Through' Trust as an IRA Designated Beneficiary -- Conduit or Accumulation?
"Treasury Regulations actually do allow trusts in certain circumstances to be treated as designated beneficiaries eligible to stretch post-death RMDs over life expectancy, by looking through the trust to the underlying beneficiaries and using their life expectancies instead. The caveat, though, is that qualifying for "see-through" trust treatment requires the trust to be drafted properly, consider crucial decisions like whether to be structured as a 'conduit' or 'accumulation' trust, and at best may still entail the trade-off of less favorable income tax treatment to achieve other financial and estate planning goals!"
(Michael Kitces in Nerd's Eye View)
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Retirement Shares Plan: A New Model of Risk Sharing
"Investment risk and longevity risk are borne by the plan sponsor in a defined benefit (DB) plan or by the plan participant in a defined contribution (DC) plan. By contrast, [the] proposed Retirement Shares Plan (RSP) allocates the longevity risk to the plan sponsor and investment risk to the plan participant. The RSP allows the participant sufficient control over the investment risk to tailor that risk to his specific circumstances. This allocation of risk provides predictable and stable cost to the plan sponsor with little chance of unfunded liabilities. The retiree receives lifetime income and potential inflation protection."
(Pension Research Council, Wharton School of the University of Pennsylvania; free registration required)
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Financial Wellness Is Impossible to Achieve Without Plan Participation
"[E]mployers need to clearly communicate the true 'cost' of participation. Employees need to see their out-of-pocket costs expressed as dollar amounts, not just concepts.... Next, employers need to lay out the benefits of participation over time. The objective here is to try to expand the employee's concept of long term planning and tangibly demonstrate the accumulation of wealth over time."
(Employee Fiduciary)
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A 401(k) Conundrum: Can You Make Your Cash Pile Last for Life?
"Even if you've socked plenty of money away in your 401(k) plan and invested it carefully, some of your toughest decisions lie ahead. And don't expect much help or clarity from the government or your employer.... For retirees, choices about how to spend a life's worth of savings are fraught with tricky calculations about financial risk, taxes and death."
(Bloomberg)
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Two Key Decisions for Your Retirement Withdrawal Strategy
"[R]etirees need to consider two sets of questions: first, the extent to which they're comfortable with a fluctuating payday and, second, whether they want their paycheck to come from income alone, or other sources as well. Investors often conflate these two sets of questions ... In reality, it's possible to employ an income-centered strategy that delivers a steady dollar paycheck. Meanwhile, the opposite strategy is also viable: building a total-return-centered portfolio that delivers a variable, market-sensitive payday."
(Morningstar)
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Pension Finance Watch, September 2014
"Equities fell, but long bond yields rebounded in September. The upward movement in discount rates proved to be the more powerful factor, so that the net impact was a 0.6% increase in the Towers Watson Pension Index, to 73.5. Even with the small September increase, the funding index remains down 6% for the year."
(Towers Watson)
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[Opinion]
Congress Should Consider These Eight Retirement Plan Fixes
"Require 'auto' features.... Require re-enrollment.... Eliminate participant loans.... Allow unlimited Roth 401(k) contributions.... Require a QDIA in every plan.... Require electronic notice distribution.... Every party with a signed contract is a fiduciary.... Get all company stock out of 401(k) plans."
(Lawton Retirement Plan Consultants)
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[Opinion]
America's New Retirement Reality?
"The good news is Americans are living longer. And if they change the laws to lower the astronomical cost of cancer drugs, even more people will live longer. But longer lifespans also means more people are retiring in poverty ... But there is another reality squeezing older Americans. A growing percentage of aging Americans are struggling to pay back their student debt[.]"
(Pension Pulse)
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Benefits in General; Executive Compensation
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Potential for Criminal Liability for ERISA Disclosure or Reporting Violations (PDF)
"Violating these disclosure and reporting obligations, or the obligation to retain records necessary to verify information on annual reports, could lead to criminal liability under Section 501 of ERISA or under 18 U.S.C. Section 1027. Although these statutory provisions use the terms 'willfully' and 'knowingly' in describing the prohibited conduct, an employer could be convicted of violating these provisions without having intended to engage in criminal conduct.... This article describes some of the courts of appeals cases that have interpreted these statutes."
(Groom Law Group)
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Stock Compensation: 2014 Assumption and Disclosure Study
"Compared to prior year data, stock awards continued to outpace options when looking at the value of grants reported for 2013. Large companies and high techs still issue options, but even then less in quantity compared to stock awards for both groups of companies. Option valuations are reflecting lower volatilities as we move further from the last recession, but expected term has not shortened for either group. And stock compensation expense continues to pace at the 3%-4% range for large companies, and much higher for high techs."
(PricewaterhouseCoopers)
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Press Releases
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