[Guidance Overview]
Examining the DOL 2014 Fall Regulatory Agenda
"The updated agenda provides the anticipated publication dates for the next steps in the regulatory process for nearly a dozen ERISA items. This bulletin discusses the agenda for the retirement plan projects that [the authors] believe are most important to plan sponsors and service providers[:] The 'Conflict of Interest Rule.' ... Brokerage Windows.... Projection of Lifetime Income.... 408(b)(2) Guide." [Editor's note: for each agenda item, the authors discuss the anticipated effect on plan sponsors and on service providers.]
(Drinker Biddle)
|
[Guidance Overview]
Noteworthy Developments of Interest to Sponsors of Multiemployer Retirement Plans (PDF)
Articles covering: [1] As plan sponsors embrace the idea of diversification, there has been a dramatic uptick in interest in hedge funds in a liquid (mutual fund) format; [2] The Society of Actuaries has released updated mortality tables reflecting a rise in life expectancy that may result in higher benefit obligations; [3] The key provisions of the Multiemployer Pension Reform Act of 2014 generally become effective for plan years beginning on or after January, 2015; and [4] A multiemployer DB plan currently in the PPA '06 green zone may not be 'green' for long if its obligations exceed its assets plus future contributions.
(Segal Consulting)
|
Final IRS Regs Clarify Some Questions on Individual FATCA Reporting of Foreign Pensions and Deferred Compensation on Form 8938 (PDF)
"Beginning with the 2011 tax year, individuals have had to report specified 'foreign financial assets' valued at over certain threshold amounts on Form 8938 with their individual tax returns. Pensions and deferred compensation are generally included as one of the types of foreign assets that may have to be reported.... The final regulations do not mark a very different approach from the prior temporary regulations, and the preamble to the final regulations devotes most of the discussion to explaining changes requested by commentators that the IRS did not choose to make."
(Groom Law Group)
|
|
|
2014 Review of Defined Benefit Plan Issues
"In 2014 there were several major DB policy developments, including a significant extension of MAP-21 funding relief, new mortality tables and the finalization of the hybrid plan regulations on 'market rate of return.' In addition, the year-end federal spending deal included ERISA section 4062(e) legislation. [This article reviews] these developments, beginning with the legislation Congress just passed."
(October Three Consulting)
|
|
|
Like the Cheshire Cat, Defined Benefit Plans Are Slow in Vanishing
"The importance of pension plans is much greater in some industries and at some corporations than it is at others. That's why some plans are being more aggressive in reducing pension risk than others. The aggregate picture, though, is one which shows that DB plans will continue to be a major consideration for many CFOs for a long time to come."
(Russell Investments)
|
Whoomp, There It Is! The New Prudent Fee Fiduciary Standard
"[The] United States District Court for Southern District of New York provided the long-anticipated introduction, or more specifically the judicial verification, of Vanguard's funds' fees as a comparative basis for assessing excessive of fund fees was established. While the case is not binding on other courts, the rationale used by the court is persuasive and will undoubtedly be referenced by plaintiffs' attorneys in both 401(k) and other cases where breach of fiduciary issues involving fee issues are involved.... More importantly, the court's decision provides further support for the relevance of intrinsic costs and returns in analyzing both investment recommendations made by financial advisors and investment options offered by 401(k) plans and other retirement plans." [Leber v. The Citigroup 401(k) Plan Investment Committee, No. 07-CV-9329 (S.D.N.Y. Sept. 30, 2014)]
(The Prudent Investment Adviser Rules)
|
How to Settle an ERISA Breach of Fiduciary Duty Case and Sleep at Night: A Checklist for Plan Trustees
"This [article] focuses on how Plan Trustees can appropriately settle ERISA breach of fiduciary duty claims in order to achieve 'complete peace.' The article provides a check list and discusses strategies for handling settlement of fiduciary breach claims including, barring future claims by non-settling parties, baring future claims by non-settling co-defendants, protecting against future claims with adequate insurance coverage, and moving on after settlement."
(Proskauer Rose LLP)
|
Amgen ESOP Fiduciaries Remain Subject to Suit for Failure to Drop Inflated Company Stock from Investment Menu
"ESOP participants will be allowed the opportunity to prove in court that plan fiduciaries acted imprudently in continuing to offer company stock as an investment option when they knew or should have known that the stock price was artificially inflated ... The participants will also be permitted to rely on documents incorporated by reference in plan summary plan descriptions to establish a breach by the plan fiduciaries of their duty to provide the participants with material information related to the investment in company stock.... The case is one of the first to be adjudicated in the wake of the invalidation by the U.S. Supreme Court of the presumption of prudence." [Harris v. Amgen, Inc., No. 10-56014 (9th Cir. Oct. 30, 2014)]
(Wolters Kluwer Law & Business)
|
CBO's 2014 Long-Term Projections for Social Security: Additional Information (PDF)
"The first part of this report examines Social Security's financial status from several vantage points. The fullest perspective is provided by projected streams of annual revenues and outlays. A more succinct analysis is given by measures that summarize the annual streams in a single number. The system's finances also are described by projecting the trust fund ratio, which is the amount in the trust funds at the beginning of a year in proportion to the outlays in that year."
(Congressional Budget Office [CBO])
|
DCIO Providers to Compete for Market Share
"Seventy-nine percent of [defined contribution investment-only (DCIO)] providers plan to increase staffing further in at least one distribution-related role. The leading positions where DCIO groups plan to increase head count are internals, where 50% of firms plan to increase staffing; and marketing, where 46% plan to increase staffing.... Only 36% of DCIO organizations plan to increase head count of external salespeople, and only 29% suggest they will be hiring in key account/strategic relationship roles."
(planadviser)
|
Bipartisan SAVE Act Looks to Help Small Business Retirement Plans
"The bill [1] adds a new SIMPLE 401(k) deferral-only safe harbor for small employers ... [2] permit[s] the operation of so-called 'open' multiple employer plans (MEPs), provided that each employer involved in the plan has less than 500 employees (with a five-year grace period)....[3] creates a new 'automatic deferral IRA' arrangement that allows employers to automatically enroll eligible employees (defined as any employee that makes at least $5,000 per year) into a payroll deduction IRA arrangement.... [4] allows a limited transfer of an unused balance contained in a flexible spending account to be rolled into a qualified retirement plan.... [5] creates an annuity selection safe harbor in qualified plans
designed to encourage lifetime income options in retirement."
(American Society of Pension Professionals & Actuaries [ASPPA])
|
Creditor to Oppose San Bernardino Bankruptcy Plan Favoring CalPERS
"The creditor intends to pursue a new approach when hearings resume next year, in light of a deal the city reached with Calpers in November that will see the pension fund paid in full under a bankruptcy plan. The city has been ordered to produce a plan by May.... The move is significant because all the capital market creditors have so far supported the bankruptcy and it signals a change in course, speaking to the wider fight between Wall Street and pension funds over how they are treated in municipal bankruptcies."
(Reuters)
|
[Opinion]
U.S. Chamber of Commerce Comment Letter to IRS on Proposed Transitional Rules for Hybrid Retirement Plans (PDF)
"The proposed rule allows plan sponsors to fix only the piece of the interest credit that is not in compliance. However, changing just that single piece could change the overall impact or effect a plan sponsor may have been trying to reach.... Rather than requiring [Pension Equity Plans (PEPs)] to use administrative and financial resources to engage in a two-step process, we recommend that the transitional rules for PEPs not apply until further guidance specifically for these plans are issued.... The proposed rule is to take effect on the date that that a transition rule is published. Treasury and the IRS did not consider legally feasible alternative compliance schedules, such as 6, 12, 18 or 24 months after final rule publication."
(U.S. Chamber of Commerce)
|
[Opinion]
ERIC Comment Letter to IRS on Transitional Amendments for Hybrid Retirement Plans (PDF)
12 pages. "[1] The 'silo' approach to transition in the proposed regulations is unnecessarily restrictive and fails to take account of the many variations in interest crediting rates among existing plans, resulting in arbitrary distinctions among plans. [2] The final regulations for the first time penalize plans that calculate lump sums using the 'whipsaw' method (even though the [IRS] previously required plans to use that method).... [3] The final regulations for the first time, and without statutory authority, establish a new definition of early retirement subsidy that differs markedly from the established definition embodied in the statute and regulations since the passage of [ERISA]."
(The ERISA Industry Committee [ERIC])
|
|
Benefits in General; Executive Compensation
|
|
|
|
|
Baby Boomer Workers Revolutionize Retirement, But Are They and Their Employers Ready? (PDF)
"Sixty-five percent of Baby Boomer workers plan to work past age 65 or do not plan to retire. More than half (52 percent) plan to continue working after they retire.... 62 percent of the Baby Boomer workers who plan to work in retirement and/or past age 65 indicate that their main reason is income or health benefits.... [The] majority of employers share positive perceptions of their older workers with 87 percent saying that they are 'a valuable resource for training and mentoring' and 86 percent identifying them as 'an important source of institutional knowledge.' Many employers do feel they have higher healthcare costs (57 percent), but only 28 percent cite higher disability costs."
(Transamerica Center for Retirement Studies)
|
|
Press Releases
|
|
|
|
|
|
|
|
|
