401(k) Analyst
LegacyAdvisors, LLC
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Goldleaf Partners
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Retirement Plan Administrator
Southern California TPA Firm
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IRI Retirement Plan Forum
July 1, 2015 in DC
(Insured Retirement Institute [IRI])

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[Official Guidance]

IRS Employee Plans News, December 23, 2014: Rollovers of After-Tax Contributions in Retirement Plans
"The Service has received a number of questions following the issuance of Notice 2014-54. The following FAQs are provided to assist taxpayers in applying the notice. [1] Can I roll over just the after-tax amounts in my account to a Roth IRA and leave the remaining amounts in the plan (i.e., take a partial distribution of just the after-tax amounts)? No.... [2] I want to roll over my after-tax contributions to a Roth IRA and roll over earnings on my after-tax contributions to a traditional IRA. Can I do that? Yes...." (Internal Revenue Service [IRS])  

[Advert.]

ASPPA's New Business Executives and Managers Conference -- January 2015

The Business Executives and Managers Conference (BEAM), is a must attend for small business TPA owners, executives, managers, and decision makers. This event offers valuable knowledge and ideas in best practices; register today!

[Guidance Overview]

Puerto Rico Treasury Announces Key Benefit Plan Limits for 2015 (PDF)
"[A table] lists the key 2015 limits specified in Circular Letter 14-05, the corresponding 2014 limits, and the U.S. Internal Revenue Code sections that specify analogous limits." (Buck Consultants at Xerox)  

[Guidance Overview]

Puerto Rico Treasury Department Issues Guidance on Retirement Plan Limits for 2015
"[T]he Puerto Rico Secretary of the Treasury recently issued Circular Letter of Tax Policy No. 14-05 announcing the key pension limits for 2015 under the Puerto Rico Internal Revenue Code ... For plans qualified only in Puerto Rico (PR-Only Plans), the limits on annual contributions, plan compensation and the highly compensated employee threshold all will increase, but the limits on elective deferrals, after-tax and catch-up contributions, and annual benefits all will remain unchanged for 2015. For plans qualified both in Puerto Rico and the U.S. (Dual-Qualified Plans), the limits on elective deferrals, plan compensation, and annual contributions, and the highly compensated employee threshold all will increase, but the limits on catch-up and after-tax contributions, and annual benefits all remain unchanged." (Groom Law Group)  

ERISA Fee Litigation: Is My Plan at Risk?
"Here are a few things to consider in light of ... recent settlement announcements: Vendor transparency.... Service Provider Expenses.... Investment expenses.... Revenue sharing.... Year-end balances.... Total cost." (Milliman Retirement Town Hall)  

A New Way to Assess Reasonableness of Retirement Plan Fees
"QPSteno's long-term goal is to provide benchmarking by activity or time taken on activities. For example, if census data collection on average takes two hours, and a TPA can do it in one hour, that's a selling point for the TPA. If it takes the TPA three hours, a trustee can determine if it's a problem with the plan sponsor's data or processes or with the TPA's processes. Another thing the system benchmarks is participant behavior." (PLANSPONSOR)  

What to Look for in a Rollover Provider
"Plan sponsors that are looking at different providers for rollovers should weigh the services each offers, and determine how best to serve the needs of the plan participants. For example, is the workforce bilingual? How are calls from participants answered?" (planadviser)  

Hybrid Plan Transition Rules Would Not Mandate That Prior Plan Designs Be Treated as Improper
"Treasury Benefits Tax Counsel George Bostick ... said that the Treasury and the IRS do not expect people to read the government's mind. The setting of permitted interest rates in the final regulations does not imply that certain rates used in the past would fail, he added. The new rules should have no influence on whether a past rate is acceptable." (Wolters Kluwer Law & Business)  

Year-End Compliance Testing Overview for Defined Contribution Plans
"The end of the calendar year is fast approaching which means the plan year end for many qualified plans. It will be time for plan sponsors to collect complete employee data to enable their service providers to perform the numerous compliance tests required to retain the plans tax qualified status. This article provides a brief description of the required defined contribution plan compliance tests as well as an overview of the census data collection process." (Markley Actuarial)  

New Mortality Tables Shine Spotlight on 401(k) Plans
"Barring strategies such as deferring retirement or investing more aggressively (in hopes of achieving higher returns on retirement assets), living longer means people need to save more to fund a longer retirement. However, many of the communications offering participants a lump-sum payment of their accrued pension benefit instead of a lifetime annuity don't mention they will have to make the payment last over an expected longer lifespan." (CFO)  

Take-Up Rates of Target Date Funds
"Perhaps as a result of the growing use of automatic enrollment and qualified default investment alternatives (including TDFs), recently hired participants were more likely to hold TDFs than those with more years on the job: at year-end 2013, 51% of participants with two or fewer years of tenure held TDFs, compared with 41% of participants with more than five to 10 years of tenure, and a quarter of participants with more than 30 years of tenure. Industry surveys suggest that only about a third of auto-enrolling plans extend that to current workers[.]" (Nevin Adams, for National Association of Plan Advisors [NAPA])  

The 2014 Charitable IRA Rollover: Who Might Benefit, and When Must Action Be Taken?
"On the surface, you may think it is a 'wash' if a taxpayer includes an RMD in income, and then deducts it after contributing the same amount to charity. But there are many instances in which this is not so. For example, some taxpayers do not itemize; some are subject to limitations on itemized deductions because they have high income; and some find that increased income causes other adverse tax consequences that cannot be wiped out by a charitable contribution (such as a higher percentage of social security benefits becoming taxable, and a higher threshold for deduction of medical expenses)." (Holland & Knight)  

Reason Foundation's Pension Reform Newsletter, December 2014
Topics include: [1] GAO Report on Pension Discount Rates: A Comprehensive Picture; [2] Myth And Muddle Blocking Pension Reform; [3] Stockton and Detroit Exit Bankruptcy Leaving Pension Systems As-Is; [4] Judge Strikes Down Reform of Illinois' Extremely Screwed Up Public Pensions; [5] Pension Debt: Omaha's Billion Dollar Problem; [6] Demographic Changes Threaten Pensions; and [7] Truth in Accounting: The 2013 Financial State of States. (Reason Foundation)  

Manulife Announces Transaction with New York Life to Significantly Expand John Hancock's Retirement Plan Services Business
"John Hancock's acquisition of New York Life's RPS business will increase John Hancock's RPS assets under administration by approximately 60 percent, accelerate its expansion into the mid-case to large-case private sector retirement plan markets, and add both scale and expertise to John Hancock in a strategically significant line of business. The resulting combined RPS businesses will consist of approximately $135 billion in assets under administration, 55,000 retirement plans and 2.5 million plan participants. The combined business will create a top 15 provider of retirement plan services in the mid-case plan market and solidify our leading position in the small-case market, as measured by assets under administration." (John Hancock)  

John Hancock Expands Further Into Retirement Planning with Purchase of New York Life Division
"New York Life handles pensions and retirement plans for labor unions and mid-size to large companies, such as the office supply chain Staples Inc. Until now, John Hancock has provided retirement planning services primarily to start-ups and smaller business. The acquisition will bring $135 billion in assets and 55,000 retirement plans under John Hancock's administration. As part of the purchase, John Hancock expects to offer positions to all 450 New York Life employees in Westwood who handle the retirement segment[.]" (The Boston Globe)  

Comerica Chosen as myRA Custodian
"Comerica will serve as custodian for the Treasury Department's upcoming 'myRA' retirement savings bond program, which is being rolled out in phases.... Comerica was chosen through a competitive bid process managed by Treasury's Bureau of the Fiscal Service. Comerica and its partner, Fidelity National Information Services, will administer the accounts, a Treasury spokesman said." (Pensions & Investments)  

Text of Second Circuit Opinion in Amara v. CIGNA, Upholding District Court's Reformation of Pension Benefits Plan (PDF)
"We agree with the district court that, because the CIGNA Pension Plan is part of a compensation package for employees that stems from their employment agreements, plaintiffs have given consideration for their participation in the retirement plan so that it is appropriate, to the extent this plan constitutes a trust, to analyze reformation under contract principles.... By hiding the truth about the plan, CIGNA prevented all of its employees from becoming disaffected, spreading knowledge regarding the plan to others who stood to lose more from the benefit conversion, and from planning for their retirement. Therefore the district court did not err in determining that CIGNA committed fraud or inequitable conduct against all of the class members... Finally (and contrary to defendants' claim), reforming the CIGNA retirement plan partly in light of the misleading representations made in the SPDs and other plan communications is consistent with the applicable principles of reformation." [Amara v. Cigna, Nos. 13-447-cv and 13-526 (2d Cir. Dec. 23, 2014)] (U.S. Court of Appeals for the Second Circuit)  

History of the Employee Benefit Research Institute, Part 1
"This is the first part of a history of the Employee Benefit Research Institute (EBRI), which the EBRI board has asked Dallas Salisbury to fully document between now and his move from EBRI President (after 37 years in that position) to EBRI President Emeritus in 2016.... EBRI opened its doors on December 4, 1978. The Institute's early work supported the 1978 President's Commission on Pension Policy, which generated visibility for both retirement issues and EBRI and led to an expansion of EBRI's membership and horizons." (Employee Benefit Research Institute [EBRI])