ASPPA

Conversion Analyst
Pension Corporation of America
in OH

WMG Specialist - Recordkeeping
Chemung Canal Trust Company
in NY

401(k) Plan Administrator
PASI, LLC
in CT

Retirement Plan Consultant
Associated Pension Consultants, Inc.
in NY

Retirement Benefits Specialist
Cummins
in TN

Senior 401k Administrator
Findley Davies, Inc.
in OH

Retirement Services - Managing Director
General Board of Pension and Health Benefits
in IL

ERISA Compliance Associate
MBM Advisors, Inc.
in TX

Director of Sales
Pension Consultants
in MO

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Practicing Before the IRS - Circular 230 A to Z
RECORDED
(IRS [Internal Revenue Service])

Creating Results: Three Steps to Success with Your Benefits Communication
February 19, 2015 WEBCAST
(Benz Communications)

Social Security Bootcamp: The Retirement Income Puzzle
March 3, 2015 WEBCAST
(InvestmentNews)

401(k) Advisor Symposium in Houston,TX on March 5th
March 5, 2015 in TX
(401k Rekon)

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[Guidance Overview]

Text of IRS Publication 5196: Getting Ready -- Monthly Tracking (PDF)
2 pages; dated Feb. 2015. "To prepare for 2016, applicable large employers need to track information each month in 2015, including: [1] Whether you offered full-time employees and their dependents minimum essential coverage that meets the minimum value requirements and is affordable. [2] Whether your employees enrolled in the self-insured minimum essential coverage you offered.... All applicable large employers are required to report health coverage information for the first time in early 2016 for calendar year 2015. To be prepared to report this information to the IRS and issue the new Form 1095-C to employees, you'll need to: [1] Determine if your organization is an applicable large employer. [2] Determine the kind of health insurance coverage you offered to full-time employees and their dependents, if any. [3] Identify who your full-time employees are for each month and track health coverage information in 2015 to help complete new IRS forms." (Internal Revenue Service [IRS])  

[Advert.]

Save Time & Money by Filing 5500s with ASC

The ASC 5500 System includes batch "roll forward" & 5558 creation, customized "invite signer" emails, and auto-data sharing with other ASC systems - saving you time and money! See how – click here!

Are Target Date Funds a Ticking Time Bomb?
"Many fiduciary advisers see TDFs as fraught with issues.... The appearance of simplicity best explains the popularity of TDFs, but it also suggests their problem.... There has long existed a viable alternative to TDFs... 'Target Risk funds or "lifestyle" funds match the risk profile of the investor (or rather the investor selects the lifestyle fund that matches his or her risk profile),' says [investment advisor] Francesca E. Federico.... Target risk funds have the advantage over target date funds in that they are easier to support the retirement saver's personal goals." (Fiduciary News)  

Good News! We're Living Longer According to New RP-2014 Mortality Tables and MP-2014 Mortality Improvement Scales (PDF)
"While this is good news for us as individuals, the updated mortality tables will likely increase today's estimate of the cost of providing benefits over the lifetime of members. In particular, the cost increases will be more pronounced for retirement systems that haven't kept up to date with mortality improvements or haven't anticipated sufficient future rates of improvement.... The impact of switching to the new tables depends on the [plan's] current assumptions." (Gabriel Roeder Smith & Company)  

Headlines About Decreased Pension Plan Termination Shortfall Are Misleading (PDF)
"There have been some very misleading headlines lately about how the cost of plan terminations has decreased over the last couple months. Unfortunately this couldn't be further from the truth.... [T]he Society of Actuaries (SOA) released new mortality tables in October, 2014.... The increased life expectancy reflected in the new tables increases the liability reported for the plan. However, this increase has precious little to do with a plan's actual termination. Insurance companies have been using their own internal mortality tables that closely resemble the new SOA tables for a while. These new SOA tables have no effect on the terminal cost of the plan." (Findley Davies)  

How to Prevent Retirement Plan Fraud
"The Internal Revenue Service (IRS) recently released the results of their Fraud Project, which was completed by the Employee Plans Compliance Unit (EPCU). Their project was based on Form 5500's that were filed and had indicated an actual Fraud Loss. Based on their reviews, the IRS determined two of the main contributing factors to fraud were weak internal controls and risky investments.... As a plan sponsor, it is a best practice to strengthen your controls surrounding plan operations to limit the potential risk of fraud.... Here are some best practices that the IRS noted in their project results." (Meaden & Moore)  

[Advert.]

Free web briefing: The new Congress and employer retirement plans

With a user-friendly website, daily emails, and regular web briefings, Mercer Select members stay informed about health, retirement, and other key benefit and HR issues. Register for a free Washington Update web briefing on Feb. 12 at 1 pm ET.

IRS Releases 2015 Form 1042-S Instructions
"The IRS has released the detailed 2015 instructions for Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding. The form is to report amounts paid from IRAs and retirement plans to certain foreign persons, including nonresident aliens. One noteworthy change is that beginning January 1, 2016, if disbursements are paid to multiple accounts, each payment will require a separate Form 1042-S. Formerly, such amounts having the same income code could be aggregated on a single Form 1042-S." (Ascensus)  

Pension Plans, Once Inviolable Promises to Employees, Are Getting Cut
"The stock market has soared more than 75 percent in the past five years, yet many pension funds, where many middle-class workers should benefit from the market's rise, continue to struggle, jeopardizing benefits for the workers who were counting on them in retirement. At the end of last year, Congress passed legislation allowing certain distressed pension plans to slash retirement benefits, including those already being received by retirees -- an unprecedented move altering a principle enshrined in federal law for four decades that said benefits already earned could not be cut." (The Washington Post; subscription may be required)  

562 Pennsylvania Municipalities Administer Pension Plans That Are 'Distressed' and Underfunded by at Least $7.7 Billion (PDF)
Topics include: [1] Causes of underfunding; [2] Increased life expectancy of retirees and current employees raises future pension costs since benefits have to be paid over a longer period of time; [3] Inclusion of sizeable accrued lump-sum leave and excessive overtime payments drains pension assets farther than projected; [4] Legal provisions allow elimination of employee contributions which shifts burden of pension plan funding to municipalities and taxpayers; [5] eight recommendations to address underfunding of pension plans; [6] five recommendations to address systemic issues associated with pension plans. (Department of the Auditor General, State of Pennsylvania)  

Public vs. Private Employees on the Pension Crisis: Nobody Wants Responsibility
[Yesterday's newsletter contained a link to the press release; here is a lengthier article.] "[P]rivate sector workers -- who largely fund government workers' defined benefit pensions -- strongly favor shifting current employees to 401k style accounts by a margin of 65 to 31 percent. However, public employees oppose 52 to 46 percent. Nevertheless, a slim majority of government workers would favor such a reform if it only applied to future government workers, and not themselves (54 percent favor to 43 percent oppose).... [G]overnment workers remain opposed to 401k-style accounts even if that means taxes would have to be raised on everyone else or government would have to cut services." (Reason.com)  

[Advert.]

6th Annual Financial Advisor Retirement Symposium - April 1-2, 2015

The editors of Financial Advisor and Private Wealth magazines bring together industry experts to share insights and strategies on retirement at a conference that promises to energize advisors with new practice-building ideas. BenefitsLink Discount.

Case Studies of State Pension Plans That Switched to Defined Contribution Plans (PDF)
12 pages. "A misperception persists among some that defined contribution (DC) plans 'save money' when compared with traditional pensions. However, several states that switched to DC plans have experienced a much different reality over time. Indeed, a recent NIRS analysis of the economic efficiencies of defined benefit (DB) plans reconfirmed that pensions deliver the same amount of lifetime income for about half of the cost of providing the lifetime income from a typical DC plan. [This article] presents summaries of past changes in three state retirement systems that made the switch to a DC plan from a traditional DB pension ... West Virginia, Michigan, and Alaska. Rather than save states money, these DB to DC switch exacerbated funding problems and drove up pension debt." (National Institute on Retirement Security [NIRS])  

Are You Mentally Fit Enough to Plan for Retirement?
"In this era of 'self-directed' retirement (no pensions, you make all the investment choices) postponing making a real plan poses a particular risk to future security. Not only are the logistics of planning hard enough -- when to collect Social Security, how to budget for expenses, what to do with savings -- but the decline in cognition that accompanies normal aging has a measurable negative impact on the ability to make sound financial decisions." (TIME)  

U.S. Retirement Security Isn't Getting Any Better
"The 2015 Natixis Global Retirement Security Index put Switzerland at the No. 1 spot in its annual ranking of the well-being and 'life conditions' that pre-retirees and retirees can expect across 150 countries. The prospects for current and aspiring retirees in America is less good: The U.S. is stuck at No. 19, where it's been for the past three years." (Bloomberg)  

Administration Budget Proposals Would Expand Impact on Tax-Favored Retirement Benefits (PDF)
"[T]he 2016 package ... includes ... proposals to [1] repeal the longstanding favorable tax treatment of 'net unrealized appreciation' on employer stock distributed in kind to participants, [2] require employers to report employer contributions to defined contribution plans on an employee's Form W-2, [3] require certain part-time employees to be given the opportunity to make pre-tax contributions under qualified plans, and [4] facilitate the addition of lifetime income options in DC plans." (Groom Law Group)  

Amara Again: Second Circuit Upholds Judicial 'Reformation' of Pension Plan (PDF)
"The latest opinion is notable for its holding that contract, as well as trust, principles could inform the availability of reformation, and for its conclusion that the elements of contract reformation had been established based on generalized circumstantial evidence of a unilateral mistake by the entire plaintiff class." [Amara v. CIGNA, Nos. 13-447-cv and 13-526 (2d Cir. Dec. 23, 2014)] (Steptoe & Johnson LLP)  

Text of SSA Chief Actuary's Memo: Potential Reallocation of the Payroll Tax Rate Between the Disability Insurance Program and the Old-Age and Survivors Insurance Program (PDF)
"This letter presents our estimates of the effects on the OASI and DI Trust Funds of enacting the temporary reallocation of the payroll tax rate proposed in the President's Fiscal Year 2016 Budget. We estimate this reallocation will equalize the projected years of reserve depletion for the two trust funds to 2033.... The President's proposal would increase the total (employee plus employer) payroll tax rate for the DI Trust Fund by 0.9 percentage points, from 1.8 to 2.7 percent, for calendar years 2016 through 2020. The payroll tax rate for the OASI Trust Fund would be reduced by an equal amount so that the total OASDI payroll tax rate for these years would be unchanged." (Office of the Chief Actuary, U.S. Social Security Administration [SSA])  

[Opinion]

Hottest 401(k) Plan Enhancement For Your Executives
"Roth in-plan conversions are a unique tax planning tool since they are the only investments I can think of where the investor has control over when an investment is taxed, without actually having to liquidate the investment! ... Executives might feel that it makes sense to tax some of their retirement plan benefits now at what might be historically low tax rates." (Lawton Retirement Plan Consultants)  

[Guidance Overview]

SEC Proposes Hedging Disclosures
"Section 14(j) of the Exchange Act covers hedging transactions conducted by any employee or member of the board of directors or any of their designees. The SEC believes the term 'employee' should be interpreted to include everyone employed by an issuer, including its officers. According to the SEC it is just as relevant for shareholders to know if officers are allowed to effectively avoid restrictions on long-term compensation as it is for directors and other employees of the company.... The SEC does not propose to exempt smaller reporting companies or emerging growth companies from Item 407(i) disclosure." (Dodd-Frank.com, a blog by Stinson Leonard Street)  

2013 Retirement Survey Key Findings and Issues: Experiencing Change in Retirement (PDF)
"This report presents findings from the 2013 Risks and Process of Retirement Survey, specifically those relating to the phases of retirement. 'Phases of retirement' refers to changes that take place during retirement. The report uses quotations from the series of focus groups to illustrate the findings and addresses factors relating to how people decide to retire and to changes in lifestyle and needs over the course of retirement, including paid employment and housing." (Society of Actuaries)  

Boston Wealth Management & Marathon RPC – Two Leading Independent Wealth Management Advisory Firms – Announce Merger
Boston Wealth Management [BWM]

Groom Law Group Expands its Plan Funding and Restructuring Practice: Joshua Shapiro Joins Firm
Groom Law Group

Retirement Strategies, Inc. is Certified to Industry Best Practices
Centre for Fiduciary Excellence [CEFEX]

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