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Employee Benefits Jobs
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Webcasts and Conferences
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[Guidance Overview]
IRS Issues Annual Lineup of Legal Changes for Qualified Plans: The 2014 Cumulative List (PDF)
"A summary of the key new items on the 2014 Cumulative List [is] set forth [in this article]. Notably, the 2014 Cumulative List deletes all items that were reviewed by the IRS during the prior Cycle E submission period.... [E]ach plan sponsor should: Review the plan document (and existing amendments) against the 2014 Cumulative List and ensure that the document has been updated for all required and optional plan changes (including legal and design changes). In the event of any missed amendment, an EPCRS filing should be considered."
(Groom Law Group, via Taxes The Tax Magazine)
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[Guidance Overview]
Changes to Determination Letter Process Have Begun
"We've made changes to the determination letter program for retirement plans effective February 1, 2015, beginning with Cycle E2 applications. These changes will improve the program's efficiency and consistency.... If your deficient application is closed and either the final response deadline or the postmark date of the submitted response occurs before the end of the plan sponsor's remedial amendment cycle, you will be given a set period of time to submit a new on-cycle application, with a new user fee."
(Internal Revenue Service [IRS])
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[Guidance Overview]
IRS Publication 4285: SEP Checklist (Rev. 2-2015) (PDF)
"Every year it's important that you review the requirements for operating your Simplified Employee Pension (SEP) plan. Use this checklist to help you keep your plan in compliance with many of the important rules [with links to] additional information (including examples) on how to find, fix and avoid each mistake."
(Internal Revenue Service [IRS])
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[Guidance Overview]
IRS Publication 4284: SIMPLE IRA Plan Checklist (Rev. 2-2015) (PDF)
"Every year it's important that you review the requirements for operating your Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) IRA plan. Use this checklist to help you keep your plan in compliance with many of the important rules [with links to] additional information (including examples) on how to find, fix and avoid each mistake[.]"
(Internal Revenue Service [IRS])
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Tibble v. Edison: Why Investment Monitoring Is as Important as Investment Selection
"The duty to prudently select plan investments and the duty to prudently monitor plan investments are separate fiduciary responsibilities, but there is no difference in the standard of prudence required in each case ... Most plan fiduciaries are already performing [periodic] monitoring ... thus protecting themselves and existing participants, as well as newly appointed plan fiduciaries and new participants, from risks associated with prior imprudent decisions ... Such monitoring, if performed in this case, would have uncovered the imprudent selection of retail-class mutual fund shares in time to avoid or at least mitigate the loss to participants and/or risk of participant legal claims[.]"
(fi360)
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Putting a Stop to Retirement Plan Leakage
"[P]roposals that have been suggested include: [1] Raise the age requirement for early withdrawal from 59-1/2 to 62 to match the earliest Social Security retirement age; [2] Limit balances for in-service withdrawals to only employee contributions; [3] Tighten hardship rules even more and only allow hardships in case of 'unpredictable events,' for both 401(k) plans and IRAs; [4] Remove cash-outs altogether (this will mostly likely be met with resistance from plan sponsors because small balances can be expensive and burdensome to administer)."
(Milliman Retirement Town Hall)
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Americans Aren't Saving Enough for Retirement; One Change Could Help
"The standard prescription is that Americans should put more money aside in investments. The recommendation, however, glosses over a critical driver of unpreparedness: Wall Street is bleeding savers dry.... Actively managed mutual funds, in which many workers invest their retirement savings, are enormously costly. First, there is the expense ratio -- about 1.12 percent of assets for the average large capitalization blend fund. Then there are transaction costs and distribution costs. Active funds also pay a penalty for keeping a share of their assets in low-yielding cash. Altogether, costs add up to 2.27 percent per year ... By contrast, a passive index fund ... costs merely 0.06 percent a year in all."
(The New York Times; subscription may be required)
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Mutual Funds Cut Expenses by Shifting Billions to Collective Trusts
"Mutual fund companies ... have slashed fees on their most popular funds by shifting billions of dollars into collective trusts not regulated by the [SEC]. The growing shift to collective trusts could prove a weapon for actively managed mutual funds losing out to low cost passive investment products such as the exchange-traded funds ... For investors, one drawback is less transparency about the risks and performances of their holdings."
(Reuters)
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[Opinion]
ASPPA Comment Letter to IRS on Program for Pre-Approved Defined Benefit Plans (PDF)
"ASPPA recommends that the IRS [1] extend the submission deadline for pre-approved defined benefit plans to a date that is at least 5 months after the issuance of the Listing of Required Modifications (LRMs) or other IRS guidance regarding the parameters for pre-approved cash balance plans ... [2] permit integrated and non-integrated Master and Prototype (M&P) plans to be combined into one adoption agreement; and [3] expand the volume submitter program by permitting minor modifier submissions of mass submitter plans in a manner consistent with what is permitted for M&P plans and for volume submitter 403(b) plans."
(American Society of Pension Professionals & Actuaries [ASPPA])
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[Opinion]
American Academy of Actuaries Comment Letter to Actuarial Standards Board on Second Exposure Draft of the Modeling ASOP (PDF)
"We are concerned that ... attempting to enumerate the components of modeling to develop what is essentially a checklist ... creates the false impression of uniformity of the modeling process. At the same time, this enumeration could either lead actuaries to do unnecessary validation work, or provide unhelpful disclosure as to why such additional work is inappropriate.... [O]nly models above some minimal level of complexity should be explicitly covered by the ASOP ... It is unclear why this ASOP is needed in situations involving straightforward calculations[.]"
(American Academy of Actuaries Pension Committee)
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Benefits in General; Executive Compensation
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Nonqualified Plan Beneficiary Was Not Determined by Terms of Qualified Plan
"A decision from the 9th U.S. Circuit Court of Appeals confirms a lower court ruling that a retirement plan membership letter and beneficiary designation form for a nonqualified plan 'did not clearly and unequivocally incorporate by reference the entirety' of the terms of a plan sponsor's qualified retirement plan. For this reason, the terms of the qualified plan cannot determine a beneficiary under the nonqualified plan, the court ruled." [E & J Gallo Winery v. Rogers, No. 13-55327 (9th Cir. Feb. 23, 2015; unpublished)]
(PLANSPONSOR)
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Press Releases
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