Retirement Plans Newsletter

March 27, 2015

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Employee Benefits Jobs

401(k) Plan Administrator
MVP Plan Administrators, Inc.
in ANY STATE

Bi-Lingual Retirement Education Specialist
MassMutual Financial Group
in TX

Retirement Plan Administrator
The Retirement Plan Company
in ANY STATE

Client Service Manager
CBIZ
in OH

ERISA Compliance Consultant
OneAmerica Retirement Services
in CA

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Webcasts and Conferences

Minimum Essential Coverage: Reporting on IRS Forms 1094 and 1095
RECORDED
(Hill, Chesson & Woody)

The New Multiemployer Pension Plan Reform Act of 2014 – What You Need to Know
April 16, 2015 in NY
(Worldwide Employee Benefits Network [WEB] - New York Chapter)

401(k) Plan Workshop 2015
April 30, 2015 in NC
(SunGard Relius)

Form 5500 Workshop 2015
May 1, 2015 in NC
(SunGard Relius)

Getting It Right - Know Your Fiduciary Responsibilities
July 9, 2015 in OH
(Employee Benefits Security Administration [EBSA], U.S. Department of Labor)

Executive Compensation National Institute
November 16, 2015 WEBCAST
(ABA Joint Committee on Employee Benefits)

View All Webcasts and Conferences



[Official Guidance]

Text of PBGC Submission to OMB and Comment Request: Reportable Events -- Notice of Failure to Make Required Contributions
"PBGC intends to revise the current forms and instructions to: [1] Require that additional supporting and identifying information be provided ... [2] Require more description of the pertinent facts relating to an event ... and on information being included or missing with filing. [3] Add an information requirement included in the regulation to Forms 10 and 10-A (for change in contributing sponsor or controlled group event). [4] Provide enhanced instructions on the type of actuarial information required to be submitted.... [5] Remove information requirements that PBGC no longer needs or can gather from public sources. [6] Require additional information for certain events ... [and] [7] Require a signature and certification on Form 10 and Form 10-A as to the completeness and accuracy of the contents of the filing." (Pension Benefit Guaranty Corporation [PBGC])  


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[Official Guidance]

Text of IRS Announcement 2015-13: Reporting Airline Payment Amount Rollovers Under Public Law 113-243 (PDF)
"Qualified airline employees who received airline payment amounts should include the full amount on Form 1040 for the year of receipt. Up to 90 percent of the aggregate airline payment amounts may be excluded from income if rolled over to a traditional IRA within 180 days of receipt. To exclude these amounts for 2014, a qualified airline employee must file a paper Form 1040 and include the amount rolled over on line 21 of Form 1040 as a negative amount and write 'airline payment' on the dotted line next to line 2." (Internal Revenue Service [IRS])  

2014 ERISA Advisory Council Report: Issues and Considerations Surrounding Facilitating Lifetime Plan Participation
"[T]his report provides ideas for plan administrators and plan participants, including communications strategies and plan design options to facilitate lifetime retirement plan participation. The Council recommends DOL develop educational materials for Participants and Sponsors on the value of lifetime plan participation and educate Plan Sponsors on various plan features that may encourage such participation. The Council also makes recommendations with respect to plan loans and development of sample forms to simplify plan rollovers and facilitate consolidation of retirement assets within a plan." (Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL])  

2014 ERISA Advisory Council Report: Outsourcing Employee Benefit Plan Services
"The 2014 ERISA Advisory Council examined the outsourcing of employee benefit plan services with a particular focus on functions that historically have been handled by employers, such as 'named fiduciary' responsibilities. The Council also looked at multiple employer plans or 'MEPs' and their potential role in the outsourcing industry. Through its examination, the Council's intent was to identify areas in which the Department could provide education, outreach, regulatory guidance, and sub-regulatory guidance pertaining to employer's outsourcing of employee benefit plan services. Further, the Council hopes that employers will find its report helpful in understanding outsourcing practices and their underlying legal obligations under [ERISA]". (Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL])  

Ameriprise to Pay $27.5 Million Settlement in 401(k) Fiduciary Breach Suit
"The agreement calls on [Ameriprise Financial Inc.] to continue refraining from receiving payment for administrative services provided to [the 401(k) plan for its employees] other than reimbursement of direct expenses from the plan, to continue paying fees to the record keeper on either a flat fee or per-head basis, provide necessary disclosures of plan fees to the participants and to consider the use of collective investment trusts and separately managed accounts. Most notably, the plan's fiduciary committee for investment selection will not include any member who is an executive with [a subsidiary of Ameriprise:] Columbia Management Investment Advisers or its investment management affiliates.... Ameriprise said that they never had a member who is an executive with Columbia on the fiduciary committee for investment selection[.]" (InvestmentNews)  


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Plan Administrator's 'Second Plan Interpretation' Violates Anti-Cutback Rule
"The plan administrator had been interpreting the plan terms to provide for an unreduced pension benefit commencing before age 65. In connection with certain plan restatements, a provision was added to the plan to provide for actuarially reduced benefits for those who commenced benefits prior to normal retirement age. The plan's actuaries subsequently informed the plan administrator that paying unreduced pensions jeopardized the plan's tax qualified status. The plan administrator thus informed individuals who had already retired that they could commence benefits, but at an actuarially reduced amount.... The Third Circuit, affirming the district court's decision, held that the plain terms of the pre-amended plan document provided for an unreduced pension." [Cottillion v. United Refining Co., Nos. 13-4633, 13-4743(3d Cir. Mar. 18, 2015)] (Proskauer's ERISA Practice Center)  

New Areas for 401(k) Lawsuits Emerge
"New areas ripe for suits include failure to promptly follow fee disclosure regulations, arrangements where plan service providers have discretion over fund menus and employee stock ownership plans. Even smaller -- $20 million to $50 million -- plans aren't safe from suits. The trend is highlighted by a series of multimillion dollar settlements involving unreasonably high fees in retirement plans." (InvestmentNews)  

Secretary of Labor Says New Fiduciary Rule Will Distinguish Between Investor Education and Investment Advice
"Mr. Perez said the rule would not ban commissions, would contain a 'robust economic analysis' justifying the need for the measure and would draw a clear line between investor education and investment advice.... The regulation will contain so-called prohibited transaction exemptions that would OK certain conflicts, which in addition to commissions might include revenue sharing." (InvestmentNews)  

Latest Fiduciary Rule Battle Cry: Broker Ads Mislead Investors
"The Public Investors Arbitration Bar Association (PIABA) ... an association of attorneys who represent investors, issued a report that claims brokerage firms advertise themselves and their advisors as fiduciaries, yet argue in arbitration cases that they are not to be held to that standard.... The authors of the report argue that the firms' actions underscore the importance of adopting a national fiduciary standard, urging regulators to swiftly implement one." (Financial Planning)  

Key Insights for Alternative Fund Managers Looking to Defined Contribution Plans as a Growth Opportunity
"Since liquid alternatives are relatively new and don't come with a decades-long benchmarking history, fact-based education and training will play a central role in their adoption by DC plan fiduciaries, advisors and participants. Education should focus on both the benefits and risks of these investments in a portfolio[.]" (BNY Mellon)  

Two States Consider Pension De-Risking Legislation; Insurance Lawmaker Group Adopts Guidelines
"Lawmakers in two states, Connecticut and New York, are considering legislation that would expand disclosures and protections from creditors for plan participants. And legislators in several other states have expressed interest in developing legislation to deal with pension de-risking issues.... Scott Kaplan, head of Prudential's pension risk-transfer team ... [said the best practices recommendations] are 'a positive step forward to make sure retirees have retirement security, and not only to make sure that they have retirement security, but also to address any other areas where they may be worried about their pension.' " (Bloomberg BNA)  

Summary of Quarterly Survey of Public Pensions for 2014: Q4 (PDF)
"For the 100 largest public-employee pension systems in the country, cash and security holdings totaled $3,337.1 billion in the fourth quarter of 2014, just short of the all-time-high of $3,365.4 billion set in the second quarter of 2014. Compared to the same quarter 2013, assets for these major public pension systems increased 4.3 percent from $3,200.8 billion." (U.S. Census Bureau)  

Texas Supreme Court Affirms Significant Houston Workers Pension Ruling
"Following extensive briefing and oral argument, the Texas Supreme Court ... ruled against the city and the handful of employees who had wanted to get early distribution of their pension benefit while continuing to be paid for the same job and also be eligible for a new 401(k) plan benefit." [Klumb, et al. v. Houston Municipal Employees Pension System, No. 13-0515 (Tex. Mar. 20, 2015)] (Baker Botts LLP)  

Combat Veterans Support Offering Troops a 401(k)-Style Retirement Plan
"The retirement overhaul is one of 15 recommendations from the congressionally mandated Military Compensation and Retirement Modernization Commission.... Under the existing defined-benefit plan, most officers and enlisted personnel who serve 20 years receive annual retirement pay equal to half of their average basic pay over their last three years of service. The panel proposed cutting that figure from 50 percent to 40 percent, in part to fund a 401(k)-like defined-contribution plan for the more than eight in 10 service members who leave the military without getting any retirement benefit." (Military.com)  

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