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Employee Benefits Jobs
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Webcasts and Conferences
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[Guidance Overview]
DOL Proposes New Fiduciary Regulation and Prohibited Transaction Exemption Relief for Investment Advice Fiduciaries (PDF)
10 pages. "The Proposed Regulation, if adopted, is expected to extend fiduciary status to many investment professionals, including broker-dealers, insurance agents, pension consultants and appraisal firms, that do not consider themselves to be fiduciaries under current law.... Unlike the current regulations, the Proposed Regulation does not require that investment advice be furnished on a regular basis, or that the adviser and advice recipient mutually agree that the advice furnished will serve as a primary basis for investment decisions." [Article includes a 2-page chart summarizing the proposed amendments to existing prohibited transaction class exemptions.]
(Skadden, Arps, Slate, Meagher & Flom LLP)
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[Guidance Overview]
The New Fiduciary Regulation Proposal, Part II: The Facts, Ma'am, Just the Facts (PDF)
9 pages. "The point of the PTE requirements is to try to reduce the impact that a 'Material Conflict of Interest' has on the behavior of the investment advisor and financial institution.... In other words, the PTE requirements are an attempt to encourage the fiduciary to disregard his or her financial self-interest in favor of the interests of the advice recipient, notwithstanding the fact that the compensation being received will vary based on which recommendation the recipient accepts when investing. This is particularly interesting when one considers that it is specifically the existence of this conflict that has given rise to the Proposal."
(Ferenczy Benefits Law Center LLP)
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[Guidance Overview]
DOL Proposed Regs Expand Definition of Fiduciary
"Does There Need to be a Written Agreement to Act as a Fiduciary? No ... the proposed regulations will cover any person who renders advice pursuant to a verbal agreement or understanding that the advice being given is directed to the person or plan for consideration in making investment decisions. There are very little formalities necessary to make one a fiduciary.... [F]iduciaries may receive 'reasonable' compensation for services provided; but the compensation must be reasonable. We do not have specific guidance on what is reasonable."
(McDonald Hopkins)
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Building Better Savings, Building Brighter Futures: Legislative Proposals to Improve Retirement Savings (PDF)
"This initiative will direct employers with 10 or more employees, if they do not already offer a retirement plan, to open individualized retirement accounts for every employee. These federally-established Secure, Accessible, Valuable, Efficient Universal Pension accounts (SAVE UP accounts) will have traits similar to the Thrift Savings Plan currently offered to federal employees ... Employers will be required to directly contribute into this account, or their existing employee accounts, a defined amount per hour, for every worker, which would be adjusted annually for inflation. Once enrolled, employees will automatically begin contributing 3% of their pre-tax income, with employee contributions increasing gradually over time unless the employee opts out. Contributions will be pre-tax, growth of investments will be tax-free, and withdrawals during retirement will be taxed as ordinary
income."
(U.S. Rep. Joseph Crowley [D-NY], Vice Chair of the House Democratic Caucus)
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IRS Considers Eliminating Periodic Determination Letter Process
"Plan sponsors whose EINs end in 5 or 0, and governmental plan sponsors who did not file in Cycle C, clearly should consider filing their plans prior to January 31, 2016, to provide as much protection as possible in the event of a future IRS audit, because this may be the last opportunity to do so. Individually designed plans that have never received a favorable determination letter are probably at the most risk in the event of an IRS audit, since they have had no official IRS determination that their plans are qualified in form at any point in time."
(Hanson Bridgett LLP)
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Allocation of Revenue Sharing in 401(k) Plans
"[S]ome providers and some plan sponsors are allocating all of the revenue sharing back to the participants and then charging participants' accounts for the recordkeeping costs.... [F]iduciaries have a duty to oversee the use of revenue sharing by the recordkeeper and, when they delve into the matter (in order to understand the issues and fulfill their fiduciary responsibilities), the fiduciaries often determine that the equitable allocation of revenue sharing, and then proper allocation of plan costs, produces a result that is fair and that manages the fiduciary risk."
(FredReish.com)
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A Look at Who Is Affected by the Proposed DOL Fiduciary Rules
"The primary thrust of the new proposed rules appears to be to provide a map to fiduciary responsibility for brokerage firm advisors.... The proposed regulations provide a path to fiduciary compliance for brokers which is much less onerous than many experts expected."
(Lawton Retirement Plan Consultants)
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More Than One Million People Increase Retirement Savings Rate; Account Balances Reach Record High
"The average 401(k) balance at the end of Q1 was $91,800 ... up 0.5 percent from last quarter and up 3.6 percent from one year ago. More than a million workers increased their contribution rate in Q1 2015, and a record 23 percent of employees have increased their contribution rates since Q1 2014. The average overall savings rate, which includes both employee and employer contributions, increased to 12.5 percent. The employee contribution rate remained constant at 8.1 percent while the employer contribution rate climbed to 4.4 percent.... For self-employed 401(k) accounts, the average balance at the end of 2014 was $144,100, a 39 percent increase since 2007. The average contribution was $22,400 at the end of 2014, a 29 percent increase since 2007."
(Fidelity)
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DeAWM Petitions DOL for Exemption to Manage U.S. Retirement Assets
"Deutsche Asset & Wealth Management, the money management unit of Deutsche Bank, applied to the U.S. Department of Labor for permission to continue providing services to retirement plans after the bank's DB Group Services U.K. unit pleaded guilty to federal charges that it manipulated interest rates ... The company can continue to manage retirement plan assets while waiting for approval from the [DOL] for a permanent exemption."
(Pensions & Investments)
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Sen. Warren Targets Annuity Sales Incentives
"Sen. Elizabeth Warren wants the 15 largest U.S. annuity issuers to send her detailed information on the expensive incentives annuity issuers use to get agents and brokers to sell their product, especially to those people nearing retirement. Warren, D-Mass., argues that the offering of incentives such as Super Bowl 'style' diamond-encrusted rings, cash or stock options to agents and brokers to sell annuities is a potential conflict of interest."
(InsuranceNewsNet.com)
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[Opinion]
Comprehensive Regs Already Protect Consumers' Interests in Annuity Sales
"The American Council of Life Insurers (ACLI) issued [a] statement in connection with the request from Sen. Elizabeth Warren (D-MA), to certain life insurance companies for information on annuity sales ... From product development to advertising to sales, life insurers offering annuities must comply with state and federal laws and rules that help protect consumers' interests. As insurance products, annuities are regulated by the states that have laws and regulations for the content and marketing of the product."
(American Council of Life Insurers [ACLI])
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[Opinion]
Target Date Solutions Comments to DOL on Proposed Fiduciary Standard
"This letter specifically addresses certain misunderstandings about target date funds that the DOL may have reinforced, as well as a serious concern about TDFs that has not been addressed.... Here are the misunderstandings: 'To' funds are less risky at the target date than 'Through' funds.... TDFs can be matched to workforce demographic.... Low cost is best.... Our main concern is the glaring failure of many fiduciaries to vet their TDF selection. The DOL has not addressed this concern, but should."
(Target Date Solutions)
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Benefits in General; Executive Compensation
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Text of 3rd Quarter Update to the Treasury Department 2014-2015 Priority Guidance Plan (PDF)
47 pages; Employee benefit projects begin on page 5. "The 2014-2015 Priority Guidance Plan contained 317 projects that are priorities for allocation of the resources of our offices during the twelve-month period from July 2014 through June 2015 (the plan year).... This third quarter update to the 2014-2015 plan reflects 25 additional projects that have become priorities and guidance we have published during the period from January 1, 2015, through March 31, 2015."
(Internal Revenue Service [IRS])
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Annual Statistical Supplement to the Social Security Bulletin, 2014
"The majority of the statistical tables present information about programs administered by the Social Security Administration -- the Old-Age, Survivors, and Disability Insurance program, known collectively as Social Security, and the Supplemental Security Income program. In addition, data are presented on the major health care programs -- Medicare and Medicaid -- and social insurance programs ... The Supplement also includes program summaries and legislative histories that help users of the data understand these programs.... The Supplement has been published annually since 1940." [Link is to web page where individual sections of the report can be viewed and downloaded; also available is the complete report as a single
PDF file of 551 pages.]
(U.S. Social Security Administration [SSA])
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Press Releases
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