DST Retirement Solutions

Part Time On Call Retirement Planning Consultant
Transamerica Retirement Solutions
in AR, CA, FL, GA, HI, IL, MI, MO, NJ, NY, TN, TX, UT

Sr. Financial Writer
DST Systems
in NY

401(k) Plan Consultant
Accounting & Consulting Group, LLP
in TX

Retirement Plan Administrator
PenSys, Inc.
in CA

Senior Project Manager/Business Analyst
National Rural Electric Cooperative Association [NRECA]
in VA

Defined Benefit Contribution Plan Consultant
SBC Benefit Consultants, Inc.
in NJ

Retirement Plan Administrator
BSP Consulting
in FL

Retirement Plan Analyst
Habif, Arogeti & Wynne, Wealth Management
in GA

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Protecting Your ESOP Fiduciary
RECORDED
(National Center for Employee Ownership)

Affordable Care Act: Employer Shared Responsibility and Information Reporting
May 12, 2015 WEBCAST
(IRS [Internal Revenue Service])

Small Business Workshop
May 13, 2015 in IL
(Employee Benefits Security Administration [EBSA], U.S. Department of Labor)

Ethics
May 14, 2015 in CA
(Western Pension & Benefits Council - San Diego Chapter)

Qualified Transportation Plans: Designing and Delivering Commuter Benefits
June 4, 2015 WEBCAST
(Thomson Reuters / EBIA)

Spring 15 Retirement, Annuity, and Life Insurance Benefit Planning
June 9, 2015 in NY
(New York State Bar Association)

401(k) Plan Workshop 2015 - Syracuse
June 23, 2015 in NY
(SunGard Relius)

Form 5500 Workshop 2015 - Syracuse
June 24, 2015 in NY
(SunGard Relius)

Mature ESOP: Making Sure Everyone's an Owner
September 23, 2015 WEBCAST
(Beyster Institute)

View All Webcasts and Conferences

[Guidance Overview]

DOL's New Proposed Fiduciary Definition: Start Preparing Now
"This alert is not intended to fully explain the extensive Proposal, but instead it suggests what an employer, pension consultant, insurance salesman or investment advisor should consider doing now to prepare for the date the final regulations and prohibited transaction exemptions are issued.... The Proposal is not minor and will require many changes in operations of many parties dealing with retirement plans and IRAs. While the DOL has indicated there will be 8 months following the effective date (which will be 60 days post issuance of the final regulation) in which to bring your plan or entity into compliance, even this almost 10 month period may not be sufficient to accomplish full compliance for all regulated parties. In addition, each party's compliance will depends on the compliance of the other parties with which it interacts." (Winstead PC)  

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[Guidance Overview]

The Best Interest Contract Exemption
"The [Best Interest Contract (BIC)] will be a formal contract committing the advisor and her firm to act with the care, skill, prudence and diligence that a prudent person would exercise based on the circumstances.... This is a roadmap for the plaintiffs bar as prudent persons can disagree on what is prudent in various circumstances, and reasonable fees may be reasonable to some and not to others.... The firm must warrant that it has adopted policies and procedures designed to mitigate conflicts of interest.... Going through the process to 'clean up' will be expensive as well and will likely require significant changes in the way many firms do business.... There are required disclosures that must met in the BIC ... This will add significant additional cost to the process.... Being unable to limit exposure may be cost prohibitive when it comes to small plans and small accounts." (Benefits Bryan Cave)  

[Guidance Overview]

The Likely Impact on Investment Advisors of the Proposed Fiduciary Regulation
"[T]he DOL has adopted the FINRA position that a recommendation to a participant to take a distribution from a plan is a recommendation to sell the investments in the participant's account. Thus, a recommendation to take a distribution is fiduciary advice, implicating both the fiduciary standard of care and prohibited transaction rules. As a result, fiduciary advisors will need to prudently analyze the participant's best interests, considering factors such as services and fees in both the plan and an IRA. There may be cases where a fiduciary advisor would need to recommend that the participant stay in the plan (where, e.g., the advantages of the plan outweigh the advantages of an IRA).... While the prohibited transaction relief in [the 'best interest contract exemption] also applies to recommendations to take distributions and rollover to an IRA, it will be difficult to satisfy the conditions." (Fred Reish, for Hartford Funds)  

[Guidance Overview]

Investment Opportunity for Defined Contribution Plans: Qualifying Longevity Annuity Contracts (QLACs) (PDF)
"In an effort to help prevent retirees from outliving their retirement savings, the IRS and the Treasury Department finalized new rules that allow participants in defined contribution plans to invest in 'longevity annuities' that do not violate the complex minimum required distribution (MRD) requirements, which otherwise mandate that participants start taking plan distributions upon reaching age 70-1/2. These complex new rules, which were first introduced in 2012, are set forth in Treasury Regulations Section 1.401(a)(9)-6, and are briefly summarized [in this article]." (Groom Law Group, via Journal of Pension Benefits)  

[Guidance Overview]

Withdrawal Liability to Multiemployer Pension Plans Under ERISA (2015 Update) (PDF)
"This paper is intended as a general guide to the withdrawal liability provisions of ERISA, which were added in 1980 by the Multiemployer Pension Plan Amendments Act (MPPAA), for practitioners and executives. It discusses the MPPAA's background and the operation of its major provisions, with some emphasis on litigation procedures." (Vedder Price)  

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Today's Choices, Tomorrow's Opportunity: Innovations in Retirement Policy and Practice (PDF)
Executive summary of presentations at invitation-only research forum held on May 7, 2015; attendees included congressional staff, agency staff, policy analysts, researchers and other distinguished experts. Topics included: [1] Save More Later and Particularly After Your Next Birthday: The Effect of Procrastination on Retirement Savings; [2] The Role of Exponential-Growth Bias and Present Bias in Retirement Savings; [3] Complexity of Choice and Defined Contribution Plan Design; [4] Defined Contributions Provider Networks; and [5] Optimal Saving Behavior: Implications for Financial Education and Policy. (TIAA-CREF Institute; and Pension Research Council, Wharton School of the University of Pennsylvania)  

Can an Old Tool Help Fix the Looming Retirement Crisis?
"Speaking at a forum Wednesday on Capitol Hill, a top official with Prudential Retirement called for legal changes that would allow small employers greater flexibility to use an old tool to help solve the retirement coverage problem: multiple-employer plans.... The idea is included in several bills pending on the Hill, and some believe that the stars are aligning for the changes to occur within the next few years, particularly if Congress takes up a major tax-reform bill." (The Washington Post; subscription may be required)  

Improving Retirement Readiness Through Effective Programs and Engaged Participants
Infographic. "To improve their defined contribution retirement plans and engage employees in building and protecting their retirement savings, employers can look to four primary areas. [1] Plan Design ... [2] Investment ... [3] Communication ... [4] Fees." (Towers Watson)  

Three Reasons to Consider a 401(k) Instead of a SEP
"[1] General creditor protection may be enhanced.... [2] You can establish a vesting period.... [3] You may be able to contribute more to a 401(k)." (Slott Report)  

Is the 401(k) Market Finally Ready for ETFs?
"Many providers to the 401(k) market expected Schwab's ETF 401(k) offering, launched at the beginning of 2014, to push awareness, demand, and ultimately ETF product offerings to plan sponsors. But adoption has been slow.... Nonetheless, Schwab says its data shows that its all-ETF 401(k) platform can cut plan costs by up to 30 percent compared to plans build on indexed mutual funds." (BenefitsPro)  

Can ESOP Companies Continue to Hold Employer Stock?
"[E]ven appropriate documentation does not provide immunity from lawsuits alleging fiduciary breach. Instead, it is designed as a process to assist in the defense. The DOL has made it clear that they want to see the documentation of the process followed by the plan fiduciaries, in which case supplying more documentation and demonstration of good corporate governance will likely reduce the need to justify the actions to the DOL." (The Principal Financial Group)  

Regulators Pave the Road to Retirement Income
"Washington has shown its focus on removing barriers and fostering adoption of retirement income solutions. As employers increasingly seek to solve this retirement income puzzle, the changing regulatory environment is a win for everyone -- and for the participants in particular." (NISA Investment Advisors; free registration required)  

Pension Funded Status Improves by $40 Billion in April (PDF)
"The funded status of the 100 largest corporate defined benefit pension plans increased by $40 billion during April ... The funded status deficit fell to $311 billion at the end of April primarily due to an increase in the benchmark corporate bond interest rates used to value pension liabilities. Weak asset returns partially offset the full extent of the liability decreases in April. As of April 30, the funded ratio rose to 82.6%, up from 80.9% at the end of March. The projected benefit obligation (PBO), or pension liabilities, decreased by $42 billion during April, lowering the Milliman 100 PFI value to $1.791 trillion." (Milliman)  

Pension Indicator, Updated for April 2015
"Equities ended up about one percent for the month ... The lack of meaningful growth will likely cause the Fed to pause on interest rate hikes, now speculated to not begin until the fall of this year. The yield curve did not have a parallel movement. Yields on short- to mid-term bonds were virtually unchanged, but long bond yields did increase. This assists plans with longer durations as well as plans that might be contemplating an annuity purchase or other de-risking options." (Findley Davies)  

Role of Government Powers at Issue in New Jersey Pension Funding Case
"The state Supreme Court probed whether the state has a contractual obligation to pay what it agreed to in a 2011 pension overhaul law and tried to get lawyers from both sides to explore whether such a finding would represent an overstepping of the courts' role and put it in the middle of the state budget process every year.... Some of what the justices must sort through include whether Christie and lawmakers really meant to make the pension contribution scheduled binding as a contract." (ABC News)  

Utah Public Employees Plan May Have Missed Out on $1.35 Billion Return
"A new legislative audit says the Utah Retirement Systems [URS] for public employees may be investing too heavily in hedge funds and other 'alternative investments' as part of trying too hard to avoid risk. If the agency had not shifted to such a strategy during the past decade, auditors said, 'URS theoretically would have had $1.35 billion in additional assets' based on projections by an outside consultant.... URS now has about 40 percent of its assets in such investments, up from 16 percent in 2005. Similar agencies average about 25 percent." (The Salt Lake Tribune)  

[Opinion]

Litigation Is a Poor Way to Regulate Investment Industry
"The question of fiduciary responsibility -- and specifically minimization of the risk of lawsuits -- has been a growing concern for many retirement plan sponsors in recent years. It has reached the point where the specter of potential litigation is weighing too heavily in too many decisions that are being made to the detriment not only of plan sponsors, but also of participants." (Russell Investments)  

[Opinion]

Joint Trade Association Comment to EBSA Requesting Extension of 45-Day Comment Period on Proposed Fiduciary Regs (PDF)
"The Associations applauded the Department's decision to establish a 104-day comment period with respect to the 2010 Predecessor Proposal, and to have a hearing and a post-hearing comment period in 2011. In that context, the Associations are very concerned about the much shorter 75-day period provided with respect to a much longer and more complicated Proposal. For these reasons, we are requesting a 45-day extension of the comment period. The Associations believe that a 120-day comment period would lead to more thoughtful and comprehensive input, which will ultimately increase the possibility for a more workable final rule that would benefit all parties." (Financial Services Roundtable and 15 other retirement industry associations)  

[Guidance Overview]

The SEC's Proposed Pay Versus Performance Rule
"[T]here may be no link at all between executive pay and [total shareholder return (TSR)].... Executive pay may well have increased because of improved financial metrics the compensation committee chose wisely to reward while the stock price declined because of general market conditions beyond the executives' control.... Turnover in the executive ranks will likely penalize the company in the pay versus performance table, even if it is for the benefit of the company.... Multi-year equity based performance awards which vest in the earliest of the reported period will be based on success metrics for prior years not reflected in TSR for the earliest period, perhaps skewing results." (Dodd-Frank.com, a blog by Stinson Leonard Street)  

[Guidance Overview]

Implications of Proposed SEC Pay-for-Performance Disclosure Rule
"The positive aspects of these rules are: [1] It will force companies to explain and demonstrate the link between pay and performance.... [2] Five years of data ultimately will need to be disclosed.... [3] The measures of performance are TSR and relative TSR. These are the measures that investors rely on for determining their performance.... [4] Options are valued at their fair market value, rather than intrinsic value, which puts them on equal footing with other equity vehicles.... [5] Pensions are valued without regards to uncontrollable events, like interest rates and mortality rates... On the negative side, a significant issue with the proposed rules is that the time horizon of the pay measured will not necessarily match the time horizon of the performance measured." (Farient Advisors)  

Pay Versus Performance
"SEC Chair Mary Jo White mentioned the issues in the reports in which she is most interested. They include: [1] whether TSR is the optimal measure of financial performance; [2] whether there are other measures that would provide useful information to shareholders that would be consistent with the statutory mandate to take into account changes in the stock value and any distributions; [3] whether shareholders are likely to use the information with respect to investments or voting decisions; [4] whether shareholders are likely to use this information to compare the companies in which they invest; and finally, [5] whether investors in smaller reporting companies will use this information and the costs to these companies of providing this information." (Winston & Strawn LLP)  

Retention Compensation Plans
"On its face, retention compensation strategies are another form of long-term deferred compensation; but it is different in that retention rewards are typically in place because of a specific event or set of circumstances triggering the need.... The most common use is where there is an anticipated transaction which requires leadership and key talent continuity in order to maintain the ongoing value of the enterprise.... [The authors] have seen growth in the use of retention arrangements within the health care industry as a result of the recent and expected future consolidation of hospitals and health systems." (Findley Davies)  

IRS Office of Chief Counsel Rejects Last Minute Corrections Under Section 409A
"A Section 409A document error generally can be corrected without penalty -- and without complying with the onerous correction procedures of IRS Notice 2010-6 -- if the arrangement is corrected before it vests (technically while it is still subject to a 'substantial risk of forfeiture).... Practitioners who work with those proposed regulations uniformly agree that the technique works so long as the correction is made prior to vesting and the arrangement remains unvested throughout the rest of the year. What has been less clear is whether the fix-before-vest technique also works when the arrangement subsequently vests within the same tax year. With the CCA, the IRS Chief Counsel's office offers its opinion and says the technique works only when the agreement remains unvested throughout the tax year." (Winston & Strawn LLP)  

Small Business Owners: Are You Helping Protect Your Employees' Financial Security?
"[M]ost employers and plan fiduciaries want to do the right thing for their workers, as demonstrated by their provision of health and retirement benefits. However, inadvertent mistakes can happen and create problems. [EBSA wants] to help you prevent this. We assist employers in complying with the law by increasing awareness and understanding of basic fiduciary responsibilities and protections for health and retirement benefits." (Phyllis Borzi, in U.S. Department of Labor [DOL] Blog)  

NCPERS Unveils Code of Conduct for Pension Service Providers
National Conference on Public Employee Retirement Systems

ESOP Association Honors Members for Excellence in Employee Ownership Communications
ESOP Association

Health Advocate Launches Medical Visit Checklist Builder
Health Advocate

Transamerica Adopts RiskFirst’s PFaroe to Help Clients Manage DB Pension Risk
Transamerica Retirement Solutions

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