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Why Maintaining the IPS is the Most Important Duty a Fiduciary Performs
RECORDED
(fi360)

Mid-Year Election Changes: Cafeteria Plan Tips & Traps
May 21, 2015 WEBCAST
(Hill, Chesson & Woody)

Employee Benefits Ready: Benefit Planning Considerations
May 27, 2015 in NC
(Hill, Chesson & Woody)

Form 5500 for Welfare Plans [2015] - A Two-Part Program
June 4, 2015 WEBCAST
(SunGard Relius)

Form 5500 for 403(b) Plans [2015] - A Two-Part Program
June 18, 2015 WEBCAST
(SunGard Relius)

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[Guidance Overview]

Benefit Suspensions Under the Multiemployer Pension Reform Act (PDF)
7 pages. "This [article] examines the conditions for making such suspensions and the procedure that Trustees must follow before putting them into effect. The process is lengthy and can take more than one year before any benefit reductions are actually made. The process for implementing benefit suspensions takes place in several steps. Each of these steps contains additional requirements that must be satisfied before a plan may implement any suspension of benefits." (Cheiron)  

[Advert.]

Start your FREE Trial Today: Benefits Practice Resource Center

The Benefits Practice Resource Center is the authoritative, integrated solution that brings you time-saving answers. Start your trial and get Bloomberg BNA's report, Anthem Data Breach: Benefit Plan Fiduciaries -- Managing and Controlling Plan Records.

Text of Unanimous Supreme Court Opinion: Claim for Ongoing Breach of Fiduciary Duty to Monitor Investments and Remove Imprudent Ones was not Barred by 6-year Statute of Limitations (PDF)
"[A] fiduciary normally has a continuing duty of some kind to monitor investments and remove imprudent ones. A plaintiff may allege that a fiduciary breached the duty of prudence by failing to properly monitor investments and remove imprudent ones. In such a case, so long as the alleged breach of the continuing duty occurred within six years of suit, the claim is timely. The Ninth Circuit erred by applying a 6-year statutory bar based solely on the initial selection of the three funds without considering the contours of the alleged breach of fiduciary duty." [Tibble v. Edison Int'l, No. 13-550 (U.S. May 18, 2015)] (Supreme Court of the United States)  

Plaintiffs Score Victory Before Supreme Court in Tibble v. Edison
"The decision reversed an earlier 9th Circuit ruling that ... a claim involving a plan investment that was initially chosen outside the 6 year window from when a lawsuit is brought could only be viable if there was a change in circumstances that would cause a fiduciary to reexamine the fund's inclusion in the plan. The Supreme Court rejected this interpretation, finding that under ERISA, there is a continuing duty to monitor and remove imprudent investments. Today's decision also effectively reversed rulings in the 4th and 11th Circuits that were similar to the 9th Circuits.... Different Justices of the Supreme Court showed during oral arguments that they struggled with the question of exactly what this continuing duty to monitor looks like. Rather than resolve the question, they have remanded the case back to the 9th Circuit to decide what the duty to monitor requires and whether the plaintiffs here met that burden to have viable claims. But they did so while also providing important context from trust law." [Tibble v. Edison Int'l, No. 13-550 (U.S. May 18, 2015)] (Fiduciary Matters Blog)  

DOL Extends Comment Period on Fiduciary Duty Proposal
"In a letter sent Friday to several Democratic senators, Labor Secretary Thomas Perez said the initial comment period would last for 90 days instead of the original 75.... After the first round of comments, the department will hold a public hearing during the week of Aug. 10. Following that event, the comment period will reopen for an additional 30 to 45 more days. 'This is considerably longer than the typical comment period for [the Employee Benefits Security Administration's] other proposed rule makings,' Mr. Perez wrote ... 'We believe this accommodation will provide adequate time for the public to provide their input on this issue and for the administration to continue its dialogue with the stakeholder community.' " (Investment News)  

One in Five Big Companies Still Puts Your 401(k) Money in Its Own Stock
"Ten of the 50 largest companies in the S&P 500 still put 401(k) contributions in the company's own stock... It's an 'extreme example of poor diversification,' the behavioral economists Shlomo Benartzi of UCLA and Richard Thaler of the University of Chicago have written, echoing the warnings of many other economists and retirement experts. 'Workers risk losing both their jobs and the bulk of their retirement savings all at once.' " (Bloomberg)  

[Advert.]

2015 SPARK National Conference -- June 7-9, Washington DC

The retirement services industry's leading event for top marketing, sales, administration and record keeping professionals. Comprehensive agenda is designed to meet the needs of 401(k) Plan Providers, Financial Advisors and Third Party Administrators.

Align the Design: Considering and Evaluating Target Date Glide Paths
"To look forward, we need to gauge the progress an individual has made in accumulating DC savings relative to their retirement income needs. One way would be to consider the QDIA's probability of success based on future real annuity prices -- which, unfortunately, do not exist.... [A] 20-year ladder of zero-coupon TIPS (Treasury Inflation-Protected Securities) provides the best available proxy for annuity rates. If we compare real annuity rates to the TIPS ladder, we see a 94% correlation and a small difference in the payout rate." (PIMCO)  

We Speak, Therefore We Save -- or Not
"Some languages such as English make a grammatical distinction between the present and the future.... Linguists categorize English and languages with similar treatment of tenses as strong future-time reference (strong-FTR) languages. Weak-FTR languages such as Estonian, German, and Chinese make weaker demarcations between the present and the future.... [One researcher] finds that those who speak weak-FTR languages are more likely to save and, on average, accumulate more wealth for retirement than those who speak strong-FTR languages." (Vanguard)  

How Gamification Can Help Get Clients to Plan for Retirement
"The concept of financial wellness takes into account choices and consequences. However, many clients just can't visualize their future well enough to understand the interplay of these concepts. That's where gamification exercises and goals-based planning software can help." (Investment News)  

New Study Confirms 401(k) Limits Not Constraining
"The results showed that the increase in 401(k) limits and introduction of catch-up provisions did not have a statistically significant effect on contributions of those workers unconstrained by the deferral limits -- both those under 50 and those over 50.... Constrained workers under age 50 contributed a statistically significant $917 more after 2001 than non-constrained contributors in the same age group. Constrained workers over age 50 -- those now eligible for the catch-up provisions -- contributed a statistically significant $1,697 more after 2001 than their non-constrained counterparts. This increase was about half of the amount by which they could have raised their contributions." (MarketWatch)  

A Dynamic Approach to Pension Glide Paths (PDF)
"The efficient and active implementation of a glide path can help better match assets to liabilities, increase funded status and eliminate risks that are under-compensated or uncompensated.... [One] strategy provides frequent to continual monitoring of plan assets and liabilities to help lock in and preserve gains from improvements in the funded status of a pension plan, while limiting portfolio risk and volatility over time." (NEPC)  

Income Inequality: Hidden Economic Cost of Prevailing Approaches to Pension Reforms (PDF)
"[I]ncome inequality was highly co-related with the trend toward conversion of DB into DC plans.... This correlation is robust and means that the lower the percentage in the workforce with DB plans, the higher the income inequality.... Rather than making changes such as increasing employee contributions, cutting benefits, converting DB plans into DC or hybrid plans, and so forth, policymakers should close tax loopholes." (National Conference on Public Employee Retirement Systems [NCPERS])  

Liquidity in Retirement Savings Systems: An International Comparison
"This paper compares the liquidity that six developed economies have built into their employer-based defined contribution (DC) retirement savings systems. We find that all of them, with the sole exception of the United States, have made their DC systems overwhelmingly illiquid before age 55." (National Bureau of Economic Research [NBER])  

Ascension Health Settles ERISA Church Plan Exemption Lawsuit (PDF)
"In addition to making an $8 million contribution toward reducing a purported $444 million deficit, and paying up to $2 million in attorney's fees, the terms of the agreement require [several] ERISA-like protections even though the plan will still be considered exempt from ERISA's coverage as a non-electing church plan[.]" (Buck Consultants at Xerox)  

Navigating Retirement Risks: Creating Sustainable Retirement Income
"New mortality statistics indicate that men will live, on average, almost 22 years after age 65, and women will live nearly 24 years.... But such a long retirement raises other concerns and risks: a risk associated with how money is withdrawn; inflation risk; ...a risk some have labeled 'cognitive risk,' which refers to the erosion of our ability to make complex decisions as we get older. There is another risk that is not often identified as such, one that we are calling the 'apprehensive investor' risk." (Drinker Biddle)  

[Opinion]

DOL Fiduciary Rule Proposal: Specific Questions to Consider
"[1] How can higher-cost, similar products be justified? ... [2] How can bonuses be awarded? ... [3] Changing the relationship between [broker-dealer] and [registered representative]? ... [4] Are [Variable Annuities] and [Equity-Indexed Annuities] more likely to be recommended in IRA accounts? ... [5] How is a one-time high commission amount 'reasonable'? ... [6] Fixed annuity, [equity-indexed annuity] fee/cost determinations.... [7] Less commissions, more 12b-1 fees? ... [8] Does the [best interest contract exemption] meet the requirements for a [prohibited transaction exemption]?" (Ron Rhoades)  

[Guidance Overview]

Correction of 409A Failure in Year of Vesting Does Not Work: Time to Consider IRS Correction Programs
"If deferred compensation that violates Section 409A vests in 2015 but the vesting date has not occurred ... the IRS correction program immediately should be considered -- otherwise, there is a substantial risk that the IRS would consider the 'fix' to be invalid. Immediate action is particularly important for severance payments scheduled to be made pursuant to the terms of an existing employment agreement, where the terms of such agreement violate Section 409A.... For 2016, reviewing documents ... now for Section 409A compliance is imperative -- it may be possible to correct certain Section 409A violations in 2015, without going through the applicable IRS correction program, and avoid the adverse tax consequences altogether." (Chiesa Shahinian & Giantomasi PC)  

Proxy Season Update, Part 1: Compensation Trends
"Performance-based pay went over the 50 percent mark as a portion of total CEO compensation two years ago; in 2015, the trend continues, with performance pay comprising about 55 percent of total compensation. More companies are also using long-term performance awards, generally in the form of equity awards. The number of companies using this type of pay instrument rose to 80 percent so far this year, up from 73 percent last year. TSR remains the top performance metric used for long-term performance awards, with 58 percent of companies using TSR, up from 51 percent last year." (Institutional Shareholder Services [ISS])  

AFL-CIO's 'Executive Paywatch' Website Demonstrates How Pay Ratio Would Be Used in Organizing Efforts
"This week, the AFL-CIO launched its annual Executive PayWatch website, with much of it focused on shaming and bolstering union organizing efforts at a large, well-known retailer, thus providing a tailor-made example of how the pay ratio will be used if and when it is finalized. The 2015 site notes that the CEO-to-average employee pay ratio increased 12 percent in 2014 to 373-to-1." (HR Policy Association)  

Federal District Court Finds SPD Posted on Company Intranet Was Not 'Delivered' to Employees
"A federal court has found that merely posting a summary plan description (SPD) on a company intranet did not satisfy the electronic disclosure rules under ERISA.... The Court noted that 'the regulations relating to the disclosure of SPDs through electronic means require the SPD be 'furnished,' not simply made available.' [Thomas v. CIGNA Group Ins., No. 09-CV-5029 (E.D.N.Y. Mar. 2, 2015)] (The Wagner Law Group)  

Third Circuit: Catalyst Theory of Recovery Applies to ERISA Fee Award
"The Third Circuit agreed that the catalyst theory applied, but ... held that all that was necessary was that litigation activity pressed Defendants to settle or give Plaintiffs the requested relief. It explained that the victory must be voluntary, non-trivial, and more than a procedural victory that is apparent to the court without the need to conduct a lengthy inquiry into whether that success was substantial or occurred on a central issue." [Templin v. Independence Blue Cross, No. 13-4493 (3d Cir. May 8, 2015)] (Proskauer's ERISA Practice Center)  

Trucker Huss Benefits Report, May 2015 (PDF)
Articles include: [1] DOL proposed fiduciary rule: a significant second take; [2] Plan sponsors gear up for required ACA reporting of coverage; and [3] New final ACA rules regarding limited wraparound coverage as an excepted benefit. (Trucker Huss)  

Cedar Brook Financial Partners’ Howard Slater, MBA, MSFS, ChFC, CLU, Completes Another Year of Teaching Financial Literacy to Teens
Cedar Brook Financial Partners

Only 37% of Wellness Plans Have Smoking Cessation Programs, HealthMine Survey Finds
HealthMine

Dennis Herber Named VP, Business Development Officer
Heartland Financial USA, Inc.

MassMutual Names Elizabeth Ward Chief Actuary
MassMutual

Tyrone P. Thomas Elevated to Member of Mintz Levin
Mintz Levin

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