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Retirement Planning Consultant
Transamerica Retirement Solutions
in KS

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Associated Pension Consultants
in ANY STATE

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Integrated Retirement Initiatives, LLC
in ANY STATE

Team Lead, Conversions
Verisight
in CA

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Pinnacle Plan Design, LLC
in AZ

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IRA Excess Contributions and Recharacterizations
September 15, 2015 WEBCAST
(Ascensus)

Executive Benefits: Choices and Concerns from the Practical to the Prudent
November 11, 2015 WEBCAST
(Conference of Consulting Actuaries)

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[Official Guidance]

Text of DOL Notice of Hearing and Extension of Comment Period for Proposed Conflict of Interest (Fiduciary) Regs and Prohibited Transaction Exemptions
"Notice is hereby given that [EBSA] will hold a public hearing on August 10, 11, and 12, and continuing through August 13, 2015 (if necessary) to consider issues attendant to adopting a regulation concerning its proposed conflict of interest rule and related proposed prohibited transaction exemptions. The Department also is extending the date by which comments may be submitted on the proposed rule and proposed new and amended exemptions. Public comments on the proposals may now be submitted to the Department on or before July 21, 2015." (Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL])  

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[Guidance Overview]

Money Market Funds Changes: Implications for Plan Sponsors, Plan Administrators and Investment Fiduciaries (PDF)
5 pages. "New SEC money market funds rules that go into effect in 2016 will impact nearly every retirement plan that uses such funds as investment options or to facilitate plan administration. The new rules change how money market funds will be invested, priced, operated and act when financial markets are under stress. Plan sponsors, investment committees, those who advise them (investment fiduciaries) and plan administrators should understand the upcoming changes in order to determine what steps, if any, that will be required or may be beneficial to take regarding such funds, and to consider their alternatives." (Reliance Trust)  

Link to Online Survey: GAO Asking Plan Sponsors for Information about Lifetime Income Options in Their 401(k) Plans
"401(k) plans permit their participants to withdraw 100 percent of their account balance if they choose, and many allow participants to make partial withdrawals, but some barriers exist that can prevent plans that want to offer a diverse selection of lifetime income options from doing so.... GAO is reaching out to DC plan sponsors to help us to better understand their use of these policies. This survey will help to inform our report to Congress and help us to ensure that it provides accurate, balanced information on this topic." [This survey asks about the advantages and disadvantages of these options, education about them, and barriers that might limit their adoption. GAO estimates the survey will take about 15-20 minutes to complete; responses will be accepted until July 24th.] (U.S. Government Accountability Office [GAO])  

Link to Online Survey: GAO Asking Plan Sponsors for Information about Eligibility and Vesting Requirements in Their DC Plans
"[GAO] is studying eligibility and vesting requirements in defined contribution (DC) plans.... As part of this study, GAO is reaching out to DC plan sponsors to help us to better understand their use of these policies. This survey will help to inform our report to Congress and help us to ensure that it provides accurate, balanced information on this topic." [This survey examines why plan sponsors use certain eligibility and vesting requirements, how they may have changed the requirements, and how they communicate them to employees and participants. GAO estimates the survey will take about 15-20 minutes to complete; responses will be accepted until July 24th.] (U.S. Government Accountability Office [GAO])  

Text of PBGC RFP: Smaller Asset Managers Pilot Program
"The PBGC has a requirement for active investment management services from a firm with at least $250,000,000 or more in Assets Under Management (AUM). The investment management services are for a US core fixed income portfolio with allocations ranging from $50,000,000 to $250,000,000. The portfolio objective will be to provide a total rate of return over a full market cycle that exceeds the portfolio benchmark (Barclays Capital US Aggregate Bond Index) at appropriate levels of risk." [A video of the pre-bidder's conference held on June 8, 2015, including a Q&A session, is available online.] (Pension Benefit Guaranty Corporation [PBGC])  

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GAO Report: Frequent and Collective Trading Are Uncommon in 401(k) Plans and Not a Significant Concern for Plan Participants, Sponsors, or Mutual Funds
"GAO was asked to examine issues related to frequent and collective trading in 401(k) plans. This report examines [1] the types of trading restrictions 401(k) participants typically face, [2] what is known about frequent or collective trading by plan participants and the effect of such trading on plan costs, and [3] how stakeholders view current regulation of a participant's ability to manage their retirement accounts and the duties of plan fiduciaries and obligations of mutual funds." (U.S. Government Accountability Office [GAO])  

Tibble's Impact on Target Date Monitoring: How Often Are Underlying Assumptions of Glidepaths and Allocations Revised? (PDF)
"Given the fragility of the assumptions, three obvious questions arise: How often are the assumptions underlying the glidepath, including those that lead to allocations within and among the asset classes, revised? Should the glidepath be static, as most are now described, or should it be dynamic so that it can reflect current market conditions which will enable it to capture opportunities to enhance investment returns? Unless the fiduciaries understand all the assumptions that go into creating their target-date funds, how can they justify both their initial selection and monitoring processes?" (Investment Horizons, Inc.)  

Adding Annuities to DC Plans Still Open to Debate
"The challenges include investment risk, income risk, capital market volatility, longevity risk and inflation risk ... [One consultant] said her review of research on retirement savings suggests that so-called in-plan annuities aren't a good idea for people age 55 and older.... Citing other research that found only 17% of retirees have more than $100,000 in retirement assets, [she] said 'we need more creative solutions' than annuities." (Pensions & Investments)  

Pension Overpayments Raise Tough Questions About How to Recoup Losses
"The fiduciary of a plan covered under [ERISA] can invoke administrative claims procedure on its behalf, and then adjudicate its own claim ... Instead, when the fiduciary uses the administrative claims procedure, it should allow the participant who has received an overpayment to file a claim if the person thinks there hasn't been an overpayment or that there is some other reason he or she shouldn't have to restore the overpaid amounts to the plan.... But before even going through that process, plan administrators must comply with the claims procedures under ERISA Section 503, which require plans to notify participants of their appeal rights ... The phrasing of those letters is important, [one attorney] said, noting that he's seen letters that 'look like collection demands,' and don't inform participants of their rights." (Bloomberg BNA)  

Selecting and Documenting Mortality Assumptions for Pensions (PDF)
44 pages; June 2015. "This practice note is intended to assist actuaries by describing some approaches for selecting and documenting mortality assumptions that ... could be employed to comply with ASOP No. 35 ... This practice note replaces the October 2011 version and has been updated to reflect a new mortality improvement scale (BB) published by ... the Society of Actuaries in September 2012 and to reflect a new mortality table RP-2014 and mortality improvement scale MP-2014 published by the Society of Actuaries in October 2014[.]" (Pension Committee, American Academy of Actuaries)  

Money Flows Out of 401(k) Plans as Baby Boomers Age
"Withdrawals from 401(k) plans are now exceeding new contributions as baby boomers age, a shift that could have profound implications for the U.S. retirement industry. Investors pulled a net $11.4 billion from tax-deferred savings plans in 2013 ... ending decades of expansion.... The movement out of 401(k)s is expected to accelerate in the coming decade as more baby boomers retire, squeezing large money-management firms that rely on fees charged to employers and investors as a chief profit engine ... Asset managers hope they can replace the outflows with a new surge from millennials ... One industry data provider said most funds leaving 401(k)-style plans are migrating to IRAs." (The Wall Street Journal; subscription may be required)  

Auto-IRAs: How Much Would They Increase the Probability of 'Successful' Retirements and Decrease Retirement Deficits?
"Assuming no opt-outs, this analysis finds that the introduction of an auto-IRA for households currently ages 35-39 working for small employers, would increase the probability of a 'successful' retirement (as measured by the Retirement Readiness Ratings, or RRR) by 8.4 percent, declining as employer size increases. Even in the worst-case scenario (75 percent opt out) there was an increase in RRR, albeit only 2.2 percent for those working for small employers and 1.1 percent for those with large employers." (Employee Benefit Research Institute [EBRI])  

Using Your IRA to Buy a Business: Still a Risky Strategy
"The court said that the wages could not be justified as reasonable compensation, which is an exception to the prohibited transaction rules, because the reasonable compensation exception is available only for services performed for the IRA or qualified plan. In this case, the services were performed for the business, not for the IRA itself, so the exception did not apply. Note that the salary amounts were modest ($9,754 in 2005 and $29,263 in 2006); it was the act of directing the salary payments, not the amount of those payments, that was the prohibited transaction." [Ellis v. Comm'r of Internal Revenue, No. 14-1310 (8th Cir. June 5, 2015)] (Stinson Leonard Street)  

A Way Around the Once-per-Year Restriction on IRA Rollovers
"[B]egin by taking money out of [the] IRA ... But rather than putting $50,000 back into the IRA within 60 days, this client would create a Roth IRA and fund the new account with $50,000.... [T]he final step is to recharacterize that conversion on or before the due date of the tax return for the year of the conversion. That effectively undoes the Roth conversation and transfers the $50,000 (plus any growth accumulated during that year) back into the traditional IRA. From a tax perspective, it is as if the money never left the account." (The Wall Street Journal; subscription may be required)  

How Should a Business Owner Define Retirement?
"Compared with an employee's retirement, business owner retirement entails more opportunities and landmines. That's why it's not only important for you to define your retirement but also to build a financial plan around your strategy." (Forbes)  

Proposed Bill Would Raise Penalties for Forms 1099 Filing Failures
"The Trade Preferences Extension Act (H.R. 1295) ... would boost monetary penalties for filing failures associated with certain information returns ... [including] those in the Form 1099 series (Forms 1099-R, 1099-SA, 1099-Q).... The first-tier penalty for filing an information return late but within 30 days of due date would increase from $30 to $50 per return. The penalty for correction after 30 days and before August 1 would increase from $60 to $100 per return. The continuing delinquency penalty (filed on or after August 1) would rise from $100 to $250 per return. The penalty for intentional failure would rise from $250 to $500 per return." (Ascensus)  

[Opinion]

AARP's David Certner on DOL's Proposed Fiduciary Rule: 'Disclosure Alone Not Enough'
"Given the confusion and lack of understanding in the marketplace, it is clear that disclosure alone is not enough.... The current rules were basically adopted before individual account plans like 401k-type plans and IRAs were in existence. Most Americans with retirement savings now rely on individual account plans, and therefore the responsibility for investing the plan assets falls on the individual. The rules must be updated to respond to this change, and to ensure that all retirement plan advisers act in the 'best interest' of the individual investor. Failure to act will continue to cost Americans billions of dollars each year out of their retirement savings -- money that they cannot afford to lose." (Fiduciary News)  

[Opinion]

The Unsuitability of 'Suitability': SIFMA's Deceptive 'Best Interests' Proposal
"The 'best interests' standard recently proposed ... by SIFMA only slightly expands upon the very weak suitability standard.... This 'best interest' standard is nothing more than an attempt to preserves the arm's-length, product-sales nature of broker-customer relationships. Even worse, by wrapping arms-length product sales in a blanket of false assurance to consumers, SIFMA's 'best interest' proposal creates an illusion of protection where none exists." (Ron Rhoades)  

[Official Guidance]

Text of EBSA Request for Nominations: Advisory Council on Employee Welfare and Pension Benefit Plans
"The terms of five members of the Council expire at the end of this year. The groups or fields they represent are ... [1] employee organizations; [2] employers; [3] investment counseling; [4] actuarial counseling; and [5] the general public.... [A]ny person or organization desiring to nominate one or more individuals for appointment to the Advisory Council on Employee Welfare and Pension Benefit Plans to represent any of the groups or fields specified ... may submit nominations to Larry Good, Council Executive Secretary, Frances Perkins Building, U.S. Department of Labor, 200 Constitution Avenue, NW., Suite N-5623, Washington, DC 20210, or as e-mail attachments to good.larry@dol.gov. Nominations (including supporting nominations) must be received on or before July 31, 2015." (Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL])  

FASB Proposes Accounting Standards Update to Improve and Simplify Accounting for Stock Compensation (PDF)
"The proposed ASU amends Topic 718 in the following eight areas ... [1] Stock-for-tax withholding ... [2] Presentation of stock-for-tax withholding on statement of cash flow ... [3] Accounting for award forfeiture ... [4] Accounting for excess tax benefits and deficiencies ... [5] Presentation of excess tax benefits and deficiencies on statement of cash flows ... [6] Classification of awards with contingent repurchase feature ... [7] Estimating expected term of stock option award for nonpublic companies ... [8] Using intrinsic value rather than fair value for liability awards for nonpublic companies." (Frederic W. Cook & Co., Inc.)  

Pensionmark Introduces Custom Target-Date Solution
Pensionmark Retirement Group

Great Lakes Pension Associates, Inc. Is Certified to Industry Best Practices
CEFEX

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