ASPPA and Western Benefits Conference

Experienced Retirement Plan Administrator
Benetech, Inc.
in CA, CO

Health and Welfare Attorney
Perkins Coie LLP
in IL, WA

Retirement Plan Administrator II
Fulton Financial Advisors (a subsidiary of Fulton Financial Corporation)
in PA

Senior Retirement Plan Administrator
Goldberg, Swedelson & Associates
in CA

Defined Contribution Retirement Plan Senior Administrator
First American Bank
in IL

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Mid-Year Election Changes: Cafeteria Plan Tips & Traps
RECORDED
(Hill, Chesson & Woody)

Voluntary Fiduciary Correction Program and Abandoned Plan Program
July 15, 2015 WEBCAST
(Employee Benefits Security Administration [EBSA], U.S. Department of Labor)

ACA Information Returns (AIR) – Forms 1094-C and 1095-C Non-technical Walkthrough
July 21, 2015 WEBCAST
(IRS [Internal Revenue Service])

HIPAA Breach Update for Employee Benefits Lawyers and In-House Counsel
July 23, 2015 WEBCAST
(American Law Institute Continuing Legal Education Group [ALI CLE])

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[Official Guidance]

Disaster Relief Relating to PBGC Deadlines In Response to Severe Storms and Flooding in Wyoming
"This Disaster Relief Announcement provides relief relating to PBGC deadlines ... [to persons] located in the disaster area for which the [IRS] has provided relief in DEN-2015-41, July 8, 2015 ... or [who] cannot reasonably obtain information or other assistance needed to meet the deadline from a service provider, bank, or other person whose operations are directly affected by the Severe Storms and Flooding that began on May 24, 2015, in Wyoming.... The relief generally extends from May 24, 2015 through August 31, 2015. The disaster area consists of Johnson and Niobrara counties." (Pension Benefit Guaranty Corporation [PBGC])  

[Advert.]

SPARK Forum - November 8-10, 2015 -- The Breakers, Palm Beach, FL

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

[Guidance Overview]

Pension De-Risking Gets New Rules: IRS Shuts Down Lump Sum Offers to Retirees While Connecticut Increases Safety of Group Annuity Contracts
"In Notice 2015-49, the IRS acknowledges that, under current regulations, a pension plan may offer a lump sum option during a limited window to participants who are already receiving monthly pension payments. The IRS has issued several rulings permitting this practice. However, the IRS has now concluded that these lump sum windows 'undermine the intent' of the minimum required distribution regulations to prohibit changes to annuity payments once they begin. Although the minimum required distribution requirements generally seek to limit delays in payments, the IRS stated that the intent of the regulation also includes prohibiting changes that accelerate payments." (National Law Review)  

[Guidance Overview]

IRS Puts Brakes on Pre-Plan Termination Retiree Cashout Windows (PDF)
"It is not surprising that IRS is trying to hold the line on retiree cashouts in response to concerns that have been raised in defense of retirees who may not fully understand the long-term ramifications of taking a lump sum. Comments on the merits of a change to the proposed regulation will likely challenge the notion that accelerating payments rather than continuing deferral could in any way circumvent the requirements of the minimum distribution rule. The end result is difficult to predict. However, given that most employers who have offered these windows have limited eligibility to participants whose benefits are not yet in pay status in light of concerns over anti-selection, the impact of changing the regulation should be minimal." (Buck Consultants at Xerox)  

[Guidance Overview]

IRS to Stop Pension Plans from Making Lump-Sum Payments in Lieu of Annuities
"[T]he IRS intends to amend Regs. Sec. 1.401(a)(9)-6, A-14(a)(4), to provide that the types of benefit increases permitted include only those that increase the ongoing annuity payments, not those that accelerate the annuity payments. The new rules will not permit acceleration of annuity payments to which an individual receiving annuity payments was entitled before the amendment, even if the plan amendment also increases annuity payments." (Journal of Accountancy)  

[Guidance Overview]

Multiemployer DB Plan Disclosure Requirements Expanded by MPRA
"The categories added by MPRA [include] ... [1] The Form 5500 annual report for any plan year; [6] The annual funding notice for any plan year; [2] Audited financial statements of the plan for any plan year; and [3] In the case of a plan that was in critical or endangered status for a plan year, the latest funding improvement or rehabilitation plan, and the contribution schedules applicable with respect to such funding improvement or rehabilitation plan[.]" (Segal Consulting)  

How the Future of Pension Risk Management Will Differ from the Past (PDF)
"[P]lan sponsors will likely need to broaden their toolkits to achieve the return goals necessary to close the funding gap, including becoming more market-aware when implementing within asset classes as well as potentially expanding the investment strategies considered. Plan sponsors' level of sophistication and ability to manage complexity should influence which strategies are most appropriate, and [this article outlines] several possible strategies and the governance needed to implement them successfully." (Aon Hewitt)  

Text of Federal District Court Opinion in Tussey v. ABB: Choice of Investment Funds was Abuse of Fiduciary Discretion, but Participants Have Not Proved Damages (PDF)
"The record is clear that ABB understood how it and Fidelity were benefited by revenue sharing.... ABB's conflict of interest under these circumstances makes the removal of the Wellington Fund and the mapping of its assets to the Fidelity Freedom Funds an abuse of discretion.... [E]ven if the Court assumes that the performance of the alternative target fund that had the highest rate of return would be the proper measure of damages, Plaintiffs have presented no evidence of what that figure would be. Given that the Eighth Circuit has suggested a measure of damages, the Court finds that measure persuasive and Plaintiffs have failed to present evidence of the only measure of damages that the Eighth Circuit has tacitly approved. Therefore, Plaintiffs have failed to satisfy their burden of proof on the issue of damages." [Tussey v. ABB Inc., No. 2:06-CV-04305 (W.D. Mo. July 9, 2015)] (U.S. District Court for the Western District of Missouri)  

On Remand, Tussey v. ABB Defendants Found to Breach ERISA But Win on Procedural Technicality
"Without a doubt, the outcome of this decision has been driven by the unique procedural aspects of the case, rather than substantive ones. For ERISA fiduciaries that might take comfort, don't. The plaintiffs bar will adapt and the proper damages calculations as required by the court will be presented in all cases in the future. But even these plaintiffs may still get another bite at the apple, as they have every right to appeal the case again to the 8th Circuit, which must hear it[.]" [Tussey v. ABB Inc., No. 2:06-CV-04305 (W.D. Mo. July 9, 2015)] (Fiduciary Matters Blog)  

Declaration of Independence: Preserving the Role of the Independent Fiduciary Post-Dudenhoeffer (PDF)
"In the wake of Fifth Third v. Dudenhoeffer, a complaint that seeks to hold an ERISA fiduciary liable for failing to divest a plan of employer stock based solely upon publicly available information fails to state a plausible claim. An 'independent' fiduciary -- by the nature of his outside status -- only has access to public information. For this reason, claims that an independent fiduciary breached his ERISA fiduciary duties in connection with publicly traded company stock necessarily fail post-Dudenhoeffer. The plaintiffs' bar may attempt to plead around this fatal flaw by claiming that appointing fiduciaries have some duty to 'disclose' nonpublic information to independent fiduciaries.... To impose such a disclosure obligation upon appointing fiduciaries would violate the securities laws or the 'objectives' of those laws, in direct contravention of the US Supreme Court's reasoning in Dudenhoeffer." (Alston & Bird LLP, via Benefits Law Journal)  

Nibbling at Roth Conversions
"Since few want to swallow the elephant all at once, yet ownership of a Roth IRA is highly desirable, we must help clients look for ways to take small bites: ... Here are examples of the types of planning opportunities we should keep an eye out for: The 'backdoor' Roth conversion.... Use up temporary losses, deductions, AMT brackets.... Direct aftertax plan distributions to a Roth IRA.... Contribute to a Roth rather than a deductible traditional IRA.... Convert enough to reach, but not exceed, the next income tax bracket.... Convert to avoid expected future higher tax rates.... Don't forget state taxes! ... What else are you going to spend the money on?" (Morningstar Advisor)  

Can You Afford to Live to 100?
"[1] Put off claiming Social Security ... [2] Buy a simple annuity ... [3] Consider long-term-care insurance ... [4] Mind your withdrawals ... [5] Don't overlook Medicaid." (Consumer Reports)  

When Wall Street Offers Free Money, Watch Out
"Despite the risks, governments are lining up to issue billions of dollars in new debt to replenish their depleted pension funds and, as a bonus, take some pressure off strapped budgets. In some cases, the borrowing makes their balance sheets look vastly better. Bankers, who make fat fees for raising the money, are encouraging this borrow-and-bet trend. Their sales pitch is that borrowing at today's low interest rates all but guarantees a profit for the governments because they can invest the proceeds in their pension funds and for decades earn returns higher than the 5 percent or so in interest that they will pay on the bonds." (The Washington Post; subscription may be required)  

Pennsylvania Governor Vetoes Pension Bill, Republicans 'Dismayed'
"[M]ost future state and school employees would have seen changes designed to reduce payments of about $11 billion over three decades on an estimated $53 billion pension debt ... The scuttled plan would have combined a 401(k)-style defined-contribution plan, whose cost would be shared by employees and employers, and a 'cash-balance' plan financed by the employees. Future employees would have been required to contribute at least 3 percent of their salary into the defined-contribution plan and employers would have had to contribute an additional 2.9 percent for school employees and 4 percent for state workers." (WTAE Pittsburgh)  

[Guidance Overview]

SEC Proposes Dodd-Frank Act Clawback Rules
"The proposed rules reflect an unfortunate lack of trust in boards of directors as to when pursuing clawback may be in the best interests of the issuer and its shareholders. The clawback requirements as proposed could influence companies to move away from incentive compensation that is tied to financial performance metrics ... to avoid the clawback issue altogether. The proposed rules do not address potential significant tax ramifications for executive officers who experience a substantial clawback on a pre-tax basis years after the officer has paid income taxes on that compensation (an especially harsh result for a nonculpable individual). Clawbacks of incentive compensation based on stock price or total shareholder return may necessarily require the board to estimate (rather than mathematically calculate) the excess compensation that should be clawed back, which is likely to result in disputes or even litigation between affected current (or former) executive officers and employers." (Jones Day)  

[Guidance Overview]

SEC Proposes Broad Executive Compensation Clawback Rules
"Executive officers may seek higher compensation, either to take into account the risk of the proposed rules or to make themselves 'whole' after having compensation clawed back.... Executives may insist upon provisions in their employment agreements and indemnification agreements that obligate the issuer to bear such legal fees and expenses. In turn, issuers may insist upon coverage of these expenses by D&O insurers ... Executives may consider purchasing insurance policies for themselves that cover clawed-back compensation amounts." (Pillsbury Winthrop Shaw Pittman LLP)  

[Guidance Overview]

SEC Wants Companies to Adopt, Disclose, and Comply with Clawback Policies on Erroneously Awarded Executive Compensation
9 pages. "Because the focus of the recovery policy is on the performance period for which the excess compensation was paid, the actual payment date of the compensation is not relevant.... [A] company's principal financial officer and principal accounting officer or controller are specifically defined to be executive officers for purposes of the proposed rules. Recovery would be required regardless of whether there was any misconduct and even if an executive officer had no role in preparing the company's financial statements that were later required to be restated." (Morgan Lewis)  

[Opinion]

Hodak Value Advisors Comment Letter to SEC on Proposed Disclosure of Pay for Performance (PDF)
16 pages. "[T]he proposed rule could distort investors' view of pay-for-performance, either by making reasonable pay-for-performance look bad, or by making poor pay-for-performance look good.... Some unintended consequences that the proposed rule would likely encourage:.... [1] A greater emphasis on short-term performance ... [2] A reduced emphasis on equity awards ... [3] Greater use of stock-based metrics driving variable compensation ... By being conscious of the role that variable compensation plays in creating alignment, as well cost, we can derive an improved method for determining 'pay' that avoids the potential ramp-up, path-dependence, and other distortions of the proposed rule." (U.S. Securities and Exchange Commission [SEC])  

MassMutual Names Lynn Esenwine To Lead Its Pension Buyout Business
MassMutual Retirement Services

Infinata Announces Latest Release of Retirement PlanVision with Integrated Morningstar Data
Infinata

PenChecks Trust and ASPPA Announce Second Annual QKA Scholarship Program
ASPPA [American Society of Pension Professionals & Actuaries]

Newport Group to Acquire Greensboro Operations of Clark Consulting
Newport Group, The

US Department of Labor Files Lawsuit to Appoint an Independent Fiduciary for Ants Software Inc. Abandoned 401(k) Plan in Dunwoody, Georgia
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

President Appoints Mary K. Wakefield as Deputy Secretary of HHS, and Andy Slavitt as Administrator of CMS
White House

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