ASPPA

Retirement Plan Consultant
Ascensus
in IN

Retirement Plan Consultant
Ascensus
in IN

CFO/Director of Finance
Sheet Metal Workers' National Pension Fund
in VA

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2015 SOA Annual Meeting & Exhibit
October 11, 2015 in TX
(Society of Actuaries)

2015 IHC Forum & Expo Las Vegas Conference
November 16, 2015 in NV
(Institute for HealthCare Consumerism)

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[Official Guidance]

Text of PBGC Disaster Relief in Response to Severe Storms, Tornadoes, Straight-Line Winds, Flooding and Mudslides in Kentucky on July 11, 2015
"This Disaster Relief Announcement provides relief ... [to] any person responsible for meeting a PBGC deadline (e.g., a plan administrator or contributing sponsor) that is located in the disaster area for which the [IRS] has provided relief in KY-2015-13, August 13, 2015 ... or [who] cannot reasonably obtain information or other assistance needed to meet the deadline[.]" (Pension Benefit Guaranty Corporation [PBGC])  

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[Guidance Overview]

DOL Provides Guidance on DC Annuity Fiduciary Obligations
"ERISA generally provides for a six-year statute of limitations for a claim based on a fiduciary breach. With regard to the application of this statute of limitations to fiduciary claims based on the imprudent selection/monitoring of an annuity carrier ... [FAB 2015-02 provides] that, generally, plan fiduciaries are 'off the hook' six years after the plan has 'de-selected' the annuity carrier. Also, if the participant's claim is based on the imprudent selection of an annuity contract, plan fiduciaries are also generally off the hook six years after the date the annuity was purchased." (October Three Consulting)  

Text of Fifth Circuit Opinion: Purchase of Group Annuity by Verizon DB Plan Did Not Violate ERISA Despite Resulting Loss of PBGC Guarantees (PDF)
"[T]he Transferee Class also asserts that the phrase 'loss of benefits' encompasses federal protections under ERISA and the [PBGC].... [T]his interpretation of 'benefits' is more expansive than the ERISA regulation governing the purchase of annuities by plan fiduciaries ... which requires that such transactions guarantee a participant's 'entire benefit rights.'... [We] hold that the transfer of pension liabilities from an ongoing plan through an annuity transaction amendment is a settlor function, permitted under ERISA, or, alternatively, that such transactions are not subject to fiduciary duty requirements." [Lee v. Verizon Comm. Inc., No. 14-10553 (5th Cir. Aug. 17, 2015)] (U.S. Court of Appeals for the Fifth Circuit)  

Text of Amicus Brief of American Benefits Council Urging Supreme Court to Rule on Anti-Cutback Rule Applied to Erroneous Benefit Calculations (PDF)
19 pages. "Under the law of the Second, Seventh, Ninth and D.C. Circuits, employers can offer their employees retirement benefits without assuming the risk that mistakes by the plan administrator will be irreversible. In the Third and Sixth Circuits, however, an employer who chooses to offer retirement benefits can become bound -- in perpetuity -- to a plan administrator's mistake in interpretation.... If offering such benefits exposes an employer to the uncertainty inherent in this circuit split, and the unpredictable liability that follows from the Third Circuit's rule, employers may stop offering such benefits, or may not offer such benefits in the first place." [United Refining Co. v. Cottillion, No. 15-66 (3d Cir. March 18, 2015; cert. pet. filed July 13, 2015)] (American Benefits Council)  

Access to Employee Benefit Records: Take Action Now to Avoid Issues Later
"Employers are sometimes surprised that their vendors (or former vendors) are not able to produce records they need to respond to a participant or government audit/inquiry or that those records and forms are insufficient to meet compliance standards. The following steps can lessen the risk of this happening: ... Check your vendor agreement. Confirm your rights to your retirement plan data.... Audit your vendor's procedures, forms, and retention of administrative documents.... Protect your historical plan data on vendor conversion.... Protect your payroll data.... Retain executed copies of retirement plan documents until plan is terminated and beyond." (Poyner Spruill LLP)  

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One More Year Until New Mortality Tables Are in Place
"After much anticipation, the latest IRS Notice 2015-53 has clarified that annuity starting dates with the stability period beginning in 2016 will follow the same procedures as those from 2008-2015. The bad news? Actuaries are expecting a change to the RP-2014 mortality tables beginning in 2017. The good news? One more year before the new tables are in place and lump sum values increase." (Findley Davies)  

Study Stirs Pension Debate by Touting DC Plans' Performance
"Those who dare to enter the bitter debate over whether U.S. employers should offer defined benefit or defined contribution retirement plans have often assumed that DB plans are better for employees, even as they acknowledge that companies have good reasons to move to a DC world, to offload pension liabilities and the earnings volatility that comes with them. But a new paper seeks to dispel some of that conventional wisdom, arguing that DC plans can offer advantages to employees as well as employers.... Other pension experts take issue with his findings." (Institutional Investor)  

Why Target-Risk Funds Are Wrong for 401(k) Plans
"Target date funds use plan participant inertia (the tendency of participants to set-it and forget-it) in a positive way.... The opposite is true with target-risk funds. Participants have to identify the various points in their lives when their risk tolerance changes and choose to move to a lower risk fund.... Participants take on more risk than they should.... Participants learn they are in the wrong fund at the wrong time.... Participants become dissatisfied with the plan.... Participants need a significant amount of education to understand their ability to bear risk and the risk profiles of the target-risk funds available." (Lawton Retirement Plan Consultants)  

Fund Companies Put Their Interests First in 401(k) Menus
"In general, the researchers wrote, mutual fund companies' dual role of managing assets in search of positive returns in the financial markets and for fee payments while helping plan sponsors set their investment option menus 'creates conflicting incentives.' A predisposition by fund companies to fill retirement plan investment menus with poorer-performing funds could leave plan sponsors open to litigation by participants if they and plaintiff's attorneys can demonstrate that the plan sponsor ignored or was unaware of historically underperforming stocks that damaged returns for their retirement accounts." (Thompson SmartHR Manager)  

Study Shows Openness Needed on 401(k) Investment Options
"According to the study, proprietary funds, with a 13.7 percent deletion rate, were much less likely to be cut out of a 401(k) plan's menu than unaffiliated funds, which had a 19.1 percent deletion rate. The bias favoring proprietary funds was particularly pronounced for poorly performing funds, with plans removing just 13.7 percent of the funds in the poorest performing decile, or lowest 10 percent of funds, which was much less than the 25.5 percent deletion rate for unaffiliated funds in the same bottom decile of funds[.]" (Bloomberg BNA)  

Reactions to DOL's Proposed Expansion of Fiduciary Duty Rules
"This Alert describes some of the leading themes in the comment letters and the public hearings, focusing on the concerns of the regulated community.... [S]everal comment letters appeared to outline legal challenges to the Department's economic analysis or the Department's authority to implement the proposal. Meanwhile, the proposal has sparked debate in Congress.... In the short term, the Department has invited another round of comments. Comments will be due two weeks following the date the Department posts the transcripts from the recent public hearings." (Ropes & Gray LLP)  

DOL Secretary Vows to Finalize DOL Fiduciary Rule as Planned, Despite Calls for Re-Proposal
"In a letter addressed to Rep. Ann Wagner, R-Missouri, Labor Secretary Thomas Perez vowed to move forward with finalizing the Department's proposed conflict-of-interest rule ... Wagner and 19 other House members, including two Democrats, [had] expressed concern that a final rule will be markedly different from the proposal now being vetted ... [and suggested that] the DOL should be required to re-propose the rule, reinitiating the rule-making process." (BenefitsPro)  

DOL Will Move Forward on Fiduciary Rule
"Labor Department officials are determined to produce a new standard of fiduciary duty for anyone giving retirement investment advice, once they process concerns raised in thousands of comment letters and four days of hearings on their proposal.... Giving up on producing a final rule is not an option, [Labor Secretary Thomas Perez] said. 'The cost of inaction is too high.' " (Pensions & Investments)  

The Future of Retirement Is Now
"Gray, small, and distinctly female. This is what the director of MIT's AgeLab, Joseph Coughlin, sees when he peers into the future of retirement.... Coughlin spooled out a list of stunning facts to impress on his audience the dramatic impact of rising longevity and graying populations in the developed world, and he urged them to think in fresh ways about retirement. In Japan, for example, adult diapers are outselling baby diapers. China already faces a looming worker shortage, and Germany's population is in sharp decline. In 2047, there will be more Americans over age 60 than children under 15. 'The country will have the demographics of Florida,' Coughlin said." (SquaredAway Blog, by the Center for Retirement Research at Boston College)  

[Opinion]

Statement of the Pension Rights Center Before the ERISA Advisory Council on Model Notices and Disclosures for Pension Risk Transfers (PDF)
"Participants first need clear, accurate, and specific information about their benefit options.... Participants need to know how many years they and their spouses are expected to live under the plan's calculations so they can properly evaluate their options.... Participants need assurance that the pension benefits they have earned and are entitled to are guaranteed lifetime benefits ... The notice accompanying a lump sum offer needs to include the precise risks of accepting a lump sum offer as well as a description of the circumstances that would make a lump sum offer beneficial.... The tax implications of accepting a lump sum offer should be clearly explained ... A disclosure notice should remind participants and their spouses to check all personal information provided by the employer for accuracy, such as age, dates of employment, salary, and elected spousal benefit." (Pension Rights Center)  

Union Rallies Outside Patriot Coal Over Pension and Retiree Health Benefits
"The company wants permission from a federal bankruptcy judge in Virginia to reject the company's collective bargaining agreement with union miners and change retirees' health care benefits. Patriot wrote that it would otherwise run out of cash and have to liquidate.... For union mine retirees, a cut to their pensions and health benefits would snap an essential pact that they rely on for their livelihood. This is the second time in two years those benefits have been threatened for Patriot union miners and retirees." (ABC News)  

Public Pension Plan Mortality Study Data Request
Society of Actuaries

New “For Dummies” Book from ConnectYourCare Shows Consumers How to Save with Flexible Spending Accounts
ConnectYourCare

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