Retirement Plans Newsletter

August 31, 2015

BenefitsLink.com logo EmployeeBenefitsJobs.com logo LinkedIn logo Twitter logo Facebook logo
Get Health & Welfare News  |  Advertise  |  Previous Issues  |  Search

Employee Benefits Jobs

Retirement Plan Administrator
TPA Firm
in MO

Benefit Consultant
USI Northeast
in NJ, NY

Retirement Plan TPA Account Manager - Part Time
Norton Financial Services
in ME

IRT Relationship Manager 3
Wells Fargo
in VA

Account Manager
BenTek
in FL

Employee Benefits/ERISA Attorney
Barclay Damon, LLP
in NY

Insurance Specialist
The Newport Group
in NC

Plan Administrator, Compliance
Verisight
in IL, MD

Team Lead, Client Services
Verisight
in CA

Post Your Job

View All Jobs

RSS feed for jobs RSS Feed: All Jobs


Webcasts and Conferences

Affordable Care Act Workshop
September 1, 2015 in MO
(Employee Benefits Security Administration [EBSA], U.S. Department of Labor)

Understanding Your Fiduciary Responsibilities under ERISA Workshop
September 2, 2015 in MO
(Employee Benefits Security Administration [EBSA], U.S. Department of Labor)

Analysis of the Final ACA Employer Reporting Forms for 2015
September 17, 2015 WEBCAST
(Littler Mendelson)

View All Webcasts and Conferences


Subscribe Now to This Newsletter (free)

We also publish the BenefitsLink Health & Welfare Plans Newsletter (free): Subscribe Now


[Official Guidance]

Text of IRS Temporary Regs: Administration of Multiemployer Plan Participant Vote on an Approved Suspension of Benefits Under MPRA
"A participant vote requires the completion of three steps. First, a package of ballot materials is distributed to eligible voters. Second, the eligible voters cast their votes and the votes are collected and tabulated. Third, the Treasury Department (in consultation with the PBGC and the Labor Department) determines whether a majority of the eligible voters has voted to reject the proposed suspension.... Under these temporary regulations, the Treasury Department is permitted to designate a service provider or service providers to facilitate the administration of the vote.... Because the ballot for each eligible voter is accompanied by a unique identifier, the plan sponsor cannot itself distribute the ballot. Instead, the plan sponsor is responsible for furnishing a list of eligible voters so that the ballot can be distributed on the plan sponsor's behalf.... [B]allot packages be distributed no later than 30 days after the application has been approved and specify that the voting period begins on the ballot distribution date.... The temporary regulations do not provide for the collection of votes using paper ballots ... Within 7 days after the end of the voting period ... the Treasury Department (in consultation with the PBGC and the Labor Department) will either certify that a majority of all eligible voters has voted to reject the suspension or, if a majority of eligible voters did not vote to reject the suspension, issue a final authorization to suspend." (Internal Revenue Service [IRS])  


[Advert.]

A Revolutionary New Resource.

Sponsored by Burrmont Compliance Labs LLC

ERISApedia.com is an Online Compliance Library with real-time updates. Our robust platform offers outstanding search tools and an intuitive interface. Quickly find answers to your ERISA questions. Free Trial - Sign up or email sales@ERISApedia.com.



Employee Plans Compliance Unit (EPCU) Summary Report: Proposed Amendment Timely Executed (PATE) Project
"This EPCU project focused on plan sponsors who filed for a determination letter between December 2006 and January 2011, with a proposed caveat ... The focus of this project was to determine whether the designated caveat amendments were signed within the 90 day time frame, or if not, to determine the reason why.... An analysis of the closures indicate the majority of cases involved were found to be in compliance or were already under review through an examination process, SCP/VCP or by the Pension Benefit Guaranty Corporation (PBGC)." (Internal Revenue Service [IRS])  

Employee Plans Compliance Unit (EPCU) Summary Report: SIMPLE IRA Plan Follow-Up Project
"This project allowed EPCU to determine the effectiveness of contacting these sponsors of SIMPLE IRA plans. While a significant number of plans were timely amended (including extension), project results indicate as many as 25% of the amendments may be due to our contacts sent in 2006." (Internal Revenue Service [IRS])  

Employee Plans Compliance Unit (EPCU) Summary Report: Prohibited Stock Allocations in ESOPs Project
"The purpose of this project was to verify compliance with the prohibited stock allocation (PSA) rules and to ensure Form 5330, Return of Excise Taxes Related to Employee Benefit Plans, is filed appropriate to the Form 5500.... A review of responses indicates returns identified as having a PSA shows the information was either reported in error or the conversion of the information into IRS systems was flawed. None of the plans identified had PSA issues." (Internal Revenue Service [IRS])  

Employee Plans Compliance Unit (EPCU) Interim Report: Multiemployer Actuarial Certification Projects
"The purpose of this project is to collect and document actuarial certifications for multiemployer defined benefit plans required to be filed by PPA of 2006 and IRC Section 432.... MECA Project: 2008 was the first plan year certifications were required. At that time over 75% of the plans were in 'Green Status' indicating they were 'Neither Endangered nor Critical'. By 2009, the percentage of cases in 'Green Status' dropped to 31.80%; revealing a nearly complete reversal of plan funding. This was most likely due to the effects of the economic crisis. The 2012 filings show a significant improvement with 57.59% of certifications reporting their funding as 'Green Status'. Plans in the Critical, Seriously Endangered, or Endangered Status started to decline in number, which is a direct result of Legislative action under WRERA." (Internal Revenue Service [IRS])  

New EPCU Project: 401(k) Plans Reporting 4971(a) Tax
"A review of the Form 5330 return showed that excise tax was paid under IRC Section 4971(a) for late payment of required minimum contributions. The Form 5500 series return reports the plan contains a 401(k) feature and was not subject to the minimum funding requirements of IRC section 412. The EPCU will be mailing the contact letter and Information Request to plan sponsors. A closing letter will be issued to the plan sponsor upon completion of our review." (Internal Revenue Service [IRS])  

EPCU Projects Are a Kinder, Gentler Way to Ensure Retirement Plans Comply with Tax Qualification Requirements
"ideas for compliance check projects can come from other sources than tax filings, such as retirement plan practitioners' suggestions or questions for agents.... When [a] project is started, the EPCU prepares a prospectus that details its scope and actions, develops an information request, and prepares a Web page for plan sponsors that get a contact letter to learn more about the project.... During the compliance check, the EPCU tries to resolve any plan sponsor errors found by asking the plan sponsor to go through the Voluntary Correction Program or other EPCRS programs. Some cases may be referred for audit." (PLANSPONSOR)  

Open Government at PBGC
"PBGC's Open Government webpage highlights our commitment to increase transparency, participation and collaboration with our stakeholders. The page includes important PBGC data sets that are used to increase our accountability to the public, and to improve the public's awareness of our operations and how we carry out our mission." (Pension Benefit Guaranty Corporation [PBGC])  

ACOPA Meets with PBGC on Form 501, Forced Cash-outs
"PBGC has found instances in which benefits are improperly transferred to individual retirement plans when a participant is a missing participant. In such cases, the plan administrator must follow PBGC's Missing Participant regulation, which requires that the plan either purchases an annuity for the participant or transfers the participant's benefits to PBGC, and in either case provides information to PBGC." (American Society of Pension Professionals & Actuaries [ASPPA])  

401(k) Plan Participants React Visibly to Market Dip
"[T]rading activity [on Friday August 21 was 2 times the normal level, while activity on Monday [August 24] was 7 times the normal level, the third highest day of trading since 2008.... Preceding Friday's market drop, the Aon Hewitt 401(k) Index showed no days of above normal trading in July or the beginning of August. The trading movement on Friday and Monday was out of equities and into fixed income." (Aon Hewitt)  

Retirement Plan Sponsors Seek a Breakup from Mutual Funds
"Aside from the rise of index funds, it has taken hundreds of fee-related class-action lawsuits, two Department of Labor rules and numerous advances in recordkeeping technology to push down 401(k) fees. But plan costs are also coming down for a reason that has nothing to do with mutual funds themselves. The fact is, plan sponsors have been increasingly jettisoning mutual fund lineups in favor of more efficient retirement plan vehicles." (Institutional Investor)  

Would Financial Advisors Really Abandon the Market Over Fiduciary Rules?
"After sales commissions were banned in the United Kingdom, the number of advisors shrank -- by about 11 percent to 31,000 advisors at the end of 2012 -- before rising again.... Is the financial services industry voicing a legitimate concern, or is it resorting to scare tactics to protect its own hide?" (InsuranceNewsNet.com)  

Fewer People Pay IRA Early Withdrawal Penalty
"The number of people paying the penalty for early withdrawals from their retirement account has declined significantly over the past five years from 1.2 million in 2009 to 690,780 in 2013. And the amount paid in penalties has been cut in half from $456 million in 2012 to $221 million in 2013 ... People whose adjusted gross income is between $50,000 and $75,000 and those earning from $100,000 to $200,000 were the most likely to take early withdrawals from their retirement accounts[.]" (U.S. News & World Report)  

Large Foreign Banks at Risk of Ban on Pension Business Because of LIBOR Convictions
"The Department of Labor is tentatively denying affiliates of Deutsche Bank AG, UBS AG and Royal Bank of Scotland Group the right to serve U.S. retirement plan clients because of criminal convictions related to LIBOR manipulations and other charges.... However, DOL officials ... proposed granting Deutsche Bank a temporary exemption for nine months, with several conditions. The other banks, whose sentencing on the criminal convictions is expected later, have not been offered a temporary exemption." (Pensions & Investments)  

San Bernardino Pension Shift to Save $2.7 Million
"Bankrupt San Bernardino approved a plan last week to disband the city fire department and annex the city to a large county fire district. Part of the expected savings is $2.7 million a year from avoiding future CalPERS rate increases. City firefighters now in CalPERS would be transferred to the San Benardino County Employees Retirement System. And the county system is said to face lower rate increases, because it has more quickly paid down pension debt." (Calpensions)  

Benefits in General; Executive Compensation

Third Circuit Requires Benefit Denial Letters to Contain Plan Limitations Period
"As a possible silver lining, the Third Circuit stopped short of requiring the inclusion of the limitations period for the most analogous state law claim. It noted that, while the issue was not before the court, such a requirement would require legal research into various state law for each claim and would potentially result in the administrator providing legal advice to claimants." [Mirza v. Ins. Admin. of America, Inc., No. 13-3535 (3d Cir. Aug. 26, 2015)] (Seyfarth Shaw LLP)  

Third Circuit Says ERISA Administrative Appeal Denial Letters Must State Plan-Imposed Time Limits
"Given that three circuits already have ruled consistently on these issues, plan fiduciaries should make sure that administrative appeal denial letters specifically set forth plan-imposed time limits. Furthermore, given the courts' tendency not to penalize participants for failure to consult SPDs and plan documents when pursuing a claim for benefits, plan sponsors and administrators should consider whether there is other information pertinent to the claims process to which they should affirmatively alert participants when determining claims for benefits." (Proskauer's ERISA Practice Center)  

When Does ERISA Apply to Small Business Owner Benefit Plans?
"The court noted that for the ERISA exemption to apply, the corporation would need to have been owned by one person and his or her spouse. In this particular situation, however, the plaintiff owned the company along with two others, so the ERISA exemption did not apply." [Silverman v. Unum Group, No. 14-CV-6439 (S.D.N.Y. July 30, 2015)] (DeBofsky & Associates, PC)  

Connect   LinkedIn logo   Twitter logo   Facebook logo

Additional useful links:

BenefitsLink.com, Inc.
1298 Minnesota Avenue, Suite H
Winter Park, Florida 32789
Phone (407) 644-4146
Fax (407) 644-2151

Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

Copyright 2015 BenefitsLink.com, Inc. — but feel free to forward this newsletter without further permission from us, if you do not modify the newsletter in any way (including this lower portion).

All materials contained in this newsletter are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of BenefitsLink.com, Inc., or in the case of third party materials, the owner of that content. You may not alter or remove any trademark, copyright or other notice from copies of the content.

Links to websites other than those owned by BenefitsLink.com, Inc. are offered as a service to readers. The editorial staff of BenefitsLink.com, Inc. was not involved in their production and is not responsible for their content.

We are proud of our Privacy Policy.

Thanks for reading this newsletter!