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Senior Policy Analyst
National Business Group on Health
in DC

Manager, Compliance Disclosures
T. Rowe Price
in MD

ERISA Consultant
Empower Retirement
in KS, MA

Client Service Manager
United Retirement Plan Consultants
in OH

Senior Technical Position
Benefit Associates, Inc.
in CA

Retirement Plan Services Specialist
First Financial Bank
in IN

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Employer Health Plans in the Time of Exchanges: Compliance, Administration, and Employee Communications Impacts
RECORDED
(Thomson Reuters / EBIA)

Hot Topics in Pension Accounting
November 18, 2015 WEBCAST
(PricewaterhouseCoopers LLP)

Dos and Don'ts of Qualified Domestic Relations Orders
November 19, 2015 WEBCAST
(Western Pension & Benefits Council)

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[Guidance Overview]

Brief Description of Pension Provisions in the Bipartisan Budget Act of 2015 (PDF)
"[T]he Bipartisan Budget Agreement of 2015 contains a number of provisions that would affect [1] the premiums that pension plan sponsors pay to the [PBGC] and [2] the amount of contributions that the sponsors of defined benefit (DB) pension plans are required to make on an annual basis. These provisions would result in an increase in revenues to the U.S. Treasury and offset provisions in the bill that are unrelated to pension plans." [Insight No. IN10385, Oct. 28, 2015.] (Congressional Research Service [CRS])  

[Advert.]

Retirement Loan Eraser improves retirement outcomes.

Retirement Loan Eraser™ "RLE" improves retirement outcomes by restoring balances when loans default because of job separation. Help participants stay on track while maintaining plan assets with RLE protection. Learn more.

[Guidance Overview]

Pension Funds Stabilization Provisions in the Bipartisan Budget Act of 2015 (PDF)
"MAP-21 called for different rate adjustments to be made between 2012 and 2016. H.R. 5021, the Highway and Transportation Funding Act of 2014, delayed the implementation of the scheduled different minimum and maximum percentages by five years, holding the percentages constant at the 2012 level until 2018. [The] Bipartisan Budget Act of 2015 ... would extend the schedule by two years. Current segment rates are lower than the current minimum; therefore, pension plan discount rates would be higher through 2022 under the proposal than under the HTF, effectively creating a spending offset." [CRS Insight No. IN10383, Oct. 27, 2015.] (Congressional Research Service [CRS])  

[Guidance Overview]

Social Security and Social Security Disability Insurance (SSDI) Provisions in the Proposed Bipartisan Budget Agreement of 2015 (PDF)
13 pages. "Among these changes is a temporary reallocation of the Social Security payroll taxes so that a larger share is deposited in the Disability Insurance (DI) trust fund to extend the life of this trust fund beyond its current predicted exhaustion in 2016. Under this provision, the allocation of the 12.4 0% Social Security payroll tax assigned to the DI trust fund would increase from 1.80% to 2.37% and the allocation to the Old-Age and Survivors Insurance (OASI) trust fund would decrease from 10.60% to 10.03%. These changes would last through 2018. In addition, these provisions extend the Social Security Administration's (SSA) demonstration authority for the Social Security Disability Insurance (SSDI) programs, make changes to data and earnings reporting, and increase penalties for benefit fraud." [Report No. R44250, dated Oct. 28, 2015.] (Congressional Research Service [CRS])  

[Guidance Overview]

Overpayment Correction Methods for Use by DC Plans
"This article presents an overview of the overpayment correction methods for defined contribution plans and includes changes from Revenue Procedure 2015-27. [1] EPCRS's 'Overpayment Definition' ... [2] Overpayment correction rules ... [3] Employer relief ... [4] Notification of employee ... [5] Recovery of small overpayments not required ... [6] 403(b) Overpayment definition." (McKay Hochman)  

[Guidance Overview]

Does Your DB Plan Need to Be Amended Before Year-End?
"If your defined benefit plan is subject to the hybrid plan rules, you should make sure that the plan is amended as necessary to satisfy the following requirements: Age discrimination.... Market rate of return.... Preservation of capital requirement.... Vesting ... Plan termination rules.... Actuarial increases after Normal Retirement Age.... Conversion requirements." (Drinker Biddle)  

[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.

You're About to Get Too Expensive for Your Employer's Pension Plan
"[E]very person in a [defined benefit plan covered by the PBGC] will get more expensive at the stroke of a pen. Employers are already deeply concerned about the extent and uncertainty of future pension liabilities and are trying to shed them. The proposed increase in the budget legislation would push even more pension plans to manage costs any way they can, including reducing participant head count[.]" (Bloomberg)  

Assessing Fee Reasonableness, Step Three: Implement a Prudent Evaluation Process
10 pages. "Assessing the reasonableness of a provider's fees generally gets most of the attention because ... a simple dollar or bsp metric, like a light switch, is easy to get your head around. However, [ERISA] section 408(b)(2) makes the evaluation of a fees merely a component of a broader mandatory evaluation of the reasonableness of the plan's overall 'arrangement' with the service provider.... A prudent reasonableness evaluation process begins with ... [an] examination of the provider's [service agreement], including all amendments, side letters,fee schedules, statements of work and performance guarantees.... Listed below are some frequently overlooked terms[.]" (ERISA Fiduciary Administrators LLC)  

The Fiduciary Process for Higher Education Institutions as Plan Sponsors
"The largest shift in the management of college and university retirement plans over the past decade is the role of the institution. In the past, their role included salary reduction agreements and remittance processing. Today, plan fiduciaries face important decisions about the retirement programs they oversee.... These are complex topics. They are further complicated by their interrelated nature and the administrative constraints faced by plans with individual annuity contracts. The result can be paralyzing." (CAPTRUST Financial Advisors)  

Adding a Target Date Fund to a Retirement Plan Lineup
"84% of plans ... use a QDIA transition strategy. Of plans electing a QDIA, 77% chose a TDF to fill that role.... 78% of participants go along with the plan's default (do not opt out) and a year later, 73% are still in that investment option." (The Principal Blog)  

[Advert.]

Developing an Effective Financial Wellness Program

November 9 -- Providing worksite financial education can empower your employees to reach their financial goals and raise their financial well-being, leading to a more satisfied and engaged workforce. BenefitsLink discount.

Prototype ESOP Documents Now Allowed
"[Employers] that decide to adopt a preapproved ESOP will need to complete IRS Form 8905 (Certification of Intent to Adopt a Pre-Approved Plan) before the end of their ESOP's current five-year remedial amendment cycle. Form 8905 serves as a record of an employer's intention to transition from an individually designed plan to a preapproved plan." (Morgan Lewis)  

Recent Developments in Employee Benefits (PDF)
12 pages. Topics include: [1] Data: the Building Blocks of an Efficient Retirement Plan; [2] IRS Announces 2016 Annual Limits; [3] Considering a Merger or Acquisition? Consider This; [4] The M&A Checklist; and [5] BPS&M Pension Liability Index. (Bryan, Pendleton, Swats & McAllister, LLC)  

What's Really Scaring U.S. This Halloween: Financial Wellness
"[T]here's a 55% chance you fear not having enough money in retirement (versus 37% for losing your job and 25% for gaining weight).... [O]nly 19% of employees who took a financial wellness assessment last year reported being on track for retirement. The unprepared fall into three categories: the unknowns, the underfunded, and the under-confident." (Financial Finesse)  

Morningstar Report Suggests Jiu-Jitsu Tactic for Buying Annuities: Game Them Right Back by Waiting
"The 'when' is at least as important as the 'what' in purchasing the controversial retirement products ... [One] model, which incorporates the ability to make changes during retirement, reduces the optimal annuity amount by half on average.... [T]he costs associated with delaying the purchase of an annuity until it's needed are relatively small, provided retirees start to incorporate annuities by the 10th year of retirement." (RIABiz)  

Illinois Supreme Court Affirms Constitutional Protection of Public Pensions (PDF)
"The state's principal argument ... was that a budgetary crisis necessitated the modifications to the pension benefits, thus trumping the protections afforded by the pension protection clause. The state argued that its exercise of the police power was reasonable and necessary in light of the dramatic squeeze on the state's finances due to the recent recession, the poor condition of the economy, and the deterioration of the state's credit rating. In a 7-0 opinion, the court forcefully rejected that defense." [In re Pension Reform Litigation, No. 118585 (Ill. May 8, 2015)] (Alston & Bird LLP, via Benefits Law Journal)  

[Opinion]

The Problem with ESG Investing
"What's really happening is that the power of capital, concentrated in retirement plans, is being used for political ends. Obviously. Does anyone not believe that is what is going on? ... The real problem is when you use someone else's money to advance your political agenda.... Thus the problem isn't prudence -- that standard (competitive 'expected returns), in this dimension at least, is so baggy almost anything would be permitted. The problem is exclusive purpose. Note to fiduciaries: this isn't your money and you shouldn't be using it to advance a personal agenda." (Michael Barry in PLANSPONSOR)  

[Opinion]

DOL's Revised VFCP May Provide an Opportunity to Submit Comments (PDF)
"[T]he DOL's regulatory agenda includes publishing a revised VFCP this fall as an interim final rule....[O]nce the interim final rule is published, interested persons should have an opportunity to submit public comments ... Some changes that would make the VFCP more attractive are: [1] Requiring a simplified application that would lower the cost of preparing VFCP applications; [2] Allowing the correction amount due to a plan to be reduced by any payments the plan received during a prohibited transaction period; and [3] Allowing an alternative method of calculating lost earnings." (Groom Law Group)  

[Opinion]

Jacksonville Pension's Failed Adoption of the Highest Federal (ERISA) Safety Standards
"If you are a participant in a state or local government pension, I suggest taking a peek at whether your fund mentions ERISA's heightened federal pension 'safety standards' anywhere in its by-laws, operating policies, procedures or investment guidelines. Public pensions, in my experience, often do reference ERISA in their organizational documents but rarely give compliance with the comprehensive federal statute much attention. So it's up to stakeholders to hold Boards to their promises." (Edward Siedle in Forbes)  

[Opinion]

New Budget Deal Is Cutting Your Social Security Benefits and It's a Good Thing
"The budget agreement will remove a lot of the claiming strategies by extending the deemed filing rules up to age 70, simplifying the Social Security claiming decision for millions of Americans.... [T]his move shows that the Government is not afraid to make the tough decisions necessary to ensure the long-term success of the program.... A reduction in these aggressive claiming strategies will keep more money in the Social Security system and will improve its long-term financial stability." (Forbes)  

[Opinion]

Budget Deal Hikes Pension Premiums Again
"It's at least ironic -- some stronger words come to mind -- that the same Congress and presidential administration that have taken numerous steps aimed at improving retirement savings now support an action that would only hasten the trend of pension plan sponsors freezing or closing their plans.... By law, the premiums that pension-plan sponsors pay to the PBGC cannot be used for anything but PBGC programs. Yet the [CBO] records the premium increases as general revenues. Put simply, it's an accounting trick on the level of one that would get a publicly held corporation busted by the [SEC]." (CFO)  

[Official Guidance]

Text of IRS Temporary Regs: Preparer Tax Identification Number (PTIN) User Fee Update
"The IRS has determined that the full cost of administering the PTIN program going forward has been reduced from $50 to $33 per application or renewal. Individuals who prepare or assist in preparing all or substantially all of a tax return or claim for refund for compensation are required to have a PTIN. The ability to prepare tax returns and claims for refund for compensation is a special benefit, for which the IRS may charge a user fee to recover the full costs of providing the special benefit. The amount of the user fee is $33 for both initial PTIN applications and renewals because the activities the IRS is required to perform to issue a new PTIN or renew an existing PTIN are the same." (Internal Revenue Service [IRS])  

[Guidance Overview]

The Pay Ratio Rule: Preparing for Compliance (PDF)
11 pages. "[T]his article: [1] Provides an overview of the pay ratio disclosure requirement. [2] Explains methodologies companies can use to carry out key tasks that are essential for determining elements of the pay ratio, including: identifying the median employee; and calculating annual total compensation. [3] Offers guidance on how to present pay ratio disclosure. [4] Suggests initial steps companies should take to prepare for compliance." (Frederic W. Cook & Co., Inc. and Simpson, Thatcher & Bartlett LLP, via Practical Law)  

Bipartisan Budget Act of 2015: Items of Interest for Plan Sponsors
"Medicare 2016 premiums ... Repeal of the Affordable Care Act's auto-enrollment rule ... Single-employer PBGC premium increase ... PBGC premium payment acceleration ... Plan-specific substitute mortality tables ... Extension of single-employer funding stabilization percentages." (Segal Consulting)  

What the Budget Bill Means for Your Social Security and Medicare Benefits
"The file-and-suspend strategy will be eliminated ... The restricted application strategy will be eliminated ... High-income Medicare Part B participants will get a break." (Slott Report)  

Employment Cost Index, September 2015
"Compensation costs for civilian workers increased 0.6 percent, seasonally adjusted, for the 3-month period ending in September 2015, the U.S. Bureau of Labor Statistics reported today. Wages and salaries (which make up about 70 percent of compensation costs) increased 0.6 percent, and benefits (which make up the remaining 30 percent of compensation) increased 0.5 percent.... [For civilian workers:] The increase in the cost of benefits was 1.4 percent for the 12-month period ending in September 2015, lower than a year earlier when the increase was 2.3 percent.... [For private industry workers:] Benefit costs increased 1.8 percent for the 12-month period ending in September 2015. In September 2014, the increase was 2.4 percent." (U.S. Bureau of Labor Statistics [BLS])  

Vertical Management Systems, Inc. announces the addition of The Retirement Advantage, Inc. to its Retirement Revolution® Third Party Administrator Community.
The Retirement Advantage [TRA]

Dr. Susan Mangiero Earns Certified Fraud Examiner (CFE) Credential at a Time When Global Fraud is Estimated at $3.7 Trillion Per Year
Fiduciary Leadership, LLC

JULY Adds Midwest Regional Sales Consultant
July Business Services

FINRA Chairman and CEO Rick Ketchum to Retire in 2016
Financial Industry Regulatory Authority [FINRA]

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