Retirement Plans Newsletter

November 4, 2015

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Benefits Analyst (Health)
The Segal Group
in CA

Plan Administrator, Compliance
Verisight
in IL

Enrolled Actuary
PenSys, Inc.
in CA

Compliance Product Manager
SunGard Relius
in FL

Service Center Representative
Hooker & Holcombe
in CT

Sr. Actuarial Analyst
USI Consulting Group
in CT, NY

401k/Defined Contribution Consultant
Consulting Actuaries Incorporated
in NJ

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Webcasts and Conferences

What Every Employer Needs to Know About the Affordable Care Act
November 12, 2015 WEBCAST
(Wagner Law Group P.C.)

Advanced Pension Conference 2016
February 10, 2016 in FL
(SunGard Relius)

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[Official Guidance]

Fact Sheet: Key Facts About myRA (PDF)
"Many people want to save, but haven't found an easy way to get started. According to a 2015 Federal Reserve Report, 31 percent of non-retired people said they have no retirement savings or pension whatsoever. The U.S. Department of the Treasury developed myRA to make it easy for people to start saving for the future.... myRA is a Roth IRA that could be a good fit for people who: [1] Don't have access to a retirement savings plan at work or lack other options to save; [2] Want to save but haven't found an easy way to get started; [3] Earn an annual income below $131,000 if single, or $193,000, if married filing jointly." (U.S. Department of the Treasury)  


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[Guidance Overview]

U.S. Treasury Launches myRA (My Retirement Account) to Help Bridge America's Retirement Savings Gap
"People can get information about myRA and sign up for an account at myRA.gov.... myRA is now available nationwide with multiple ways for people to start saving: [1] Paycheck. Set up automatic direct deposit contributions to myRA through an employer. [2] NEW: Checking or savings account. Now savers can fund a myRA account directly by setting up recurring or one-time contributions from a checking or savings account. [3] NEW: Federal tax refund. At tax time, direct all or a portion of a federal tax refund to myRA." (U.S. Department of the Treasury)  

[Guidance Overview]

IRS Employee Plans News No. 2015-11, November 3, 2015
Topics: [1] IRS announces 2016 pension plan limits; [2] Electronic filing for Form 8955-SSA; and [3] IRS webinars and video: Easy low-cost ways to start your small business retirement plan; Employee Plans programs -- summer 2015 updates; and SEP and SIMPLE IRA Plans -- avoiding the pitfalls. (Internal Revenue Service [IRS])  

[Guidance Overview]

Do You Need to Send an Annual Notice to Your DC Plan Participants? (PDF)
"This advisory serves as a reminder of the multiple year-end notices that defined contribution plans must issue to participants. These notices must be distributed within a reasonable period of time, typically 30 days, prior to the start of the plan year. [A] table provides a list of the content and deadlines for the most common notices that plan sponsors may need to distribute ... [1] Traditional Safe Harbor 401(k) Notice; [2] Qualified Automatic Contribution Arrangements (QACA) for a Safe Harbor 401(k) Notice; [3] Eligible Automatic Contribution Arrangement Notice; [4] Qualified Default Investment Alternative Notice (QDIA); [5] Non-Safe-Harbor Automatic Contribution Arrangement Notice; [6] Annual participant fee disclosures." (Alston & Bird LLP)  

[Guidance Overview]

Recent Developments in ERISA's Church Plan Exemption
"At least three federal district courts have broken from the long-settled interpretation that church-affiliated organizations may take advantage of ERISA's church plan exemption, and held that the exemption covers only plans established by churches themselves." (Weil Gotshal & Manges LLP)  

[Guidance Overview]

GASB Proposes Changes to Pension Standards for Certain Multiple-Employer DB Pension Plans
"The proposed new guidance is intended to assist governments that participate in certain multiple-employer [DB] pension plans to meet the reporting requirements of GASB Statement No. 68, Accounting and Financial Reporting for Pensions.... [An] employer covered by such a plan would recognize a pension expense equal to the employer's required contributions to the plan for the reporting period, and a payable equal to the difference between the contributions required and contributions made at the end of the reporting period. In addition, the employer would recognize pension expenditures equal to the employer's required contributions to the plan, and an associated payable that is recognized to the extent it is normally expected to be liquidated with available resources." (Gabriel Roeder Smith & Company)  

401(k) Plan Design: A Checklist to Make the Process Simpler
"There are 6 major features a 401k plan must define during the design process -- eligibility, compensation, contributions, vesting, distributions and loans.... Use this checklist to choose the 401k specifications for your plan ... Once the checklist is complete, a professional 401k provider can use it to help draft a formal plan document to govern your 401k plan." (Employee Fiduciary)  

Recovering Pension Overpayments May Get Even Harder
"Plan fiduciaries have become more aggressive in their attempts to recover mistaken overpayments to retirees. The plan may elect to recoup the overpayments by reducing future pension payments, but what if the participant received a lump sum or the recoupment method will not work, for example, because the retiree is elderly and the value of the future payments is not large, or because the payee wasn't really entitled to any vested pension? ... Recent actions by the U.S. Supreme Court may make it even more difficult to prevail in a lawsuit to recover pension overpayments." (Osler, Hoskin & Harcourt LLP)  

IRS LRMs Provide ESOP Diversification Guidance
"In the [ESOP] LRM sample diversification language, the IRS indicates that the 90-day election period is a minimum election period and can be extended. More importantly, this LRM language provides that the 90-day period for processing the participant's diversification election begins the day after the close of such extended election period, even if the election is processed well beyond the 180th day of the plan year." (Principal Financial Group)  


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Letter from Members of Congress to DOL Requesting Public Comment Period on Any Additional Changes to Proposed Fiduciary Regs (PDF)
"Given your Department's commitment to transparency and public input, we request that upon determining the specific changes the DOL will make to the Rule, you open a 15-30 day comment period prior to finalizing the Rule.... [Y]ou can submit the Rule to OMB for an expedited review period, which could last less than a week ... The review period would be followed by the publication of the new version of the Rule in the Federal Register to begin a very short comment period. This would allow you to receive the necessary feedback from all parties on the changes that you make in the Rule." (47 Members of Congress)  

More Fiduciary Rule Questions Answered
"[1] [Under the proposed rule] if you had a flat fee for compensation, then you could include hedge funds, private equity or non-traded REITS? ... [2] Upon the effective date of the rule, will existing IRAs be grandfathered? ... [3] For the addition of DC plans under BICE, is the 100 participant number one that you have heard from DOL or just your best guess? ... [4] Does this apply to fixed and variable investments? ... [5] What is the impact on nonqualified investments? ... [6] Under BICE there was mention of onerous annual reporting requirements for plan costs and underlying fees. Is this still the case? ... [7] Why hedge funds?" (fi360)  

Weighing Income Options Can Prepare Individuals for Retirement
"Many pension plans offer the choice between a lump-sum payout (into a rollover for example) or an annuity. When presented with all or nothing, most retirees select lump sums, when in many -- if not most -- situations, allowing a mix or partial annuitization and partial lump sum would be better for the participants and welcomed by them.... When their money exits the plan, as a rollover for example, they face retail pricing, which is significant. The move to a lump sum/rollover paradigm has transferred not only the varied risks to participants, but also the ongoing and significant administrative and management costs as well." (Milliman Retirement Town Hall)  

New File-And-Suspend and Restricted Application Deadlines for Social Security Claimants
"[T]he next 6 months do mark an important transition period that merits a close look at Social Security claiming strategies, for the brief time window that all of the tools remain on the table, whether it's an individual filing and suspending for a potential lump sum reinstatement in the future, a couple claiming spousal benefits, or a family claiming dependent or disabled child benefits while delaying individual retirement benefits until age 70. And for those 'lucky' enough to be born in 1953 or earlier, only a few years remain to consider a Restricted Application, before that deadline ends, too!" (Michael Kitces in Nerd's Eye View)  

S&P 1500 Pension Funded Status, October 2015
"The estimated aggregate funding level of pension plans sponsored by S&P 1500 companies increased by 4% to 83% as of October 31, 2015, as equity markets increased while rates remained the same as the previous month end. As of October 31, 2015, the estimated aggregate deficit of $386 billion reflected a decrease of $71 billion as compared to the end of September." (Mercer)  

Pension Finance Update, October 2015
"Pension sponsors saw an improvement in funded status during October, as both stocks and interest rates moved higher. Both model pension plans we track gained ground last month: Plan A picked up almost 5% during October and is now ahead 3% for the year, while Plan B improved close to 2% last month and is now up almost 2% on the year through October." (October Three Consulting)  

[Opinion]

These Policy Fixes Would Help Small Employers with Retirement Plans
"Develop a simplified starter 401(k).... Expand underutilized startup tax credits and make the credits refundable.... Increase availability of multiple-employer plans.... Establish designated plan providers to oversee administration of MEPs.... Create a regulatory environment that encourages plan adoption and maintenance." (Empower Retirement)  

Benefits in General; Executive Compensation

[Guidance Overview]

November and December 2015 Filing and Notice Deadlines for Qualified Retirement and Health & Welfare Plans
"The filing and notice deadline table below provides key filing and notice deadlines for the next two months. If the due date falls on a Saturday, Sunday, or legal holiday, the due date is delayed until the next business day. Please note that the deadlines will generally be different if your plan year is not the calendar year. Please also note that the table is not a complete list of all applicable filing and notice deadlines (including any available exceptions and/or extensions), just the most common ones." (King & Spalding)  

Reply Brief for Petitioner Montanile to Supreme Court on Tracing Requirement for ERISA Overpayments (PDF)
"An agreement can define the scope of property to which a lienholder is entitled. But no agreement can create a lien that is enforceable against something other than specific property. That is simply not a lien... Similarly situated litigants said precisely the same thing nearly fifteen years ago in Great-West. Since then, the world has not crumbled, and Congress has not rushed in to correct this Court's alleged error. As this Court and ERISA litigants well know, Congress' decision to limit 29 U.S.C. Section 1132(a)(3) to 'equitable relief' has its pluses and minuses. But it is up to Congress, and Congress only, to change that equation." [Bd. of Trustees of the National Elevator Industry Health Benefit Plan v. Montanile, No. 14-11678 (11th Cir. Nov. 25, 2014; oral arg. sched. Nov. 9, 2015)] (Robert Montanile, petitioner)  

Wellness Programs Add Financial Advice to Improve Employee Health
"About half of all U.S. employers now offer financial wellness programs, although how they define them varies. Many companies have long offered lectures on topics like retirement. But increasingly, say analysts tracking the trend, employers are tailoring their programs to the worker -- more like a personal trainer who works on your budget rather than your waistline." (National Public Radio)  

Press Releases

US Labor Department Sues DC-area Government Contractor and Employee Benefit Plan Service Providers
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

HealthCare.gov Pilots New Doctor Lookup Feature
Centers for Medicare & Medicaid Services [CMS]

InterOcean Capital, LLC is Certified for Fiduciary Excellence
Centre for Fiduciary Excellence [CEFEX]

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David Rhett Baker, J.D., Editor and Publisher
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