Retirement Plans Newsletter

January 8, 2016 logo logo LinkedIn logo Twitter logo Facebook logo
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Webcasts and Conferences

Government Reorganizations and Priorities for 2016
January 19, 2016 in CA
(Western Pension & Benefits Council - San Diego Chapter)

Health & Welfare Plans Regulatory and Legislative Update
January 25, 2016 WEBCAST
(ABA Joint Committee on Employee Benefits [JCEB])

ASOPs Updates
February 10, 2016 WEBCAST
(Conference of Consulting Actuaries)

Employer Level SIMPLE Plans
February 11, 2016 WEBCAST

Fundamentals 03: Compensation and HCEs 2016
February 18, 2016 WEBCAST
(SunGard Relius)

457(b) Plans for 401(k) Practitioners 2016
February 23, 2016 WEBCAST
(SunGard Relius)

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[Official Guidance]

PBGC Update: Reportable Events Forms and Instructions
"Revised forms and instructions for reporting under the recently revised 4043 regulation (i.e., Forms 10, 10A, and 200) have been approved by OMB and are now available on the Reportable Events & Large Unpaid Contributions page of PBGC's website.... Reporting required under the new regulation must be done electronically, either using these forms or PBGC's new e-filing portal." (Pension Benefit Guaranty Corporation [PBGC])  


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[Official Guidance]

Text of 2015 IRS Publication 590-A: Contributions to Individual Retirement Arrangements (IRAs) (PDF)
62 pages. "What's New for 2015: [1] Modified AGI limit for traditional IRA contributions increased.... [2] Modified AGI limit for Roth IRA contributions increased.... [3] Application of one-rollover-per-year limitation ... [4] Rollovers to SIMPLE Retirement Accounts." (Internal Revenue Service [IRS])  

[Guidance Overview]

Revisions to Determination Letter Process and User Fees
"The IRS will no longer include an expiration date on determination letters it issues. Expiration dates in previously issued letters are no longer operative. This means an employer will have ongoing reliance on a determination letter.... [If] an employer is using an individually designed document for a defined contribution plan, the employer will have until April 30, 2017 to restate to a preapproved plan and submit for a determination letter ... This relief is particularly important for those individually designed plans which use special provisions that are difficult to replicate in a preapproved document." (SunGard Relius)  

[Guidance Overview]

Changes to User Fees for Voluntary Correction Program (VCP) Submissions
"In many cases the user fee for VCP submissions is reduced under Revenue Procedure 2016-8. The revised fee schedule for employee plan user fees (including VCP submissions) is effective February 1, 2016." (Benefits Bryan Cave)  

PBGC Intervention in Corporate Transactions Under Its Early Warning Program
"In recent years, the PBGC has focused on transactions affecting pension plans with aggregate underfunding of $50 million or more (determined on the basis of conservative plan termination assumptions) or 5,000 or more participants.... In 2014, however, a brief interest rate increase improved pension plan funding overall. This prompted the PBGC to lower its monitoring standard to $25 million in aggregate underfunding ... The current interest rate environment may cause the PBGC again to adjust its monitoring criteria to maintain a stable universe of about 1,500 companies." (Morgan Lewis)  

The New 401(k) Argument: Vanguard Costs Too Much
"As the low-hanging fruit becomes plucked, plaintiffs must stretch further with their complaints. The Anthem case is particularly bold, setting three precedents for 401(k) lawsuits. To start, Vanguard funds are accused of being too expensive.... The second precedent is that four of the cited funds are indexed.... The third and final claim ... is the boldest. The suit suggests that even switching to the cheapest available institutional share class may be insufficient." (Morningstar)  

Have You Checked Your Retirement Plan Fees Lately?
"Recordkeeping and investment advice fees often are structured to yield a targeted amount of revenue -- an amount that may be grossly inappropriate if the plan's assets increase dramatically.... If you recognize that the recordkeeper's job is largely an accounting function, the fee for keeping track of participants' accounts should remain the same no matter how large the account grows.... A large number of public agencies maintain multiple 457(b) plans.... A single larger plan has more purchasing power." (Chang Ruthenberg & Long PC)  

2016 Hot Topics in Retirement and Financial Well-Being (PDF)
28 pages. "Fifty-five percent of employers already offer help in at least one category that falls under the umbrella of financial well-being and 38% have at least three categories covered. By the end of the year, these percentages are expected to grow to 77% and 52%, respectively.... Seventy percent of employers believe they will experience an increase in retirements over the next three years.... More and more defined contribution plans are allowing individuals to receive their money through an automatic payment over an extended period of time (45% in 2016, up from 35% in 2015)." (Aon Hewitt)  

Norton Healthcare Loses Battle Against Early Retirees
"Senior Judge Thomas B. Russell rejected Norton's proposed formula for recalculating the participants' monthly retirement income and lump sums, holding that the plan failed to propose a formula that would ensure the recalculated lump sums were at least actuarially equivalent to the monthly retirement income. Russell also held that those participants whose monthly retirement income was based upon a cash balance benefit, as well as those who retired early and received a lump sum in 2003, were members of the class and, thus, entitled to have their benefits recalculated." [Clemons v. Norton Healthcare, Inc. Ret. Plan, No. 3:08-CV-00069 (W.D. Ky. Jan. 6, 2016)] (Bloomberg BNA)  


Inheriting an IRA or Employer-Sponsored Retirement Plan

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January 26 webinar - Learn how to spot and avoid some of the common mistakes taxpayers make with their inherited IRAs. BenefitsLink discount.

2016: The Year of the Fiduciary Rule
"[T]he impact on retirement plan sales and advice may be less than is commonly expected. However, the impact on advice and sales to IRAs will be nothing short of revolutionary. Similarly, the 'capturing' of IRA rollovers, through recommendations to participants to take distributions, will be dramatically affected." (  

Pension De-Risking: Five Reasons to Do It in 2016 (PDF)
"[1] The stock market ... [2] It isn't an all-or-nothing decision ... [3] Mortality rate calculations aren't changing ... yet.... [4] Rising interest rates ... [5] Industry trends." (Lockton)  

Ford Move to Mark-to-Market Accounting: More to Follow?
"Ford today announced a switch to mark-to-market reporting for pension gains and losses. A handful of other major corporations already use this approach ... There are two reasons that [Ford's move] could prove to be a harbinger of more to follow. One is that changes like this tend to come in waves ... The other reason is timing." (Russell Investments)  

Monte Carlo Analysis and Black Swans Explained
"[W]hile Monte Carlo analysis for retirees is commonly criticized for failing to capture extreme market events, it turns out that the biggest problem with Monte Carlo is not that it fails to model the downside risks but that it actually understates the possibility for upside surprises!" (Michael Kitces in Nerd's Eye View)  


Vanguard Comment Letters to DOL on Fiduciary Proposal
"[Vanguard] expressed serious concerns that, unless substantially changed, the proposal would limit access to important educational and advisory services for retirement investors, including plan participants.... Vanguard encouraged the DOL to significantly streamline the conditions of the proposed new exemption to allow investors continued access to useful investment products and services.... [Vanguard also] offers additional views on the DOL's proposed regulation, including recommendations on the scope of the proposed definition of a fiduciary when providing investment advice and on the conditions that should be included under a simplified set of prohibited transaction exemptions." (Vanguard)  

Benefits in General; Executive Compensation

[Guidance Overview]

DOL Updating Employer Disability Benefit Claims and Appeals
"The changes are intended to better align the claims and appeals processes with the requirements for internal claims and appeals for group health plans. The updated regulations will also apply to pension plans that provide disability benefits. The DOL is revising the regulations 'because of the volume and constancy of litigation in this area, and in light of advancements in claim processing technology.' " (Towers Watson)  

Press Releases

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