Retirement Plans Newsletter

January 12, 2016 logo logo LinkedIn logo Twitter logo Facebook logo
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Employee Benefits Jobs

Group Benefits - Health and Welfare Compliance
NRECA [National Rural Electric Cooperative Association]
in VA

Regional Retirement Plan Sales Consultant
Brighton Jones
in WA

Compliance Analyst
National Retirement Services, Inc.
in NC

Senior Vice President - Regional Sales
Pension Consultants, Inc.

Retirement Plan Sales Consultant
John Hancock Retirement Plan Services
in MA

Regional Sales Consultant
The Retirement Advantage
in IL

Client Relationship Manager
The Retirement Advantage

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Webcasts and Conferences

Risk Transfer Trends
January 13, 2016 WEBCAST
(Conference of Consulting Actuaries)

2015 Employee Benefits Year in Review...and What’s Coming for 2016!
January 21, 2016 WEBCAST
(ABD Insurance & Financial Services)

Look into the Crystal Ball: How Retirement Plans and Financial Well-Being Programs will Evolve in 2016
January 26, 2016 WEBCAST
(Aon Corporation)

Future of Group Benefits: Are You Prepared?
January 27, 2016 WEBCAST

Mastering the HIPAA Privacy, Security, and Breach Notification Rules
February 4, 2016 in MD

Affordable Care Act - Just the Basics
February 9, 2016 WEBCAST
(Liebert Cassidy Whitmore)

IRA Excess Contributions & Recharacterizations
February 23, 2016 WEBCAST

East Coast Defined Contribution Conference
March 6, 2016 in FL
(Pensions & Investments)

View All Webcasts and Conferences


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[Official Guidance]

Text of 2015 Instructions for IRS Form 5500-EZ: Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan (PDF)
12 pages. "What's New: [1] IRS Electronic Filing Requirements ... [2] IRS Compliance Questions: Participant information ... New optional IRS compliance questions.... [3] IRS Late Filer Penalty Relief Program." (Internal Revenue Service [IRS])  


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[Official Guidance]

SEC Announces 2016 Examination Priorities
"Protecting retail investors, including those investing for retirement, remains a priority in 2016. [The Office of Compliance Inspections and Examinations (OCIE)] will continue several 2015 initiatives to assess risks to retail investors seeking information, advice, products, and services to help them plan for and live in retirement. It also will undertake examinations to review exchange-traded funds (ETFs) and ETF trading practices, variable annuity recommendations and disclosure, and potential conflicts and risks involving advisers to public pension funds." (U.S. Securities and Exchange Commission [SEC])  

[Official Guidance]

Text of PBGC Disaster Relief Announcement 16-01 Relating to PBGC Deadlines in Response to Severe Storms, Tornadoes, Straight-Line Winds and Flooding in Mississippi
"This Disaster Relief Announcement provides relief relating to PBGC deadlines ... [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 IR-2016-02 ... in connection with filing extensions for Form 5500 series returns, or cannot reasonably obtain information or other assistance needed to meet the deadline from a service provider, bank, or other person whose operations are directly affected by the Severe Storms, Tornadoes, Straight-Line Winds and Flooding that began on December 23, 2015, in Mississippi.... The relief generally extends from December 23, 2015 through May 16, 2016. The disaster area consists of Benton, Coahoma, Marshall, Quitman and Tippah counties." (Pension Benefit Guaranty Corporation [PBGC])  

[Guidance Overview]

IRS Moves Forward with Changes to Determination Letter Program
"Beginning in 2017, individually designed retirement plans will be eligible to obtain determination letters only for initial qualification (at birth), when they terminate (at death) and in certain other limited cases (as yet to be defined).... There has been a great deal of speculation as to how the new, more limited program will work since the IRS first announced the proposed change. [Notice 2016-03] provides a few answers to these questions." (McGuireWoods LLP)  

New IRA Private Letter Ruling Fee: $10,000
"[F]or many years the IRS has offered 'bargain' PLR rates for certain requests; namely, requests for late 60-day rollovers and late recharacterization requests. For years, late recharacterization requests were 'just' $4,000, while late 60-day rollover requests were as low as $500 in some cases. But all of that is going to change on February 1, 2016, when these bargain rates go away and the PLR fee for all IRA-related rulings becomes $10,000." (Slott Report)  

Participants Putting More Money in Workplace Retirement Plans, Taking Out Less
"Participation rates have remained steady the last several years with about 88 percent of eligible participants having an account balance, and 80 percent making contributions to the plan. Deferral rates increased back to pre-crash levels, and are in fact higher, increasing from 5.3 percent of pay in 2013 to 5.8 percent of pay for lower-paid employees ... [T]he percentage of participants with loans and the percentage of assets loaned have been decreasing and have reached their lowest rates in more than a decade -- just 14.6 percent of participants have an outstanding loan balance and only 0.7 percent of all plan assets are held in loans." (Plan Sponsor Council of America [PSCA])  

JPMorgan Dodges ERISA Liability Tied to 'London Whale' Trades
"According to the judge, the workers challenging JPMorgan's decision to keep declining company stock in the 401(k) plan failed to allege any viable action the company could have taken instead of continuing to offer the stock. In the judge's view, halting investments in JPMorgan stock would have required public disclosures, and the company could have reasonably concluded that those disclosures would have harmed stock price -- and thus the workers' retirement savings -- even more than keeping the stock in the plan." [In re JPMorgan Chase & Co. ERISA Litigation, No. 12-Civ-04027 (S.D.N.Y. Jan. 8, 2016)] (Bloomberg BNA)  

Bell v. Anthem, Excessive Fee Cases, and the Economics of Settlement
"[F]iduciaries should not be found liable for a fiduciary breach if their process was strong, the plan was well run, the investment options were well investigated, but nonetheless the plan ended up with some investment choices that were marginally more expensive than, in a perfect world, they might have been.... [S]ome of the large dollar excessive fee settlements that we have seen to date reflect simply defendants buying out the risk of having a large verdict imposed after trial for only a few cents on the dollar, even if those cents add up to millions in settlement." (Stephen Rosenberg, The Wagner Law Group)  

Eighth Circuit Win for Principal Is Loss for DOL
"The Labor Department is now 0-3 in its attempt to persuade the federal appeals courts to impose ERISA fiduciary liability on 401(k) service providers.... The court's decision in favor of Principal follows the recent judicial trend of dismissing excessive fee claims against 401(k) service providers after finding that the providers don't qualify as fiduciaries under ERISA. The DOL has argued against this trend forcefully -- and unsuccessfully -- in the appellate courts[.]" [McCaffree Fin. Corp. v. Principal Life Ins. Co., No. 15-1007 (8th Cir. Jan. 8, 2016)] (Bloomberg BNA)  


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The Impact of Healthcare Merger and Acquisition Activity on Defined Contribution Retirement Plans
"While the parties come together for an expressed healthcare purpose, they need to address the different retirement plans that each entity offers. These are frequently explored late in the transaction discussions. Given the complexity and the potential liability associated with either assuming or terminating the retirement plan of the acquired organization, it is worth assessing the retirement plan much earlier in the process, in order to evaluate any potential impact on the costs and risk associated with the transaction." (Cammack Retirement Group)  

Investors Say Their Spouse Has the Greatest Influence on Retirement Planning, Followed by Their Financial Advisor
"Half of investors surveyed ... credit their spouse as the person who has the most positive influence over their retirement planning decisions, while four in ten investors say their financial advisor has been most influential. One quarter cite their father as the most important person in their retirement planning.... Nearly half of investors (48 percent) surveyed expect to remain in their current home when they retire.... Sixty percent think their retirement experience will be better than their parents' was. A quarter of investors believe their children's quality of life in retirement will be better than theirs[.]" (John Hancock)  

House Votes to Give Former Presidents a Pension Cut
"The House has approved a measure to curb the taxpayer-funded benefits former presidents receive each year after leaving the White House in order to tamp down on benefits afforded to those who make a considerable salary in the private sector. The bill ... would limit yearly presidential pensions to $200,000 -- slightly less than they're allowed now -- but would cut that amount by a dollar for every dollar they earn over $400,000 a year in the private sector." (ABC News)  

New Jersey Assembly Agrees to Gov. Christie's Changes on State-Run Private-Sector Retirement Plan
"The state Assembly voted after 1 a.m. Tuesday to cooperate with Gov. Chris Christie's veto of a bill creating a state-run retirement plan for private-sector workers, 12 hours after the governor handed down his executive veto. Christie gutted the plan, sponsored by the Democratic leaders in both houses, offering instead to create a small business retirement marketplace to close the gap in private-sector retirement savings." (  

How Many Poor Elderly Americans Will There Be in 2050?
"Based on current rates of population growth and assuming no improvements in what is promised in Social Security benefits, there's likely to be an increase in the numbers of elderly poverty from 8.9 million in 2010 to 25 million in 2050 -- an increase of 180 percent. Most of this predicted 180-percent increase between 2010 and 2050 -- about two-thirds of it -- can be attributed simply to the increase in the elderly population as Boomers get older.... The remaining third of this increase -- the part that's not just a matter of having more elderly people -- is America's weak retirement system." (Teresa Ghilarducci, in The Atlantic)  


Will Fee Litigation Kill the 401(k)?
"How long would it have taken Anthem to negotiate those separate accounts? How good a deal would they get? Since that negotiation would be on behalf of plan participants, could they charge their time back to those participants? ... [If] this sort of suit becomes the norm, it's time to get rid of employer-sponsored individual account plans." (Benefits and Compensation with John Lowell)  


IRI Retirement Security Policy Agenda for 2016
"Congress should maintain the current tax treatment for retirement savings to help workers prepare for a secure retirement.... Congress should continue to pursue legislation to expand access to multiple employer plans or MEPs ... [which] should be required to make a lifetime income option available to their employees ... [T]he DOL should allow private-sector plans to include the same automatic features that would be permitted in state-run plans under the proposal.... Legislation should be enacted to increase the RMD age from 70-1/2 to at least 75, and mortality tables should be updated to reflect longer life expectancies." (Insured Retirement Institute [IRI])  

Benefits in General; Executive Compensation

[Guidance Overview]

2016 Deadlines Approach to Furnish Incentive Stock Option and Employee Stock Purchase Plan Information Statements and Returns
"Section 6039 of the Internal Revenue Code requires a corporation to furnish a written statement to any employee or former employee who either [1] exercised an incentive stock option within the meaning of Section 422 of the Code (ISO) during 2015 or [2] during 2015 first transferred legal title to shares acquired under the corporation's employee stock purchase plan.... The corporation must furnish these statements on Forms 3921 and 3922 no later than February 1, 2016.... [C]orporations must [also] file returns with the Internal Revenue Service on Forms 3921 and 3922 no later than February 29, 2016, if filed on paper, or March 31, 2016, if filed electronically." (DLA Piper)  

New 'Digest of EEO Law' Issued by EEOC
"The [EEOC] today announced the latest edition of its federal sector Digest of Equal Employment Opportunity Law, which is available online. The Digest now includes hyperlinks so that stakeholders can easily access the full decisions which have been summarized. This quarterly publication, prepared by EEOC's Office of Federal Operations, features a wide variety of recent Commission decisions and federal court cases of interest. The current edition also includes a special year-end selection of notable EEOC decisions for fiscal year 2015 (which ended Sept. 30, 2015)." (U.S. Equal Employment Opportunity Commission [EEOC])  

Press Releases

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