Retirement Plans Newsletter

January 18, 2016

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401(k) Pension Administrator
Nicholas Pension Consultants
in CA

Relationship Manager
Paychex, Inc.
in AZ, CO, IN, NY, TN

Benefits Specialist
AvalonBay Communities
in VA

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LoVasco Consulting Group
in MI

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Webcasts and Conferences

Designing Your Wellness Plan to Avoid Enforcement Action and Litigation Risks
February 8, 2016 WEBCAST
(Lorman Education Services)

PBGC Reportable Events: What You Need to Know About the New Rules
March 17, 2016 WEBCAST
(Lorman Education Services)

2016 City Event
March 24, 2016 in CO
(PSCA [Plan Sponsor Council of America])

2016 City Event
March 24, 2016 in GA
(PSCA [Plan Sponsor Council of America])

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[Official Guidance]

Text of IRS Notice 2016-07: January 2016 Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates (PDF)
"This notice provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates used ... and the 24 -month average segment rates ... In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities ... as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate under Section 431(c)(6)(E)(ii)(I)." (Internal Revenue Service [IRS])  


[Advert.]

35th Annual ISCEBS Symposium - Sept. 18-21

Sponsored by International Foundation of Employee Benefit Plans [IFEBP]

The Symposium is a must-attend event for corporate benefits professionals. Designed with a variety of U.S., Canadian and globally oriented sessions, the Symposium is an opportunity to learn from industry colleagues, experts and leaders.



[Official Guidance]

Text of IRS Publication 560: Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans), for Use in Preparing 2015 Returns (PDF)
28 pages; dated Jan. 14, 2016. "What's New: Compensation limits for 2015 and 2016.... Elective deferral limit for 2015 and 2016.... Defined contribution limit for 2015 and 2016.... SIMPLE plan salary reduction contribution limit for 2015 and 2016.... Catch-up contribution limit for 2015 and 2016." (Internal Revenue Service [IRS])  

Fiduciary Breach Lawsuit Dismissed Based on Defined Benefit Plan's Improved Financial Condition
"A federal district court in Minnesota dismissed a plan participant's allegations that plan fiduciaries mismanaged a defined benefit plan -- and thus caused it to be underfunded -- because the plan's financial condition improved during the course of the litigation.... [T]he court held that plaintiffs' claims were now moot because the plan had become overfunded. As a result, 'any money that could be awarded would simply add to the Plan's now-existing surplus, in which Plaintiffs have no legal interest.' " [Adedipe v. U.S. Bank, N.A., No. 13-2687, slip op. (D. Minn. Dec. 29, 2015) (Proskauer's ERISA Practice Center)  

Is a Qualified Retirement Plan Required to Apply Windsor Retroactively?
"It is important to note that the court's decision in Schuett merely allows the surviving spouse to proceed with her breach of fiduciary claim against FedEx (in which she seeks declaratory and injunctive relief amounting to payment of the QPSA); it does not require FedEx to apply Windsor retroactively or pay a benefit to the spouse. Also notable is the fact that the court granted FedEx's motion to dismiss the spouse's other two claims. " [Schuett v. FedEx Corp., No. 15-cv-0189 (N.D. Cal. Jan. 4, 2016)] (Proskauer's ERISA Practice Center)  

When You Should Fire Your Retirement Plan Providers (PDF)
"They don't provide you with fee disclosures.... They're not doing the basics of their job.... They aren't in communication with you.... They make too many errors and have too many excuses for them.... They are related to you or someone who works for you.... They are behind the curve.... They won't hold your hand." (The Rosenbaum Law Firm, P.C.)  


[Advert.]

Firm Owners: Attend the 2016 BMOC Conference, March 20-22

Sponsored by ASPPA

Are you the owner or manager of a TPA firm? Register for the BMOC Conference - the only conference designed specifically for YOU! Earn ASPPA CE credits, network and gain insights on issues commonly faced by you and your fellow business managers and owners.



Liability Driven Investing Strategies: A Statistical and Qualitative Review of Q4 2015 and Outlook for 2016
19 pages. "Equities bounced back in October, driving modest improvements in funded status which stayed generally intact throughout the remainder of Q4. These outcomes held true across all three LDI funding indices we track (which do not vary the 45% assumed equity allocation), though results were most favorable for the Traditional Pension Index -- the index that represents a non-LDI plan." (Standish)  

Ten States Where Most People Don't Get Retirement Benefits
"Just 38 percent of full-time employees in the sunshine state participate in retirement benefits, the lowest of any state. Florida is also the state where the smallest proportion of workers (46 percent) are offered a retirement account or other type of retirement benefit by their employer.... Just over half (51 percent) of California workers qualify for retirement benefits at work, but only 44 percent of workers actually use the plan." (U.S. News & World Report)  

California State Plan for Automatic IRA May Surface Soon
"One of the plan options being considered by the Secure Choice board is like an IRA with no loss protection. The board would have to make a decision about the type of investment funds and whether they would be insured to provide loss protection. The other option is an innovative pooled IRA that gives the employee something like a variable-rate savings bond. But it has a reserve fund, built up over time by taking some of the peak investment returns, that could be used to offset investment losses." (Calpensions)  

Bad Idea: Rolling a 401(k) Into an IRA, Part III
"[M]ost of the time it does not make sense for your 401(k) plan participants to roll their 401(k) account balances into IRAs when they leave your employment.... It is difficult, and most times impossible, to find stable value or guaranteed fund investment options available in IRA accounts.... In a 401(k) plan, not only is the employer a fiduciary, but the investment advisor associated with the plan is likely to be one as well.... the average return in an IRA account from 2000 to 2012 was 2.2%. The average return in a 401(k) plan account for the same period was 3.1%." (Lawton Retirement Plan Consultants)  

Pension Lump Sum Payouts and Your Retirement Security (PDF)
"A guide for consumers considering their retirement payout options from a private-sector plan.... Questions to ask before accepting a lump sum: ... [1] Will you be at risk of running out of money? ... [2] Will you have the necessary investment skills? ... [3] Is your money protected? ... [4] Is a combination of payouts possible? ... Regardless of the payout you choose, detect and correct errors in your pension or lump sum calculation ... If you choose a lump-sum payout: [1] Plan for tax consequences ... [2] Make your money last ... [3] Protect your money from fraud and scams." (Consumer Financial Protection Bureau)  

Annuity and Life Insurance Product Update
"This quarterly slide deck examines new product releases from annuity carriers and life insurers covered in [the Corporate Insight] Annuity Monitor and Life Insurance Monitor research services.... [It provides] a rundown of the new products introduced on the firms' websites in the fourth quarter of 2015 and highlight their key features [along with] an overview of all releases by product type for 2015." (Corporate Insight)  

Benefits in General; Executive Compensation

[Guidance Overview]

Another Suggested Stock Incentive Plan Revision for 2016
"[C]urrently, to avoid triggering liability treatment, any shares withheld to cover the taxes due at settlement of an option or award must be limited to the minimum required statutory withholding of the award holder. [FASB recently] affirmed its decision to broaden this provision to allow shares to be withheld for taxes up to the maximum individual tax rate in the applicable jurisdiction.... [Most] companies ... have hardwired the minimum required statutory tax-withholding requirement into their stock plan documents. Given the liberalization of this requirement, however, most companies (and many executives) will want to preserve the flexibility to withhold taxes at a higher rate in some circumstances." (Winston & Strawn LLP)  

[Guidance Overview]

Comments on Proposed Changes to Regs on Disability Claims Procedures Due January 19
"Pension plans, disability plans, and grandfathered group health plans are not necessarily familiar with the claims procedures established under the ACA for non-grandfathered group health plans. The new requirements may have greatest administrative impact on those plans that are administered internally by the plan sponsor.... Plans with a definition of disability the same as under the Social Security Act may be able to minimize additional administrative costs by relying on a determination of disability made by the Social Security Administration where practical." (Cheiron)  

Supreme Court Passes on ERISA Plan Lawsuit Venue Case
"The Supreme Court has denied a petition to review a case about restriction-of-venue clauses in retirement plan documents related to ERISA challenges -- based not on the weakness of appellees' arguments but on a lack of conflict among the circuit courts. The U.S. Supreme Court will not take up Smith v. Aegon Companies Pension Plan, despite the opinion of the U.S. Solicitor General that the district and appellate courts erred in allowing the enforcement of a plan document's venue-restriction clause in the case." (PLANSPONSOR)  

Press Releases

DOL Files Suit to Recover $80K in Missing Plan Assets from J.E. Keever Mortuary Inc. in Ennis, Texas
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

Savant Capital, LLC Certified to ERISA 3(16) Administrator Role
Centre for Fiduciary Excellence [CEFEX]

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David Rhett Baker, J.D., Editor and Publisher <davebaker@benefitslink.com>
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BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2016 BenefitsLink.com, Inc. 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.

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