Good News for 412(d)(2) Amendments
"In December, the IRS issued an internal memorandum instructing EP Determination and Examinations employees that an amendment made in the first 2-1/2 months of a year that increases benefits for service in the prior year does not adversely affect a plan's qualification. The memo advises that this type of amendment is not a 'discretionary amendment' that must be adopted before the end of the prior year, provided the amendment was not 'operationally effective' until after the end of that prior year."
(American Society of Pension Professionals & Actuaries [ASPPA])
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Society of Actuaries 2015 Risks and Process of Retirement Survey (PDF)
276 pages. "This report presents the results of an online survey of Americans ages 45 to 80 conducted ... to evaluate Americans' awareness of potential financial risks in retirement, how this awareness impacts the management of their finances with respect to retirement, and how Americans are managing the process of leaving the workforce."
(Society of Actuaries)
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Post-Retirement Experiences of Individuals Retired for 15 Years or More: SOA Findings (PDF)
88 pages. "This study provides direct evidence on this issue and does so through careful questioning of long-term retirees themselves: people who have been retired at least 15 years. By their own testimony most long-term retirees have coped with managing their finances during the first decade and a half of retirement well. Some had to make cutbacks in their lifestyles: a number state they have gone from satisfying 'wants' to satisfying 'needs.' But those who have had to make that transition have accomplished it with resilience and not bitterness. Some have experienced financial shocks, but most shocks have been absorbed and adjusted to well. Retirement clearly has a number of challenges, including declines in health and cognitive capacity, the loss of spouses and, in some cases, social isolation. These are difficult challenges and for many the financial challenges are the easiest to deal
with."
(Society of Actuaries)
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DC Plans Expected to Exit Prime Money Market Funds
"[T]he key issue for DC plans is the [SEC] rule requiring providers of prime money market funds to create redemption gates -- or limits -- on withdrawals by participants and to establish fees on withdrawals to prevent a run on the funds.... 'The fees and gates are too complicated for participants,' said Martha Tejera, president of Tejera & Associates... 'Prime money market funds will disappear from 401(k) plans.' "
(Pensions & Investments)
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401(k) Fee Litigation: Practices to Mitigate Fiduciary Risk
"By illustrating areas of potential exposure, [recent] cases provide guidance for developing prudent fiduciary practices that can help lessen that exposure.... [T]here are some general practices that all plan fiduciaries should consider adopting or strengthening -- all with the critical caveat that the fiduciary process leading to, and implementing, these (and other) decisions needs to be well documented."
(Proskauer Rose LLP)
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Empower Retirement Sued Over Revenue-Sharing Practices
" 'The amounts of the revenue-sharing payments bear absolutely no relationship to the value of the cost or value of such services' provided by Empower through separate accounts in the 401(k) plan for TPS Parking Management LLC, said the complaint filed Jan. 14 in U.S. District Court in Denver."
(Pensions & Investments)
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What the Growing Longevity Gap Means for Social Security
"While many people will live significantly longer than their parents and grandparents, some groups have seen no gains, and others (such as poorer women) may have lost years of life. This troubling development makes Social Security less progressive ... and some widely discussed changes, like raising the full retirement age, could make things worse."
(Center on Budget and Policy Priorities)
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States Commend DOL on Proposed Retirement Plan Rule, Look for Some Expansions
"State officials in California, Connecticut, Illinois and Maryland urged the Labor Department to expand the original scope of the proposed rule's safe harbor for state-run payroll deduction IRA programs that mandate smaller private-sector employers participate, opening it up to also allow voluntary automatic enrollment. In California, where employers with at least five workers that do not offer a retirement program will be enrolled in a state program, removing the mandate 'would become an even stronger tool for states to partner with the private sector,' state Treasurer John Chiang said in his comment letter."
(Pensions & Investments)
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Public Retirement Plan Gains Momentum in Connecticut
"When the General Assembly convenes next month for the 2016 session, the Connecticut Retirement Security Board will submit to lawmakers a detailed plan of how a state-sponsored retirement savings program would work ... Any legislation would include a mandate that private-sector employers with more than five employees either have a retirement savings vehicle in place for their workers or participate in the state program[.]"
(The New Haven Register)
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A Common Sense Approach: The Connecticut Work and Save Plan
"3 in 5 voters support a state retirement savings plan. Across political views, 8 in 10 voters agree that elected officials should support a retirement savings plan to help small business workers and help small businesses stay competitive. Most wish they had saved more, and those without a workplace option would gladly take advantage if offered. Over half of Connecticut registered voters have retirement savings."
(AARP)
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How a Year and a Half of Progress in Funding of Public Employee Pensions Was Wiped Out in Just Three Months
"For a year and a half, state and local pensions were improving. The gap between how much they were presently worth and how much they would someday owe was closing. Fears of a looming crisis were easing. But, in just three months last year, those gains were erased.... [A]bout one-and-a-half year's worth of improvements to state and local government pensions were undone in the third quarter of 2015, driven in large part by a stock market slide that summer. The historically bad market start to this year suggests that pension conditions could worsen even more."
(The Washington Post; subscription may be required)
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Why Retirees Need to Stop Writing Checks to Charities
"[The qualified charitable contribution] can actually represent a valuable tax strategy for many retirees.... The charitable contribution generally -- but not always -- results in a charitable tax deduction. Individuals who do not itemize their deductions ... do not benefit from the charitable contribution. In addition, charitable deductions are limited to a percentage of the adjusted gross income ... When an IRA owner takes a distribution from the IRA and then later makes a charitable contribution, the distribution counts in the calculation of adjusted gross income (AGI). If a QCD is elected, the distribution is excluded from income and it does not count as part of AGI."
(Forbes)
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Benefits in General; Executive Compensation
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Employee Stock Plans: Year-End 2015 International Reporting Requirements
"This Commentary highlights some of the principal calendar and year-end reporting requirements for employee stock plans that U.S. companies most commonly encounter when offering these programs to their employees in selected jurisdictions worldwide. Please note that this Commentary does not address routine, year-end tax reporting obligations. A chart summarizing these items [is included]."
(Jones Day)
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New Year's Executive Compensation To-Do List
"Although the rules do not mandate a specific hedging policy, companies will want to consider adding or amending a policy given heightened shareholder interest. Communicating the CEO pay ratio will be important -- the ratio will be out there for all to see. A primary concern should be implementing the clawback policy in a way that does not trigger shareholder lawsuits."
(Towers Watson)
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Press Releases
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