Retirement Plans Newsletter

January 29, 2016 logo logo LinkedIn logo Twitter logo Facebook logo
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Employee Benefits Jobs

Retirement Plan 401(k) / Pension Administrator
in CA

Plan Services Consultant - Retirement
OneAmerica Financial Partners
in IN

Director, Plan Consulting & Legislative Compliance
OneAmerica Financial Partners
in IN, WI

Staff Accountant
Professional Capital Services
in PA

Retirement Plan Services Senior
in IL

Retirement Plans Specialist
Benefit Plans Plus, LLC

Employee Benefits Associate
Akerman LLP
in FL

TPA Account Manager
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Sr. Relationship Management Specialist
Securian Financial Group
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Webcasts and Conferences

Current Trends in ERISA Litigation and Best Practices to Avoid the Courtroom
February 4, 2016 in IL
(ASPPA Benefits Council [ABC] of Chicago)

Highlights of the 2015 Cumulative List of Changes for Retirement Plans
February 18, 2016 WEBCAST
(IRS [Internal Revenue Service])

Transfers and Rollovers
March 29, 2016 WEBCAST

View All Webcasts and Conferences


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[Official Guidance]

Text of IRS Notice 2016-16: Mid-Year Changes to Safe Harbor Plans and Safe Harbor Notices (PDF)
"This notice provides guidance on mid-year changes to a safe harbor plan under Sections 401(k) and 401(m) of the Internal Revenue Code. The notice provides that a mid-year change either to a safe harbor plan or to a plan's safe harbor notice does not violate the safe harbor rules merely because it is a mid-year change, provided that applicable notice and election opportunity conditions are satisfied and the mid-year change is not a prohibited mid-year change, as described in the notice. In addition, the notice requests comments on additional guidance that may be needed, in particular with respect to mid-year changes to safe harbor plans in cases in which a plan sponsor is involved in a merger or acquisition." (Internal Revenue Service [IRS])  


Form 5500 Reporting Update

Sponsored by Lorman and BenefitsLink

February 24 webinar - Navigating the maze of changes with Form 5500 can leave you lost and helpless without all the important must know information. BenefitsLink discount.

[Official Guidance]

Text of PBGC Disaster Relief In Response to Severe Storms, Tornadoes, Straight-Line Winds and Flooding in Missouri
"[PBGC] is waiving certain penalties and extending certain deadlines in response to the Severe Storms, Tornadoes, Straight-Line Winds and Flooding that began on December 23, 2015, in Missouri.... The disaster area consists of Barry, Barton, Camden, Cape Girardeau, Cole, Crawford, Franklin, Gasconade, Greene, Hickory, Jasper, Jefferson, Laclede, Lawrence, Lincoln, Maries, McDonald, Morgan, Newton, Osage, Phelps, Polk, Pulaski, Scott, St. Charles, St. Francois, St. Louis, Ste. Genevieve, Stone, Taney, Texas, Webster and Wright counties." (Pension Benefit Guaranty Corporation [PBGC])  

OMB Confirms Receipt of Fiduciary Rule Language
"To be clear, investment and retirement plan industry professionals will have to wait a little longer to actually see the final fiduciary rule, and compare it to the proposed regulation language published last year. There could be substantial changes included in the rule language currently being looked at by OMB, but given the fact that comment periods on the regulations ended fairly recently, it is unclear whether major changes could or would have been made in that time.... [T]he news that OMB is reviewing a final fiduciary rule comes despite Labor Secretary Thomas Perez's comments just this week that implied reports that the conflict of interest rule would be sent to OMB soon were incorrect." (planadviser)  

DOL Sends Fiduciary Rule to OMB
"The Department of Labor sent its fiduciary rule to the Office of Management and Budget Thursday, signifying its intent to publish a rule before President Barack Obama leaves office. OMB can take up to 90 days to review the rule, during which time the contents remain under wraps. After the agency signs off, the DOL will release the final rule publicly. OMB reviews do not typically require the entire 90 days. The timeline means the DOL can publish the rule by mid-April, which will be followed by an eight-month implementation period." (  

Proposed Retirement Security Legislation Would Give Every Worker Access to a Retirement Savings Plan
"The American Savings Act would establish a new universal savings account plan -- the American Savings Account [ASA] ... If your employer doesn't already offer a retirement plan, you'll automatically be given your own [ASA]. Initially, your employer will put 3% of your earnings into your account with each paycheck, but you can choose to adjust your contribution to as low as 2% of your income, or as high as $18,000 per year, or to opt out entirely. ASAs will have the same investment options as federal employees get through the TSP plan ... Workers will control their own accounts directly through a website. Contributions to an ASA would be tax-deductible, and participants would be able to rollover any previous IRAs into their ASA or roll their ASA funds into an employer-sponsored 401(k) or 403(b) plan." (Sen. Jeff Merkley [D-OR])  


Advisors: Attend NAPA's 2016 401(k) Summit, April 17-19 in Nashville

Sponsored by NAPA

Register for NAPA's 2016 401(k) Summit the event Plan Advisors won't want to miss! Enjoy networking with other financial advisors and TPAs while earning up to 14 hours of NAPA/ASPPA CE credits from innovative sessions on the topics that matter most to YOU.

Tackling the Retirement Savings Shortfall in the 2017 Budget
"Key points in the Obama retirement plan proposal: [1] Offering tax credits to small businesses that automatically enroll employees in a new 401(k)-style retirement plan -- or requiring them to offer payroll deductions to an Individual Retirement Account if they don't offer a company plan.... [2] Requiring companies with existing plans to offer them to long-term, part-time workers who work 500 hours a year for three years ... [3] Making it easier for companies to pool their retirement plans to bring down expenses through multiple employer plans." (Cammack Retirement Group)  

Reciprocity Agreement Required Payment of 'PPA Funding Contributions' (PDF)
"The arbitrator decided in favor of [the plaintiff, the National Pension Fund (NPF),] that '[Pension Protection Act (PPA)] Contributions' were 'Employer Contributions' within the meaning of the [United Association Pension Reciprocal Agreement, the purpose of which was to facilitate the transfer (reciprocation) of funds when members of one local union visit and work in the territory of another local union] ... and ordered [the U.A. Local 38 Defined Benefit Pension Plan (Local 38)] to pay more than $200,000 in contributions to the NPF. Local 38 appealed to the District Court. The District Court confirmed the arbitration award and granted the NPF's request for damages." [Trustees of the U.A. Local 38 Defined Benefit Pension Plan v. Trustees of the Plumbers and Pipe Fitters National Pension Fund, No. 15-cv-04703 (N.D. Cal. Jan. 21, 2016)] (United Actuarial Services, Inc.)  

Excessive Fee Lawsuit Reaches Further Than Others
"[T]his lawsuit emphasizes the importance of using low cost investment share classes when possible and continually monitoring record keeper's fees. As the record keeping industry continues to consolidate, fees continue to fall, and the fee that was renegotiated several years ago may no longer be reasonable.... The lawsuit alleges that because of Anthem's large plan size, the retirement committee should have considered reducing investment costs by using collective trusts, rather than the Vanguard mutual funds. It also claims that the size of the plan should have been used to leverage even lower record keeping fees." (Pension Consultants, Inc.)  

IRS Proposes New DB Plan Non-Discrimination Testing Rules
"As proposed, the new rules, which keep the snapshot rule and allow closed plans to satisfy non-discrimination rules in certain other situations, would apply only for five years after a plan was closed, and plans must have been in effect at least five years before closing, with no major changes. What would happen after five years was not addressed[.]" (Pensions & Investments)  

Target Date Funds: The Next Generation, But Not a Silver Bullet
"These target-date funds of the future would be structured with glide paths that include the purchase of annuity-like units, designed to hedge longevity risk.... Currently the marketplace is struggling with how to deliver such a solution in a format that is diversified, portable, and low-cost. As the industry evolves and the need for retirement income solutions clarifies further, we look forward to these 'next generation' target-date funds becoming regular components of well-designed investment menus." (Francis Investment Counsel LLC)  

Enrolled Actuaries Report, Winter 2015 (PDF)
Articles include: [1] Multiemployer pension plans draw concern over long-term health; [2] Updated annual Social Security tables; [3] PPC submits comments to Treasury; and [4] Pension Committee releases Practice Note Exposure Draft. (American Academy of Actuaries)  

Retirees Often Choose Income Strategies That Increase Risk to Retirement Security
"[A recent] study of consumers between ages 45 and 75 with investable assets of $100,000 or more found that 56 percent do not have a strategy for income in retirement.... 6 in 10 who have a strategy said they plan to withdraw from their savings only occasionally or when needed. The issue of risk is more pronounced for the 32 percent who said they will make regular withdrawals from their savings. Of this group, most plan to withdraw a constant dollar amount or percentage of their savings on a regular basis." (LIMRA)  


Testimony of Insured Retirement Institute for Senate Finance Committee Hearing: Helping Americans Prepare for Retirement
"Our agenda identifies policy solutions to expand access to workplace retirement plans that help Americans save and prepare for retirement; to increase access to lifetime income options that help Americans ensure their savings will not be outlived; and to improve access to education and information that American savers need to make better and more-informed decisions regarding their finances.... [W]hile the removal of annuities' tax-deferred status would not necessarily generate additional tax revenue over the long term, it would have a negative effect on Americans' ability to save for retirement." (Insured Retirement Institute [IRI])  


American Benefits Council Statement to Senate Finance Committee: Helping Americans Prepare for Retirement
10 pages. "The voluntary, employer-sponsored system is important because it gives companies the flexibility to tailor their plans to diverse and evolving employee populations.... If employers are subject to 50 different state mandates regarding retirement coverage, it will create such significant burdens on the employer-based system that many employer plans will be terminated, leaving employees without employer contributions and thus with far less retirement security.... [We] need certain fundamental rules to protect the employer-based system[.]" (American Benefits Council)  

Benefits in General; Executive Compensation

You've (Still) Got to Be Kidding: Supreme Court Holds ERISA Plan Participants May Ignore Reimbursement Provisions If They Spend the Money Fast Enough
"The case adds nothing to the Court's earlier guidance on what makes a reimbursement provision enforceable. And since its earliest decisions in this area the Court has recognized the loophole allowing an industrious (or spendthrift) participant to flout a reimbursement provision by spending the plan's money on non-traceable items. But several federal circuit courts of appeals either overlooked this wrinkle or could not believe the Court meant it, and instead held that ERISA plans may seek reimbursement from a recalcitrant participant's general assets. The Court agreed to hear Montanile to set them straight." [Montanile v. Bd. of Trustees of Nat. Elevator Ind. Health Benefit Plan, No. 14-723 (U.S. Jan. 20, 2016)] (Spencer Fane)  

Study Finds 'Mortality Gap' Among Middle-Aged Whites
"From 1999 to 2014, death rates in the U.S. rose for non-Hispanic white adults between the ages of 22 and 56, peaking at about age 30 and age 50 ... Deaths from suicide and substance abuse explain about 40 percent of the 'mortality gap,' while 60 percent is tied to death rates failing to drop as expected for nearly all of the top-ranked causes of death of middle-aged whites ... 'For working-age whites -- especially 45-to-54-year-olds -- we are witnessing regression that has little precedent in the industrialized world over the past half century,' the report said." (Kaiser Health News)  

Employment Cost Index, December 2015
"Compensation costs for civilian workers increased 0.6 percent, seasonally adjusted, for the 3-month period ending in December 2015 ... [B]enefits (which make up ... 30 percent of compensation) increased 0.7 percent.... The increase in the cost of benefits [for private industry] was 1.3 percent for the 12-month period ending in December 2015, lower than December 2014 when the increase was 2.5 percent. Employer costs for health benefits increased 3.0 percent over the year. In December 2014, the increase was 2.4 percent." (U.S. Bureau of Labor Statistics [BLS])  

Proposed Section 83(b) Regs May Benefit Nonresidents (PDF)
"A nonresident who expects to become a U.S. tax resident in the future may not be required to file a return. Failure to do so could, however, invalidate a Section 83(b) election. By eliminating the return filing requirement, the proposed regulations would facilitate Section 83(b) elections by nonresidents." (Holland & Knight)  

Press Releases

CMS Announces Proposed Improvements to Medicare Shared Savings Program
Centers for Medicare & Medicaid Services [CMS]

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BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2016, 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, 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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