Retirement Plans Newsletter

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Employee Benefits Jobs

Team Leader, Client Services
Newport Group
in CA

Customer Service Consultant
MassMutual Financial Group
in TX

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MassMutual Financial Group
in TX

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Webcasts and Conferences

401(k) Testing Techniques
(FIS Relius Education)

Selling Your Business to Your Employees Via an ESOP
February 10, 2016 WEBCAST
(Ohio Employee Ownership Center)

Mergers & Acquisitions and Multiple/Multi-Employer Plans
February 16, 2016 in CA
(Western Pension & Benefits Council - San Diego Chapter)

Safe Harbor Midyear Amendments: Yes You Can!
February 17, 2016 WEBCAST
(FIS Relius Education)

Risk Management for Retirement Benefits Professionals
February 18, 2016 WEBCAST
(Western Pension & Benefits Council)

2016 NIPA Annual Forum & Expo
May 1, 2016 in NV
(NIPA [National Institute of Pension Administrators])

View All Webcasts and Conferences


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[Official Guidance]

Form 8955-SSA Barcode Standards (PDF)
45 pages; of interest to firms that develop software for creating and electronically filing IRS Form 8955-A. This is version 1.8, dated Feb. 3, 2016. Topics include: [1] Overview; [2] General standards; [3] Approval procedures; [4] Duration of approvals; [5] Barcode specifications; [6] Rules; [7] Form versions and printing notes; [8] Field types; and [9] Form 8955 -- SSA barcode layout. (Social Security Administration)  


Need help in testing season? there for you!

Sponsored by Burrmont Compliance Labs LLC

Just send an email to and we will set you up with a free trial of our eResources -- QPeS, F55 and GS -- until March 15. We we also will let you submit five free questions to our Ask the Author service.

[Guidance Overview]

New PBGC Reportable Events Filing Requirement May Affect Corporate Borrowers with DB Pension Plans
"Under the new rules, a loan default is a reportable event when the loan has an outstanding balance of $10,000,000 or more. The loan may be to the plan sponsor or may be to another member of the plan sponsor's controlled group. A reportable event includes an acceleration of payment or default under a loan agreement or the lender's waiving or agreeing to an amendment of any covenant of the loan agreement, the effect of which is to cure or avoid a breach that would trigger a loan default." (Stinson Leonard Street)  

[Guidance Overview]

IRS Liberalizes Rules on Mid-Year Changes to Safe Harbor 401(k) Plans
"The IRS made virtually a complete about-face in Notice 2016-16, generally allowing most mid-year changes to safe harbor 401(k) plans.... [A] mid-year change to a safe harbor 401(k) plan will not cause the plan to lose its safe harbor status simply because it is a mid-year change, as long as: [1] The change is not a prohibited mid-year change, as described in the IRS Notice; and [2] If information that is required to be included in the plan's safe harbor notice will change, participants are provided with an updated safe harbor notice and allowed to change their deferral elections." (Mazursky Constantine LLC)  

[Guidance Overview]

Treasury Proposes Change in Cross-Testing Rules
"The proposed regulation provides that a rate group cannot pass the average benefit test unless 'The formula that is used to determine the allocation for the HCE with respect to whom the rate group is established applies to a group of employees that satisfies the reasonable classification requirement of section 1.410(b)-4(b).' Passing the ratio percentage in rate group testing a cross-tested plan frequently will require most contributions to one or more NHCE participants." (FIS Relius)  

[Guidance Overview]

IRS Issues Normal Retirement Age Proposed Regs for Governmental Pension Plans
"The proposed regulations would apply to governmental plans the safe harbor in the 2007 normal retirement age regulations: that a normal retirement age of at least age 62 is deemed to satisfy the reasonably representative requirement. And, in response to comments on Notices 2007-69 and 2012-29, the proposed regulations provide four additional safe harbors in which a normal retirement age would be deemed to satisfy the reasonably representative requirement[.]" (Practical Law Company)  

American Views on Defined Contribution Plan Saving, 2015 (PDF)
32 pages. "Survey responses indicated that households value the discipline and investment opportunity that 401(k) plans represent and that households were largely opposed to changing the tax preferences or investment control in those accounts. A majority of households also affirmed a preference for control over the disposition of their retirement accounts and opposed proposals to require retirement accounts to be converted into a fair contract promising them income for life from either the government or an insurance company. In addition, a vast majority of households disagreed with the proposal to require workers to participate in a new government-sponsored pension plan." (Investment Company Institute [ICI])  

Sen. Grassley Seeks GAO Review of DOL Oversight of Central States Pension Fund
"In his letter to the GAO, Grassley said that for more than three decades, Central States has operated under a federal court-ordered consent decree obtained by the Labor Department following its investigation that found gross mismanagement and self-dealing by fund managers. Among other things, the consent decree granted the Labor Department considerable oversight authority on the selection of independent fund managers, as well as to changes in investment strategies, among other oversight powers. Grassley wrote that he is unaware of any GAO review of the Labor Department's role in overseeing the pension fund since 1985." (Sen. Chuck Grassley, R-IA)  

Second House Panel Approves Bill to Block Fiduciary Rule
"The DOL may also be moving too quickly, Kent A. Mason, a partner with Davis & Harman LLP [said]. 'We reviewed the major DOL retirement regulations over the last 10 years and found that DOL almost always spends far more time on far less complicated regulations. Measured a different way, the time DOL spent working on the final rule works out to less than one hour per comment letter, even counting nights, weekends and holidays. This is completely unprecedented in terms of the shortness of the time spent per comment letter,' Mason said." (Bloomberg BNA)  

Advisors Mostly Absent in 401(k) Litigation But One Document Could Change That
"By employing a system that tracks activity of a CSP and services stated in the 404(a)(5) disclosure, a responsible plan fiduciary can efficiently display that they have monitored and documented that a CSP has delivered the stated services for which they have been compensated. Additionally, a compliance department can use the system to monitor that the services to which their representative has committed have actually been performed. A continual monitoring process of this nature, while more time consuming than a year end sign off, also affords the CSP the opportunity to rectify potential lapses before they become issues." (QP Steno Blog)  


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.

Downloadable Files of Historical and Projected Populations of the Social Security Area
"The following tables provide historical and projected populations of the Social Security area by single year of age, gender, marital status, and year for the period December 1940 through December 2090.... (Projected values contained in these files are based on the intermediate assumptions of the 2015 Trustees Report) In each file, the first column gives the year and the second column gives the age. The remaining columns have headings that display the gender and marital status." (U.S. Social Security Administration [SSA])  

Harvard Graduate Student Council Talks 401(k)
"As a contingent of graduate students continues to call for unionization, the Council largely focused on discussing whether Harvard should offer a similar 401(k) retirement plan -- available to staff and faculty -- to graduate students.... [Council president Darcy Frear] said a graduate student emailed her about retirement plans, writing 'that they're spending so much time in grad school that they're wasting that time for investing money earlier on' ... [Vice President John Gee] said 'the reason that there isn't this option is almost certainly that Harvard graduate students don't have the status of employees.' " (The Harvard Crimson)  

ESOPs Turn Workers into Owners
"The idea of giving employees 'skin in the game' through ownership of company stock is a compelling one to many businesses. Yet, few employers follow that idea to its fullest conclusion by establishing an employee stock ownership plan (ESOP) ... Private or closely held companies may be interested in ESOPs as a way to provide their business with financial liquidity without selling their company to a third party, such as a private equity group." (Society for Human Resource Management [SHRM])  

S&P 1500 Pension Funded Status in January 2016
"The estimated aggregate funding level of pension plans sponsored by S&P 1500 companies decreased by 3 percent to 79 percent as of January 31, 2016, as a result of negative equity markets and a decrease in rates. As of January 31, 2016, the estimated aggregate deficit of $472 billion increased by $68 billion as compared to the $404 billion deficit measured at the end of 2015[.]" (Mercer)  

Pension Finance Watch, January 2016
"The year opened with a major decline in equity markets, and the resulting hit to portfolio returns dominated January results. Bond yields also declined, adding slightly to the negative impact, as the Willis Towers Watson Pension Index declined 3.6% to 70.4." (Willis Towers Watson)  

Missed Your 2015 RMD? Keep Calm and Take These Three Steps
"The IRS can waive the 50% penalty for good cause.... [To] have the penalty waived. [1] Take the RMD.... You must take the RMD amount that was not taken in 2015. [2] File the 2015 IRS Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts.... [3] Attach a letter of explanation to Form 5329." (Slott Report)  

Texas Securities Regulator Cracks Down on Pension Advances
"Texas securities commissioner John Morgan has ordered a firm based in Mississippi to stop selling investments in pension benefits it acquires from federal government employees and military members.... People who sell their benefits are often veterans and disabled persons, and may be solicited when they're in 'financial distress,' the Texas securities board said." (InvestmentNews)  


Private Retirement Benefits in the 21st Century: Achieving Retirement Security (PDF)
"In response to concerns about retirement security, the Chamber has prepared this white paper to offer guidelines on initiatives that will bolster the voluntary employment-based retirement benefits system and retirement security for workers. These guidelines include ways to strengthen the current private retirement structure and to address the demographic changes and retirement needs of an evolving workforce. The paper also identifies ways to encourage innovation and flexibility in the private retirement system." (U.S. Chamber of Commerce)  


DOL Poised to 'Reform' Retirement Savings at Small Businesses' Expense: Seven Reasons You Should Be Worried
"[1] We will not know what is in it until we have to live with it.... [2] The rule discriminates against small businesses and individuals ... [3] The rule will increase costs and reduce financial advice choices, particularly for small business plans and IRAs ... [4] The rule could actually prevent advice that is in your best interest ... [5] The rule conflicts with existing securities laws and financial regulation ... [6] The rule makes it harder to offer investment education and to consolidate retirement accounts to prevent 'leakage' ... [7] We need more advice, not less." (U.S. Chamber of Commerce)  

Benefits in General; Executive Compensation

[Guidance Overview]

Text of IRS Fact Sheet 2016-8: 2015 Tax Changes (PDF)
Topics include: [1] Standard mileage rates revised; [2] New starter retirement account available; [3] One-rollover-per-year limit for IRA owners; [4] Health care changes; [5] Health care reminders; [6] Health care basics. (Internal Revenue Service [IRS])  

The Retro-Effect: Outstanding Issues in Qualified Plan Recognition of Same-Sex Marriage as Highlighted by Schuett v. FedEx
"[This case] highlights the reality and potential impacts of a retroactive application of Windsor. Plan administrators and fiduciaries should remain aware of the possibility of claims brought under Title I of ERISA to enforce a benefits claim by a participant in a same-sex marriage who retired before the Windsor decision ... Furthermore, Plan administrators should be aware that plan amendments that provide for recognition of same-sex marriages beginning on the date of the Windsor decision will not protect the plan and fiduciaries from Title I claims stemming from events prior to the Windsor decision." [Schuett v. FedEx Corp., No. 15-cv-0189 (N.D. Cal. Jan. 4, 2016)] (Trucker Huss)  

Supreme Court Decision Means It's Time to Review Benefit Plan Subrogation and Reimbursement Practices
"This Supreme Court decision's effect may not be limited to health benefit plans. Similar situations could arise with pension or disability benefit overpayments because of fraud or unintentional errors. The Court ruling may limit a plan sponsor's ability to recover these overpayments if the money has already been spent on consumable or intangible goods or services, such as everyday living expenses. This decision may also result in health plans reconsidering or delaying the payment of medical expenses in situations that involve injuries caused by a third party." [Montanile v. Bd. of Trustees of Nat. Elevator Ind. Health Benefit Plan, No. 14-723 (U.S. Jan. 20, 2016)] (International Foundation of Employee Benefit Plans [IFEBP])  

Are Your Benefits Management Decisions Under-Informed?
"Employers have typically drawn from three main sources of information to help them plan their benefits programs.... Third-Party Consultants ... Employee Surveys ... Industry Surveys ... [T]here's a fourth method that employers can now add to their toolkit for even greater perspective: real-time, big data aggregation.... Just as Amazon and Netflix guide their users' decisions by showing them what similar users have done, revealing actual benefits enrollment activity can promote a new level of clarity in program planning." (Benefitfocus)  

Press Releases

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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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