Retirement Plans Newsletter

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Employee Benefits Jobs

Webcasts and Conferences

Voluntary Fiduciary Correction Program
March 17, 2016 WEBCAST
(Employee Benefits Security Administration [EBSA], U.S. Department of Labor)

Applicable Large Employers Information Return Requirements (IRC 6056) for Tax Year 2015
March 30, 2016 WEBCAST
(IRS [Internal Revenue Service])

Affordable Care Act: Employer Shared Responsibility Provisions (IRC 4980H)
April 6, 2016 WEBCAST
(IRS [Internal Revenue Service])

Latest in Compensation and Benefits Accounting: Navigating the FASB's Proposed Pension Changes
April 13, 2016 WEBCAST
(PricewaterhouseCoopers LLP)

ASPPA Chicago Regional Conference
June 16, 2016 in IL
(ASPPA [American Society of Pension Professionals & Actuaries])

Western Benefits Conference
July 19, 2016 in WA
(ASPPA [American Society of Pension Professionals & Actuaries])

View All Webcasts and Conferences

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[Official Guidance]

Text of PBGC Disaster Relief In Response to Severe Storms and Flooding in Louisiana
"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 LA-2016-01, March 14, 2016 ... The relief generally extends from March 8, 2016 through July 15, 2016. The disaster area consists of Bossier, Claiborne, Grant, Morehouse, Ouachita, Richland, and Webster Parishes." (Pension Benefit Guaranty Corporation [PBGC])  


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Is the IRS Undermining the Goal of Expanding Coverage for Nonhighly Compensated Employees?
"[W]hy, after all these years, would the IRS change the rule to make it more expensive to sponsor a cross-tested plan, possibly causing many small employers to amend their plans to eliminate NECs or even terminate their plans? The answer may lie in looking at who most adopts these plans.... [It] is commonly understood that many, possibly the majority of, cross-tested plans have been adopted by professional practices including those dastardly doctors and lawyers, seemingly high earners that the IRS may believe want nothing more than to take advantage of their employees. If the rule is finalized, the effect will likely be a reduction in the size of employer contributions to the accounts of those NHCEs fortunate enough to be participants in cross-tested plans." (Benefits Bryan Cave)  

Three Things Most Retirement Plan Sponsors Take for Granted -- But Shouldn't
"[P]lan sponsors should read every line of their 5500s and confirm that the answers are complete and accurate prior to filing.... [P]lan sponsors should confirm each year that their operating system is, in fact, eliminating the possibility of contribution limit errors.... [It] is important that plan sponsors confirm that a separate and distinct fiduciary liability insurance policy/rider has been purchased and the proper level of coverage has been obtained each year (at policy renewal time) that reflects the growing assets of the plan." (Cammack Retirement Group)  

New SEC Unit to Focus on Retirement Advice
"The [SEC] has tapped Peter Driscoll to lead the new Office of Risk and Strategy within the Office of Compliance Inspections and Examinations, a role where he will help identify market risks and coordinate where to channel the SEC's scarce exam resources. One of the major areas of focus for Driscoll's team will be the practices of advisors serving retirees as the SEC advances a multiyear initiative that is evaluating how firms handle issues like account selection, sales practice, suitability and supervision." (On Wall Street)  

DOL, OMB May Blunt Fiduciary Rule, Delay It Until Late May
"[F]ormer DOL Deputy Secretary Seth D. Harris ... said recently that DOL acknowledges the final fiduciary regulation would warrant a significant transformation of a long-standing business model in the insurance industry. The department's senior leaders also recognize the industry would need to put into place new systems and procedures to comply with the rule, which will take time.... Many observers are expecting the rule to be released by 60 days, which would place it in late March. But sources close to the process say that guess may be off by as much as two months. Although DOL has not revealed a date when it will publish the final rule, OMB is likely to take longer than the permitted 90 days to evaluate it, according to a source." (  


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Join your peers to strengthen, refine, and amplify your voice at PSCA's 69th Annual National Conference. Hear the latest from Washington and learn the newest trends in DC plans to be a stronger and sharper advocate for your participants and your plan.

Floodgates: States in Overdrive on Retirement Legislation
"Since January, new state retirement plan bills have poured into state legislatures around the country, some promising opportunity and some threatening confusion or worse for state plan participants. Obviously not every piece of legislation succeeds, but bills that die in one session often re-emerge later if there's enough political appetite." [Article includes a summary of legislation pending in ten states.] (National Tax-Deferred Savings Association [NTSA])  

Largest Corporate DB Plan Sponsors Make Subtle Shifts in Strategy as Funded Status Stagnates (PDF)
"In 2015, plan sponsor contributions were down more than 50% since 2013, with many sponsors taking full advantage of funding relief measures despite average funded status below 80%. Portfolio assets allocated to fixed income (mostly LDI) now exceed 40%, on average -- an increase from 33% in 2010. Three of the 20 plan sponsors allocated more than 55% to LDI. Better than half of the members of this group have adopted an alternative approach to calculating pension cost, via either the 'marked-to-market' or 'full yield curve' approach." (Russell Investments)  

As PBGC Premiums Spike, U.S. Corporate Pensions Aim to Transfer Risk
"With plan sponsors struggling to meet funding goals thanks to low interest rates and tepid economic growth, the PBGC is projected to gather an additional $4 billion through 2025 off the latest hikes. For pension sponsors, possible changes to offset these costs include higher contributions (32 percent of respondents ...), lump-sum payouts to shift people off a plan (32 percent) and risk transfers to insurance annuities to shrink the number of pensioners in a plan (17 percent)." (Institutional Investor)  


A Proposal to the Retirement Industry: Let's Create a Financial Education Program
"I would like to offer a challenge to the retirement industry. Let's be proactive about educating our clients, present and future, by developing a curriculum to be offered in the grammar, middle and high schools. I'm not suggesting we attempt to turn every kid into a stockbroker or financial whiz. But I believe it's critical that we teach the basic money management skills that schools are currently not providing.... [W]ith today's technology we could easily create online curriculums that could supplement or take the place of live classrooms." (PenChecks)  

Benefits in General

[Guidance Overview]

Accounting Standards Update 2015-12: Simplifying Employee Benefit Plan Financial Statement Disclosures
"ASU 2015-12 removes the requirement to report fully benefit-responsive investment contracts at fair value and to show the adjustment from fair value to contract value on the face of the financial statements.... ASU 2015-12 removes the requirement to report investments that represent 5 percent or more of net assets available for benefits and, although it still requires disclosures of the net appreciation or depreciation of investments, it does not require disaggregation by investment type.... For plans whose fiscal year-end does not coincide with a month-end, the plan may measure investments and investment related accounts (e.g., a liability for a pending trade with a broker) using the month-end closest to the plan's fiscal year-end." (Belfint Lyons & Shuman, CPAs)  

Gobeille v. Liberty Mutual Insurance Company: The Interesting Things Are in the Concurrences and the Dissent
"[T]hree justices -- Thomas, Ginsburg and Sotomayor -- in two different opinions (one concurring and one dissenting) wrote independently to suggest that ERISA preemption has gone off the rails and either may not be (in Thomas' view) or is not (in the view of the other two justices) as broad as the majority opinion insists, or as broad and sweeping as most ERISA litigators argue. Both opinions, in fact, give guideposts to litigators for arguing in the future against preemption, with Thomas, in fact, seemingly inviting someone, somewhere to attack the very constitutional foundation of applying ERISA preemption to the extent that it has been traditionally applied." [Gobeille v. Liberty Mutual Ins. Co., No. 14-181 (U.S. Mar. 1, 2016)] (Stephen Rosenberg, The Wagner Law Group)  

Executive Compensation and Nonqualified Plans

Is Your Executive Plan Top-Hat?
"Looking at a history of case law and DOL opinion on the topic, one might consider these elements: [1] The percentage of the workforce in the top-hat group; [2] The relative pay of the top-hat group as compared to the pay of those people not in the top-hat group; [3] Whether the top-hat group was selected by the Board as compared to being, for example, any employee with the title Vice President or higher; [4] Whether individuals in the top-hat group, especially those among the lower-paid in the group, have significant management responsibilities; [5] Whether individuals in the group need the protection of ERISA." (Benefits and Compensation with John Lowell)  

Some Executive Rewards Decline, Other Perks Hold Steady
"As shareholders and advisory groups continue to scrutinize executive compensation, the number of executives entitled to tax gross-ups and other financial rewards triggered by a change in control of management is declining.... A major trend impacting change-in-control arrangements is the move toward performance-based long-term incentives ... Among other notable findings: Decline in tax gross-up payments ... Decrease in severance multiples.... Conditions on cash severance payment." (Society for Human Resource Management [SHRM])  

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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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