Retirement Plans Newsletter

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Webcasts and Conferences

Affordable Care Act: Information Reporting by Providers of Minimum Essential Coverage
March 29, 2016 WEBCAST
(IRS [Internal Revenue Service])

DOL's Fiduciary Advice: Final Regulations
April 14, 2016 WEBCAST
(Practising Law Institute)

Hone Your HIPAA Expertise
April 14, 2016 WEBCAST

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[Official Guidance]

Text of PBGC Final Regs: Annual Financial and Actuarial Information Reporting
31 pages. "The final rule modifies the reporting waiver under the current regulation tied to aggregate plan underfunding of $15 million or less to be based on non-stabilized interest rates. In addition, the final rule adds new reporting waivers for smaller plans and for plans that must file solely on the basis of either a statutory lien resulting from missed contributions over $1 million or outstanding minimum funding waivers exceeding the same amount (provided the missed contributions or applications for minimum funding waivers were previously reported to PBGC). The final rule also provides alternative methods of compliance for reporting certain actuarial information and makes a few technical changes to the regulation." (Pension Benefit Guaranty Corporation [PBGC])  


A Revolutionary ERISA ReSource

Sponsored by Burrmont Compliance Labs LLC

An intuitive on-line library. ERISA technical guidance and tools. ASK THE AUTHOR Personalized help for tough ERISA questions - rapid reply with tracking. Form 5500 eSource. A Complete Guide to Form 5500. Free Trial - Sign up or email

[Official Guidance]

Text of PBGC Interest Rate Update for Second Quarter, 2016
"The interest rate that PBGC will charge on employer liability, unpaid contributions, and unpaid premiums, for the calendar quarter beginning April 1, and ending June 30, 2016, is 4.00%." (Pension Benefit Guaranty Corporation [PBGC])  

[Guidance Overview]

IRS Reminds Multiemployer Plans: Send Only One Annual Actuarial Certification Each Year
"The multiemployer plan actuary must complete an Annual Actuarial Certification of the plan's funding status. It must be submitted to the IRS no later than 90 days after the beginning of the plan year. We're receiving duplicate certifications from the same plan for the same plan year. Submitting duplicate certifications to ensure we've received it creates administrative issues ... If you wish to confirm delivery, we suggest using the U.S. Postal Office's Certified Mail service for mailed certifications and the confirmation page for faxed certifications." (Internal Revenue Service [IRS])  

[Guidance Overview]

Puerto Rico Treasury Exempts Employee Benefit Trusts from Certain Annual Filing Requirements (PDF)
"[F]or years commenced on January 1, 2015, Employee Benefit Trusts are no longer required to file Form 480.7(OE) (or Form 5500) with the PR Treasury to comply with the annual filing requirement under ... the PR Code ... [I]n the case of Employee Benefit Trusts established or adopted by employers that are not required to file a Puerto Rico income tax return, the Employee Benefit Trust will be required instead to file Form AS 6042.01 to comply with the annual filing requirement under ... the PR Code." (McConnell Valdes)  

The 2016 Retirement Confidence Survey: Worker Confidence Stable, Retiree Confidence Continues to Increase (PDF)
"The percentage of workers very confident about having enough money for a comfortable retirement ... increased from 13 percent in 2013 to 22 percent in 2015, and, in 2016 has leveled off at 21 percent. The percentage of workers somewhat confident increased from 36 percent in 2015 to 42 percent in 2016, while the percentage not at all confident decreased from 24 percent in 2015 to 19 percent in 2016.... Retiree confidence in having enough money for a comfortable retirement, which historically tends to exceed worker confidence levels, continued to increase in 2016 reaching 39 percent who are very confident (up from 18 percent in 2013).... Sixty-nine percent of workers report they or their spouses have saved for retirement (statistically equivalent to 67 per-cent in 2015). Still, a sizable percentage of workers report they have virtually no savings and investments." (Employee Benefit Research Institute [EBRI])  


2015 SPARK National Conference -- June 19-21, Washington DC

Sponsored by SPARK

The retirement services industry's leading event for top marketing, sales, administration and record keeping professionals. Comprehensive agenda is designed to meet the needs of 401(k) Plan Providers, Financial Advisors and Third Party Administrators.

2016 Key Administrative Dates and Deadlines for Calendar-Year Defined Contribution Retirement Plans (PDF)
Detailed 4-page chart of notice and reporting requirements and deadlines. (Milliman)  

Seventh Circuit Does The Math and Sides with Plan Administrator in Pension Calculation Dispute
"[When the plaintiff went to work for Terminal, he had already begun receiving early retirement benefits from his previous employer. The dispute concerned the offset provision under Terminal's plan when the plaintiff retired.] The Court recognized that using [the lower early retirement amount as the offset rather than the full normal retirement benefit amount] would have provided plaintiff with a windfall because the two amounts were actuarial equivalents.... Forcing the Terminal plan to use the lower offset would place plaintiff in a better position by choosing to begin benefits earlier even though he had worked the same amount. The Court noted that this same conclusion was recently reached by the Eight Circuit in a 'virtually identical case.' " [Cocker v. Terminal Railroad Association, No. 15-2690 (7th Cir. Mar. 16, 2016)] (Seyfarth Shaw LLP)  

Welcome to the New Age of Electronic Participant Communications
"While it is common to fulfill many of the notice obligations through electronic means, administrators must navigate the patchwork of rules issued by varying agencies. Notably, different requirements apply when providing different documents: multiple DOL requirements apply to ERISA-mandated disclosures, IRS requirements apply to certain disclosures required under the Internal Revenue Code, and SEC requirements apply to certain disclosures regarding employer stock." (Morgan Lewis via Plan Consultant)  

Supreme Court v. the Ninth Circuit on Failure to Enforce ERISA Stock-Drop Pleading Standard
"Like the plaintiffs in Fifth Third, the Amgen plaintiffs alleged a 'nonpublic information' or 'insider' fiduciary claim. As a result, the Amgen plaintiffs must overcome the '[no] more harm than good' pleading hurdle to sustain their complaint.... The degree to which the lower federal courts, as the primary gatekeepers in such cases, permit plaintiffs to take a formulaic approach to satisfy their Fifth Third/Amgen pleading burden -- or instead require more substantive, detailed factual allegations to overcome the hurdle -- remains to be seen." (Carlton Fields via JD Supra Business Advisor)  

Fiduciary Timeline Is Unrealistic, SIFMA Says
"Advisors, executives and regulators have been debating the merits of the Labor Department's proposed fiduciary rule for nearly a year. But now that the rule is likely to be finalized within weeks, is the industry ready to adjust to a new regulatory reality? It'll be 'massive undertaking,' according to Ira Hammerman, general counsel for SIFMA ... [He] discussed the implementation of the rule and how it might change advisor-client relationships." (On Wall Street)  

Stop Paying the Hidden Fees in Your 401(k)
"The damage inflicted by revenue sharing on your retirement portfolio can be extensive over time. The more you invest, the more revenue sharing eats away at your savings. The amount of revenue sharing paid varies by mutual fund, but can be as high as 0.40% per year or more. And because revenue sharing is built in to the mutual fund's daily net asset value (NAV), you don't see it or feel it. It's insidious." (Kiplinger)  

Robo-Adviser Marstone Has Partnered with IBM Watson to Deliver Cognitive Computing-Powered Advice
"Marstone's platform will offer digital advice supported by cognitive computing, which is self-learning technology that uses data, patterns and natural language. With Marstone Powered by Watson, advisers will help clients throughout the entire process of planning and managing investments by managing data, analyzing behavior, identifying trends and being predictive." (InvestmentNews)  

Understanding Pension Risk Management
"Pension Risk Management (PRM) represents a shift from an asset-only risk focus to the practice of managing the assets and liabilities in concert, in order to minimize volatility generated by the plan's surplus risk. Because DB plans represent legacy liability on plan sponsors' balance sheets, finance personnel may utilize PRM as a means to prevent DB plan liabilities from controlling the balance sheet. [Aspects of PRM discussed in this article are:] Constructing a roadmap ... Plan design ... Funding strategies ... Investment strategies ... Settlements ... Preparations." (Cammack Retirement Group)  

New Church Plan Lawsuit Alleges Underfunding of $204M
"Cincinnati-based St. Elizabeth Medical Center Inc. is the latest hospital to be targeted by a lawsuit challenging its decision to treat its pension plan as an ERISA-exempt church plan.... According to the complaint against St. Elizabeth, the hospital's pension plan is underfunded by more than $204 million. If the lawsuit is successful, the hospital could be forced to make up this funding deficiency or implement other worker protections required by ERISA." (Bloomberg BNA)  

Chicago Borrows $220 Million for Pension Payments
"The city drew the money down from its $900 million line of short-term credit, which is akin to putting the tab on a credit card. The loan carries an interest rate of about 3 percent.... [T]he city is required to find the money to make the police and fire pension contributions, which increased dramatically this year, to start closing a combined $12.2 billion shortfall in the two pension funds." (Chicago Tribune; subscription may be required)  

Benefits in General

[Official Guidance]

Text of IRS Disaster Relief Announcement HOU-2016-03 for Victims of Severe Storms, Tornadoes and Flooding in Texas
"Victims of the severe storms tornadoes and flooding that took place beginning on March 7, 2016 in parts of Texas may qualify for tax relief from the [IRS].... Individuals who reside or have a business in Jasper, Newton, and Orange Counties may qualify for tax relief.... [C]ertain deadlines falling on or after March 7, and on or before July 15, 2016 have been postponed to July 15, 2016. This includes 2015 income tax returns normally due on April 18. It also includes the April 18 and June 15 deadlines for making quarterly estimated tax payments. A variety of business tax deadlines are also affected[.]" (Internal Revenue Service [IRS])  

Plan's Contractual Limitations Period Could Not Be Enforced Because Denial Letter Did Not Describe It
"[T]he plaintiff argued that the plan failed to advise him of the limitations period in the plan and therefore the plan should not be allowed to enforce the three year period set forth in the document.... Rather than resolving the issue in terms of equitable remedies, the Court concluded [that] ... 'Based on the plain language of the regulation, we hold that the correct interpretation of section 2560.503-1(g)(1)(iv) is that a denial of benefits letter must include notice of the plan-imposed time limit for filing a civil action. To repeat, the regulation states that the letter must contain a "description of the plan's review procedures and the time limits applicable to such procedures, including a statement of the claimant's right to bring a civil action." ' [Santana-Diaz v. Metropolitan Life Ins. Co., No. 15-1273 (1st Cir. Mar. 14, 2016)] (Health Plan Law)  

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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