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Webcasts and Conferences

New, Holistic Way to Look at Defined Benefit Plan Termination Strategies
(University Conference Services)

Innovative Strategies to Manage the Cost of Specialty Drugs
(University Conference Services)

ACA is Here to Stay: Where Do We Go From Here?
April 28, 2016 in OH
(Worldwide Employee Benefits Network [WEB] - Cleveland Chapter)

ESOPs: A Briefing for Professional Advisors
May 4, 2016 WEBCAST
(Beyster Institute)

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[Guidance Overview]

IRS Withdraws Troubling Provision of Proposed Nondiscrimination Regs
"From the standpoint of the IRS, the troubling part of the proposal addressed some serious abuses by practitioners and the sponsors they consult to. From the standpoint of practitioners, the proposed regulations took an objective test that has been around for quite a while and essentially changed the rules of the game.... While the preamble to the proposed regulation said that it was targeting QSERPs, practitioners found that they also were potentially problematic for many plans of small businesses and plans of professional service firms." (Benefits and Compensation with John Lowell)  


The 2016 Pension Answer Book

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[Guidance Overview]

IRS Offers New Correction Method for Failure to Adopt Pre-Approved Plan by the Applicable Deadline
"Under [the Umbrella Closing Agreement (UCA)], a financial institution or service provider that offers a pre-approved DC retirement plan document may request a closing agreement on behalf of all adopters of its plan document that miss the execution signing deadline. Previously, the only way an employer could correct its failure to sign a pre-approved DC retirement plan by the deadline was to complete a submission under the Voluntary Correction Program (VCP)." (Reid and Riege, P.C.)  

[Guidance Overview]

An Overview of the Fiduciary Rule
"[T]he impact of the fiduciary and Best Interest standards of care has not been adequately considered.... In both cases (that is, the prudent man rule and the Best Interest standard), the adviser's recommendations will be measured by what a hypothetical prudent and knowledgeable investor would do. In other words, it is the standard of a hypothetical knowledgeable person, and not the standard of the actual adviser or the investor.... [B]roker-dealers will be affected the most. Insurance companies will also need to make changes.... [M]ost RIAs will only need to make changes to adjust to the new rules regarding recommendations of distributions and rollovers from plans and withdrawals and transfers of IRAs.... Recordkeepers who have insurance companies or mutual fund manager affiliates will be impacted more than independent recordkeepers." (  

[Guidance Overview]

Tweaks to Final DOL Fiduciary Rule Help Ease Implementation Without Sacrificing Core Principles
"One of the big surprises in the final rule was the inclusion of equity-indexed annuities under BICE.... Fixed annuities remain under PTE 84-24, which was itself strengthened. It was also somewhat surprising that the DOL completely removed its restricted menu of investment products available under BICE. Previously only traditional investments such as bank deposits, CDs, mutual funds, exchange-traded REITS and ETFs were eligible. Now, any product is available.... Finally, the DOL indicated that an adviser's monitoring responsibilities can be specifically limited in a client engagement. However, the DOL also made clear that it would be very difficult for a fiduciary adviser to justify not monitoring a recommended course of action that is risky or volatile." (fi360)  

[Guidance Overview]

DOL Finalizes Overhaul of Investment Fiduciary Definition
"[T]wo implications for larger plans are... [1] A consultant who is hired by a plan to provide investment advice on a one-time basis will now be considered a fiduciary. For example, a consultant who is hired to assist in selecting an annuity provider in connection with the termination of a defined benefit plan will be considered a fiduciary as a result of providing investment advice.... [2] Any recommendation as to the amount and destination of a distribution or rollover from a retirement plan also constitutes investment advice resulting in fiduciary status under the new rule." (Mazursky Constantine LLC)  


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[Guidance Overview]

SEC Fact Sheet: Business Conduct Standards for Security-Based Swap Dealers and Major Security-Based Swap Participants
"The [SEC] voted on April 13 to adopt final rules implementing a comprehensive set of business conduct standards and chief compliance officer requirements for security-based swap dealers and major security-based swap participants ... The final rules require security-based swap dealers and major security-based swap participants acting as counterparties to special entities to reasonably believe that the special entity has a qualified independent representative who is ... an [ERISA] fiduciary (if the special entity is an ERISA plan) ... The rules also require security-based swap dealers to comply with rules designed to prevent 'pay-to-play in transactions with municipal entities.... The final rules become effective 60 days after publication in the Federal Register." (U.S. Securities and Exchange Commission [SEC])  

BP Sued Over Alleged Misleading Statements on Changes to Retirement Plan
"The plaintiffs allege that BP told participants when it replaced its traditional defined benefit plan with a cash balance plan in 1989 that the cash balance plan was 'comparable to and, in most cases, better than' prior benefits under the old plan, when actually, certain employees' benefits were reduced." [Guenther v. BP Retirement Accumulation Plan, No. 4:16-cv-00995 (S.D. Tex. filed Apr. 13, 2016)] (Pensions & Investments)  

Loan Activity from 401(k) Plans Rising
"The temptation to take loans from a company 401(k) retirement savings plan is apparently too hard to resist for some people even after they've been warned of how dipping into that account can knock their retirement plans off track.... As of the end of September 2015, 17.6 percent of 401(k) plan participants had loans outstanding, compared with 15.3 percent with outstanding loans at the end of 2008." (The Seattle Times)  

Closing the Gap in DB Plans (PDF)
"Sixty-four percent (64%) of respondents report either that their companies have already increased contributions (15%) or that they are likely to do so within two years (49%).... [H]alf of the firms in the survey (49%) report that they have modeled future DB contributions based on assumptions of extreme market volatility, while 62% have modeled for increasing longevity." (Prudential)  

Private Equity Funds Found Responsible for Withdrawal Liability of Bankrupt Portfolio Company
"It may be very difficult for private equity funds to avoid being considered trades or businesses for ERISA purposes under the investment plus test adopted by the First Circuit and applied by the district court, with its focus on the management fee offset structure.... Responsibility for multiemployer plan withdrawal liability of a private equity fund's portfolio company may extend not only to the private equity fund, but also to other portfolio companies owned by such fund that are under common control with the company that withdrew.... [If] the fund and the companies were considered trades or businesses under common control, [separate 401(k)] plans would be tested as if they had all been sponsored by a single employer, which could make passing the coverage requirements problematic." [Sun Capital Partners III, LP, et al. v. New England Teamsters & Trucking Industry Pension Fund, No. 10-10921 (D. Mass. Mar. 28, 2016)] (McGuireWoods LLP)  

Retirees Rally at the Capitol, Protesting Pension Cuts
"Some 400,000 retirees who worked in the trucking, parcel delivery and grocery supply industries face drastic pension cuts on July 1... [T]he outrage focused on the seeming lack of political will from Congress to rescue a pension plan that had promised retirement benefits to middle-class workers, even when the same Congress was willing to bail out major financial institutions during the 2008 financial crisis. The workers blamed some of the same Wall Street banks that needed bailouts for the poor investment decisions that sent the Central States Pension Fund hurtling toward insolvency." (The New York Times; subscription may be required)  

NYC Pension Votes to Scrap $1.5 Billion Hedge Fund Portfolio
"The action Thursday by the trustees of the $51 billion Employees Retirement System, known as NYCERS, may signal a growing willingness among public pensions to pull their money from the investment vehicles, whose highly paid managers have become a political lightning rod and have frequently failed to outperform. In September 2014, California's Public Employees' Retirement System, the largest U.S. pension, divested its $4 billion portfolio saying it cost too much and was too small to affect its overall returns." (Bloomberg)  


Fiduciary Defined: Is Your Broker Suddenly Equipped to be a True Adviser?
"Commissioned brokers with opaque compensation schemes simply won't be able to act as a true adviser and fiduciary. The devious soft-dollar funding arrangements currently used by some service providers will likely be subject to extensive fiduciary scrutiny as well. We expect the retirement landscape to change dramatically over the next 12 to 24 months[.]" (Ascende)  

Benefits in General

In California, a Vested Right to a Benefit Does Not Create a Vested Right to the Benefit at the Same Terms in Effect at Any Time
"In 1975, the [Los Angeles] City Council passed [an ordinance] to implement the authorized subsidy program [that would help public service employees pay for their health insurance].... In 2005, the Charter sections governing the subsidy program were amended to eliminate the cap on the maximum monthly subsidy ... [In] 2011, the City Council passed [an ordinance] freezing the maximum subsidy.... Four employees in the fire and police departments [sued and] alleged that the City had not reserved the right to freeze the subsidy ... The trial court ... rejected the assertion that there was a vested right to the subsidy increases." (Liebert Cassidy Whitmore)  

First Circuit: Benefit Denial Letters Must Explain Plan's Deadline for Filing a Lawsuit
"The plan administrator had argued that the DOL regulations only required notice of the time limits for a plan's internal appeal processes and not the deadline for filing a lawsuit. The First Circuit, however, rejected this argument, finding that there was no authoritative guidance to support this interpretation of the DOL regulations." [Santana-Diaz v. Metropolitan Life Ins. Co., No. 15-1273 (1st Cir. Mar. 14, 2016)] (The Wagner Law Group)  

Press Releases

ERIC Advances Telehealth Initiative
ERIC [ERISA Industry Committee]

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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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