Retirement Plans Newsletter

April 26, 2016 logo logo LinkedIn logo Twitter logo Facebook logo
Get Health & Welfare News | Advertise | Previous Issues | Search

Employee Benefits Jobs

Account Manager
National Retirement Services, Inc.
in NC

Senior Pension Benefits Analyst
Willis Towers Watson
in CO, MA, MI, PA, TX

Pension Consultant
Willis Towers Watson
in CO, MA, MI, PA, TX

Product Support Specialist
Newport Group
in FL

Internal Sales Consultant
Newport Group
in CA

Client Relationship Manager
Newport Group
in FL

Retirement Plan Analyst
PlanTech, LLP
in AL, Telecommute

Pension Administrator / Consultant
Boyce & Associates, Inc.
in AZ

Manager, Client Reporting
Newport Group
in NC

EM Client Executive
in KY, MN, OH, Telecommute

Post Your Job

View All Jobs

RSS feed for jobs RSS Feed: All Jobs

Webcasts and Conferences

National Wellness Conference: Spotlight On Sustainability
June 27, 2016 in MN
(National Wellness Institute)

Getting It Right - Know Your Fiduciary Responsibilities
August 2, 2016 in AZ
(Employee Benefits Security Administration [EBSA], U.S. Department of Labor)

View All Webcasts and Conferences

Post Your Event


Subscribe Now to This Newsletter (free)

We also publish the BenefitsLink Health & Welfare Plans Newsletter (free): Subscribe Now

[Official Guidance]

IRS VCP Submission Kit: Failure to Adopt a New Pre-Approved Defined Contribution Plan by the April 30, 2016 Deadline
"This kit is for plan sponsors that maintain a pre-approved defined contribution plan but failed to adopt a new plan document by April 30, 2016 and are correcting the failure by adopting a pre-approved defined contribution retirement plan that reflects the provisions of the Pension Protection Act (PPA).... Before making a VCP submission to the IRS, plan sponsors may want to check with the law firms, banks, brokers, other financial institutions or plan administrators that created the pre-approved defined contribution plan to see if they will be making a special request for a closing agreement on behalf of all adopters who missed the deadline." (Internal Revenue Service [IRS])  

[Advert.] Instant Access to Answers

Sponsored by Burrmont Compliance Labs LLC is proud to announce that Ilene H. Ferenczy, JD, CPC, APA, has assumed authorship of The Qualified Plan eSource! Robust Search - Timely updates - Direct Gov't Source Links. Free Trial - Sign up or email

[Official Guidance]

Text of Treasury Department Announcement of Multiemployer Pension Plan Application to Reduce Benefits
"The Board of Trustees of the Iron Workers Local Union 16 Pension Fund, a multiemployer pension plan, has submitted an application to Treasury to reduce benefits under the plan in accordance with the Multiemployer Pension Reform Act of 2014 (MPRA). The purpose of this notice is to announce that the application ... has been published on the website of the Department of the Treasury ... and to request public comments on the application from interested parties, including contributing employers, employee organizations, and participants and beneficiaries of the Iron Workers Local Union 16 Pension Fund. Comments must be received by June 9, 2016." (U.S. Department of the Treasury)  

[Guidance Overview]

IRS Issues PLR on DB Plan Termination and Asset Transfer Reflecting Contingency for Pending Litigation
"It was the Taxpayer's desire to transfer any assets in excess of the DB Plan's benefit obligations to the DC Plan so that such excess assets would not be subject to taxation under section 4980 of the Internal Revenue Code... The outcome of the outstanding litigation, however, including the exact amount of the Liability and date as of which the Liability would be determined, was outside the control of the Taxpayer. The Taxpayer adopted board resolutions committing to retain enough assets in the DB Plan to satisfy the anticipated maximum potential Liability, transfer any amount in excess of the anticipated maximum potential Liability (and not less than 25% of the DB Plan's total excess assets) to the DC Plan as soon as administratively feasible, and, subsequent to the resolution of the outstanding litigation and satisfaction of the Liability, transfer any further remaining assets to the DC Plan as soon as administratively feasible." (The Wagner Law Group)  

[Guidance Overview]

Fiduciary FAQs: What You Need to Know About Selecting a 401(k) Plan Provider
11 pages. "Does a plan sponsor face a higher risk in selecting a plan recordkeeper that is not the lowest-cost recordkeeper? Does a plan sponsor face a higher risk in selecting investments managed by the plan recordkeeper's affiliates? Can advisors (if they choose) avoid providing investment advice that would make them an ERISA fiduciary while recommending that the plan sponsor change the plan's recordkeeper? Does ERISA favor passively managed investments, which typically have lower fees than actively managed investments?" (Principal Financial Group)  

[Guidance Overview]

Q&As on DOL Fiduciary Rule: Rollovers and IRAs
"Would the definition of 'investment advice' include a rollover from previous 401(k) to current 401(k)? ... How can a level fee plan fiduciary advisor accept a participant's rollover and manage the IRA rollover assets with a level fee? ... Will rollover analysis be required for any IRA rollover advice? ... Because BICE is not available to advisors with discretion does that mean that advisors who are fiduciaries on a retirement plan cannot recommend a rollover to an IRA and use BICE to avoid the prohibited transaction issue due to uneven compensation?" (fi360)  


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.

[Guidance Overview]

Puerto Rico Retirement Plans Face New Reporting Rules
"Plan sponsors no longer need to file Form 480.70(OE), which in many instances also required an accompanying copy of the Form 5500 that was filed with the [DOL]. Instead, sponsors of Puerto Rico qualified plans must file Form 6042 -- which has been required since 2011 -- with their corporate tax return.... This change ... makes filing Form 6042 doubly important, as failing to do so would now violate the annual reporting requirement for Puerto Rico qualified plans. The new rules take effect for plan years beginning on or after January 2015." (Willis Towers Watson)  

Protecting Access to Affordable Retirement Advice
"To protect access to affordable retirement advice, Rep. Phil Roe (R-TN), along with Reps. Charles Boustany (R-LA) and Ann Wagner (R-MO), introduced H. J. Res. 88. The resolution would invoke Congress's powers under the Congressional Review Act to prevent the department's rule restricting access to retirement advice from going into effect." (Committee on Education and the Workforce, U.S. House of Representatives)  

Kodak Fiduciaries Settle Stock-Drop Lawsuit for $9.7M
"Fiduciaries of the Eastman Kodak Co. employee stock ownership plan and savings investment plan agreed to pay $9.7 million to settle a lawsuit accusing them of breaching their ERISA fiduciary duties by offering imprudent investment options.... The settlement represents a recovery of between approximately 20 percent to 50 percent of the total damages allegedly suffered by the participants, according to court filings." (Bloomberg BNA)  

'Excessive' 401(k) Fees Often in the Eye of the Fund Holder
"While the DOL fails to define 'reasonable,' it does offer a hint at what it expects.... So we are left with this loose definition: A fee is 'unreasonable' (and therefore must be avoided) when it is 'excessive' and 'attributable to advisers' conflicts.' At least that's what the Rule states. On the other hand, there are many interpretations to the term 'excessive' and the DOL has so muddied the waters when it comes to understanding what a conflict-of-interest that some have said simply getting compensation represents a 'conflict-of-interest.' ... One quick and dirty way to define 'excessive' is to compare it to the range of fees typically charged." (Fiduciary News)  

Considering Shorter-Duration Treasury Inflation Protected Securities in Target Date Funds (PDF)
"Bond investors could be exposed to tremendous risk if inflation picks up and interest rates rise.... As target-date funds (TDFs) on the short-term horizon (for example, a 2020 or 2025 TDF), tend to increase allocations from stocks into bonds to help decrease equity risk, other risks such as inflation risk exist. Plan sponsors should have a solid understanding of the methodologies behind the glidepaths in their target-date funds and if inflation risk is being adequately addressed." (SEI)  

Transitioning from a Defined Benefit to a Defined Contribution Program
"Due to the MAP-21 corridor, rates used to determine plan liabilities and their corresponding contribution requirements have been decreasing by about 20 to 30 basis points per year, which in turn has led to higher liability valuations. This pattern is likely to hold until 2020, enabling actuaries to determine the discount rates used to measure future plan liabilities with unprecedented accuracy and leaving asset returns as the remaining significant variable in determining future contribution requirements. As plan liabilities are projected to steadily rise, funding levels will decrease, unless assets over-perform. Combined with the potential for a down year in asset returns, many plan sponsors may once again face the specter of substantial increases in upcoming contribution requirements." (Cammack Retirement Group)  

Exposure Draft: Selecting Investment Return Assumptions Based on Anticipated Future Experience (PDF)
20 pages. "Complex issues arise in the determination of investment return assumptions, especially for an investment return assumption that will be used as a discount rate (i.e., as a means for determining the present values of promised benefit payments payable over long periods).... Arithmetic averages generally exceed geometric averages, but some issues and concerns may arise in developing investment re turn assumptions based on these higher rates." (Pension Committee of the American Academy of Actuaries)  

Why Pensions Should Be Pensive Over Rate Normalization
"In the short term, interest rate changes may not have a significant impact on plans. Two years out, however, it's imperative we get back to rate normalization to stabilize plan valuations.... With rate normalization comes some element of risk and volatility. Although there's no one-size-fits-all approach to managing interest rate risk because of the unique asset and liability structure of each pension plan, there are some general strategies that can be used to manage the impact of rate normalization ... [1] Asset allocation ... [2] Liability matching ... [3] Derivatives." (Institutional Investor)  

Trends in Retirement Satisfaction in the United States: Fewer Having a Great Time (PDF)
"[T]he share of respondents reporting 'very satisfying' retirements dropped from 60.5 percent in 1998 to 48.6 percent in 2012. On the other hand, the share of respondents reporting 'moderately satisfying' and 'not at all satisfying' retirements increased from 31.7 percent to 40.9 percent and from 7.9 percent to 10.5 percent, respectively.... Both the highest -- and lowest-asset quartiles show similar trends. Also, people with and without pension income show similar trends in retirement satisfaction levels.... Higher net worth is associated with higher levels of satisfaction, and poorer health is associated with lower levels of satisfaction." (Employee Benefit Research Institute [EBRI])  

Disappearing Pensions Hurt U.S. Economy as Well as Workers
"Without pensions, older workers are being forced to work longer hours and stay in the workforce longer, and that means they're squeezing out some of the most productive workers of all ... On one hand, the U.S. economy has become more productive by pushing older workers into the labor force, along with women and migrants who have also increased their participation in the labor force. However, by doing so the U.S. has also decreased its productivity per worker[.]" (USA TODAY)  

The Impact of 'Next Generation' IRAs: myRA Accounts, EZ IRA and State-Mandated IRAs (PDF)
"Given the critical role that IRAs have in wealth management and retirement planning, it is important for employers as well as retirement and payroll service providers to educate themselves on these next-generation IRAs. With a more complete understanding of these new types of payroll IRA programs, employers will be able to make informed decisions when selecting an appropriate retirement savings vehicle for their employees, and providers will be able to offer up-to-date guidance to them." (The Wagner Law Group)  

Could the Saver's Credit Enhance State Coverage Initiatives? (PDF)
"[S]everal states ... are setting up their own plans for uncovered workers. These state initiatives could potentially be enhanced by the federal Saver's Credit, an existing tax incentive that could, in essence, provide a match on contributions to a state plan. But the current credit is limited and not refundable; proposed legislation would extend the credit and make it refundable. This brief, using Connecticut as an example, examines the effectiveness of the current Saver's Credit and the proposed changes." (Center for Retirement Research at Boston College)  

Three Five-Year Rules for Roth IRAs You Need to Know
"[1] Five-year rule for penalty-free distributions of converted funds ... [2] Five-year rule for tax-free distributions of earnings ... [3] Five-year rule for beneficiaries." (Slott Report)  


Comments by American Academy of Actuaries to FASB on Changes to the Disclosure Requirements for Defined Benefit Plans (PDF)
"[T]he following four items listed in the exposure draft can provide decision-useful information for users of a plan sponsor's financial statements: [1] Description of benefits; [2] Weighted-average interest crediting rate for cash balance plans; [3] Narrative description of reasons for significant gains and losses; and [4] Disclosure of the impact of a 1-percentage-point change in health care trend rates for nonpublic entities." (American Academy of Actuaries)  

Benefits in General

In the Ninth Circuit, a New Burden of Proof for Employers in Handling of Benefit Claims
"In a decision the dissent characterizes as 'off the rails,' a three-judge panel of the Ninth Circuit has ruled that where a benefits claimant makes a prima facie case of entitlement to retirement benefits but lacks access to the corporate information needed to substantiate the claim, the burden shifts to the defendant-employer to produce this information[.]" [Estate of Barton v. ADT Security Serv. Pension Plan, No. 13-56379 (9th Cir. Apr. 21, 2016)] (Practical Law Company)  

Better Pay and Benefits Loom Large in Job Satisfaction
"Sixty percent of employees rated benefits as a very important contributor to job satisfaction, keeping benefits in the No. 3 position. But just over two-thirds (68 percent) of employees indicated that they were satisfied with their benefits." (Society for Human Resource Management [SHRM])  

The Retirement Cost Variable You May Be Overlooking
"[M]ore than half (52%) of Americans turning 65 will need some form of long-term care services in their lifetime, care that typically begins in the home. Data shows the national average for a home health aide in 2015 increased 1.7% over 2014 ... [T]hat could add up to $46,000 per year based on 40 hours of care per week.... The national average fee for a registered nurse is $83 per hour, which may cost more than $172,000 annually[.]" (National Association of Plan Advisors [NAPA])  


Comments to FASB on Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (Topic 715) and Changes to the Disclosure Requirements for DB Plans (Subtopic 715-20)
Links to the text of comment letters submitted to FASB by 27 firms, including Willis Towers Watson, AT&T, CNA Financial Corporation, BB&T Corporation and FedEx Corporation. (Financial Accounting Standards Board [FASB])  

Press Releases

Connect   LinkedIn logo   Twitter logo   Facebook logo, Inc.
1298 Minnesota Avenue, Suite H
Winter Park, Florida 32789
(407) 644-4146

Lois Baker, J.D., President <>
David Rhett Baker, J.D., Editor and Publisher <>
Holly Horton, Business Manager <>

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.

Links to web sites other than and are offered as a service to our readers; we were not involved in their production and are not responsible for their content.

Privacy Policy