Retirement Plans Newsletter

May 12, 2016 logo logo LinkedIn logo Twitter logo Facebook logo
Get Health & Welfare News | Advertise | Previous Issues | Search

Employee Benefits Jobs

Webcasts and Conferences

Affordable Care Act Information Returns Corrections Process
(IRS [Internal Revenue Service])

Practical Corrections Series 05: Plan Loan Failures
May 17, 2016 WEBCAST
(FIS Relius Education)

Fundamentals Series 12: Participant Loans
May 23, 2016 WEBCAST
(FIS Relius Education)

Practical Corrections Series 06: Testing Failures: ADP/ACP, 415, 402(g)
May 24, 2016 WEBCAST
(FIS Relius Education)

Nuts and Bolts of Section 409A: Practical Issues to Consider in Every Practice
June 9, 2016 WEBCAST
(ABA Joint Committee on Employee Benefits [JCEB])

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]

Text of PBGC Interim Final Rule: Adjustment of Civil Penalties
"This rule adjusts the maximum civil penalties that PBGC may assess under sections 4071 and 4302 of ERISA. The new maximum amounts are $2,063 for section 4071 penalties and $275 for section 4302 penalties.... Section 4302, added to ERISA by the Multiemployer Pension Plan Amendments Act of 1980, authorizes PBGC to assess a civil penalty of up to $100 a day [prior to adjustments for inflation] for failure to provide a notice under subtitle E of title IV of ERISA (dealing with multiemployer plans). Section 4071, added to ERISA by the Omnibus Budget Reconciliation Act of 1987, authorizes PBGC to assess a civil penalty of up to $1,000 a day [prior to adjustments for inflation] for failure to provide a notice or other material information under subtitles A, B, and C of title IV and sections 303(k)(4) and 306(g)(4) of title I of ERISA." (Pension Benefit Guaranty Corporation [PBGC])  


Hurry! Early bird registration ends on May 27th!

Sponsored by Wolters Kluwer

Sign up for our 5th Annual Customer Conference, August 17-19 in downtown Chicago!

[Official Guidance]

Text of PBGC Interest Rate Update for June 2016
"The June 2016 interest assumptions under the benefit payments regulation will be 0.75 percent for the period during which a benefit is in pay status and 4.00 percent during any years preceding the benefit's placement in pay status. In comparison with the interest assumptions in effect for May 2016, these interest assumptions represent a decrease of 0.25 percent in the immediate annuity rate and are otherwise unchanged." (Pension Benefit Guaranty Corporation [PBGC])  

[Guidance Overview]

Final Fiduciary Rule Creates Implications for Plan Sponsors and Financial Advisers
"The final rule could threaten common arrangements that financial advisers have with ERISA-covered plans and IRAs under ERISA's fiduciary duty rules or under related prohibited transaction rules.... The BICE is available to both plans and IRAs and provides needed relief from the ... prohibited transaction provisions in ERISA that would otherwise apply if a participant is deemed to be a fiduciary." (Porter Wright Morris & Arthur LLP)  

[Guidance Overview]

The DOL's New Fiduciary Rule: The Thin Line Between Education and Advice (PDF)
"The line between investment education and investment advice will pose special challenges for broker and plan-specific call centers, where call center personnel have been specifically trained to know the details of a plan's investment options and the products and services available by the provider. This may result in separate call centers dedicated to IRA customers that provide less information about investment options than to retail customers generally." (Shearman & Sterling LLP)  

[Guidance Overview]

SEC Extends Rule 482 Relief to Non-ERISA Retirement Plans
"[T]he SEC staff issued a no-action letter in late 2011 under which it agreed, for ERISA plans, to treat the DOL-required disclosures as if they satisfied the conditions of Rule 482. The SEC staff's February 18 letter extends that position to cover provision of the same disclosures required by the DOL rule to participants and beneficiaries in plans that are not subject to ERISA, thus permitting reliance on Rule 482 for such disclosures." (Carlton Fields)  


ASPPA's New Retirement Plan Fundamentals Course - Now Available

Sponsored by ASPPA

ASPPA's Retirement Plan Fundamentals course has been redesigned as online, interactive modules. Perfect for anyone new to the industry or who is preparing for an ASPPA credential. Ask your employer to make RPF part of your professional development.

The Continuing Battle Over Economically Targeted Investments
18 pages. "As a matter of statutory interpretation, IB 2015-01, like its predecessors, is unpersuasive. [ERISA] requires plan trustees to invest 'solely' to provide participants' retirement benefits. A trustee who invests in ETIs violates this statutory obligation by pursuing collateral economic benefits for persons other than plan participants. As a matter of policy, the social investing which ETIs exemplify is unsound. At best, such social investing in practice merely shuffles investment ownership without altering market-based allocations of capital." (Prof. Edward Zelinsky, via SSRN)  

DOL Promises Answers to Welter of Fiduciary Rule Questions
"The changes that the DOL made from the proposed rule to the final, as well as forthcoming subregulatory guidance, should help with operations and implementation, [Timothy D. Hauser, deputy assistant secretary for program operations at EBSA] said. Hauser also expressed confidence that the industry is innovative enough to quickly adapt to the new regulation.... Subregulatory guidance will probably come in the form of questions and answers, which could be rolled out as the DOL is able to address them, Hauser said." (Bloomberg BNA)  

Treasury's Ruling Raises Question of Rescue Plan Process
"[Central States Pension Fund executive director Thomas C. Nyhan said] that although the fund's dealings with Treasury during the review wasn't 'an adversarial process,' it wasn't 'collaborative, either.' He said that despite meeting with Treasury three times and providing the department and the Pension Benefit Guaranty Corporation with 'massive amounts of actuarial data over the many months of their deliberations,' Treasury never told the fund about the department's concerns before the decision." (Bloomberg BNA)  

Multiemployer Plan Conundrum: Are Composite Plans the Answer?
"A hypothetical composite multiemployer pension plan could survive severe economic stress through a combination of contribution increases and benefit reductions ... The plan was presumed to be 100 percent funded in 2016, falling to 73 percent funded in 2017 as a consequence of the severe shocks similar to those that defined benefit plans experienced in 2008-2009, and projected to be at 60 percent funding in 15 years.... The analysis found that either of two possible realignment programs would increase the hypothetical plan's funding to 121 percent in 15 years -- slightly above the 120 percent funding requirement." (Bloomberg BNA)  

Case Study: Smart Plan Design and Holistic View Guide Positive Change (PDF)
"The revised plan defaulted participants into an asset allocation program with auto-rebalancing. The company matching contribution, which had been very limited initially, was expanded to a 50% match on the participant's first 6% of pay. Auto enrollment, originally set up in 2007 at a 3% default contribution level, was bumped up to 6%.... The average deferral rate climbed from 4.8% to 6.4%. Participation in the automatic asset allocation program grew to 188 participants -- almost half of all participants -- from 26. And assets in that program grew more than tenfold." (Retirement Advisor Council)  

Benefits in General

[Guidance Overview]

New EU Data Privacy Regulation May Impact U.S. Benefit Plan Administrators (PDF)
"US plan administrators may need to comply with the Data Privacy Regulation if the plan administrator gathers, processes, or has another entity gather or process personal data of individuals in the EU and it is determined that the processing is related to the offering of goods or services to EU residents.... [P]rocessing data in connection with the offering of pension or welfare benefits to EU residents could be deemed to be in connection with the offering of services ... [It] appears likely that administrators of both pension and welfare plans will be deemed to gather or process some personal data if any plan participant or beneficiary resides in the EU." (Groom Law Group)  

[Guidance Overview]

IRS Extends Prohibition on Treating Partners as Employees
"Characterizing employees as self-employed has potentially significant implications, in that self-employed individuals ... [1] Are ineligible to participate in 'cafeteria' or Section 125 flexible spending and dependent care programs; [2] Have the full cost of employer-provided health insurance and life insurance included in income ... [3] Are prohibited from taking loans from tax-qualified retirement plans; [4] May be unable to defer certain compensation for tax purposes under 'nonqualified deferred compensation' programs." (Latham & Watkins)  

[Guidance Overview]

IRS Regs Provide That Certain Employees of Partnerships Now Have Self-Employment Status for Employee Benefit and Tax Purposes
"The regulations are intended to clarify that where the partners are separately working for [a second, wholly owned] legal entity, such individuals may not be treated as employees, and must be treated as self-employed individuals for both self-employment and employee benefit plan purposes. As a result, the partners may not be provided the tax benefits provided employees with respect to benefit plans such as cafeteria plans, parking and transit benefits, health benefits and health insurance." (McDermott Will & Emery)  

Executive Compensation and Nonqualified Plans

[Guidance Overview]

Federal Regulators Re-propose Joint Rule on Incentive-Based Compensation Arrangements at Large Financial Institutions (PDF)
15 pages. "[T]he proposed rule would prohibit covered institutions from awarding incentive-based compensation that is believed to encourage in appropriate risks and would impose mandatory deferral and clawback provisions. It would also require such institutions to disclose certain information regarding the structure of their incentive -based compensation arrangements to the applicable regulator." (Sidley Austin LLP)  

Beware the Vested Salary Continuation Trap in Drafting Employment Agreements
"Experienced and capable chief executives can be hard to find, particularly when it comes to leadership positions of a limited duration ... [so] it is understandable that the executive would want the agreement to contain protections against the premature or unanticipated termination of the contract by the hiring agency.... [But some contracts simply] provide that upon the expiration or termination of the contract by either party (and for whatever reason), the executive will continue to receive 'salary continuation' for the specified period. Unless these payments are properly structured as a 'bona fide severance pay plan' under IRC section 457(e)(11) -- that is, payable only upon the unanticipated termination of employment -- the executive and the agency likely have an income tax (or income tax reporting) problem." (Chang Ruthenberg & Long PC)  

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