Retirement Plans Newsletter

May 16, 2016 logo logo LinkedIn logo Twitter logo Facebook logo
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Internal Sales Support
Pentegra Retirement Services
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The Air Line Pilots Association, Int'l
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Wells Fargo
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Webcasts and Conferences

Pension De-Risking Market Update -- Decision 2016: Which Path will you Elect to Go?
May 25, 2016 WEBCAST
(Dietrich & Associates, Inc.)

What's New with 403(b) and 457(b) Plans?
May 26, 2016 WEBCAST

403(b) and 457(b) Plan Documents
May 31, 2016 WEBCAST
(FIS Relius Education)

HCEs: Digging Deeper
June 7, 2016 WEBCAST
(FIS Relius Education)

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[Guidance Overview]

More DOL Final Fiduciary Rule Fallout: Some Potential IRS Pitfalls for IRA Custodians and Trustees
"For IRA custodians and trustees using prototype custodial or trust agreements that have been submitted and approved by the IRS, ... any changes made to prototype agreements are submitted to the IRS for approval ... [B]ecause the prototype IRA custodial and trust agreements have generally not been required to be updated for changes in the law since 2002, the IRS may require any prototypes submitted that have not been updated to be updated for law changes before approval." (Morgan Lewis)  


2016 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.

The Final Fiduciary Rule: How the Labor Department Brought the Internal Revenue Service Wolf to the RIA Door
"If the DOL writes a rule, is it really a regulation at all if nobody is there to enforce it other than a bunch of freelancing tort lawyers? It's a metaphysical and legal questions that hangs over the [DOL's] imposition of fiduciary responsibility over IRA assets where it has no jurisdiction to mete out justice against financial advisors who put their own interests ahead of clients. It's the [IRS] that oversees Individual Retirement Accounts. So what gives?" (RIABiz)  

Final Fiduciary Rule Spells End of Compensation Perks for Insurance Agents
" 'The rules are actually quite strict in the sense that you can't pay any more than the commission, period,' [Fred] Reish said. 'So far, every brainstorming idea that clients have asked us to look at does not work under this rule.' High-commission variable and fixed indexed annuities remain allowable if they are sold under the Best Interest Contract Exemption. But even then, those past high commissions are not going to be as high. The rule still mandates 'reasonable' compensation." (  

It's Back to the Drawing Board for Multiemployer Pension Reform
"Sweeping solutions are not expected in an election year, particularly one that could change the balance of power in Congress. MPRA critics, including the Pension Rights Center in Washington and AARP, realize their victory in the Central States decision is short-lived, as many troubled multiemployer plans head toward insolvency, along with the Pension Benefit Guaranty Corp.'s multiemployer insurance program itself." (Pensions & Investments)  

Hospital Pensions Hammered by 'Church Plan' Class Actions
"Hospital workers have filed 15 class actions in the past two months challenging multimillion-dollar funding shortfalls in their pension plans.... This litigation effort -- which was spearheaded in 2013 by [two plaintiffs' law firms] -- has hit nearly 20 health-care companies in total, spanning 18 different judicial districts. The workers have scored victories in the U.S. courts of appeals for the Third and Seventh Circuits, with future rulings expected from the Ninth and Tenth Circuits. Recent court filings suggest that one of the targeted hospitals, Illinois-based Advocate Health Care Network, plans to take this fight to the U.S. Supreme Court." (Bloomberg BNA)  

Retirement Funds and Business Start-Ups: Do 'ROBS' Work?
"The IRS zeros in on two primary concerns ... [1] [If] the ROBS 401(k) plan is set up in a way that permits only the business owner to invest his 401(k) plan account in company stock, it may discriminate against any rank and file employees who qualify to participate in the plan.... [2] [T]he new 401(k) plan is prohibited by law from paying more for the shell corporation's stock than the fair value of its business. Is a start-up franchise business, for example, really equal in initial value to the amount of its substantial up front franchise fee and other start-up costs -- before it has generated even one dollar of revenue? Questionable, and remember it's your burden to establish that value in the unfortunate event the IRS comes calling." (Golan & Christie LLP)  

Sequence-of-Return Risk Hurts More Than Just Recent Retirees
"[T]he volatility of an accumulator's portfolio can also be viewed as its retirement date risk -- the danger that a planned date of retirement (or financial independence) may turn out to be later than originally expected, due to a poorly timed sequence of bad market returns. And as it turns out, the greater the volatility of the portfolio and reliance on growth, the greater the retirement date risk that goes along with it." (Financial Planning)  

Delaying Retirement Might Help You Live Longer
"[A recent study] found that healthy adults who delayed retirement for one year past age 65 had an 11 percent lower risk of dying.... The healthy retirees in the study said their health had no impact on their decision about when to retire. The longevity bonus for delayed retirement held even after the research controlled for income, education, lifestyle and health issues." (U.S. News & World Report)  


'Best Interest,' BICE and Liability Exposure for Plan Sponsors
"In most cases, plan sponsors mistakenly believe that they have recourse against their service providers if the information provided to the plan sponsor is incorrect. In truth, most service providers use contracts that effectively limit any fiduciary liability for the information they may provide to a plan.... Plan sponsors should be aware that the courts have held that reliance on stockbroker, insurance agents and others with a potential financial interest in the advice they provide is never justified.... Evaluating funds based solely on annual returns and standard deviation of returns data is not acceptable, as it ignores other important factors in the fiduciary prudence equation." (The Prudent Investment Adviser Rules)  

Press Releases

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