Retirement Plans Newsletter

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Legacy Retirement Solutions LLC
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Arthur J. Gallagher & Co.
in IL, TX

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Webcasts and Conferences

Wellness Programs in a Global Market
June 6, 2016 WEBCAST
(International Foundation of Employee Benefit Plans [IFEBP])

Update on Fiduciary Requirements
June 16, 2016 WEBCAST

The Effects of ACA on Medical Expense Accounts (HSAs, FSAs and HRAs)
June 23, 2016 WEBCAST
(International Foundation of Employee Benefit Plans [IFEBP])

HSA Basics
July 19, 2016 WEBCAST

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[Guidance Overview]

The Final Fiduciary Rule Has Arrived Finally (PDF)
"[F]irms should promptly begin evaluating and developing project teams to: Assess the new rule's impact on current services and operations ... Open dialogs with the firm's third-party product and service providers ... Review, refine and strengthen the firm's supervisory controls over retirement plan related services, products and relationships.... Map revenue streams to identify all instances of variable compensation with respect to retirement related services and products.... Review and likely restructure compensation related incentives, policies and practices.... Create and adopt required disclosures ... Create model BIC PTE contracts ... Establish recordkeeping practices and procedures for maintaining for six years those records required to demonstrate compliance with the BIC PTE." (Warner Norcross & Judd LLP)  

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[Guidance Overview]

Who's a Fiduciary Now? (PDF)
14 pages. "Conversations and transactions that previously were untouched by ERISA -- such as distributions and rollovers from retirement plans, conversations with call center representatives, and advice about IRA investments -- now will be measured against 'best interest' standards. And although these rules may not directly affect employers and plan-level fiduciaries, those fiduciaries nevertheless have a duty to understand the new regulatory regime so that they can protect retirees and participants and mitigate their own co-fiduciary liability." (Spencer Fane)  

Senate Rejects Fiduciary Rule; Obama Vows to Veto
"The Senate voted Tuesday to disapprove and nullify the new fiduciary rule released by the [DOL], by a vote of 56-41, along party lines. The House of Representatives passed a similar measure on April 28, also along party lines." (Pensions & Investments)  

2015 ERISA Advisory Council Report: Model Notices and Plan Sponsor Education on Lifetime Plan Participation (PDF)
54 pages. Dated Nov. 2015; published online May 2016. "The 2015 ERISA Advisory Council has taken the 2014 Council's report ... to the next level by developing sample participant notices, as well as educational materials for plan sponsors regarding plan design features that encourage lifetime plan participation.... This report, along with the accompanying drafts of a tip sheet and sample participant notices, draws on testimony received during two days of hearings and on written submissions." (Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL])  

2015 ERISA Advisory Council Report: Model Notices and Disclosures for Pension Risk Transfers (PDF)
47 pages. Dated Nov. 2015; published online May 2016. "The 2015 ERISA Advisory Council examined information needs of plan participants and disclosure practices of plan sponsors when engaging in defined benefit plan risk transfer transactions and drafted Model Notices relevant to these transactions.... These documents are intended to be beneficial in providing relevant information to plan participants impacted by risk transfer transactions." (Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL])  

IRS Issues Final Regulations for Designated Roth Account Distributions (PDF)
"As a result of this change, if a taxpayer receives a designated Roth account distribution and also directly rolls over designated Roth account assets to a Roth IRA or to another designated Roth account, then the pretax amounts will be allocated first to the direct rollover, rather than being allocated pro rata to each destination. Also, a taxpayer may direct the allocation of pretax and after-tax assets that are distributed from a designated Roth account that are directly rolled over to multiple destinations." (Ascensus)  

Hospital Settles Church Pension Lawsuit for $107 Million
"In 2015, a proposed class of workers accused Connecticut-based St. Francis Hospital of improperly treating its pension plan as a 'church plan' exempt from federal law, resulting in a pension underfunding of $139 million. According to recently filed court documents, St. Francis has agreed to settle this lawsuit by contributing $107 million to its pension plan over a 10-year period, which corresponds to about $60,000 per plan participant. This settlement amount dwarfs the $8 million settlement reached by Ascension Health and its workers in a similar case last year[.]" (Bloomberg BNA)  


American Retirement Association Comments to IRS on Notice 2016-16 Regarding Mid-Year Changes to Safe Harbor Plans (PDF)
"[ARA's recommendations include:] [1] Allowing prospective mid-year changes to eligibility in addition to entry date changes; [2] Clarifying what is meant by 'type' of safe-harbor plan in the context of classifying a mid-year change in the type of safe-harbor plan as a prohibited mid-year change; ... [3] Allowing mid-year amendment of the safe harbor contribution in accordance with the exception for a final plan year ... for plans merging into an acquirer's plan; [4] Extending application of Notice 2016-16 to [eligible automatic contribution arrangements under Code section 414(w) (EACAs)] and allowing mid-year establishment of such arrangements" (American Society of Pension Professionals & Actuaries [ASPPA])  

Benefits in General

[Guidance Overview]

GASB 73/74/75: Timing Considerations for Compliance with New Financial Reporting Rules (PDF)
"There are several important dates to consider when calculating and reporting OPEB liability ... For plan reporting, the actuarial valuation must have been performed as of a date no more than 24 months prior to the plan's FYE. For employer reporting, the actuarial valuation must have been performed as of a date no more than 30 months and one day prior to the employer's FYE.... The measurement date is the date as of which the net OPEB liability is measured ... For purposes of GASB Statement Nos. 73 and 75, the measurement date may be selected from a range starting no earlier than the end of the employer's prior FYE and ending no later than the employer's current fiscal year." (Milliman)  

New Overtime Rules May Affect Benefits Plans
"The laws surrounding most employee benefits plans allow various classifications to be deemed non-discriminatory as long as all those individuals within the same classification are treated the same. Therefore, some companies today may offer only certain benefits or benefits levels to certain groups of employees.... Many plans include overtime in their plan definition of compensation. The change could also affect plans that exclude overtime pay from the plan's definition of compensation if the new overtime pay causes the definition to become discriminatory in favor of highly compensated employees (HCEs)." (The Huffington Post)  

Press Releases

DOL Files Lawsuit to Restore Funds owed to Demmy Sand & Gravel Retirement Savings Plan
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

Bankruptcy Court Declares $27k in Debts owed to Rose Printing Services Employee Benefit Plans Non-dischargeable
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

IRI Fact Book 2016 Now Available
Insured Retirement Institute [IRI]

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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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