Retirement Plans Newsletter

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Webcasts and Conferences

2016 Legislative & Regulatory Updates
July 12, 2016 WEBCAST
(ECFC [Employers Council on Flexible Compensation])

HSA Proliferation in the New Health Care Market
July 17, 2016 WEBCAST

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[Guidance Overview]

IRS Checklists for Retirement Plan Documents
"Listed [at this page] are IRS checklists for retirement plan documents categorized into subject matter packages that Employee Plans Specialists use when reviewing retirement plan documents.... Each package contains: [1] An Explanation that provides guidance in the law and legal citations. [2] Alert Guidelines (Worksheets) you can use to review retirement plans.... [3] Plan Deficiency Paragraphs (Checksheets) that are pre-approved wording that, if used by plan sponsors, will satisfy the applicable Internal Revenue Code requirements." (Internal Revenue Service [IRS])  


401(k) Answer Book, 2016 Edition

Sponsored by Wolters Kluwer

When participants, sponsors, or service providers ask you questions, this book has the answers. Covers 401(k) plan design, testing, reporting and disclosure, plan termination, investment topics and regulatory guidance. Use code BENEFIT20 for 20% discount.

[Guidance Overview]

DOL Tries to Find a More Ideal Balance in the Final 'Investment Advice' Rules (PDF)
32 pages. "The Final Rule is arguably the most significant change to the fiduciary rules governing retirement plans since ERISA was enacted, and it has the potential to disrupt many trends and practices by which financial products are currently marketed and sold to retirement investors.... There is an important impact on certain market participants who themselves might not be fiduciaries, but whose business will be affected by those who are -- notably, registered investment companies ('funds') and their sponsors. The Final Rule could significantly impact funds' intermediary-distribution channels, and may therefore lead to changes in demand for certain types of funds, share classes and intermediary-compensation arrangements." (Dechert LLP)  

Supreme Court Hands Verizon Retirees Victory in Pension Spinoff Case
"[T]he U.S. Supreme Court vacated a lower court decision and sent the case back to be re-evaluated, giving the class action suit, advanced by the Association of BellTel Retirees Inc., a significant shot in the arm.... At issue... is whether the plaintiffs can show they suffered 'concrete harm' as a result of the company's actions. The Verizon retirees argue that the company, in selling off pension assets to Prudential Insurance Company as a group annuity, is putting all retiree pensions at risk." [Pundt v. Verizon Comm., No. 15-785 (S. Ct. cert. pet. granted May 23, 2016)] (  

Choosing Default Investment Alternatives for 401(k)s Requires Close Due Diligence
"Brightscope reports that plan assets invested in TDFs already exceed $1.1 trillion ... and are likely to hit $2 trillion by 2020. But successfully gathering assets doesn't necessarily mean that a TDF is the right choice for every plan's QDIA. It certainly doesn't mean that TDFs are well-suited for every plan participant." (InvestmentNews)  

The Retirement Income Dilemma: An In-Plan Solution
26 pages. "Plan sponsors can help address most of the risks by offering an in-plan lifetime income solution. The plan sponsor's task in selecting the product is no greater than any other fiduciary decision, and it can provide a significant benefit to the employees. One solution that may provide the greatest overall benefit is income insurance, in the form of an in-plan deferred income annuity (DIA)." (Principal Financial Group)  


Now is a great time to join Worldwide Employee Benefits Network (WEB)

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Understanding the Nuances of Your ESOP Plan Language: Forced or Involuntary Distributions
"Many plan sponsors do not realize that retired participants can also be forced out of the ESOP if they do not elect to receive a distribution when eligible. This is true regardless of their account balance and regardless of the plan document language. This provision is found in IRC 411(a)(11). Though many plan documents do not state this directly, it may be inferred[.]" (Principal Financial Group)  

The Impact of Student Loan Debt on Defined Contribution Retirement Plan Participation: The Plan Sponsor Perspective
11 pages. "[T]he degree to which Millennial employees cite student loan debt as creating a 'Moderate' (26.0 percent) or 'High' (8.9 percent) barrier to saving for retirement is significant. These findings are particularly noteworthy within select industries, such as in the service industry where 42.5 percent of respondents rate student loan debt as a 'Moderate ' or 'High' barrier, or in the technology or telecommunications industry where 45.5 percent of respondents rate student loan debt as a 'Moderate' or 'High' barrier." (Plan Sponsor Council of America [PSCA])  


Universal Pensions: A Progressive Alternative to Retirement Savings
"[The] proposed Universal Pension would simplify the system and foster participation by reducing the amount of paperwork, financial sophistication, and fees that are required to save. Participation would be voluntary, but working Americans would be encouraged to open an account with a $500 tax rebate. And contributions by workers without tax liability would be eligible for an expanded refundable credit to bolster retirement savings for lower-income families." (The Hill)  

Benefits in General

DOL and Treasury Update 2015-2016 Regulatory Agendas for Employee Benefits
"The DOL's agenda and related materials include 13 pending projects related to employee benefits ... . The IRS Business Plan includes 28 pending items addressing retirement benefits and 14 pending items addressing executive compensation, health care and other benefits.... There are no new projects added to the agendas since they were last published." (Sutherland Asbill & Brennan LLP)  

ERISA Advisory Council to Discuss Cybersecurity, Other Benefit Plan Issues at June Meeting
"The council's discussion includes 'Cybersecurity Considerations for Benefit Plans' on June 7, and 'Participant Plan Transfers and Account Consolidation for the Advancement of Lifetime Plan Participation' on June 8. Both topics will be discussed on June 9; however, the meetings' schedule is subject to change." (Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL])  

Executive Compensation and Nonqualified Plans

[Guidance Overview]

Your CEO Pay Ratio Will Be an Estimate Even If You Don't Use Statistical Sampling
"[S]ome companies that they're reluctant to employ statistical sampling in calculating their CEO pay ratios based on the notion that their calculation will not be as accurate as if they had used actual data for their entire workforce.... [The SEC] does not require companies to calculate Summary Compensation Table (SCT) total compensation for all employees to identify the median employee. As a result, every company will be using a less-than-100%-accurate methodology to arrive at an estimate of the median pay[.]" (Willis Towers Watson)  

[Guidance Overview]

Reproposed Regs Will Significantly Change the Structure of Incentive Compensation at Financial Institutions with $1 Billion or More in Assets (PDF)
12 pages. "While most commentary to date has focused on the rules applicable to entities with assets of $50 billion or more (Level 1 and Level 2 entities), the rules that affect Level 3 entities ($1 billion to $50 billion in assets) are also far reaching and will substantially affect the design and administration of their incentive compensation programs. In particular, it appears impermissible for any incentive compensation plan for any employee to provide payment based solely on quantitative criteria." (Frederic W. Cook & Co., Inc.)  

Press Releases

CalPERS Wins Government Finance Award For Sustainable Pension Policy
CalPERS [California Public Employees' Retirement System]

DOL's Actions Recover $7.1M for Workers in AIT Laboratories Employee Stock Ownership Plan
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

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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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